• Dapps:16.23K
  • Blockchains:78
  • Active users:66.47M
  • 30d volume:$303.26B
  • 30d transactions:$879.24M
What is blockchain and how does it work

What is blockchain and how does it work

user avatar

by Max Nevskyi

a year ago


In recent years, blockchain has become one of the most discussed technologies, attracting the attention of not only technical specialists but also the general public. Initially emerging as the foundation for cryptocurrencies like Bitcoin, blockchain is now being applied in many areas, including finance, logistics, healthcare, and even government. But what exactly is blockchain, and how does it work?

Contents:

What is blockchain?

Blockchain is a decentralized database or ledger that records information in a sequence of blocks. Each of these blocks contains a series of records or transactions that are cryptographically linked to each other. The main characteristic of blockchain is its decentralized storage: data is not concentrated in one location but is distributed across the entire network of participants. This ensures its high security and resistance to attacks or attempts at unauthorized data modification.

Blockchain is not just a technology; it is a new paradigm of security and transparency that opens the door to many innovative solutions in various industries.

Key elements of blockchain

Blockchain consists of several key elements:

  1. Blocks: The basic building blocks of the system. Each block contains transaction data, a timestamp, and a link to the previous block.
  2. Chain: Blocks are linked to each other, forming a chain, which ensures data integrity.
  3. Nodes: Network participants who store copies of the blockchain and participate in transaction verification.
  4. Mining: The process of creating new blocks and confirming transactions.
  5. Cryptography: Used to protect data and ensure its confidentiality.

Blockchain

Types of blockchains

There are several types of blockchains, each with its own features and areas of application:

  1. Public blockchains: Open to anyone who wishes to participate in the network. An example of such a blockchain is Bitcoin.
  2. Private blockchains: Available only to a specific group of users. Often used in corporate systems.
  3. Hybrid blockchains: Combine features of both public and private blockchains.

How blockchain works

The principle of blockchain operation starts with the formation of a transaction. For example, when user A wants to transfer funds to user B, he generates a transaction containing information about the amount, as well as details about the recipient and the sender. This transaction is broadcasted across the network and undergoes verification by nodes.

The verified transaction is included in a new block, which is then added to the blockchain, and all nodes in the network update their versions of the blockchain. Due to the linking of blocks to each other, any attempt to modify information in one of the blocks would require changes to all subsequent blocks, ensuring protection against tampering.

Various consensus mechanisms are used to confirm and add blocks to the blockchain, including Proof of Work and Proof of Stake, which guarantee data reliability and security.

Comparison of consensus mechanisms

Mechanism Operating Principle Advantages Disadvantages
Proof of Work Solving complex mathematical problems High security High energy consumption
Proof of Stake Transaction confirmation based on stake ownership Energy efficiency Risk of centralization

Blockchain applications in various industries

Blockchain is being applied in various industries:

  • Financial sector: Using blockchain for fast and secure transactions, as well as for creating digital currencies.
  • Logistics: Tracking goods and managing supply chains with blockchain improves transparency and reduces costs.
  • Healthcare: Storing and managing medical data using blockchain ensures its security and confidentiality.
  • Government: Blockchain can be used for voting, identity management, and other government services.

Conclusion

Blockchain is a revolutionary technology that can transform many areas of our lives. Despite existing challenges, its potential to enhance transparency, security, and efficiency makes it one of the most promising areas of information technology development.

0

Rewards

chest
chest
chest
chest

More rewards

Discover enhanced rewards on our social media.

Other articles

Roguelite Shooter The Backwoods — Web3 Game with NFTs, Tokens, and Procedural Levels

chest

Comprehensive review of The Backwoods blockchain game on Solana: gameplay, NFTs, tokenomics, heroes, $LEAF Season, Web3 features, and community. Everything about this roguelite shooter.

user avatarElena Ryabokon

Rush Racing 2: Blockchain Racing with NFTs, Tokens, and High-Stakes PvP

chest

Explore Rush Racing 2 — a blockchain drag racing game with NFTs, real car bets, RRS tokens, and deep customization. Race, earn, and own in this high-stakes Web3 experience.

user avatarElena Ryabokon

How Fragmentic Is Transforming Liquid Restaking in the Solana Ecosystem

chest

Fragmentic is a liquid restaking protocol on Solana enabling users to earn rewards while maintaining liquidity. Featuring fragSOL, fragJTO, and the advanced FRAG‑22 standard.

user avatarElena Ryabokon

OpenRouter: How the LLM API Hub Works and Why It Matters

chest

A detailed overview of OpenRouter — the platform for accessing multiple LLMs through one API. Explore its architecture, use cases, security, and business model.

user avatarElena Ryabokon

How EigenLayer Works: Restaking, AVS, and Cloud Security on Ethereum

chest

An in-depth look at EigenLayer — a restaking protocol on Ethereum enabling next-gen security and scalability through AVS and the cloud-based EigenCloud platform.

user avatarElena Ryabokon

Color Tap analysis — in-game logic, limitations, and prospects for crypto integration

chest

Analytical overview of Color Tap — a Telegram tap-to-earn game. Examination of mechanics, blockchain, tokenization, and future potential in the context of Web3 and crypto-based Telegram projects.

user avatarEve Adams
dapp expert logo
© 2020-2025. DappExpert. All rights reserved.
© 2020-2025. DappExpert. All rights reserved.

Important disclaimer: The information presented on the Dapp.Expert portal is intended solely for informational purposes and does not constitute an investment recommendation or a guide to action in the field of cryptocurrencies. The Dapp.Expert team is not responsible for any potential losses or missed profits associated with the use of materials published on the site. Before making investment decisions in cryptocurrencies, we recommend consulting a qualified financial advisor.