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Blockchain has become an omnipresent term that encompasses a social promise and a new technology. Originally proposed as a solution for Bitcoin’s cryptocurrency record keeping system, blockchains are now used to store the records of all types of applications.

Blockchain means something more in many people’s minds. The promise many associate with blockchain applications is that they will collapse all centralized systems. Centralized systems are everywhere people need to trust a counterparty and don’t have the resources themselves to do so independently.

An easy way to identify a place where blockchain technology may be applied is to look for areas where a middleman is needed to facilitate trust. Trust is essential for things such as the transfer of money, voting, land records, IP rights, and identity. Blockchain software can be programmed to take the place of the middleman by becoming the trusted record keeping system.

In this chapter, you will learn the basics of blockchain software. This includes the vital concepts that govern most blockchains, economic models, and network structures. It will help you lay a strong foundation for understanding how the technology works and what it is capable of doing.