Definition
Blockchain is a decentralised digital ledger that records transactions across multiple computers in a secure and transparent way. Each record, known as a block, is linked to the previous one, forming a chain that is resistant to tampering or alteration. This structure ensures trust without the need for a central authority.
For example, blockchain technology is used in cryptocurrencies such as Bitcoin to record transactions transparently and prevent double spending.
Advanced
Blockchain operates through consensus mechanisms such as Proof of Work, Proof of Stake, or other protocols that validate and secure transactions. Once data is added to the chain, it becomes immutable, providing strong security and auditability.
Advanced applications extend beyond finance, including supply chain tracking, identity verification, digital contracts, and decentralised applications. Enterprises use private and consortium blockchains for controlled participation, while public blockchains remain fully open and decentralised. Integration with IoT, AI, and smart contracts enables automation of complex workflows.
Why it matters
- Provides secure and tamper-resistant record keeping.
- Reduces reliance on intermediaries in transactions.
- Enhances transparency in industries like supply chain and finance.
- Enables new business models through smart contracts.
Use cases
- Facilitating peer-to-peer cryptocurrency transactions.
- Tracking goods through supply chain systems.
- Automating agreements with smart contracts.
- Enabling decentralised identity management solutions.
Metrics
- Number of transactions processed per second.
- Energy consumption of consensus mechanisms.
- Cost efficiency of blockchain implementations.
- Adoption rate of blockchain in different industries.
Issues
- Scalability challenges due to transaction speed limits.
- High energy consumption for some consensus protocols.
- Legal and regulatory uncertainty across jurisdictions.
- Integration difficulties with existing systems.
Example
A food distributor implements blockchain to track produce from farm to store. Customers scan a QR code to verify origin, improving transparency and trust in the supply chain.