What is a Blockchain ?

A decentralized public blockchain ledger is often considered superior to traditional banking mechanisms due to key differences in structure, operation, and the role of intermediaries. The core advantages of the blockchain model center on enhanced security, greater transparency, reduced costs, and increased efficiency.

Traditional banks operate on a centralized system where a single authority (the bank) controls the ledger and validates all transactions. This creates a single point of failure that can be vulnerable to censorship, technical failure, or hacking.

In contrast, a public blockchain is a Distributed Ledger Technology (DLT). Copies of the ledger are spread across thousands of computers (nodes) worldwide.

• No Single Point of Failure: If one node goes down, the network remains operational, making it highly resilient.
• Immutability: Once a transaction is recorded on the blockchain, it is permanent and cannot be deleted or altered by any single party, including the network's creator. This drastically reduces the risk of fraud or data manipulation.

Control and decision-making are transferred from a single central authority (like a bank or government) to a distributed network of computers (nodes). No single entity owns or controls the data.

Once a transaction is recorded in a block and added to the chain, it cannot be deleted or altered. If an error occurs, a new transaction must be created to reverse the mistake, and both records remain visible.

The ledger is often public (or shared among participants in private chains), meaning all transactions can be viewed and verified by anyone on the network. However, the identity of the person (the account address) is pseudonymous.

The network must agree that a transaction is valid before it is added to a new block. This agreement is achieved through a Consensus Mechanism (like Proof-of-Work or Proof-of-Stake), which ensures a single, agreed-upon version of the truth.