A blockchain – originally block
chain – is a distributed database that is used to maintain a continuously growing list
of records, called blocks. Each block contains a timestamp
and a link to a previous block. A blockchain is typically managed by a peer-to-peer
network collectively adhering to a protocol for validating new blocks. By
design, blockchains are inherently resistant to modification of the data. Once
recorded, the data in any given block cannot be altered retroactively without
the alteration of all subsequent blocks and the collusion of the network.
Functionally, a blockchain can serve as "an open, distributed ledger that
can record transactions between two parties efficiently and in a verifiable and
permanent way. The ledger itself can also be programmed to trigger transactions
automatically."
Blockchains are secure by design and are an example of a distributed computing system with high Byzantine fault tolerance. Decentralized consensus has therefore been achieved with a blockchain. This makes blockchains potentially suitable for the recording of events, medical records, and other records management activities, identity management, transaction processing, and documenting provenance.
The first blockchain was conceptualised by Satoshi Nakamoto in 2008 and implemented the following year as a core component of the digital currency bitcoin, where it serves as the public ledger for all transactions. The invention of the blockchain for bitcoin made it the first digital currency to solve the double spending problem, without the use of a trusted authority or central server. The bitcoin design has been the inspiration for other applications.
By 2007, a number of distributed systems for double-spending prevention had been proposed.
The cryptocurrency Bitcoin implemented a solution in early 2009. It uses a scheme called proof-of-work, to avoid the need for a trusted third party to timestamp transactions. These timestamps are recorded in its public ledger called the blockchain. This avoids anyone double-spending the currency.
Blockchains are secure by design and are an example of a distributed computing system with high Byzantine fault tolerance. Decentralized consensus has therefore been achieved with a blockchain. This makes blockchains potentially suitable for the recording of events, medical records, and other records management activities, identity management, transaction processing, and documenting provenance.
The first blockchain was conceptualised by Satoshi Nakamoto in 2008 and implemented the following year as a core component of the digital currency bitcoin, where it serves as the public ledger for all transactions. The invention of the blockchain for bitcoin made it the first digital currency to solve the double spending problem, without the use of a trusted authority or central server. The bitcoin design has been the inspiration for other applications.
The words block
and chain were used separately in Satoshi Nakamoto's original paper in
October 2008, and when the term moved into wider use it was originally block
chain before becoming a single word, blockchain, by 2016. In August 2014, the
bitcoin blockchain file size reached 20 gigabytes. In January 2015, the size
had grown to almost 30 gigabytes, and from January 2016 to January 2017, the
bitcoin blockchain grew from 50 gigabytes to 100 gigabytes in size.
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The Double-Spending Problem
Double-spending is an error in a digital cash scheme in
which the same single digital token is spent twice or above. This is possible
because a digital token consists of a digital file that can be duplicated or
falsified. As with counterfeit money, this situation may lead to inflation and
devalue the currency, and diminishes user trust and the circulation and
retention of the currency. See also circulating.
Prevention of Double-Spending
The prevention of
double-spending has taken two general forms: centralized and decentralized.
Centralized
This is usually
implemented using an on-line central trusted third party that can verify
whether a token has been spent. This normally represents a single point of failure
from both availability and trust viewpoints.
Decentralized
By 2007, a number of distributed systems for double-spending prevention had been proposed.
The cryptocurrency Bitcoin implemented a solution in early 2009. It uses a scheme called proof-of-work, to avoid the need for a trusted third party to timestamp transactions. These timestamps are recorded in its public ledger called the blockchain. This avoids anyone double-spending the currency.
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