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What is a blockchain? Why do you need to know this definition? The MoneySense Glossary is your resource for learning and understanding financial terms.
Blockchain is the technology that securely, permanently and transparently records transactions in the form of a distributed digital ledger—shared across a network of computers in different locations—without involving banks or other central authorities. The first blockchain was the public ledger for bitcoin, the world’s first cryptocurrency. Today, the technology is used for a wide range of applications, such as trading digital currencies, transmitting sensitive information, tracking supply chains, preparing “smart contracts,” selling real estate and video gaming.
Blockchain and crypto assets are still evolving technologies, and investors should approach with caution. In 2022, the Canadian Securities Administrators (CSA) have issued warnings about the risks of trading crypto assets, noting that, “Generally speaking, the value and liquidity of crypto assets are highly volatile.” In June 2023, the House of Commons Standing Committee on Industry and Technology published a report, “Blockchain Technology: Cryptocurrencies and Beyond.” The committee acknowledged the “significant long-term economic and job creation opportunities” of blockchain and provided a series of recommendations regarding the technology, including the development of a national blockchain strategy that “clarifies the government’s policy direction and regulatory approach, and demonstrates support for the industry.”
Example: “Blockchain could transform how artists and musicians sell and get paid for their work.”
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