What is Blockchain

Blockchain is a digital database or ledger that is distributed among computers in a peer to peer network. A blockchain is the foundational data structure behind Bitcoin.

A blockchain is a list of records called blocks. Each of these blocks contains data—in Bitcoin’s case, each block contains transactions, representing transfers of bitcoin from one user to another.

The blockchain can be thought of as a digital ledger that keeps track of every account on the network. The entire blockchain is the book that stores the record of every transaction that has ever taken place on the network between its accounts. Each block, then, is like a new page added to the ledger to update the state of accounts on the network.

How Does a Blockchain Work?

You might be familiar with spreadsheets or databases. A blockchain is somewhat similar because it is a database where information is entered and stored. But the key difference between a traditional database or spreadsheet and a blockchain is how the data is structured and accessed.

Blockchain Transparency

Because of the decentralized nature of the Bitcoin blockchain, all transactions can be transparently viewed by downloading and inspecting them or by using blockchain explorers that allow anyone to see transactions occurring live. Each node has its own copy of the chain that gets updated as fresh blocks are confirmed and added. This means that if you wanted to, you could track a bitcoin wherever it goes.

Blockchain Decentralization

A blockchain allows the data in a database to be spread out among several network nodes—computers or devices running software for the blockchain—at various locations. This not only creates redundancy but maintains the fidelity of the data. For example, if someone tries to alter a record at one instance of the database, the other nodes would prevent it from happening because they compare block hashes. This way, no single node within the network can alter information within the chain.

Conclusion

• Blockchain is a type of shared database that differs from a typical database in the way it stores information; blockchains store data in blocks linked together via cryptography.

• Different types of information can be stored on a blockchain, but the most common use for transactions has been as a ledger.

• In Bitcoin’s case, the blockchain is decentralized, so no single person or group has control—instead, all users collectively retain control.

• Decentralized blockchains are immutable, which means that the data entered is irreversible. For Bitcoin, transactions are permanently recorded and viewable to anyone.