Blockchain technology is a decentralized digital ledger that records data, including currency transactions. Once recorded, these transactions are public and immutable, meaning they cannot be changed.
Each transaction is stored in a “block” of data. Blocks are linked to the previous ones cryptographically, forming a continuous, secure chain—hence the name “blockchain“. This structure makes it highly resistant to tampering.
I know. This sounds even more complicated than before you started reading the article. Right? Do not worry, I have good news! The definition was the most complex part of our article. Let’s break it down and find out what is blockchain in simple words by explaining each concept using simple everyday life examples.
The Blockchain Is a Decentralized Digital Ledger
The blockchain is decentralized because no single entity (like a bank or a government) controls data and transactions. Suppose Eric wants to send some Bitcoin to his friend Max. He can do so whenever he wants, and nobody can stop the transaction from happening or freeze his account.
Now, for the digital ledger part, imagine a group of entrepreneurs who want to start a business. They decide to use a shared notebook to track their spending. Every time someone spends money, they write it in the notebook, and everyone can see it. No one can erase or change what’s already written; they can only add new spending. Blockchain works similarly. It’s a digital “shared ledger” that records transactions, and everyone can see the history of what happened.
Public and Immutable Transactions
A receipt is printed for you when you buy something at a store. Now, imagine if this receipt is displayed on a public board. Once the receipt is posted, no one can remove or alter it. The original copy remains visible for everyone to see forever.
It’s the same concept with blockchain transactions; it’s like posting a permanent record on a public board. Everyone can see it, and once it’s recorded, it can’t be erased or altered, making it both public and immutable.
The Succession of Blocks Forms a Chain
So far, we explained what decentralized digital ledger means, and why transactions are public and immutable. It is now time to explain what the term blockchain refers to.
The example for this concept is quite simple, imagine a train to which we add a new train car represented by a block of information. Every time a new train car is added, it locks onto the previous one, and you can’t take it out or rearrange the order.
On the blockchain, each block of data (which contains transaction information) is linked to the previous block. Over time, a chain of blocks or a blockchain is formed. The longer the chain, the stronger it becomes, making the data more secure and tamper-proof.
So What is Blockchain In Simple Words?
It can be viewed as a public digital notebook that everyone can write in, but no one can edit or erase. It allows the recording of money transactions, property records, and other types of information in a secure environment where all involved actors can trust that the record is accurate as it is visible to all.
If you’re interested in an in-depth understanding of blockchain technology functions, its applications, and its potential, feel free to check our comprehensive blockchain guide.