What is Blockchain?

Key Features of Blockchain

• Decentralization: Unlike traditional databases that are controlled by a single entity, a blockchain is maintained by a network of nodes (computers) that work together. Each node has a copy of the entire blockchain, ensuring transparency and reducing the risk of central points of failure.


• Immutability: Once a transaction is recorded on the blockchain, it cannot be altered or deleted. This immutability is achieved through cryptographic hashing and consensus mechanisms, making the blockchain a trustworthy record of events.


• Transparency: All transactions on a blockchain are visible to all participating nodes. This transparency helps ensure the integrity of the data and builds trust among users.


• Security: Blockchain uses advanced cryptographic techniques to secure data and transactions. The distributed nature of the network also makes it difficult for any single entity to alter the data without being detected.

How Does Blockchain Work?

1. Transaction Initiation: A transaction is initiated by a user who sends data to the blockchain. This data could be financial transactions, contract details, or other types of information.


2. Transaction Verification: The transaction is broadcast to a network of nodes. These nodes verify the transaction using a consensus mechanism, such as Proof of Work (PoW) or Proof of Stake (PoS).


3. Block Creation: Once the transaction is verified, it is grouped with other transactions into a block. Each block contains a cryptographic hash of the previous block, linking them together in a chain.


4. Block Addition: The new block is added to the blockchain, becoming a permanent part of the ledger. All nodes update their copies of the blockchain to reflect this addition.


5. Transaction Completion: The transaction is now complete and recorded on the blockchain. The data is immutable and can be viewed by any participant in the network.

Applications of Blockchain

While blockchain is best known for its role in cryptocurrencies, it has many other potential applications, including:

• Supply Chain Management: Blockchain can provide a transparent and immutable record of the journey of goods from origin to consumer, enhancing traceability and reducing fraud.


• Healthcare: Blockchain can securely store and share patient records, ensuring data integrity and privacy while improving access to medical information.


• Voting Systems: Blockchain can create tamper-proof voting systems, increasing transparency and trust in electoral processes.


• Smart Contracts: Blockchain enables the creation and execution of smart contracts, which are self-executing contracts with terms directly written into code. These contracts automatically execute when predefined conditions are met.