Blockchain technology is most simply defined as a decentralized, distributed ledger that records a digital asset. Blockchains are a fascinating new technology. They enable fully decentralized databases, resistant to censorship, and potentially allowing for system adoption in critical applications like money and identity.
A blockchain is a distributed, append-only database (ledger) maintained by a decentralized computing network running software that determines the database's consensus state. That software may process transactions or run stored procedures ("smart contracts"), and it uses proof-of-work with monetary incentives or some other similar mechanism to protect against cheating (e.g., a Sybil attack). This is necessary since any number of unauthenticated participants may participate in the network. For our purposes, it's easiest to think of a blockchain as a decentralized database where there is no central administrator. Still, every computer in the network keeps a full copy of the database and processes every transaction.
To break this down a bit, a blockchain is:
-an append-only database (immutability)
-is readable by all parties involved (transparency)
-is not controlled by any one party (decentralization).
Note that other technologies have some of the same attributes. For example, we can build databases that are publicly readable or verifiably append-only. We can run procedures and store the results in databases. We have decentralized networks. And we have consensus mechanisms for systems with a known set of participants. We even have systems like Trillian that provide append-only, transparent, decentralized data storage for a general group of participants far more efficiently than blockchain (and we believe these are severely underappreciated and probably what 9 out of 10 people need when they think they need a blockchain).
The primary blockchain differentiator allows for fully decentralized databases — ones with arbitrary numbers of unknown participants.
