# **Blockchain** Blockchain is a structured digital ledger (database) of transactions. It is a continuously growing list of records, called **blocks**, which are linked and secured using cryptography. - **Immutable:** Once a transaction is recorded, it cannot be altered or hacked. - **Shared:** The ledger is maintained and shared by all network users (participants). - **Structure:** Blocks are chained together chronologically to form the blockchain. ## **Enabling Technologies** Blockchain technology is built upon three core technological pillars: ### **Cryptography** The technology used to protect information and communications by encoding it. In blockchain, it ensures: - **Confidentiality:** Only intended parties can read the data. - **Integrity:** Data cannot be altered without detection. - **Authentication:** Verifies the identity of participants and the origin of data. ### **Blockchain Networks** The infrastructure that allows participants to share the ledger. There are four main types of networks that determine accessibility and governance. ### **Transaction Process** The method by which deals are made, verified, and recorded on the network. ## **Types of Blockchain Networks** The way a blockchain network is built determines its accessibility, security, and governance. | Network Type | Description | Key Features | Common Use Cases | | :--- | :--- | :--- | :--- | | **Public** | An open network that anyone in the world can join and participate in. | - Open to all
- Weak security
- Requires high computing power | Cryptocurrency exchange (e.g., Bitcoin) | | **Private** | Managed and controlled by a single organization or private business. | - Restricted access
- High security
- Customizable permissions | Secure record-keeping for businesses. | | **Permissioned**| A network where users need permission to join and perform transactions. | - Requires authorization
- Secure and transparent
- Controlled access | Supply chain management, trade finance. | | **Consortium** | A permissioned network managed by a group of organizations. | - Multi-organizational control
- Complex setup
- Highly secure | Finance and banking, insurance. | ## **Transaction Process on the Network** The process facilitates direct, secure dealings between individuals without traditional intermediaries. - **Peer-to-Peer (P2P):** Individuals can make deals directly with each other, bypassing entities like banks or governments. This is similar to how nodes interact in a . - **Decentralization:** Instead of being stored in one central location, the data is copied and spread across millions of computers connected to the blockchain. - **Verification:** Each transaction is verified by the participants (peers) in the network before being added. This is often done through a **Consensus Mechanism**. - **Permanence:** Once a transaction is verified and added to a block, it becomes a permanent, *irreversible* part of the ledger. - **Efficiency:** Transactions are typically faster than in traditional systems because there are no intermediaries. ## **Possible Questions/Answers** - **Q:** What makes a blockchain "immutable"? **A:** The use of *cryptography*, which links the blocks together in a way that makes it impossible to alter a previous block without invalidating all subsequent blocks. For more on how data is secured, see . - **Q:** What does it mean for a blockchain to be decentralized? **A:** It means the data (the ledger) is not stored in a single, central location. Instead, it is copied and distributed across a network of many computers, making it highly resistant to failure or attack.