A blockchain is like a spreadsheet or ledger that can be used for recording transactions and other data. Crucially, no one person or entity controls the contents of the ledger.
Multiple copies of the ledger are stored across a whole network of computers, which follow a decentralized consensus protocol to agree on its present state. Thus, the whole network of computers verifies the validity of transactions, as opposed to a single trusted party. It is impossible for any one party to reverse transactions recorded in the ledger.
This property makes blockchains ideal for representing ownership digitally.
Normally, digital files are not transferred from one place to another but are simply copied. Sending a photograph from your phone to your computer does not result in the file moving, but in two copies of the file: an original on your phone and a copy on your computer.
This is clearly impractical for representing assets like money. A system must be devised to delete the first copy, avoiding duplication (also called “double spending”, because this would allow the same coin to be spent twice). Using traditional digital technology, this means trusting a third party, such as a bank, to keep an accurate ledger of transactions, deleting copies wherever appropriate.
With blockchain, a third party is not required.
On its most fundamental level, then, blockchain is a solution to the problem of trust. However, it also allows for the automation of a variety of complex processes. This can make the transfer and trading of assets, or the verification and regulation of financial activities, much more efficient.
At Nash, we believe that blockchain represents the future of digital financial services. We aim to make this technology accessible to everyone. Our platform allows anyone to trade, invest in and pay using digital assets – without Nash ever taking control of our customers’ funds.