What is blockchain and how is this technology changing the world?

Blockchain is a distributed digital ledger in which each block of transactions is linked to the previous one by cryptography, which makes the history practically impossible to change. Because the network's own participants validate transactions, it needs no central intermediary, and that is why it underpins cryptocurrencies, NFTs and smart contracts.

Have you heard of this thing called "blockchain"? It is the technology giving the world of financial transactions a real upgrade. Think of it as a global digital vault that keeps your information encrypted. And the best part: you do not need an intermediary to validate your transactions. Sounds like a good replacement for those "trustworthy institutions that protect your money" which, at any moment, can be looted or freeze our withdrawals.

Basically, it is a digital record that makes your transactions immutable, meaning they cannot be altered. Information is chained together to form unique codes, which is why blockchain is so popular for financial transactions and NFTs.

In practice, it works like a database distributed in a decentralized way: each participant has a copy of the data, linked by a chain built by computers with the help of complex mathematical operations. There is no central authority; the network's members validate transactions and, once approved, they are recorded in encrypted blocks chained to one another. Security comes from cryptography and the network model.

Did you know there are different kinds of blockchain? They can be fully decentralized, where all participants validate information to create a new block; centralized, where only a few authorized users validate and decisions sit at the top of the hierarchy; or hybrid, mixing both models.

A centralized blockchain can be used by companies to track products, materials and even employees securely and in real time, with more control over the information. A decentralized network is ideal for creating DAOs (decentralized autonomous organizations), with open voting and an economic structure very different from the traditional economy.

The first blockchain was Bitcoin's, described by Satoshi Nakamoto in the 2008 whitepaper. It works as a large ledger of transactions, and validators (miners) receive a reward in bitcoin, whose smallest unit is the satoshi, for each block closed.

Correction (Oct 2026): the original version of this text mentioned a "legend" of 22.9 million bitcoins. The right number is different: the protocol caps supply at slightly less than 21 million bitcoins, and the cap is no legend, it is in the code itself. By 2023, about 19 million had already been issued.

And it does not stop there. There are other important blockchains with different purposes.

Ethereum is a programmable blockchain that allows smart contracts and decentralized applications. It is seen as an evolution of Bitcoin's precisely because it offers more flexibility and more possible uses.

A smart contract is a program stored on the blockchain itself that runs on its own when certain conditions are met. Think of a vending machine: you insert the coin, choose the product and receive it, with no attendant. On Ethereum, the same logic applies to loans, votes and token issuance, and anyone can check the code that will run.

There are other well-known networks: the XRP ledger, from Ripple, focused on international payments; Cardano, which aims to solve scalability problems; and Chainlink, which provides oracles for smart contracts, connecting them to external data sources. Each has a different purpose and use, and knowing these traits helps you understand how they are changing the way we deal with information and money.

Can a blockchain be hacked? Changing old blocks on a large network is practically infeasible, because it would require redoing the proof of work for every following block and convincing most of the network. The most common attacks happen on wallets, exchanges and badly written contracts, not on the chain itself.

How many bitcoins will exist? Slightly less than 21 million, under the protocol's rules.

Is blockchain only for cryptocurrency? No. It is also used for product tracking, digital identity, NFTs and DAO voting.

Blockchain technology is changing the way we handle information and transactions, bringing more security, transparency and decentralization. Cryptography and artificial intelligence models sit at the top of this century's technology, and whoever understands these trends will be better prepared to make the most of what comes next. And you, do you already see how your money may change in the coming years?

Douglas Henrique, DOUVRAS Labs. Originally published on LinkedIn on February 5, 2023.

Nakamoto, S. Bitcoin: A Peer-to-Peer Electronic Cash System, 2008. bitcoin.org.

Bitcoin Developer. Blockchain Guide. Link.

Bitcoin Wiki. Controlled supply. Link.

Ethereum.org. What is Ethereum? Link.

Buterin, V. Ethereum Whitepaper, 2013. ethereum.org.

Simply Explained. How does a blockchain work. YouTube, 2017. Link.