What are blockchains?

It is common, in tech circles, to hear a business pitch that is simultaneously simple and baffling. “It is going to be like “x” [insert the name of any successful business], but on a blockchain.” The eager entrepreneur is quick to assume that everyone is both familiar with the technology and agrees on its merits. But what is a blockchain? And what are the benefits of using it meant to be?

A blockchain is a database that contains the history of whatever information it was designed to store. It is made up of a string of “blocks” of information that build on top of one another in an immutable chain. Bitcoin, one of the first blockchains, was built in 2009. It stores data on transactions in bitcoin, providing proof of who owns what at any time. What distinguishes a blockchain from other databases is that its ledger is distributed, publicly available and replicated on thousands of computers—or “nodes”—around the world.