Simply put, a blockchain is a decentralized database with tight rules about how data is entered, maintained and accessed. Instead of being stored at a single location, the data in a blockchain are stored in a series of discrete nodes. Think of it as a connected series of ledgers, each with identical data. Because each transaction must be exactly the same across all the ledgers, blockchains are “very difficult to work with, expensive to maintain, hard to upgrade and a pain to scale,” writes developer Jimmy Song at the Medium website.
“The main thing distinguishing a blockchain from a normal database is that there are specific rules about how to put data into the database. That is, it cannot conflict with some other data that’s already in the database (consistent), it’s append-only (immutable), and the data itself is locked to an owner (ownable), it’s replicable and available. Finally, everyone agrees on what the state of the things in the database are (canonical) without a central party (decentralized),” according to Song. “It is this last point that really is the holy grail of blockchain. Decentralization is very attractive because it implies there is no single point of failure. That is, no single authority will be able to take away your asset or change ‘history’ to suit their needs. This immutable audit trail where you don’t have to trust anyone is the benefit that everyone that’s playing with this technology is looking for. This benefit, however, comes at a great cost.”
Go to our sister site MassDevice and read about the six factors Song cites as reasons why blockchain is great for one specific task but terrible for most of the others its hyped for, including healthcare.