Skip to main content
EU Blockchain Observatory and Forum

What is blockchain?

Blockchain is one of the major technological breakthroughs of the past decade.

A technology that allows large groups of people and organizations to reach agreement on and permanently record information without a central authority, it has been recognized as an important tool for building a fair, inclusive, secure and democratic digital economy. This has significant implications for how we think about many of our economic, social and political institutions.

At heart, a blockchain is simply a shared database, which is why it is also known as a distributed ledger (though there can be distributed ledgers that are built with technology other than blockchain). The difference to traditional database technology is that, instead of having a singe database stored by a database owner who maintains and shares the data, in a blockchain network, all participants on the network have their own copy of the database. Thanks to the way blockchain works, it is possible to ensure that everyone can agree as to the correct contents of the data, that everyone has the same copy of this agreed-upon data, and that no one can cheat by altering the data after the fact.

This makes it possible for large numbers of individuals or entities, whether collaborators or competitors, to come to consensus on information and immutably store this agreed-upon record of the truth. For this reason, blockchain has been described as a “trust machine”.