Blockchain is a concept used by computers with bitcoin and other cyber currencies. It is also beginning to be used in other accounting related areas with the computer industry.
Basically, picture blockchain as a chain with lots of links that are attached together. Each of those links are a block.
In each block is a group of transactions, which are put together in a process called data mining. Each transaction is in the bloc and basically represents a transaction just like would be kept in a ledger (electronic or paper) in accounting. When someone goes to spend some of their cybercurrency a transaction occurs. Much like debits and credits in accounting. They will spend a certain amount of cyber currency which is shown in the transaction and put in the block as a negative to their cybercurrency balance. There will be at least one off-setting transaction that is entered also (usually two transactions) that totals to same amount. One of the transactions will be the amount that goes to whoever they are paying (buying something or making payment or transfer, etc.) and the other common transaction is a fee that goes to organization that manages accounts, which is similar to the fee charged when using a credit or debit card.
These transactions are gathered together every few minutes in a process call data mining and they are hashed (a number created from the values) of the all the transaction info and the value or the hash for the previous block and then a new block is created. If anyone breaks in a block and changes a value that destroys the hash for that block and the blocks after it as the hash values are no longer correct.
By building those blocks with the hashes based on the hash of the previous block the accounting system remains reliable and all transactions can be traced back to when occurred. This does not mean we know who owns or owned that bit currency. The hash is basically like the links in a regular chain being attached to each other where the blocks are the links.
Send me your questions about computers to my e-mail firstname.lastname@example.org and tell me you read this in this paper. I will pick a question to answer each week.
Dwight Watt does computer work for businesses, individuals and organizations and teaches about computers at a technical college in northwest Georgia. His webpage is www.dwightwatt.com.
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