A blockchain is a widely recognized platform for securely purchasing, storing, and trading major cryptocurrencies like Bitcoin, Ethereum, and others.
It functions as an electronically distributed ledger that enables the creation of permanent digital records and reliable applications through a network of interconnected computers.
Although many people associate the concept of blockchain with Bitcoin, it is important to note that Bitcoin is not synonymous with blockchain. Rather, blockchain serves as the underlying technology behind Bitcoin. Essentially, blockchain comprises a combination of distributed data storage, peer-to-peer transmission (P2P), a consensus mechanism (used to uphold the operation and fairness of the blockchain system and provide incentives to those maintaining the blockchain), encryption algorithms, and other established computer technology models. It forms a sequential transaction record, or block, in which the content is concatenated and safeguarded through cryptography. Each block contains the encrypted hash, timestamp, and transaction data of the preceding block.
In simple terms, blockchain can be understood as a distributed database that is collectively managed, transmitted, and synchronized by all node maintainers. Unlike traditional centralized databases, it is challenging to arbitrarily tamper with the data stored in a blockchain.