What Is a Blockchain?

A shared ledger

A blockchain is a ledger — a list of transactions — copied across many independent computers. New transactions are grouped into blocks and appended in order, with each block cryptographically linked to the one before it.

On a large, widely distributed network, participants must agree on the next block under a consensus mechanism (proof of work or proof of stake), so altering old history is extremely difficult and expensive.

What problem it solves

Normally a trusted institution keeps the record. A blockchain replaces that single record-keeper with rules and incentives, so participants who do not trust each other can still agree on who owns what.

What it does not solve

That protection is bounded, not absolute. It rests on assumptions: that no single group controls most of the mining power or staked value, that the software has no critical bug, and that the network is large enough. Small networks have had their recent history rewritten.

An accurate transaction record also establishes very little else. It does not make a token valuable, does not make a project honest, does not make a smart contract safe, and cannot reverse a transaction you were tricked into sending.