Here's everything you need to know about blockchains, the ground-breaking tech that could be as disruptive as the internet

From a 'castle' full of bitcoin millionaires to the initial coin offering (ICO) craze, it's hard to escape the chatter about how some people are building their fortunes off the new world of cryptocurrencies. But behind those cryptocurrencies sits a technology called blockchains, which some people believe could fundamentally rewrite how transactions are handled online.

With analysts at UBS estimating that blockchains could be a $300 billion to $400 billion global industry by 2027, it's clear that regardless of what happens in the bitcoin bubble, blockchain technology is here to stay.

Here's what you need to know about blockchains, the technology that's set to disrupt the world of contracts, finance, shipping and countless other industries.

SEE ALSO: Someone deleted some code in a popular cryptocurrency wallet — and as much as $280 million in ether is locked up

Blockchains are digital ledgers

Simply put, a blockchain is a digital ledger. Each unit of the ledger is a "block," and these blocks are linked in order of when they are created. The blocks are linked together using cryptography, which binds them together in a way that is virtually un-editable. 

Inside every block is a complete history of everything that has ever happened on that chain, as well as the rules that all of the blocks follow. 

Think of a blockchain as an ever evolving music playlist

Imagine that you start a new playlist on Spotify. Every time you add a song, you create a new version of the playlist, or a new "block" in the chain.  The new block contains your newly added songs and the previous songs. 

If your cousin decides to add some country music songs onto the playlist, she creates the next block in the chain. If that block is approved by all participants, a new block gets added to the chain and becomes the new version of your playlist. If your cousin also decides to delete one of your songs from the playlist, the next version of the playlist would contain a note that the song was previously on the list, but has been deleted.

 

 

They are most useful in situations where you need a trustworthy system of record

Blockchains are good for two things: recording events, and making sure that record is never erased. 

This makes them particularly useful in situations where two people want to make a deal but don't trust one another.

Some think blockchains could put an end to fraudulent deals, such as the Ponzi scheme that led to famed investor Bernie Madoff's demise around 2009.

See the rest of the story at Business Insider

Contributer : Tech Insider http://ift.tt/2A95vGB

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