A blockchain is a decentralised digital ledger that records transactions securely across multiple computers. It is best known for powering cryptocurrencies, but its use goes far beyond that. Blockchain ensures data cannot be altered, making it highly valuable for industries that rely on secure, tamper-proof records.
Unlike traditional databases, where a central authority verifies transactions, blockchain operates on a trustless system. Once data is entered, it is permanently recorded and cannot be changed, removing the need for intermediaries like banks, auditors, or legal authorities. This not only cuts costs but also reduces the risk of human error and fraud.
In a typical financial transaction, such as a property sale, both buyer and seller keep their own records. Disputes can arise if one party claims they haven’t received payment, even if they have. To prevent such conflicts, a trusted third party – like a bank or legal body – usually steps in. This process adds extra costs, delays, and risks.
Blockchain solves this problem by creating a shared, real-time ledger where every transaction is verified and recorded across multiple nodes (computers) in the network. No single entity controls the data, making it transparent and secure. If anyone tries to alter a past transaction, they would have to change the entire blockchain – something that is nearly impossible due to its decentralised nature.
This level of security and transparency is why blockchain is being adopted in finance, healthcare, supply chain management, and digital identity verification.
Blockchain follows a simple but powerful process:
Blockchain technology was first introduced in 2008 by Satoshi Nakamoto, the anonymous creator (or group of creators) behind Bitcoin. Nakamoto designed blockchain to solve the double-spending problem in digital transactions – allowing people to exchange money without relying on banks or financial institutions.
While Bitcoin was the first real-world use of blockchain, the technology has since expanded into many industries, powering smart contracts, digital assets, and secure data storage solutions.
Blockchain is often considered one of the most secure technologies, but no system is completely hack-proof. However, it is extremely difficult to tamper with blockchain due to its design:
While blockchain itself is highly secure, individual applications built on it (such as smart contracts or private blockchain networks) can have vulnerabilities, so security measures must always be in place.
Beyond cryptocurrency, blockchain is transforming industries in ways that improve security, efficiency, and transparency.
With its ability to provide trust, security, and efficiency, blockchain is set to reshape industries worldwide, proving it’s far more than just the technology behind Bitcoin.
Blockchain technology was first conceptualised in 1991 by researchers Stuart Haber and W. Scott Stornetta. Their goal was to create a system where document timestamps could not be altered, ensuring authenticity and security. However, it wasn’t until nearly two decades later – with the launch of Bitcoin in January 2009 – that blockchain found its first real-world application.
Bitcoin operates on blockchain technology, but the two are not the same. In 2008, Satoshi Nakamoto (a pseudonymous creator or group of creators) introduced Bitcoin as a peer-to-peer electronic cash system that eliminates the need for intermediaries like banks.
Bitcoin uses blockchain to maintain a secure, decentralised ledger of transactions. Every Bitcoin transaction is recorded on the blockchain, making it transparent and tamper-proof. However, while Bitcoin was the first major application of blockchain, it is just one of many ways blockchain technology can be used.
Blockchain itself is a versatile technology that can store and verify any kind of data, not just financial transactions. It can be used to record:
One of the most promising applications of blockchain is secure online voting. A blockchain-based voting system could give each citizen a unique digital token to vote for their preferred candidate. Since every transaction (vote) is publicly verifiable and cannot be altered, it would eliminate the risk of vote manipulation, human error, and fraud.
While Bitcoin is just one use case of blockchain, the technology itself is far more powerful and adaptable, with the potential to revolutionise industries beyond finance.
| Feature | Bitcoin | Blockchain |
|---|---|---|
| Definition | A digital currency that allows peer-to-peer transactions without intermediaries. | A decentralised digital ledger that records transactions securely and transparently. |
| Purpose | Primarily used for financial transactions. | Can be used for various applications like financial transactions, voting, supply chain management, identity verification, etc. |
| Ownership | Controlled by a decentralised network of users but follows the Bitcoin protocol. | Can be private (permissioned) or public (permissionless), depending on the use case. |
| Use Case | Acts as a store of value and a medium of exchange. | Provides a secure, transparent, and tamper-proof system for storing and sharing data. |
| First Use | Launched in 2009 by Satoshi Nakamoto. | Concept introduced in 1991, but gained popularity with Bitcoin in 2009. |
| Transactions | Uses blockchain to record Bitcoin transfers only. | Can record any kind of data, not just financial transactions. |
| Flexibility | Limited to Bitcoin-related functions. | Highly flexible – used in industries like finance, healthcare, logistics, governance, and more. |
| Security | Highly secure due to cryptographic encryption and decentralisation. | Inherently secure but depends on the implementation and consensus mechanism used. |
| Transparency | Every Bitcoin transaction is publicly recorded on the blockchain. | Can be public (transparent) or private depending on the blockchain type. |
| Examples | Bitcoin (BTC) | Ethereum, Hyperledger, Tezos, Solana, Cardano, and other blockchain networks. |
Blockchain networks can be structured in different ways depending on their purpose and level of access. The four main types include public, private, permissioned, and consortium blockchains.
A public blockchain is open to anyone who wants to participate. Bitcoin and Ethereum are prime examples. These networks are decentralised, meaning no single entity controls them. However, they come with challenges, such as:
While public blockchains work well for cryptocurrencies and decentralised applications (DApps), they may not be ideal for businesses requiring confidentiality and control.
A private blockchain operates similarly to a public one, but access is restricted. One organisation controls:
Private blockchains offer greater security and privacy, making them suitable for enterprises handling sensitive data. They can be hosted on-premises or within a corporate firewall.
A permissioned blockchain requires users to obtain approval before joining. This model applies to both public and private blockchains, ensuring that:
Businesses often use permissioned blockchains to maintain control, security, and efficiency, especially in finance, healthcare, and supply chain management.
A consortium blockchain is governed by a group of organisations instead of a single entity. This model is useful when:
Consortium blockchains balance decentralisation with control, making them more efficient than public blockchains while ensuring fair governance among participants.