In its purest form, a Blockchain (BC) acts as a decentralized and public ledger that transparently and immutably records blocks of transactions across a network of computers based on a consensus algorithm. Therefore, a BC is, as originally proposed, open to all its participants with respect to the allowances of reading, writing and participation in the consensus mechanism. A linked list (LL), however, is a data structure traditionally managed by one or more entities holding the write permissions, i.e., trusted. Thus, based on the process to compose new blocks (i.e., the consensus mechanism), as well as the guarantees of immutability and transparency, it can be said that although the final outcome of a BC and LL is similar, the way in which these structures are composed is completely different.
From a general viewpoint, a BC resembles a LL, which is an abstract data structure whose instances are logically interconnected by pointers. Thus, BC transactions are stored in the form of a LL, whereas those transactions are persisted in sequentially ordered blocks. However, the resemblances of LLs and BCs end there, since the process of composing a chain is entirely different given by the consensus protocol. For instance, the major differences lies on the processes of gathering information from the peer‐to‐peer1 network, the assembling of information (i.e., transactions) into blocks, as well as the appending of new blocks to the blockchain.
Figure 1 ‐ Blockchain Representation
The capacity of BC to provide a trustworthy, decentralized, and publicly available data storage makes it an interesting opportunity for organizations to increase business agility and reduce costs by removing intermediaries.
Therefore, depending on the needs of the application domain, the inherent power of disintermediation can increase of trust through transparency among the stakeholders involved. Nonetheless, while BC’s have started its widespread adoption within the FinTech (Financial Technology) domain, many other application areas, use cases, and specific blockchain types are emerging. However, it is important to observe that the BC applicability relies on a multitude of different facets, which are usually determined by dedicated application needs in terms of performance, security, and scalability, which have to be carefully considered in a long‐term analysis.
While the short‐term expectations of emerging technologies are often overestimated, BCs are expected to cause rather evolutionary than revolutionary change. With that in mind, BCs may cause disruption in various industries, not only from a technical side, but BCs may also challenge existing business models, business processes and beyond.