If there is one aspect of cryptocurrencies that has captured the attention of industries outside of banking and financial services, it’s blockchain technology. Blockchain is what makes cryptocurrencies possible. However, blockchain has proven extraordinarily useful to many other sectors of the economy, including healthcare, supply chain management, insurance, real estate, and others.
The technology works with the use of a blockchain, a long chain made up of “blocks,” where each block contains information about transactions. These blocks can contain information about thousands of different transactions in the same place, and each block additionally contains a randomly generated cryptographic code, known as a hash, identifying it separately from every other block on the blockchain. The next block on the chain contains its own hash and the hash from the previous block.
This is part of why blockchain is so secure. For example, to change the details of a transaction after the fact, a hacker might try to edit the block, but that would generate a new hash, while the next block in the chain would still have the old hash. To alter details in a single block, the hacker would therefore have to change every single block after it—which would require a huge amount of computing power.
All computers in the network contain a copy of the blockchain, essentially ensuring that there are thousands of copies in existence. This is why blockchain is described as “distributed” ledger technology; it is also another reason why blockchain technology is so secure. With so many copies in existence, it is even more difficult for hackers to change the information contained in the blocks. To make a change, all copies of the blockchain would need to be edited, a virtually impossible task.
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