What is a blockchain?
A shared, append-only ledger of transactions that many independent computers hold copies of and agree on, without any of them being in charge.
A blockchain records transactions in batches called blocks, each cryptographically linked to the one before it. Because every participant keeps a copy and the linking makes tampering detectable, changing a past entry means redoing the work that has been done since — which is what makes settled records expensive to alter.
Why it matters: the point is not the data structure, which is unremarkable, but that no single party needs to be trusted to maintain it. That is also the source of the trade-offs: agreement between thousands of independent machines is slower and more expensive than a single database, which is why throughput, fees and decentralisation are in permanent tension. See consensus and node.
Related terms
- HalvingThe scheduled event where the reward paid to Bitcoin miners for producing a block…
- Private keyThe secret number that authorises spending from a crypto address. Whoever knows it controls…
- Circulating supplyThe number of units of a crypto asset that currently exist and are available…
- SlashingThe penalty in a proof-of-stake network where a validator that misbehaves or goes offline…
- NodeA computer running blockchain software that stores the ledger, validates transactions and relays them…
- VolatilityHow much and how quickly an asset's price moves, in either direction.
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