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It is a special type of database. However, instead of storing data in a single location, it allows many people to store it together.

It divides data into chunks called "blocks", each of which has a timestamp and is connected in sequence like a chain of beads to form a "chain". What's even better is that each block keeps a record of the "digital fingerprint" of the previous block. If someone tries to alter the data within a block, the fingerprints of all subsequent blocks will be disrupted and immediately detected, making it very difficult to secretly modify the data.

Divided by scope of use, there are three common types of blockchains:

• Public blockchains are accessible to anyone, like Bitcoin. They are managed collectively by everyone, open and transparent but a bit slow.

• Consortium blockchains are used by several organizations together, such as between banks. They are fast and secure.

• Private blockchains are like those used within a company, managed by insiders. They are efficient but not as open. Its greatest advantages are that the data is transparent, unalterable, and managed collectively, so there's no need to worry about being cheated by an individual or institution. However, it is still developing. Sometimes the processing speed is slow and it's a bit complicated to use, but it will get better over time.

The three core characteristics of blockchainThe unique value of blockchain stems from its three core characteristics, which support each other and form its irreplaceable advantages:

1.Immutability

As mentioned earlier, blockchain uses hash value association and distributed storage, which means that modifying data requires controlling more than 51% of the nodes in the entire network (for public blockchains), resulting in extremely high costs. For example, the Bitcoin blockchain has never been successfully tampered with since it was launched in 2009, which is difficult to achieve with traditional centralized systems.

2.Transparency and traceability

Every piece of data on the blockchain has a timestamp and operation records, and can be viewed by all nodes in the network (privacy protection can be achieved through encryption in some scenarios). This means:

• Traceability of data sources: Any record can be traced back to its original creator and all circulation links (such as the entire process of production, transportation, and sales of goods in the supply chain).

• Openness and transparency of operations: When multiple parties are involved, there's no need to worry about data being modified unilaterally, reducing information asymmetry.

3.Decentralization (or multi-centralization)

Blockchain has no central server or management agency, and data is maintained jointly by multiple nodes. The advantages of this structure are:

• Resistance to single-point failures: Even if some nodes go offline, the system can still operate normally (for example, the Bitcoin network has never collapsed due to the failure of a single node).

• Prevention of monopolistic control: No individual or institution can unilaterally manipulate data, making it suitable for scenarios that require multi-party collaboration but lack mutual trust (such as cross-border trade settlements).

Key difference: Public chains pursue "absolute decentralization" and security at the expense of efficiency; consortium chains and private chains, on the other hand, strike a balance between "decentralization" and "efficiency" and are more suitable for enterprise-level scenarios.