Blockchain is a decentralized digital ledger that records transactions across multiple computers in a secure and transparent way. Each transaction is stored in a block, and blocks are linked together in chronological order, forming a chain.
Blockchain uses cryptographic techniques and consensus mechanisms like Proof of Work (PoW) or Proof of Stake (PoS) to secure transactions. Once a block is added to the chain, it becomes nearly impossible to alter past records, ensuring immutability and security.
Public blockchains (e.g., Bitcoin, Ethereum) are open to anyone and maintained by a decentralized network.
Private blockchains (e.g., Hyperledger, Corda) are restricted and controlled by a single organization or a group of entities.
Smart contracts are self-executing programs on the blockchain that automatically execute agreements when predefined conditions are met. They remove the need for intermediaries in transactions and are widely used in finance, NFTs, and supply chain management.
While blockchain is highly secure due to its decentralized and encrypted nature, vulnerabilities can arise through weak smart contract coding, 51% attacks (on PoW blockchains), and security flaws in connected systems like wallets or exchanges.
Blockchain is used in various industries, including:
Finance: Cryptocurrencies, cross-border payments, DeFi (Decentralized Finance)
Healthcare: Secure medical records and data sharing
Supply Chain: Tracking products and verifying authenticity
Voting Systems: Transparent and tamper-proof elections