Blockchain is a decentralized digital ledger technology that securely records transactions across multiple computers. Unlike traditional databases managed by a central authority, blockchain distributes data across a network of nodes, making it transparent and resistant to tampering. Each transaction is grouped into a “block,” and these blocks are linked in chronological order to form a “chain.” Every block contains a unique code called a cryptographic hash, the timestamp, and transaction data. The hash of each block depends on the previous block’s hash, ensuring the chain’s integrity.
When a new transaction occurs, it is broadcast to the network, where nodes validate it using consensus mechanisms such as Proof of Work or Proof of Stake. Once verified, the transaction is added to a new block, which is appended to the blockchain. This process prevents fraud and double-spending without needing a trusted third party.
For example, consider Bitcoin, a digital currency that uses blockchain. When Alice sends Bitcoin to Bob, the transaction is verified by miners, grouped into a block, and added to the blockchain. This ensures that the transfer is secure, transparent, and irreversible, allowing users to trust the system without intermediaries. Blockchain can be applied beyond cryptocurrencies, including supply chain tracking, voting systems, and digital identity verification.