Blockchain is the underlying technology that powers Bitcoin and other cryptocurrencies. It is essentially a digital ledger that records transactions in a secure, decentralized and transparent way.
In a traditional banking system, transactions are processed through a central authority, such as a bank. In contrast, the blockchain is a decentralized network that relies on a distributed ledger technology. This means that the transactions are recorded on multiple computers or nodes within the network, which makes it nearly impossible to manipulate or alter the data.
Each transaction is verified and added to the blockchain by a process called mining. Miners use powerful computers to solve complex mathematical equations, which generates a new block in the blockchain. This block contains the transaction data, as well as a unique code called a hash that connects it to the previous block in the chain.
Once a block is added to the blockchain, it cannot be modified or deleted without the consensus of the network. This means that the blockchain provides a high level of security and transparency, making it a popular choice for storing sensitive data and conducting financial transactions.
The blockchain can be public or private, depending on who can access and participate in the network. Public blockchains, such as the Bitcoin network, are open to anyone who wants to participate. Private blockchains are restricted to specific groups or organizations and are often used for internal processes or confidential data storage.
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