Another comparable definition of blockchain, a DLT, is: “In the strictest sense, a distributed ledger is a type of database that is shared across nodes in a network. In a DLT arrangement, nodes are the devices running the DLT software that collectively maintain the database records. In this design, the nodes are connected to each other in order to share and validate information.”.
It is “the data structure that records the transfer of scarce objects. With the blockchain, everything that was scarce now becomes programmable…cash, commodities, currencies, stocks, bonds which undergo the transformation.
Blockchain technology, as originally envisioned, is decentralized and adds changes to the database via a series of completed blocks of transactional data that are connected to each other in a chain in which transaction data is stored in a chronological order. Users of the technology automatically receive copies of the transactions. Each block contains a hash which is a one-way digital fingerprint that cannot be reversed, is timestamped, and inputs to a set of outputs. The prior block hash links the blocks together, preventing any block from being altered and actually enhances the links among the blocks.
DLTs in the form of cryptocurrencies are mainly open systems operating without governmental permission, in contrast to banking systems that use the technology in a closed network. Thus, the parties avoid third persons and the costs associated with them; have a certainty of the source, amount, and destination of the transaction (trust); are assured that the transaction may not be tampered with, and are made aware that all such transactions are final and cannot be reversed.
There are many variations of blockchain which are adapted to the particular uses of the numerous types of cryptocurrencies.
The history of blockchain (originally worded as “block chain”) is somewhat uncertain with various claimants to aspects of the technology that forms its basis. Thus, there are articles that discuss brief histories of the Bitcoin Blockchain, Blockchain from an investor’s perspective, Blockchain on trademarks, and even an introduction to cryptographytracing back to Julius Caesar and to the Greeks before the Romans.
Although the current cryptocurrency mania emanates from Bitcoin, nevertheless, it appears that each technological advance is based upon the work of predecessors. According to Wikipedia, the initial concept of a cryptographically secured chain of blocks was created and described in an article by co-authors, Stuart Haber and W. Scott Stornetta in 1991.11 The authors were concerned about securing digital documents which are easy to copy and alter. They proposed “a cryptographically verifiable label for any bit- string…by naming it according to its position in a growing, directed acyclic graph of one-way hash values.” As described more fully in their article, they proved the security of the transmission.
Discussion of cryptocurrencies other than Bitcoin
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