Blockchain technology is revolutionizing the way we think about data storage and transaction processing. This guide provides an overview of blockchain and its core concepts.
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 of Blockchain
- Decentralization: There is no central authority managing the blockchain.
- Immutability: Once data is entered into the blockchain, it cannot be altered.
- Transparency: The ledger is accessible to all participants.
- Security: Blockchain uses cryptographic techniques to secure the data.
How Blockchain Works
The Blockchain Structure
- Blocks: Each block contains a list of transactions.
- Chain: Blocks are linked together in a chain, forming the blockchain.
- Consensus Algorithm: The consensus algorithm ensures that all nodes in the network agree on the state of the blockchain.
Transactions
Transactions are records of value that are broadcast to the network. They are verified by nodes and included in blocks.
Use Cases of Blockchain
- Cryptocurrencies: Bitcoin and Ethereum are the most well-known examples.
- Smart Contracts: These are self-executing contracts with the terms of the agreement directly written into lines of code.
- Supply Chain Management: Blockchain can be used to track goods from production to delivery.
Blockchain Diagram
For more information on blockchain and its applications, check out our Blockchain Basics guide.