Blockchain: what it is and how it is used in finance

Blockchain is the latest technology, interest in which has grown alongside the popularity of cryptocurrencies. Today, it is widely discussed not only in the financial world. Blockchain is already being tested for storing and processing personal data and identification, in marketing, and in computer games. But what is blockchain? Let's break it down letter by letter.

In literal translation, blockchain is a continuous chain of blocks. It contains all records of transactions - even for tulip bulbs in a botanical garden. Unlike regular databases, these records cannot be changed or deleted; new ones can only be added.

If the number of tulips decreases (due to frost or if they are eaten by rodents), the accounting book retains the information about how many there were before. It is not edited or deleted, but a new record appears stating that there are fewer tulips and where they have gone.

Blockchain is also called distributed ledger technology because the entire chain of transactions and the current list of owners are stored on the computers of many independent users. Even if one or several computers fail, the information will not be lost.