Glossary · Finance & Payments

Blockchain

A blockchain is a shared, append-only ledger stored across many computers in which records are grouped into blocks that are cryptographically linked together.

Updated October 6, 2026

A blockchain is a distributed ledger in which transactions are grouped into blocks, and each block contains a cryptographic hash of the previous one. Because changing an old block would change every hash after it, tampering with history is detectable.

Why it matters

The design lets many parties who do not fully trust each other agree on a shared record without a central operator. Participants run nodes that validate new blocks following a consensus mechanism, such as proof of work or proof of stake. Public blockchains are open to anyone, while private or permissioned ones restrict participation. Uses include cryptocurrencies, asset tracking and smart contracts. It also has trade-offs: lower throughput than conventional databases, energy or capital costs depending on the consensus method, and data that is hard to delete. For many applications an ordinary database is simpler.

Example

Block 41  hash: a91f...  prev: 7c02...  txs: [A->B 5, C->D 2]
Block 42  hash: d34e...  prev: a91f...  txs: [B->E 1]

Block 42 stores block 41's hash. Editing a transaction in block 41 would change its hash and break the link.

Common misconceptions

  • Blockchain is not the same as Bitcoin; Bitcoin is one application of the technology.
  • "Immutable" does not mean the data is true, only that it is hard to alter afterwards.
  • Not every blockchain is public or anonymous.

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