In the simplest terms, Blockchain is a great book for digital transactions, unlike the great book we have used for hundreds of years to record sales and purchases. In both cases, the bank is an intermediary that checks the transaction: ROB's financing was verified when he took the money from an ATM or was verified by the application when he made the digital transfer.
The bank decides whether those transactions should be made. The bank also has all the transactions made by Rob, and responsible for updating it every time Rob pays someone or receives money in his account.
When a new transaction is introduced into the Blockchain, it is first encrypted using advanced cryptography technology. The Blockchain was sent (or transmitted) to the network node's computers, where it is checked by the node and, once verified, transmitted by the network so that this Blockchain can be added at the end of the great books on other people's computers, below the list of all previous Blockchain. Once approved and registered in the ledger, the transaction can be completed. What are the advantages of this system against the banking compensation systems or the center? The answer is trust. As mentioned earlier, with the banking system, it is very important that you rob your trust bank to protect your money and handle it properly.
System Blockchain, on the other hand, you don't have to trust them. All transactions (or Blockchain) in the Blockchain are verified by a network node before they are added to the large workbooks, which means that there is no single point of error and there are no unique trusted channels.
Smart Contracts
Where things are very interesting is the application Blockchain that is out of cryptography as Bitcoin. Smart Contracts (Ethereum): Perhaps the most interesting development Blockchain after Bitcoin, Smart contract is a Blockchain containing code that needs to be executed for the contract to be filled. It has all the same problems as the banking system because its data are controlled by a single opaque organization that is a single point of failure. Distribute the data in Blockchain eliminate the problem completely confidence and also promised to improve the reliability, as it is much more difficult to stop the network Blockchain.
Blockchain Technology offers a potential solution by wrapping your key data into encrypted Blockchain that can be verified by Blockchain the network every time you need to test your identity. The Blockchain technology provides a way to verify that the ballot is delivered successfully while maintaining anonymity.