What is a Blockchain?- Working & Application
Last Updated On -19 Sep 2025
In today’s digital world, everything involves the use and protection of data in a simplified and modern manner. Something that simplified the data storing and sharing process is the use of blockchain technology. Blockchain was introduced in 2009 with the use of Bitcoin. However, in the modern world, blockchain is a financial trend that is used across several industries, including banking, healthcare, logistics, and even governance. Technology serves as the backbone of our society. Blockchain is the digital descendant ledger that keeps track of transactions and does so in a manner that is separate and cannot be altered in any way. It serves as a ledger that is transparent and can be accessed by multiple users without a single user controlling the blockchain ledger.
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Get a quick recap on how Blockchain Works!
How Does Blockchain Work?
Blockchain serves as a ledge. It holds the data and serves the function of a bank, keeping transactions safe. Each ledge comes with a specific block, which holds the data of verified transactions, which serves as a digital fingerprint and holds a relationship with the previous block, which protects the chain. Once a block is formed, the data in the block cannot be changed without losing the other blocks that follow it.
Blockchain is immutable due to its structure, meaning transactions cannot be undone. Take, for example, when person A sends a cryptocurrency to person B. The transaction is bound to a network of computers, termed nodes, that is used to verify the transaction, to then add it to the blockchain for the purposes of ensuring there is zero fraudulent double-spending.
What is the Role of Mining in Blockchain?
Perhaps the most interesting part of blockchain technology is mining. Mining is the process of confirming transactions and adding them to the blockchain. This is done through the solving of complex math equations, due to the high volume of computation required. The miners solve these puzzles, and the first person to finish is allowed to add a new block to the blockchain. To encourage the miners, some cryptocurrency like Bitcoin and Ethereum is used as payment.
The blockchain, therefore, is not governed by a single entity through the use of a PoW (proof of work) mechanism. Mining is, though, very costly due to the computational and environmental resources needed. This is the reason for the shift to PoS (proof of stake). In PoS, blockchains verify transactions based on the amount of cryptocurrency a person is willing to stake.
“The Development of Technology has continued to evolve, and Blockchain Technology is Another Rather New Addition to the Family of Advancements. Therefore, it is primed with Several Features.”
Key Features of Blockchain
The most well-known example of a blockchain in action is Bitcoin. Verification transactions and Bitcoin's public blockchain are open to the public. Let's say that you send 1 Bitcoin to a friend. After a payment is done, bits are sent to a network and go through a process called mining to become blocks. After a set period of time, these blocks are and become natural Bitcoin blockchains. This action does not allow banks and other intermediaries to be in the process, and payment cannot be undone or falsified.
Blockchain is special because of the following attributes:
- Decentralization: No one company or person is in charge of the entire system. It is controlled by many computers, scattered all over the world.
- Transparency: Every participant can see the transactions that are stored on the blockchain data files. This helps build trust among the people.
- Security: Information is nearly impossible to steal, as it is encrypted and further locked in chains of hashes.
- Immutability: Once data is entered, it cannot be modified or erased. This helps eliminate possible fraud.
- Automation: Using smart contracts, blockchain is capable of executing negotiations on its own as long as the terms are met.
Key Application of Blockchain
There are many actions a person or a company should take to employ security measures, like using blockchain. One action is not sharing the private keys of the account. Accessing private data on the account or wallet with bullcoins can be done with private keys, and is not under any security measures. This means any person can access the wallet as there is no central power. It is best to use a secondary wallet or a wallet that is not correlated with dollar values.
Although blockchain is famous for powering cryptocurrencies such as Bitcoin and Ethereum, the technology has its reach in other sectors as well:
- Payments across borders are expensive, slow, and payers are vulnerable to fraud or other illegal practices. Blockchain technology streamlines transactions and enhances protection against fraud.
- Walmart and IBM use blockchain technology to monitor and manage the entire value chain of a single product from source to the buyer.
- Digitalizing, securing, and monitoring patient records reduces the risk of revealing sensitive information.
- Countries are researching the integration of blockchains into their voting systems. These countries believe that blockchains can diminish electoral fraud and resurrect belief in democratic systems.
- As an example, an automated insurance payout could be executed during a natural catastrophe. As with many applications, these executed policies will be tracked by the contracts, and parallel computing on the insurance provider's side will automatically trigger payment, porting funds.
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Did you know? The first transaction with Bitcoin happened in the year 2010, when HodlLaz, a programmer, spent 10,000 Bitcoins to purchase two pizzas. Today, that amount translates to hundreds of billions of dollars, which makes that purchase the most expensive in history of time. |
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FAQs on Blockchain
Is blockchain only used for cryptocurrencies?
No. Although first designed for Bitcoin, blockchain is now used around the world to keep secure, clear logs in industries like healthcare, supply chains, real estate, and even voting.
Is blockchain completely secure from hacking?
Due to the fact that it is decentralized and built on cryptographic blockchains, Blockchain is very secure. Any other third-party platforms, exchanges, wallets, or chains built on top of the blockchains, however, are still wobbly.
Is it true that anyone can mine on the blockchain to earn Cryptocurrency?
In theory, anyone with a robust computer and a stable internet connection is able to mine. In most cases, individual mining has become economically unfavorable due to the low supply of electricity. Right now, Cryptocurrency is mined primarily through large mining operations or pools.
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