Blockchain — it’s one of the hottest talks of the 21st century. It seems that everyday news outlets are putting out articles that involve blockchain technology. But for all the theoretical talk about it, how exactly does the blockchain network work in practice?

It’s not your fault if you don’t understand the world of blockchain by now. Many people talk about it in an abstract way that belies the fact that they don’t know much about how it works at all.

In reality, the blockchain is a relatively new piece of technology that’s only going to find more uses as the world rolls on. However, this article will walk you through what exactly the blockchain does and how it works.

Blockchain Started in Crypto

Blockchain is often mentioned in the talks about cryptocurrency. This is because cryptocurrency relies on blockchain technology.

When Bitcoin (the first cryptocurrency) was first developed, its goal was to create a form of currency that wouldn’t have to be monitored by the government. However, a completely digital currency would be easy to fabricate and counterfeit if a new form of verification wasn’t developed.

Enter blockchain. Blockchain is essentially a series of checks and balances to make sure an operation is done in a fair and honest way, from the beginning to the end.

In the blockchain system, every single step of a transaction is run through a verification process that’s secured with a complex cryptogram. This makes sure fraud occurs at no level.

To verify a single step of a transaction, people are paid money to solve these cryptograms and make sure its number lines up correctly. This is known as mining. In the world of cryptocurrency, people are usually paid for mining in the cryptocurrency itself.

Whether it’s something as early as Bitcoin, or as new as Blockster, every cryptocurrency needs to use some form of blockchain network.

Further Blockchain Applications

While cryptocurrency is dependent on blockchain, blockchain is not dependent on cryptocurrency. Many companies are finding ways to make use of this innovative verification technology.

For example, food providers. Think of the E.coli scandal that wracked Chipotle for a while. If they had blockchain technology, they could’ve solved this much quicker.

With each step of the process entered as blocks into the chain of steps, Chipotle could have easily figured out exactly where the bad batch of product came from and fixed the issue at a local level.

If used right, the blockchain can reduce fraud and improve public health.

Understand Blockchain Technology

At the end of the day, blockchain breaks down to a very complicated, but very secure and reliable form of verification. It allows one to get very specific and make sure every single aspect of production is going smoothly.

While blockchain technology had its start in the cryptocurrency market, it’s quickly becoming very important to other industries.

For more information on subjects like this, check out our “Business” section.