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A block chain, or blockchain, is a distributed database that maintains a continuously-growing list of data records hardened against tampering and revision. It consists of data structure blocks—which hold exclusively data in initial blockchain implementations, and both data and programs in some (for example, Ethereum) of the more recent implementations—with each block holding batches of individual transactions and the results of any blockchain executables. Each block contains a timestamp and information linking it to a previous block.
The block chain is seen as the main technical innovation of bitcoin, where it serves as the public ledger of all bitcoin transactions. Bitcoin is peer-to-peer, every user is allowed to connect to the network, send new transactions to it, verify transactions, and create new blocks, which is why it is called permissionless. This original design has been the inspiration for other cryptocurrencies and distributed databases.
The block chain consists of blocks that hold timestamped batches of valid transactions. Each block includes the hash of the prior block, linking the blocks together. The linked blocks form a chain, with each additional block reinforcing those before it, thus giving the database type its name.
The original definition was published by Satoshi Nakamoto in 2008 and implemented in the original source code of bitcoin published in 2009. This original design has been the inspiration for other cryptocurrencies and distributed databases. By April 2014, there were more than 80 uses of cryptoledgers.
As of 2014[update], "Blockchain 2.0" was a term used in the distributed blockchain database field to distinguish between bitcoin as an asset and the "blockchain as a programmable distributed trust infrastructure" more generally, with additions of new scalable features of "on-chain utility and extensibility."[neutrality is disputed] By April 2014, at least eight funded projects to develop blockchain 2.0 technology were underway.
The Economist has described one implementation of this second-generation programmable blockchain as coming with "a programming language that allows users to write more sophisticated smart contracts, thus creating invoices that pay themselves when a shipment arrives or share certificates which automatically send their owners dividends if profits reach a certain level."
In 2016, the central securities depository of the Russian Federation (NSD) announced a pilot project based on block chain technology. Various regulatory bodies in the music industry have started testing models that use block chain technology for royalty collection and management of copyrights around the world 
Bitcoin-based sidechains became possible by linking chains that utilize bitcoin as a transactional currency to support new assets. In this schema, even though there are "multiple chains, no new bitcoins are created."
A block chain implementation consists of two kinds of records: transactions and blocks.
Transactions are the content to be stored in the block chain. Transactions are created by participants using the system. In the case of cryptocurrencies, a transaction is created any time a cryptocurrency owner sends cryptocurrency to someone.
System users create transactions that are passed from node to node on a best-effort basis. The system implementing the block chain defines a valid transaction. In cryptocurrency applications, a valid transaction must be digitally signed, spend one or more unspent outputs of previous transactions, and the sum of transaction outputs must not exceed the sum of inputs.
Blocks record and confirm when and in what sequence transactions enter and are logged in the block chain. Blocks are created by users known as "miners" who use specialized software or equipment designed specifically to create blocks.
In a cryptocurrency system, miners are incentivized to create blocks to collect two types of rewards: a pre-defined per-block award, and fees offered within the transactions themselves, payable to any miner who successfully confirms the transaction.
Every node in a decentralized system has a copy of the block chain. This avoids the need to have a centralized database managed by a trusted third party. Transactions are broadcast to the network using software applications. Network nodes can validate transactions, add them to their copy and then broadcast these additions to other nodes.:ch. 8 To avoid the need for a trusted third party to timestamp transactions, decentralized block chains use various timestamping schemes, such as proof-of-work.
The core advantages of the block chain architecture include the following:
- The ability for independent nodes to converge on a consensus of the latest version of a large data set such as a ledger, even when the nodes are run anonymously, have poor interconnectivity and have operators who are dishonest or malicious (see Sybil attack).
- The ability for any well-connected node to determine, with reasonable certainty, whether a transaction does or does not exist in the data set (see consistency).
- The ability for any node that creates a transaction to, after a confirmation period, determine with a reasonable level of certainty whether the transaction is valid, able to take place and become final (i.e., that no conflicting transactions were confirmed into the block chain elsewhere that would invalidate the transaction, such as the same currency units "double-spent" somewhere else).
- A prohibitively high cost to attempt to rewrite or alter transaction history.
- Automated conflict resolution that ensures that conflicting transactions (such as two or more attempts to spend the same balance in different places) never become part of the confirmed data set.
Proponents of permissioned or private chains argue that the term "blockchain" is rightly applied to any data structure which batches data into blocks which are timestamped and that these blockchains serve as a distributed version of multiversion concurrency control (MVCC) in databases. Just as MVCC prevents two transactions from concurrently modifying a single object in a database, block chains prevent two transactions from spending a single output in a blockchain.
The opponents say that the permissioned systems look like traditional corporate databases, not supporting decentralized verification of the data, and that such systems are not hardened against tampering and revision by their operators.
This section only describes one highly specialized aspect of its associated subject.May 2016)(
Sidechains are networks based on the bitcoin protocol that are isolated from the block chain, allowing activity to exist in isolation until confirmation on the block chain, at which point transferability becomes bidirectional.[better source needed] Examples:
- Liquid – Exchange sidechain developed by Blockstream
- ChromaWay – Sidechain platform for colored coins
- DIONS – Digital I/O sidechain concept for identity
- tØ (tee-zero) – SEC-approved sidechain developed by Overstock.com
- Openchain – NoConsensus NoP2P modular distributed ledger technology for asset management, bidirectional pegging, and chain anchoring (or "sidechaining").
Alternative block chains
Alternative block chains (altchains) are based on bitcoin technology in concept and/or code. These designs generally add functionality to the block chain design. Altchains can provide solutions including other digital currencies, although tokens used in these designs are not always considered to be such. Altchains target performance, anonymity, storage and applications such as smart contracts. Starting with a strong focus on financial applications, block chain technology is extending to activities including decentralized applications and collaborative organizations that eliminate a middleman.[non-primary source needed] Notable designs include:
- Billon – Regulated "cryptocash" block chain solution as digital cash for governmental fiat currencies
- Ethereum – Network supporting storage of turing-complete smart contracts at specified addresses with a 15-second block time. Uses Ether as its token.
- LaZooz – decentralized real-time ride sharing
- Mastercoin – Metaprotocol with the ability to process various transactions and sub-currencies
- Namecoin – Digital currency that can store data within a chain
- Nxt – Cryptocurrency financial platform that uses proof of stake to reach consensus for transactions. It has an integrated Asset Exchange, messaging system and marketplace.
- Peercoin – Cryptocurrency-based token incorporating proof of stake in its consensus model
- Swarm and Koinify – decentralized crowdfunding
- Synereo – synchronous and asynchronous communication
The bitcoin block chain can be used as a trusted timestamp for arbitrary messages. Third party application services store messages directly in the block chain, allowing anyone who has the block chain to read the message. Bitcoin Core developer Mike Hearn among others discouraged embedding large messages in the bitcoin block chain, criticizing it as "bloat".
Other applications store a hash value in the block chain, recording data existence and confirming data integrity without revealing data and without bloating the block chain. This information can be used to implement "colored coins" or side chains to support functionality such as smart contracts.
Cooperative storage cloud solutions sometimes employ block chain technology to regulate exchange of data or actual payments for storage space.
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Based on the Bitcoin protocol, the blockchain database is shared by all nodes participating in a system.
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The network’s "nodes"—users running the bitcoin software on their computers—collectively check the integrity of other nodes to ensure that no one spends the same coins twice. All transactions are published on a shared public ledger, called the "blockchain"
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