What is a blockchain?

A blockchain is a special type of database in which all transactions are stored. The data is distributed and not stored in a centralized manner. This form of distributed database provides strong security, as a successful attack would require every existing copy of the database to be attacked. Every client connected to the network has a copy of the blockchain stored. A blockchain is divided into blocks. Each new block references a hash of the previous block, thus ensuring that no block can be manipulated ever. If an already referenced block is modified and does not match the stored hash in the subsequent block, the network discards the damaged block and replaces it with the original. To validate new entries different methods are used. These include for example Proof-of-Work (ex: Bitcoin, Ethereum) and Proof-of-Stake (ex: Cardano).

A blockchain is a distributed ledger that stores every transaction that has ever happened on it. There are no central authorities like banks or other companies needed in order to make transactions.