Blockchain is a distributed database, utilized collectively by many users within a computer network. Best known for its crucial role in cryptocurrency systems such as Bitcoin, blockchain technology ensures the accuracy and security of data recording without the need for a trusted third party.
A key difference between a conventional database and a blockchain is how the data is structured. Blockchain compiles information into blocks, which have a certain capacity. Once filled, they are sealed and linked to the previously filled block, forming a chain of data. Any new information following the recently added block is placed in a newly formed block, which is then added to the chain once filled.
As a result, in blockchain, it's impossible to falsify records of asset ownership, since this data is stored on the computers of a vast number of network participants. When a block is filled, it becomes part of a single chronological timeline. Each block in the chain includes the time and outcome of all previous transactions.
The aim of blockchain is to allow digital information to be recorded and distributed, but not edited. Blockchain serves as the foundation for immutable ledgers, or records of transactions, that cannot be altered, deleted, or destroyed. This is why blockchain is also known as distributed ledger technology (DLT).
The concept of blockchain was first introduced as a research project in 1991. Since then, distributed ledger technology has evolved rapidly, thanks to the development of various cryptocurrencies, decentralized finance applications (DeFi), non-fungible tokens (NFTs), and smart contracts.