What is blockchain?

Often confused with bitcoin, blockchain is the underlying technology used by bitcoin to operate. Concretely, it's an append-only and chronologically (timestamped) growing database, which harnesses basic cryptographic measures to protect stored transactions from being tampered with (in other words, data can't be deleted or altered). 

This database, or ledger, collects and records monetary transactions validated by the network in elementary units called blocks. Once validated by the network consensus mechanism, these blocks are added to an existing sequential chain of cryptographic hash-linked blocks, to ensure the integrity of the data—hence the name blockchain.

If a single bit changes in one of the linked blocks, the hash-link collapses, the chain is broken, and it will be rejected by the network.

The following diagram shows how the blockchain is replicated and processed by the members of the network to ensure that everyone has a consistent view of the transaction log. When a new block is validated, all nodes synchronize the same copy:

The diagram also shows us that blockchain implements a special data structure, consisting of linked blocks storing transactions and smart contracts. Let us take a closer look at these key elements in detail.