Blockchain is a decentralized data ledger shared securely among selected participants. It allows multiple parties to share, collect, and integrate transactional data through cloud-based services.
Data is organized into blocks, each linked using cryptographic hashes that ensure traceability. These blocks form a sequence where each new block references the one before it, maintaining a chronological and verifiable chain.
Blockchain ensures data accuracy by providing a single version of records, minimizing duplication and improving security. In these systems, unauthorized data changes are blocked unless approved by a quorum.
Attempts to alter data trigger alerts across the network, identifying the source of the action. This design prevents fraud and manipulation, while also allowing visibility of changes across participants.
Several ways to build a blockchain network
A blockchain network can take different forms: public, private, permissioned, or consortium-based. Public networks, such as Bitcoin, are open to anyone but often require high computational power, offer minimal privacy, and may lack adequate security for business needs. In contrast, private blockchains are governed by a single organization that determines who may join, participate, and maintain the ledger. These networks can operate within firewalls or on local infrastructure, offering more control and confidentiality.
Permissioned blockchains apply access rules that restrict who may join and what actions are allowed. While usually associated with private networks, public blockchains can also apply permissions. Participants must be invited or granted access to join the system.
Consortium blockchains involve multiple organizations managing the network together, sharing responsibility for validation and access control. These setups are suitable for industries that require shared control over data.
In a blockchain, each block contains a record of transactions. As blocks are added, they are permanently linked in sequence. Every transaction receives a unique digital identifier, providing traceable and tamper-evident records. All participants keep an encrypted copy of the ledger, which cannot be changed or deleted after a block is added. Trust is established through consensus and cryptographic verification, without relying on central intermediaries.
How does blockchain technology work?
This decentralized model allows secure and verifiable business interactions even between participants who may not fully trust one another. Companies can reduce overhead by removing the need for third-party validation.
No central location stores all the data, which lowers the risk of failure or compromise.
Blockchain nodes serve as storage units that keep the data synchronized. When a new node joins the network, it downloads and verifies the full blockchain. Nodes detect changes and maintain data consistency.
There are two types: full nodes, which store the complete chain, and lightweight nodes, which hold only recent blocks and can fetch earlier ones if needed.
Consensus algorithms enforce rules across the blockchain, ensuring all participants follow predefined conditions. These rules govern how transactions are validated and added to the chain.
Blockchain adoption is expected to grow due to its ability to improve efficiency, reliability, and data security. It provides shared, permission-based access to records, eliminating isolated data silos. This shared structure supports real-time validation and transaction transparency across the network.
Key benefits include the ability to:
- Build trust among business partners through shared, verified records
- Consolidate data from separate systems into one distributed ledger
- Improve data security across the network
- Reduce reliance on third-party validators
- Create real-time, tamper-proof transaction records
- Confirm product authenticity in commercial activities
- Enable end-to-end visibility in supply chains
With blockchain, only authorized users can view or update specific data. Network participants define access levels, maintaining control over information flow and usage.
A blockchain network can track orders, payments, accounts, production and much more. And because members share a single view of the truth, you can see all details of a transaction end to end, giving you greater confidence, as well as new efficiencies and opportunities.
Blockchain is one of the trending technologies in the world, with the highest number of social media mentions. Due to various use cases in the Supply chain, Payments, Digital Assets (Cryptocurrencies), Non-Fungible Tokens (NFT), and Smart Contracts, Blockchain registered massive growth in the past few years.
Blockchains are best known for their crucial role in cryptocurrency systems, such as Bitcoin, for maintaining a secure and decentralized record of transactions. The innovation with a blockchain is that it guarantees the fidelity and security of a record of data and generates trust without the need for a trusted third party.
One key difference between a typical database and a blockchain is how the data is structured. A blockchain collects information together in groups, known as blocks, that hold sets of information.
Blocks have certain storage capacities and, when filled, are closed and linked to the previously filled block, forming a chain of data known as the blockchain. All new information that follows that freshly added block is compiled into a newly formed block that will then also be added to the chain once filled.