A blockchain is a distributed database that is used to store a record of transactions. It is called a “chain” because it consists of a series of blocks that are linked together. Each block contains a record of multiple transactions, and once a block is added to the chain it cannot be modified.
The way that a blockchain works can vary depending on the specific implementation, but there are some common features that most blockchains have:
- Decentralization: A blockchain does not have a central authority that controls it. Instead, it is maintained by a network of computers (also known as “nodes”) that work together to validate and record transactions.
- Consensus: In order for a transaction to be added to the blockchain, it must be validated by the nodes in the network. This is done using a consensus algorithm, which is a mechanism for the nodes to reach agreement on the state of the blockchain.
- Immutability: Once a block has been added to the chain, it cannot be modified. This helps to ensure the integrity of the data on the blockchain and makes it difficult for anyone to tamper with the records.
- Cryptography: Cryptography is used to secure the transactions on the blockchain and to ensure the integrity of the data stored on the chain.
There are many different uses for blockchains, including as a platform for cryptocurrency transactions, as a secure record-keeping system, and as a way to automate and execute smart contracts.