The four key concepts behind blockchain

  1. Shared ledger - A shared ledger is an “append-only” distributed system of record shared across a business network. “With a shared ledger, transactions are recorded only once, eliminating the duplication of effort that’s typical of traditional business networks.”
  2. Permissions - Permissions ensure that transactions are secure, authenticated, and verifiable. “With the ability to constrain network participation, organizations can more easily comply with data protection regulations, such as those stipulated in the Health Insurance Portability and Accountability Act (HIPAA)” and the EU General Data Protection Regulation (GDPR).
  3. Smart contracts - A smart contract is “an agreement or set of rules that govern a business transaction; it’s stored on the blockchain and is executed automatically as part of a transaction.”
  4. Consensus - Through consensus, all parties agree to the network-verified transaction. Blockchains have various consensus mechanisms, including [proof of stake]

Each blockchain network has various participants who play these roles, among others:

Blockchain users Participants (typically business users) with permissions to join the blockchain network and conduct transactions with other network participants.
Regulators Blockchain users with special permissions to oversee the transactions happening within the network.
Blockchain network operators Individuals who have special permissions and authority to define, create, manage, and monitor the blockchain network.
Certificate authorities Individuals who issue and manage the different types of certificates required to run a permissioned blockchain.