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Understanding Blockchain Basics: A Beginner’s Guide

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What is Blockchain?

Blockchain is a distributed ledger technology that records transactions across a network of computers. This decentralized structure ensures transparency, security, and immutability. Each record, known as a block, is linked to the previous one, forming a chronological chain that cannot be altered retroactively without consensus from the network.

How Blockchain Works

At its core, blockchain consists of three main components: blocks, nodes, and miners.

This system eliminates the need for a central authority and reduces the risk of fraud or manipulation.

Types of Blockchain

There are several types of blockchain networks:

Each type offers different levels of transparency, security, and efficiency depending on the use case.

Key Features of Blockchain

Blockchain Applications

Blockchain is used in various industries beyond cryptocurrencies:

Challenges and Limitations

Despite its advantages, blockchain faces several challenges:

External and Internal Resources

FAQs

Q: What is a blockchain?

A: It’s a digital ledger that records transactions in a decentralized and immutable manner.

Q: How secure is blockchain?

A: It is highly secure due to its use of cryptographic algorithms and decentralized nature.

Q: What are the benefits of blockchain?

A: Transparency, security, reduced fraud, and elimination of intermediaries.

Q: Is blockchain only used for cryptocurrencies?

A: No, it’s used in supply chain, healthcare, finance, voting systems, and more.

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