Blockchain technology

Blockchain is one of the major tech stories of the past decade. Everyone seems to be talking about it—but beneath the surface chatter there’s not always a clear understanding of what blockchain is or how it works. Despite its reputation for impenetrability, the basic idea behind blockchain is pretty simple. And it has major potential to change industries from the bottom up.

Blockchain is a technology that enables the secure sharing of information. Data, obviously, is stored in a database. Transactions are recorded in an account book called a ledger. A blockchain is a type of distributed database or ledger—one of today’s top tech trends—which means the power to update a blockchain is distributed between the nodes, or participants, of a public or private computer network. This is known as distributed ledger technology, or DLT. Nodes are incentivized with digital tokens or currency to make updates to blockchains.

Blockchain is a type of shared database that differs from a typical database in the way it stores information; blockchains store data in blocks linked together via cryptography. Different types of information can be stored on a blockchain, but the most common use for transactions has been as a ledger.
And finally, a blockchain is a database that is shared across a public or private network. One of the most well-known public blockchain networks is the Bitcoin blockchain. Anyone can open a Bitcoin wallet or become a node on the network. Other blockchains may be private networks. These are more applicable to banking and fintech, where people need to know exactly who is participating, who has access to data, and who has a private key to the database. Other types of blockchains include consortium blockchains and hybrid blockchains, both of which combine different aspects of public and private blockchains.
Research from the McKinsey Technology Council suggests that by 2027, up to 10 percent of global GDP could be associated with blockchain-enabled transactions. But in the world of blockchain, what is real and what is just hype? And how can companies use blockchain to increase efficiency and create value? Read on to find out.