Answer: A blockchain is an encrypted, secure, decentralized database structure that allows network participants to create reliable and immutable transaction data records without the need for intermediaries. Blockchains perform numerous other functions in addition to settling transactions, including smart contracts.A “smart contract” is a digital protocol recorded in code that can have an infinite number of forms and terms. Blockchains have proven to be a great solution for securely linking data, but they can do much more than that, including tokenization, incentive design, resistance to attack and mitigation of counterparty risk. The first blockchain was the Bitcoin blockchain, which itself was the culmination of more than a century of advances in cryptography and database technology.

Answer: Blockchain software is like any other software. The first software of this type was Bitcoin, which was released as open source software that anyone could use and modify. Within the blockchain ecosystem, there are several attempts to improve on Bitcoin’s original software. Ether has its own open source blockchain software. Some of the blockchain software is owned by companies and not available to the public.

Answer: Previously, databases used a centralized client-server architecture where a central server was managed by a single authority. This design means that data is protected, modified and deleted from a single point of failure. The decentralized architecture of blockchain databases has emerged as a solution to many of the weaknesses of centralized database architectures. A blockchain network consists of a large number of distributed nodes (random participants), which must reach an agreement and work together to keep a record of transactions.

Answer: A blockchain system refers to all the aspects and functions that make up a given blockchain, from the consensus algorithm to the state machine to the cryptographic functions. As Andreas Antonopoulus and Gavin Wood point out in Mastering Ether, “open, public, decentralized, neutral, censorship-proof, etc. are qualifiers for understanding the characteristics of the blockchain in question,” “a multitude of different blockchains” exist.

Answer: When a digital transaction occurs on a blockchain network, it is grouped together with other transactions that occurred at the same time into a cryptographically secure “block.” The block is then broadcast to the network.The blockchain network consists of nodes (participants) that verify and transmit transaction information. Transaction blocks are verified by participants, called miners, who use their computing power to solve cryptographic puzzles and verify transaction blocks. The miner who is the first to solve and verify the block receives a reward. Each validated block is connected to previously validated blocks to form a blockchain. An important cryptographic foundation of blockchains is the hash function. Hashing assigns a certain value to a string of characters that is entered into the system. The hashing function of a blockchain leads to a system that is deterministic, fast to compute and difficult to scan in advance. For more information on how blockchain works, please visit our Knowledge Base.

Answer: Blockchain applications are equivalent to traditional software applications, except that they implement a decentralized architecture and cryptographic economic system to improve security, promote trust, tokenize assets, and design new network incentives. Here are 90+ ethereum apps currently in use in the ethereum blockchain ecosystem, from prediction markets to smart legal protocols.