Blockchain
A blockchain is a shared database held simultaneously by thousands of independent computers. Records are gathered into blocks, each block references the one before it, and an old record cannot be altered without breaking the whole chain after it.
How it works
Each block holds a list of transactions and the hash of the block before it, a short fingerprint of that block's contents. Change a single character in an old block and its hash changes, which breaks the reference in the next block, and so on to the end of the chain.
Forgery therefore means recomputing the entire chain and doing it faster than the rest of the network extends it. On large networks that is economically out of reach.
Which participant adds the next block is settled by a consensus mechanism: computational work in some networks, locked-up coins in others. The common part is that nodes must agree the new block is valid, or it is simply not accepted.
How blockchains differ
Speed and cost of writing differ by orders of magnitude, and that decides what a network is good for.
| Bitcoin: new block | ≈ 10 minutes |
| Ethereum: new block | ≈ 12 seconds |
| Layer 2 networks | < 1 second |
A slow network is not a worse one: bitcoin trades speed for simplicity and resilience on purpose, while Ethereum pays in complexity for the ability to run programs on-chain.
What a blockchain does not do
- It does not verify truthThe network guarantees a record will not change, not that it is correct. A lie written to a blockchain stays there forever, now as an immutable lie.
- It does not store filesBlock space is expensive, so images and documents live elsewhere and only a link or a hash goes on-chain.
- It does not make a system honest by itselfIf one team holds the contract keys, decentralised record-keeping changes nothing: that team still makes the decisions.
- It does not hide participantsA public blockchain is visible to everyone. Privacy takes deliberate work; it does not come with the technology.