What a Blockchain Is

A shared, append-only ledger

A blockchain is a ledger replicated across many independent computers (nodes) that agree on its contents without a central authority. Transactions are grouped into blocks; each block contains the cryptographic hash of the previous block, so changing any historical transaction would change every later hash, making tampering evident. Nodes agree on which blocks are valid through a consensus mechanism. Bitcoin uses proof of work, where miners spend computation to propose blocks. Ethereum switched to proof of stake in The Merge (September 2022): validators lock up ether as collateral, are chosen to propose and attest to blocks, and lose part of their stake (slashing) if they misbehave. Key properties are transparency (anyone can read the chain), immutability in practice, censorship resistance and programmability. Trade-offs: limited throughput, fees that rise with demand, public data (privacy needs extra techniques), irreversible mistakes and lost keys, and a domain full of scams and speculation. Use blockchains when multiple parties who do not fully trust each other need a shared, verifiable state; a normal database is better for most other applications.

Blocks linked by hashes

Each block stores the previous block's hash, so altering history breaks the chain.

Hash chaining in a few lines

A toy illustration in Python of why altering an old block is detectable.

import hashlib, json

def block_hash(block: dict) -> str:
    return hashlib.sha256(json.dumps(block, sort_keys=True).encode()).hexdigest()

chain = []
prev = "0" * 64
for txs in (["asha->ravi 5"], ["ravi->meera 2"], ["meera->asha 1"]):
    block = {"prev": prev, "txs": txs}
    prev = block_hash(block)
    chain.append(block)

def is_valid(chain: list) -> bool:
    for earlier, later in zip(chain, chain[1:]):
        if later["prev"] != block_hash(earlier):
            return False
    return True

print(is_valid(chain))                    # True
chain[0]["txs"] = ["asha->ravi 500"]      # tamper with history
print(is_valid(chain))                    # False: block 1 no longer points to block 0's hash

Ask "why a blockchain?"

If one organisation controls the data and users trust it, a regular database is faster, cheaper and private. Blockchains add value when several parties need a shared record that none of them controls alone.

त्वरित जाँच: How did Ethereum reach consensus after The Merge in 2022?

• Proof of stake with validators who stake ether
• Proof of work mining
• A central server
• Proof of authority by one company