An Introduction To Blockchains Marc Piano, Associate At Bedell Cristin, Explains The Basic Concept Behind Blockchains

Blockchains are commonly perceived to be complex and difcult to understand. While the technology involves a blend of several elements of computer science, the concept behind it is fairly simple.

This article provides a gentle introduction to the most important parts of blockchain technology.

What is a blockchain?

Using the example of a bank, transactions between individuals are processed through a central authority (i.e. the bank), which holds and updates a central ledger relating to those transactions. Both parties trust the central authority and rely on the records of the transaction in that central ledger as 'the truth'.

A blockchain removes that central authority. Instead, parties transact directly with each other and the record book is not controlled and updated by any single source. Instead, anyone can hold a copy of the ledger and take part in updating and maintaining it. This is known as 'decentralisation'.