// GLOSSARY -- BLOCKCHAIN & CRYPTO FUNDAMENTALS

What is Blockchain?

1 min read Updated

A blockchain is a distributed, append-only ledger that records transactions in cryptographically linked blocks, maintained by a network of nodes that reach consensus without a central authority.

WHY IT MATTERS

A blockchain combines a data structure and consensus system. Transactions are grouped into blocks, each containing a hash of the previous block (creating the 'chain'), and the network agrees on which blocks are valid through a consensus mechanism.

Key properties: immutability (past blocks can't be altered), transparency (anyone can verify the ledger), and decentralization (no single entity controls the network). These enable trustless systems.

Different blockchains make different tradeoffs. The 'blockchain trilemma' — optimizing for two of decentralization, security, and scalability — shapes all design decisions.

FREQUENTLY ASKED QUESTIONS

What problems does blockchain solve?
Trustless coordination — enabling parties who don't trust each other to agree on a shared truth. This eliminates intermediaries and creates transparent systems.
Is blockchain the same as cryptocurrency?
No. Blockchain is the technology; cryptocurrency is one application. Blockchains can be used for supply chain, identity, voting, and more.
What is the blockchain trilemma?
The observation that blockchains can optimize for two of three properties: decentralization, security, and scalability. Most scaling solutions attempt to break this.

FURTHER READING

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