I. What is Blockchain?
A. Definition of Blockchain
1. Blockchain is a ledger (or collection of data) that is distributed and immutable, used to keep a record of transactions.
B. Characteristics of Blockchain
1. Distributed. Blockchain is a distributed technology, meaning that the data is shared across multiple computer devices, instead of stored in a single location. Each computer (or “node”) that forms the blockchain network stores an identical copy of the ledger.
2. Immutable. Blockchain transactions are immutable, meaning that once the data is recorded onto the blockchain ledger, it cannot be changed. The reason the data is immutable is because a hacker or other bad actor would need to alter each copy of the blockchain held by the different nodes on the blockchain to change the data, which would be nearly impossible in most circumstances. There are some exceptions to this rule, such as if a blockchain is spread across only a few nodes or if the blockchain is run by a single organization.
3. Time-stamped. Each blockchain transaction is located in a “block” (set of data) and that block is automatically timestamped.
4. Secure. Each block on the blockchain is individually encrypted. Along with the structure of storing data in a distributed manner, this makes blockchain a very secure storage mechanism for information.
5. Programmable. Blockchain can house computer programs, allowing for functions such as smart contracts and NFTS.