Blockchain has become one of the biggest buzzwords to do the rounds in technology and business over the past year. Large companies mention it frequently in their earnings calls, according to CB Insights, and myriad startups claim to have harnessed it to put a fairer, more transparent spin on everything from healthcare to publishing to law. 

But many struggle to explain what it is. First a note about how to refer to blockchain: 

Is it “blockchain,” “the blockchain” or “a blockchain?”  

It seems trivial, but defining blockchain has become confusing because it’s often referred to as both one thing and many things. There are actually different types of blockchains. The best known one underpins bitcoin, first launched in 2009, while another underpins the ethereum network. 

Sometimes when people say “the blockchain,” they’re actually referring to a wider space known as decentralized ledger technologies (DLT) that include blockchain technologies. Some lesser-known DLTs aren’t public or even decentralized. Ledgers created by Ripple and Hyperledger aren’t technically blockchains, for instance. 

Blockchain may be the buzzword that’s captured everyone’s attention, but the important new technology to be aware of is decentralized ledger technologies (DLT).  

Okay, but still, what is blockchain? 

It’s a type of distributed, digital ledger. The name comes from the way new information that’s part of a “block” gets added to a “chain.” But it’s easier to think of it more like a giant Excel spreadsheet that’s shared across many different computers. Each time the spreadsheet is updated, everybody can see the change. In this way, a blockchain is a ledger that’s distributed across a network of computers, which records all changes for users to see. 

The changes made to each ledger are typically known as smart contracts. With the blockchain that supports bitcoin, the smart contracts are quite basic in that they only carry out a simple, monetary transaction.    

What’s a smart contract? 

They are small, automated programs that run on top of a blockchain.