Blockchain

In plain words

Picture a notebook that a whole group keeps a copy of. Whenever someone wants to add a line, the group checks it, everyone writes it in their copy, and each new page starts with a fingerprint of the page before. Tearing out or changing an old page would break every fingerprint after it, and everyone else's copy would still show the original.

The chaining idea is older than Bitcoin. Stuart Haber and Scott Stornetta described linking time-stamped documents with hashes in 1991. Satoshi Nakamoto combined it with a peer-to-peer network and proof of work in the Bitcoin whitepaper in 2008, which calls it a "chain of blocks". The single word "blockchain" came later.

How it works

1. Someone signs a transaction with their private key and sends it to the network.
2. Computers on the network, called nodes, check the signature and that the funds or data exist.
3. A miner or validator bundles waiting transactions into a new block.
4. The network agrees on that block through its consensus method, and every node adds it to its copy.
5. As more blocks pile on top, the transaction becomes harder and harder to reverse. On Ethereum, a block is final after about 15 minutes.

Types of blockchain

Proof of work and proof of stake

Bitcoin's energy mix is shifting. A 2025 Cambridge survey of miners found that 52.4% of their energy came from renewables and nuclear, up from 37.6% in 2022, with natural gas the largest single source.

By the numbers

Do you need a blockchain?

Researchers Karl Wüst and Arthur Gervais put this chart together in 2018 to cut through the hype. Their point is simple: if only one party writes the data, or everyone who writes it trusts each other or a central operator, an ordinary database does the same job faster and cheaper. A blockchain earns its cost only when several parties need to write to one shared record and none of them should control it.

Where it's used today

• Bitcoin: digital money with no central issuer, running since January 2009. Since January 2024, US investors can also hold it through spot bitcoin ETFs approved by the SEC.
• Stablecoins: tokens pegged to the dollar, mostly Tether and USDC, used for payments and trading. The US GENIUS Act of July 2025 and the EU's MiCA rules now set out how issuers are regulated.
• J.P. Morgan Kinexys: the bank's blockchain network for moving money between institutional clients, which it says averages over $7 billion a day.
• Estonia: since 2012, the government has used Guardtime's KSI blockchain to prove that records in registries like health, property and courts haven't been altered. Only hashes go on the chain, not personal data.
• Walmart: in a 2018 pilot with IBM, tracing sliced mangoes back to the farm took 2.2 seconds instead of 7 days.
• Tokenised Treasuries: products such as BlackRock's BUIDL fund and Ondo's USDY hold US government debt and issue tokens that can be traded and settled around the clock.

Some failure

• TradeLens, the shipping platform built by Maersk and IBM, shut down in early 2023. The software worked, but not enough of the industry joined for it to pay its way.
• Project mBridge, which linked central bank digital currencies across borders, reached a working product in 2024. The Bank for International Settlements then handed it over to the central banks involved and stepped away.
• Many enterprise projects used a blockchain where a shared database would have done. When one company runs every node, most of the benefit is gone.

Limitations

• Public chains handle far fewer transactions than card networks, and fees rise when they're busy. Layer 2 networks that batch transactions help, at the cost of extra complexity.
• A payment sent to the wrong address, or a lost private key, usually can't be undone.
• he chain itself is hard to attack, but exchanges, wallets, bridges and smart contracts are not. North Korean hackers alone took over $2 billion in 2025.
• Garbage in, garbage out. A blockchain proves that a record hasn't changed since it was written, not that it was true when it was written.