What is a Blockchain?

A blockchain is a special type of database characterised by its decentralised structure and security. Here are the main characteristics and functions of a blockchain:

Decentralisation: Unlike traditional databases, which are managed by a central entity, a blockchain is operated by a network of computers (nodes). Each node stores a copy of the entire blockchain.
Transparency and immutability: Every transaction stored in the blockchain is visible and traceable to all participants in the network. Once data is entered, it cannot be altered or deleted, making tampering virtually impossible.
Security through cryptography: Transactions are secured using cryptographic algorithms. Each transaction is confirmed by a digital signature, and each block is linked to the previous block by a cryptographic hash.

A blockchain consists of a chain of blocks, each of which contains data. Each block consists of

Data: This can be transaction data, such as who transferred what amount to whom. The specific data depends on the application of the blockchain.
Hash of the current block: A hash is a unique identifier generated from the block's data. It acts as a digital fingerprint of the block.
Hash of the previous block: Each block also contains the hash of the previous block, creating a chain of blocks. This ensures that a change to one block would change all subsequent blocks, making tampering very difficult and unlikely.

Transaction processing: When a new transaction occurs, it is broadcast to the network and validated by the nodes.
Block formation: Validated transactions are packed into a new block. A new block is confirmed by the nodes in the network through a consensus mechanism (e.g. proof of work or proof of stake).
Append the block: Once confirmed, the new block is added to the existing blockchain. Each node in the network updates its copy of the blockchain accordingly.

Cryptocurrencies: Bitcoin, Ethereum and other cryptocurrencies use blockchain technology to store transactions securely and transparently.
Smart contracts: Contracts that automatically execute when certain conditions are met are often implemented on blockchain platforms such as Ethereum.
Supply chain management: By tracking products along the supply chain in a blockchain, companies can improve transparency and traceability. Identity management: Blockchain can be used to create secure digital identities that are protected from tampering.
Blockchain technology has the potential to revolutionise many industries by increasing trust, transparency and efficiency.