Want to learn more? Check out some of the commonly asked questions or submit a new question if you’d like.
Blockchain is not a software program. It’s a type of database that is shared by a network of its users.
Blockchain has many important use cases across many fields. In general, it’s helpful any time a group of people have a shared goal without an ability to trust others in the group. For example, you may want to make financial transactions but need to ensure that everyone’s transactions are recorded accurately. This is a perfect use case for blockchain and is the foundation of technologies like Bitcoin.
While many use cases are still being discovered, there are a few areas blockchain is set to make a large impact. Tracking goods and services in healthcare, food, and other supply chains is one important use case. Allowing machines to effectively communicate to support the “Internet of Things” is another use case. Finance, digital identity, tokens, are all other use cases of blockchain. The solution provided by blockchain in each of these cases is a shared and trusted database that allows people and machines to communicate more effectively.
What if the initial information in all the computers is wrong and all of the computers have the wrong information?
That’s possible. The blockchain doesn’t know what’s true and what isn’t so it’s possible that wrong information can get recorded. Instead of right and wrong, the blockchain focuses on keeping information that everyone agrees on. To do this it uses a system that allows all of the computers in the network to “vote” on whether they believe information is correct. The information that gets the most votes is what becomes a part of the chain. For that reason, if the computers were to agree on information that is wrong, it would stay on the blockchain forever like anything else. The hope is that the voting system results in only including information everyone believes is correct, avoiding this problem.
How do the computers interact or share the information, is it over the internet or a different type of thing?
Computers share information over the internet. Blockchain is a database that allows networks to maintain a shared database of information. To share this information between computers is done using the internet.
Blockchain is a way to share information. An important thing to note here is that you make many blockchains (and many people have). There isn’t a single blockchain. So to help understand where information is stored, imagine that you made your own blockchain. At first, you own the only computer that is storing your blockchain’s information. Other computers can join your network by storing the information on their computer too. Anyone can do this. To do that, they begin downloading your existing blockchain data and will continue downloading more data as the blockchain continues to grow. Over time, you could end up with a blockchain network that includes many hundreds or thousands of computers, and all of these would store the information about your blockchain. This is exactly what is happening across many different blockchains around the world.
If currency is just one use for blockchain, why do non-currency companies use tokens (Cryptokitties)?
Tokens ≠ currency. Token is a digital way to identify a specific thing, it could be your kitten, your aunt’s house, or your ownership in a specific company.
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