Glossary
Blockchain
A blockchain is a shared digital ledger, copied across many computers, in which transactions are grouped into blocks that are linked together in order, so that past records are very hard to change.
Also called Distributed ledger, DLT (distributed ledger technology), Chain, On-chain ledger
See also
A blockchain is a database that many independent computers keep in sync. Instead of one company holding the master copy, every participant (called a node) stores the same history of transactions and checks new entries against shared rules. Records are grouped into blocks, and each block points to the one before it, forming a chain.
How a blockchain works
Each block contains a list of transactions, a timestamp and a cryptographic fingerprint (a hash) of the previous block. Changing an old transaction would change that block’s hash, which would break the link with every block that follows. Nodes would reject the altered copy.
To decide who adds the next block, a network uses a consensus mechanism. Bitcoin relies on proof of work, where miners spend computing power; Ethereum uses proof of stake, where validators lock up coins as collateral. Either way, cheating costs more than playing by the rules.
A concrete example
Bitcoin, described in a whitepaper published on 31 October 2008, is the first working blockchain. Its first block, the genesis block, was created on 3 January 2009. Since then, every bitcoin transfer has been recorded in a ledger that anyone can download and verify. When Alice sends BTC to Bob, her transaction waits in a pool, a miner includes it in a block about ten minutes later, and each new block stacked on top makes it harder to reverse.
Why it matters for users
- No single gatekeeper: you can send value without a bank’s permission.
- Transparency: public blockchains let anyone audit transactions and supply.
- Programmability: chains such as Ethereum run smart contracts, the basis of DeFi, stablecoins and NFTs.
Limits and risks
A blockchain is only as reliable as its network. Small chains with few miners or validators can be attacked. Public ledgers are pseudonymous, not anonymous: addresses can often be linked to people. Throughput is limited, which is why fees rise when demand peaks and why layer 2 networks exist. Finally, a blockchain records what happens; it cannot undo a mistake. Funds sent to the wrong address are usually lost.
For a longer introduction, read our guide What is blockchain?