Blockchain technology is revolutionizing the way we think about data security and transaction integrity. Below are some fundamental concepts that will help you understand the basics of blockchain.

What is Blockchain?

A blockchain is a decentralized digital ledger that records transactions across many computers so that the record cannot be altered retroactively without the alteration of all subsequent blocks and the consensus of the network.

Key Features:

  • Decentralization: Unlike traditional ledgers, blockchain operates on a decentralized network, which means no single entity has control over the entire system.
  • Immutability: Once data is recorded on the blockchain, it cannot be altered without the consensus of the network.
  • Transparency: All transactions are visible to anyone on the network, ensuring transparency and trust.

How Does Blockchain Work?

  1. Transaction: A transaction is created and broadcasted to the network.
  2. Block: Transactions are grouped into blocks.
  3. Mining: Miners validate and add these blocks to the blockchain.
  4. Consensus: The network reaches consensus on the validity of the blocks.
  5. Chain: The blockchain grows as new blocks are added.

Use Cases

  • Cryptocurrency: Bitcoin and Ethereum are the most famous examples of blockchain-based cryptocurrencies.
  • Smart Contracts: Self-executing contracts with the terms of the agreement directly written into lines of code.
  • Supply Chain: Blockchain can ensure the integrity and transparency of supply chains.

Further Reading

For more in-depth information on blockchain technology, check out our Blockchain Deep Dive.

Blockchain Diagram