How does blockchain work?

Blockchain is a type of distributed ledger technology that allows data to be stored across a network of computers in a way that is secure, transparent, and tamper-resistant. At its core, a blockchain is a chain of blocks, where each block contains a list of transactions or data entries. These blocks are linked together in chronological order using cryptographic hashes, which ensure the integrity of the data. When a new transaction occurs, it is grouped with other transactions into a block. This block is then validated by participants in the network, often called miners or validators, depending on the blockchain’s consensus mechanism. Common consensus methods include Proof of Work (used by Bitcoin) and Proof of Stake (used by some newer blockchains). Once the block is verified as legitimate, it is added to the existing chain, and this updated ledger is shared across all nodes (computers) in the network. Because every block contains a reference (hash) to the previous block, altering any information in a block would require changing all subsequent blocks, which is computationally impractical on large, decentralized networks. This makes blockchain highly secure and resistant to fraud or tampering. Additionally, the decentralized nature means there is no single point of failure or control, enhancing transparency and trust among participants. Blockchain technology is widely used not only in cryptocurrencies but also in supply chain management, voting systems, identity verification, and more.