No ledger can satisfy all ideal qualities of any recordkeeping system, correctness, decentralization, and cost efficiency simultaneously. Yet, a blockchain is more efficient than a centrally managed traditional ledge. A blockchain can be implemented in many ways, but most share several common features. We can think of a blockchain as an incredibly special database. A blockchain’s structure is shared, or distributed, rather than centralized, and thus is often referred to as distributed ledger technology (DLT).
The distributed network provides some level of security because it is unlikely an attack can be launched on every copy of the three databases. Distributed databases are not new, and most distributed databases are not blockchains. The key difference between a regular distributed database and one set on a blockchain is the structure.
Any type of transaction, for example, a financial contract for any type of property transfer, can be put into a blockchain. Given its immutability, a blockchain provides an official record of the contract and a single agreed-upon version of the contract, which is unlikely to be disputed.
To summarize, a blockchain is distinguished from an ordinary distributed database by its unique structure, which linearly connects smaller pieces of the database, or the blocks. The chaining comes in the form of a cryptographic hashing function. Any change to history will break the chain on a particular copy of the database. When a chain is broken, the network fixes it by replacing any corrupted block with a valid block.
Blockchain-associated ecosystems are being developed daily and will force traditional institutions to reconsider and change their roles in the industry. Every day new projects are being introduced, established institutions are entering the Blockchain, and a growing number of users is adopting the Blockchain decentralized technology. Great projects have already successfully connected users to the landscape of several cryptocurrencies and crypto assets.
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