Crypto glossary

Blockchain

A blockchain is a digital ledger in which transactions are stored in blocks that are linked together in order. Each block references the one before it, so changing an old entry would break every link that follows.

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How the chain is built

A block contains a batch of transactions, a timestamp and the hash of the previous block. A hash is a short digital fingerprint of data: change even one character of the input and the fingerprint changes completely. Because every block includes its predecessor's hash, the blocks form a chain stretching back to the first one, the genesis block.

If someone altered a transaction in an old block, that block's hash would change, which would no longer match the reference stored in the next block, and so on. Tampering is therefore easy to detect.

Who keeps the ledger

In public blockchains such as Bitcoin and Ethereum, thousands of independent nodes each keep a full copy. A consensus mechanism, such as proof of work or proof of stake, decides who may add the next block and makes rewriting history very costly. Anyone can read the ledger, and anyone can submit transactions.

Private or permissioned blockchains also exist, where only approved participants can write. They are used by some companies but give up much of the openness and censorship resistance of public chains.

What blockchains are used for

The first use was money: Bitcoin. Blockchains like Ethereum added smart contracts, programs that run on the chain, which enable stablecoins, decentralized exchanges, lending protocols, NFTs and tokenized assets.

Limits and misconceptions

A blockchain only guarantees what happens on the chain. If someone enters false information about the real world, the blockchain will store it faithfully. Public blockchains are also slower and more expensive per transaction than a central database, which is why scaling solutions such as layer 2 networks exist. And immutable cuts both ways: a mistaken or fraudulent transfer usually cannot be undone. Finally, public does not mean anonymous: transactions are visible to everyone and can often be traced.

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Frequently asked questions

Is blockchain the same as Bitcoin?

No. Bitcoin is a cryptocurrency that runs on its own blockchain. A blockchain is the underlying data structure, and many other blockchains exist.

Can a blockchain be hacked?

Large public blockchains are very hard to tamper with. Most hacks target apps, smart contracts, bridges, exchanges or users' keys rather than the chain's core rules.

Is a blockchain a database?

It is a special kind of database: append-only, shared among many parties and secured by cryptography and consensus instead of a central administrator.

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All glossary terms · Educational reference only — not investment, legal, tax or financial advice.