Updated: Apr 17
A blockchain is a shared distributed database or ledger between computer network nodes. A blockchain serves as an electronic database for storing data in digital form. The most well-known use of blockchain technology is for preserving a secure and decentralized record of transactions in cryptocurrency systems like Bitcoin. The innovation of a blockchain is that it fosters confidence without the necessity for a reliable third party by ensuring the fidelity and security of a record of data.
The way the data is organized in a blockchain is one significant distinction between it and a regular database. A blockchain gathers information in sets, or blocks, that each includes a collection of information. The blockchain is a chain of data made up of blocks with predetermined storage capacities that, when filled, are closed and connected to the block that came before them. Following that newly added block, all additional data is collected into a brand-new block, which is then added to the chain once it is full.
A blockchain, as its name suggests, arranges its data into pieces (blocks) that are strung together, whereas a database typically organizes its data into tables. When used in a decentralized way, this data structure creates an irreversible chronology of data by design. When a block is completed, it is irrevocably sealed and added to the timeline. When a block is added to the chain, it receives a precise timestamp.
A blockchain is a particular kind of shared database that varies from other databases in that it saves data in blocks that are subsequently connected via cryptography.
A new block is created as each new piece of data arrives. The data is chained together in chronological sequence once the block has been filled with information and is attached to the block before it.
Different types of information can be stored on a blockchain, but the most common use so far has been as a ledger for transactions.
Blockchain is utilized in the context of Bitcoin in a decentralized manner, ensuring that no one user or organization has power but rather that all users collectively maintain control.
Since decentralized blockchains are immutable, the data entered into them cannot be changed. This implies that transactions made using Bitcoin are publicly visible and permanently recorded.
Blockchain aims to make it possible to share and record digital information without editing it. A blockchain serves as the basis for immutable ledgers, or records of transactions that cannot be changed, removed, or destroyed. Blockchains are also referred to as distributed ledger technologies because of this (DLT).
The blockchain idea was first put forth as a research project in 1991, long before Bitcoin became a widely used application in 2009. Since then, the introduction of numerous cryptocurrencies, decentralized finance (DeFi) applications, non-fungible tokens (NFTs), and smart contracts has led to an explosive growth in the use of blockchains.