What is blockchain?

To most people "blockchain" means cryptocurrencies. The core idea is much simpler, and has nothing to do with money: several parties who do not fully trust each other keep the same record together.

One ledger, many hands

Picture a shared fund in a neighbourhood. If one person keeps the ledger, everyone has to trust them; if they delete a line, nobody may notice. Now let five neighbours each keep an identical copy. Every new entry is written into all five at once, and an entry only counts if a majority says "yes, that is right". No single person can now change anything quietly.

A blockchainA ledger kept together by several independent parties, whose history cannot be changed. is the digital version of this. Entries are collected into blocksA bundle of entries collected over a period; it carries the digest of the previous block., each block carries the digest of the one before, and so a chain forms. Changing an old block would mean changing every block after it, and every other party's copy as well.

Consensus: who decides?

For a new entry to go in, the parties have to agree. This is called consensusThe method by which independent parties agree on the next entry.. Public chains such as Bitcoin do this with an energy-hungry race. In institutional settings calmer methods are used: known operators take turns to propose a block and a majority approves it.

Public and permissioned chains

Public chains are open to anyone; you do not know who writes the entries, and trust rests on mathematics and economic incentives. On permissioned chains the block producers are known: ministries, regulators, recognised institutions. Everyone knows who they are, and they are accountable. For states keeping a shared trust record, the second fits. The ledger Tamga plans to use later is a permissioned one.

When is it worth it?

A blockchain earns its value when several independent parties keep the record together. If only one party keeps it, the chain is just a slower and more expensive database. The next page explains why, for that reason, Tamga does not use a chain yet, and when it will.