4 INTRODUCTION INNOVATION INSIGHTS


Here is a step-by-step process when information is stored on the blockchain


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That information is captured in an agreed form and syntax as a record.


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What is a blockchain? T


ake for example, writing words on a page, or using a computer in which information is stored behind


the scenes in a database. A blockchain provides a similar means of storing


information, but there is a significant additional benefit - the information stored cannot be removed or changed, making it a trustworthy and unchangeable source of truth. Information on a page or in a database can be scrubbed out,


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Then, the validity and integrity of that record is then checked by participants using that blockchain. This requires an agreed approach to checking each record.


If the participants agree that the record is valid and meets requirements,


the record is accepted for entry on the blockchain and added to a block, potentially beside other records on that same block.


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While many definitions exist, it is perhaps easiest to understand blockchain when it is compared to other existing ways information is stored.


modified, copied or even destroyed, but information entered on a properly managed blockchain is there forever. This simple concept, whilst sounding relatively innocuous, opens up a myriad of new possibilities.


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Each block contains a unique code called a hash, which identifies it and


allows it to be identified and referenced by other blocks formed in the same way. Any piece of information, readable by humans, or a machine even, can be easily converted into a unique hash code. What is particularly convenient about hashes is that the entire text of a book, or the short text of a tweet, both resolve to unique hashes of the same length.


Each block identifies itself using a hash and references the hash of another block. The arrangement means that these hashes create a natural chain of blocks referencing each other, hence the term “blockchain.”


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