A mathematical structure for storing digital transactions or data in an immutable, distributed, decentralized digital ledger consisting of blocks that are linked via cryptographic signature that is nearly impossible to fake, hack or disrupt.
A blockchain is like a growing list of records, where each record, called a “block,” is linked to the one before it, forming a chain. Think of it like a digital notebook where every page (block) is filled with information, and once a page is full, it’s connected to the next page with a special kind of glue (cryptographic hash). Here’s how it works in simple terms:
- Blocks: Imagine each block as a page in this notebook. On this page, you write down transactions or any kind of data you want to keep track of. For Bitcoin, this data is mainly financial transactions.
- Chain: Each new page (block) is linked to the previous one, forming a chain. This link is made with something called a “hash,” which is like a unique fingerprint for that page. If anything on the page changes, the fingerprint changes, too.
- Decentralization: This notebook isn’t kept in one place. Instead, copies are spread out across many computers all over the world. Each computer has a copy of the entire notebook, so there’s no single point of failure or control.
- Security: Because each block’s fingerprint (hash) depends on the one before it, changing any data in any block would change all the fingerprints after it. Since everyone has a copy, if someone tried to change a block, it wouldn’t match everyone else’s copy, and the network would reject this change.
- Transparency and Immutability: Everyone on this network can see the notebook (though not necessarily who wrote what, just what was written), and once something is written and enough people agree it’s correct, it can’t be changed. This makes the information very secure and tamper-proof.
- Consensus: For new transactions to be added to the notebook, everyone (or at least the majority) must agree that the new entries are valid. This process often involves solving complex math puzzles, which is what Bitcoin miners do.
In essence, a blockchain is a secure way to keep track of information where everyone involved has a say in what gets recorded, and once something is written down, it’s nearly impossible to erase or change without everyone noticing. This makes it perfect for things like cryptocurrency transactions, where trust and security are crucial.