Blockchain technology is essentially a decentralized digital ledger that records transactions across multiple computers in a way that ensures the data cannot be altered retroactively. Each transaction is grouped into blocks, which are then linked together in chronological order to form a chain—hence the name “blockchain.” This structure not only enhances security but also increases transparency, as all participants within the network can access and verify the entire history of transactions.
The security of blockchain comes from its use of cryptographic techniques, which protect the data from unauthorized access and manipulation. When a transaction is made, it is encrypted and added to a block, and each block contains a unique hash of the previous block. This interlinking creates a secure chain; if someone attempts to alter a transaction in one block, it would change its hash and disrupt the entire chain, making such tampering easily detectable. As a result, blockchain technology provides a highly secure method for conducting digital transactions, making it particularly valuable in sectors like finance, supply chain management, and healthcare.