Blockchain is a distributed database that stores information in cryptographically chained blocks. Each block contains a set of transactions, a timestamp and a reference to the previous block, creating an immutable chain.
Why does it matter?
Unlike traditional databases controlled by a central entity, blockchain operates in a decentralized way. Thousands of computers (nodes) maintain identical copies of the chain, making it practically impossible to alter data without the network detecting it.
Key Concepts
Blocks: Data packages containing verified transactions.
Hash: A unique digital fingerprint that identifies each block. Changing a single character produces a completely different hash.
Consensus: The mechanism by which network nodes agree on which transactions are valid. The two most common are Proof of Work (PoW) and Proof of Stake (PoS).
Decentralization: There is no single point of failure. The network works as long as active nodes exist.
Applications
Beyond cryptocurrencies, blockchain is used in supply chains, digital identity, electronic voting, tokenization of real assets and much more.