The blockchain builds a digital trust platform, implying the near impossibility of tampering with the information once it has been inputted and the capacity for all involved actors to verify and trace each step. Each time there is a new transaction, a new block is created and appended to the existing blocks, thus the name ‘blockchain’. All the blocks are updated on the network at the same time and contain the full history of the involved transactions, thus maintaining a chain of integrity (or a chain of trust).
Smart contracts are another important aspect of blockchain technology. They refer to programs (algorithms) using the information contained in a blockchain to automatically fulfill an agreed-upon procedure, such as a transaction or reporting. For instance, if a container has been loaded on a ship and this event has been encoded in its bill of lading blockchain, then a smart contract can be used to automatically pay the terminal operator. Smart contracts thus expand the usefulness of blockchains by providing a unique and enforceable document.