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Business & Economy

What is blockchain?

Blockchain is an electronic record-keeping system — often referred to as an electronic ledger — that uses cryptography to create verifiable histories of transactions. It was developed as an Internet-linked exchange for the trading of bitcoin and other cryptocurrencies. The coins themselves are not physical objects, nor even digital files, but entries in the blockchain ledger: Owning bitcoin is merely having a claim on a piece of information sitting on the blockchain. Identities are protected by clever cryptography; beyond that the system is entirely transparent. As well as keeping track of who owns bitcoin today, the blockchain is a record of who has owned every bitcoin since its inception. Units of currency are transferred from one party to another as part of a new “block” of transactions added to the existing chain — hence the name. In the world of business, there is more enthusiasm for what are described as private or “permissioned” blockchains, open to a controlled group of trusted and vetted users who either preserve and maintain the network collectively or use a centralized organization that oversees the entire system — making it bulletproof in terms of protection against tampering and fraud.

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