What Is A Blockchain?

The Linux Foundation started a blockchain initiative involving many of its large corporate members. The initiative will devise a viable new approach to blockchains (presumably implemented as open source software) that can be used for any application where a distributed ledger is a useful data structure.

It’s easy to confuse “blockchain”, a distributed document database technology that operates without an authoritative master copy, and “bitcoin”, a virtual currency associated with one particular instance of blockchain technology. So here’s an explanation of the blockchain.


The “blockchain” is a database, journal or ledger for storing arbitrary documents. It’s maintained as a linked list, with cryptographic signatures verifying each entry. As a public resource, there’s a risk of journal entries being made too often (a bad thing for performance, especially over time, creating a risk of DoS). To prevent this, every entry needs to be accompanied by a token indicating the good standing of the author.

Since issuing tokens from a central authority defeats the purpose of the blockchain, they are instead created by each author independently but verifiably. For the Bitcoin blockchain and many others, the token takes the form of a “proof of work” – a cryptographic evidence of having solved a computationally-complex cryptographic problem within a globally-identified sequence.

There is no master copy of a blockchain; copies of it may be kept anywhere. The validity of each entry in the blockchain can then be independently confirmed by every participant. In the case of the Bitcoin blockchain and many others, this is done by every user replicating the entire blockchain and then comparing new entries against the findings of other users. A voting mechanism between replicas allows the “wisdom of crowds” to identify and reject flawed or fraudulent entries. The crowd involved can be public (as in the case of Bitcoin), or private or indeed a mixture of both.

While Bitcoin is the best-known application of the blockchain, there are many others, including different approaches to the entry token and to cryptography. We expect blockchain to become an important part of distributed systems in many roles: creating auditable logs of transactions, establishing provenance of reference documents such as inventions or contracts, providing a micro-currency for automated transactions in a heterogeneous “internet of autonomous things” and many more beyond the familiar use as a virtual currency.

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