Blockchain is a technology that has grown in popularity in tandem with the rise of cryptocurrencies and other digital assets over the last decade. A blockchain, as the name implies, is a continuously growing list of data blocks stored on a network of computers. Some of the computers add new blocks to the list on a regular basis, and the other computers check it using unique algorithms.
Blockchains are characterised by their decentralised nature, which means that no single machine or agent may alter the record of events maintained in the “chain.” This provides them with strong security guarantees, as well as the ability to preserve an immutable record over the whole network. These systems are designed to work without relying on a single authority and instead distribute responsibility across a large number of smaller participants.
Blockchains are especially effective for forming the foundation of digital money since they aid in the creation and maintenance of scarce virtual assets. This is in sharp contrast to the common perception of digital data, which assumes that making duplicates of things is simple.
Blockchains are well-suited to financial applications because of their immutability, which allows for the production of scarce digital assets.