What is Blockchain?

How it works

A blockchain bundles transactions into "blocks" and chains each block cryptographically to the one before it. Every full node on the network keeps the entire history and validates new blocks against the rules of the protocol. Because thousands of independent nodes hold the same copy, rewriting an old block would require persuading the majority of those nodes to accept a different version of history — economically infeasible on the largest chains.

Bitcoin and Ethereum are the two most-studied examples. Bitcoin's chain holds a single asset (BTC) and a simple scripting language. Ethereum's chain hosts arbitrary smart contracts that can hold and move assets according to code.

Example

When you send 0.5 ETH to a friend, your wallet broadcasts the transaction to the network. Validators pick it up, group it with other pending transactions, and propose a new block. Once that block is confirmed and one or two more blocks are added on top, the transfer is generally considered final — reorganizing it would require the attacker to redo the work for every block since.

Why it matters

The blockchain model is the foundation that makes Bitcoin, Ethereum, stablecoins, NFTs, and most of DeFi possible. The trade-off versus a traditional database is performance: even fast chains process a few thousand transactions per second at best, where Visa's network handles tens of thousands. The benefit is that no single party controls the record — censorship and unilateral changes are extremely hard.

Different chains make different trade-offs on speed, decentralization, and cost. Bitcoin prioritizes durability over speed; Ethereum prioritizes flexibility; newer chains like Solana prioritize throughput at the cost of more centralized validator sets.