Blockchain is a decentralized technology that eliminates the need for a central authority, allowing multiple parties to maintain a shared database or ledger.
Transactions are grouped into blocks and linked together in a chronological order, forming a chain. Each block has a unique identifier called a hash, which includes the previous block's hash.
Consensus mechanisms ensure agreement among participating nodes when adding a new block. This often involves a competitive process where nodes solve complex puzzles, and the winner adds the next block.
Once a block is added, the information becomes immutable. Changing data in a previous block would require altering the hash of that block and all subsequent blocks, which is computationally infeasible.
Blockchain provides transparency and security by allowing participants to view and verify transactions. Its decentralized nature prevents manipulation and enhances security by eliminating a single point of failure.