How does blockchain work?

Blockchain is a distributed digital ledger that records transactions on multiple computers in a secure and transparent way. Each block in the chain contains a record of several transactions and is linked to the previous block using cryptographic algorithms, creating an unalterable and permanent chain of records.

When a new transaction is added to the blockchain, it is broadcast to all nodes in the network. Each node validates the transaction using complex mathematical algorithms and consensus protocols to ensure that it is legitimate. Once a majority of nodes on the network agree that the transaction is valid, it is added to a block and linked to the previous block, forming a chain.

The decentralized nature of blockchain technology means that there is no central authority controlling the network, and every participant has a copy of the entire ledger. This makes the system highly secure and resistant to fraud or hacking attempts, as any unauthorized changes would need to be made on a majority of nodes in the network simultaneously.