Technology Factsheet: Blockchain

What is Blockchain?

Blockchain is a type of distributed ledger technology (DLT) that stores data (commonly immutable and sequenced transaction records) in a decentralized manner via encryption and consensus algorithms. The first widely recognized implementation of blockchain was in 2009 with the Bitcoin public blockchain. Since then, other types of blockchains have been developed for a wide range of applications and features built on common principles such as decentralization, encryption, consensus, and immutability. In particular, blockchain technology has been most widely used in the banking and finance sector for transaction settlement and digital currencies, as well as in supply chain applications to help participants resolve issues quickly and efficiently. Other use cases are continuing to develop.

As a form of information management, blockchain and related DLTs offer advantages over traditional databases and may be useful in the development of certain emerging technologies, such as the Internet of Things. Regulation of blockchain is currently limited at the international and federal levels, though state-level legislation has shown support and recognition of aspects of blockchain technology. Most current regulation is in the form of self-regulation by blockchain developers and related communities, though a number of challenges and risks such as data privacy and security need to be addressed in the near future.

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