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Blockchain is a distributed, immutable digital ledger that records transactions across a network of computers. Rather than relying on a single central authority, blockchain distributes trust across many participants, making it extremely difficult to tamper with recorded data.
Blockchain technology has far-reaching implications across many industries:
Blockchain represents a fundamental shift in how we establish trust in digital systems.
| Property | Description | Why It Matters |
|---|---|---|
| Decentralisation | No single entity controls the network | Eliminates single points of failure |
| Immutability | Once recorded, data cannot be altered or deleted | Provides a tamper-proof audit trail |
| Transparency | All participants can view the ledger | Builds trust without requiring a central authority |
| Consensus | Participants agree on the state of the ledger through defined rules | Ensures consistency across distributed nodes |
| Cryptographic security | Transactions are secured using hash functions and digital signatures | Prevents forgery and unauthorised modifications |
Remember: Blockchain is sometimes described as a "trustless" system. This does not mean it lacks trust — it means trust is achieved through mathematics and consensus rather than through a central intermediary.
Each block in the chain contains several key components:
| Component | Description |
|---|---|
| Block header | Metadata including timestamp, previous block hash, nonce, and Merkle root |
| Previous block hash | A cryptographic hash of the preceding block, creating the chain |
| Merkle root | A hash that summarises all transactions in the block |
| Nonce | A number used in Proof of Work mining |
| Timestamp | When the block was created |
| Transaction list | The actual data (e.g. financial transfers, smart contract calls) |
Block N
+--------------------------+
| Previous Hash: 0x3a8f... |
| Timestamp: 1698273600 |
| Nonce: 48291 |
| Merkle Root: 0x7bc2... |
+--------------------------+
| Transaction 1 |
| Transaction 2 |
| Transaction 3 |
+--------------------------+
Each block contains the hash of the previous block. This creates an unbreakable chain:
Block 0 (Genesis) Block 1 Block 2
+----------------+ +----------------+ +----------------+
| Prev: 0x000... | <- | Prev: 0xa4f... | <- | Prev: 0x7d2... |
| Data: ... | | Data: ... | | Data: ... |
| Hash: 0xa4f... | | Hash: 0x7d2... | | Hash: 0xb91... |
+----------------+ +----------------+ +----------------+
If anyone alters the data in Block 1, its hash changes — which breaks the link from Block 2. This cascade effect makes tampering immediately detectable.
| Type | Description | Examples |
|---|---|---|
| Public | Open to anyone; fully decentralised | Bitcoin, Ethereum |
| Private | Restricted to authorised participants; controlled by one organisation | Hyperledger Besu (private mode) |
| Consortium | Governed by a group of organisations | R3 Corda, Hyperledger Fabric |
| Hybrid | Combines public and private elements | Dragonchain |
| Feature | Blockchain | Traditional Database |
|---|---|---|
| Control | Decentralised (no single owner) | Centralised (single administrator) |
| Data modification | Append-only; immutable once confirmed | Full CRUD (create, read, update, delete) |
| Trust model | Cryptographic proof and consensus | Trust the database administrator |
| Transparency | All participants see the same data | Access controlled by the administrator |
| Performance | Slower (consensus overhead) | Faster (no consensus required) |
| Use case | Multi-party trust, auditability | High-speed transactional systems |
Tip: Blockchain is not a replacement for all databases. It is most valuable where multiple parties need to share data and no single party should be trusted as the sole authority.
The first block in any blockchain is called the genesis block (Block 0). It is the only block that does not reference a previous block hash. The genesis block is typically hard-coded into the software.
Bitcoin's genesis block was mined on 3 January 2009 by Satoshi Nakamoto and contained the famous embedded message:
"The Times 03/Jan/2009 Chancellor on brink of second bailout for banks"