What is blockchain?

A distributed ledger that records transactions in linked blocks, maintained by a network of computers rather than a central authority.

Different cryptocurrencies run on different blockchains, which is why an asset must be sent to an address on the correct chain.

The word is used for two different things and the confusion is expensive. A public blockchain is an open network anyone can read, write to, and verify. A private or permissioned ledger run by one company shares the data structure and none of the properties that matter, and it is a database with extra steps.

How it works

Every participant keeps a copy of the ledger. New transactions are broadcast, collected into a block, and appended, with each block committing to the hash of the one before it. Changing an old entry would break every later link, which is what makes history tamper-evident rather than merely logged.

Agreeing on which block comes next is the hard part, and it is what consensus rules solve. proof of work makes producing a block cost energy. proof of stake makes it cost capital that can be destroyed for misbehavior. Both replace trust in an operator with a cost of attack.

Verification is what makes the system trustless. A full node checks every rule for itself rather than believing anyone, and enough independent nodes doing that is what stops a majority from silently changing the rules.

Chains are separate systems with separate ledgers. There is no shared address space, no automatic messaging between them, and no protocol-level way to move an asset from one to another, which is why a bridge exists and why it introduces risk the chains themselves do not have.

Everything written is public and permanent. That is a feature for verification and a cost for privacy.

Example

Illustrative: you hold USDC. The same token name exists on Ethereum, on several layer 2 networks, and on other chains, and each is a separate balance on a separate ledger. Sending USDC from a layer 2 network to an exchange's Ethereum deposit address puts tokens at an address on a chain where nobody at that exchange holds the key. Nothing was mistyped and nothing is recoverable without the exchange's cooperation.

Why it matters when you buy

Picking the right chain is the practical skill. It decides your withdrawal fee, your waiting time, and whether your funds arrive at all, and the choice appears as an easily missed dropdown next to the amount. Compare network options and costs at the fee comparison and see which chains an asset lives on at the chains directory.

Related terms

• block — the unit of the chain
• consensus — how the network agrees on the next block
• full node — the participant that verifies everything
• bridge — moving value between separate chains
• layer 2 — a chain settling to another chain
• block explorer — how you read a chain's contents

Questions

Is a blockchain anonymous?

No. Transactions are public and permanent, and analytics firms routinely link addresses to identities. It is pseudonymous, and an exchange deposit ties your addresses to your verified name.

Can data on a blockchain be deleted?

Not on a public chain. Anything written is kept by every node that stores history, which is why publishing personal information on chain is irreversible.

Do I need to understand this to buy crypto?

Only one part: which chain your asset lives on and which one your destination expects. Everything else can wait; that one decision has direct financial consequences.