A blockchain is a decentralized, distributed digital ledger or database that securely records and stores data in linked "blocks" across a network of computers. Each block contains a set of data, a timestamp, and a cryptographic hash of the previous block, which connects them in chronological order, making the chain resistant to alteration or tampering. This design allows multiple participants to verify and audit transactions independently without relying on a central authority, ensuring transparency, immutability, and security. Blockchains are widely known for enabling cryptocurrencies like Bitcoin but have broader applications across industries for securely tracking assets, transactions, and information.
How Blockchain Works Simply
Blockchain works by creating a chain of records (blocks) linked via cryptographic hashes. Each block refers to the previous one, so changing any block requires changing the entire chain, which is practically impossible without network consensus. The ledger is shared and maintained by a network of computers (nodes) that collectively validate new entries, making it decentralized and trustless, meaning no single entity controls it.
Key Characteristics of Blockchain
- Decentralized and distributed across many computers.
- Immutable, meaning once data is recorded it cannot be altered.
- Transparent, as all participants can view the transaction history.
- Secure, using cryptography to link blocks and validate transactions.
- Removes the need for intermediaries in transactions.
Common Uses
- Recording transactions in cryptocurrencies like Bitcoin and Ethereum.
- Enabling decentralized finance (DeFi), smart contracts, and non-fungible tokens (NFTs).
- Improving transparency and security in supply chains, healthcare records, and other industries.
This foundational technology has revolutionized how digital data and assets are managed and transferred globally.
