Blockchain is a decentralized, digital ledger that is used to record transactions across a network of computers. It was originally invented as the underlying technology for the digital currency Bitcoin, but it has since been adapted for a wide range of other uses. Here's a closer look at how blockchain works:
- Transactions are recorded: When a transaction is made using blockchain technology, it is recorded on a "block" that is added to the chain of existing blocks. Each block contains a record of multiple transactions, as well as a unique code called a "hash" that distinguishes it from other blocks.
- Transactions are validated: Once a transaction is recorded on a block, it is validated by a network of computers, or "nodes," that work together to ensure the accuracy and integrity of the transaction. This validation process is known as "consensus."
- Transactions are secured: One of the key benefits of blockchain technology is its security. Each block in the chain is connected to the previous block through its unique hash, creating a secure and immutable record of all transactions. This makes it difficult for transactions to be altered or tampered with, as any attempt to do so would require changing the hash of not just one block, but all subsequent blocks in the chain.
- Transactions are transparent: Another benefit of blockchain technology is its transparency. Because the ledger is decentralized and stored on multiple computers, it is publicly accessible and can be viewed by anyone. This transparency helps to build trust and accountability within the network.
Overall, blockchain is a powerful and innovative technology that has the potential to revolutionize a wide range of industries by providing a secure and transparent way to record and validate transactions.