Blockchain is a program designed to create decentralized databases.
The system is completely "open source", which means that anyone can view, modify and suggest changes to their basic code base.
While it has become popular thanks to Bitcoin's growth – it has been around since 2008, making it nearly a decade old (computing old).
The most important point about the "blockchain" is that it is designed to create applications that do not require a central data-processing service. This means that if you use a system based on it (i.e. Bitcoin) – your data will be stored on 1000 “standalone” servers around the world (you don't own any centralized service).
The way the service works is by creating a ledger. This ledger allows users to create "transactions" with each other – the contents of those transactions are stored in new "blocks" from each "blockchain" database.
Depending on the application that creates the transactions, it must be encrypted using different algorithms. Because this encryption uses encryption to “change the parameters” of the data stored in each new “block”, the term “encryption” describes the process of securing the encryption of any new blockchain data that an application may create.
To fully understand how it works, you must appreciate that "blockchain" is not a new technology – it uses technology in a slightly different way. Its core is a data graph known as "Merkel trees." Merkle trees are essential ways for computer systems to store chronological "releases" of a set of data, allowing them to manage continuous upgrades of that data.
The reason why it matters is because the current "data" systems are what can be described as "two-dimensional" – meaning they have no way to track updates to the basic data set. The data is kept completely as-is – with any updates applied directly to it. Although there is nothing wrong with this, it is a problem in that it means that the data must be manually updated or very difficult to update.
The solution that a "blockchain" provides is essentially creating "versions" of data. Each "block" added to a "chain" ("chain" being a database) gives a list of new parameters for that data. This means that if you are able to link this functionality to a system that facilitates data processing between two or more users (messaging, etc.), you will be able to create a completely separate system.
This is what we saw with likes from Bitcoin. Contrary to popular belief, bitcoin is not a “currency” per se; it is the general ledger for financial transactions.
This general ledger is encrypted so that only transaction subscribers can see / edit data (hence the name "encryption") … but more than that, the fact that data is stored and processed by 1000 servers around the world means that the service can work Independently from any banks (main draw).
Obviously, the problems that underlie the basic idea of Bitcoin and so forth, part of the service, are that it's basically a system that operates across a network of processing machines (called "miners"). They all run "blockchain" – and "translate" new transactions into "blocks" that keep the Bitcoin database up to date as possible.
While many people blindly vowed to support blockchain, it has already gotten a number of vulnerabilities – the main one being that it is almost entirely dependent on the cryptographic algorithms used in its various applications. If one of these algorithms fails, or endangers users in any way, the entire "blockchain" infrastructure may suffer as a result.