A blockchain is a timestamped series of immutable transactions that is managed by a cluster of computers using special computer algorithms. These immutable records are not owned by any single entity. A blockchain is a decentralized P2P network of nodes. Each node in a blockchain shares the same copy of data, also called the digital ledger. Each node present in the network uses the same algorithm to reach a consensus.
A blockchain, by design, is resistant to the modification of data. The ledger can record transactions between two parties in a verifiable and permanent way. Whenever there is a change in the ledger using transactions, changes are distributed to all the nodes, to verify and update their own copy of the ledger. Once a transaction is stored and verified by all the nodes in the network, then it is not feasible to change the transaction without altering all the subsequent and previous blocks. That's why blockchain transactions are irreversible, as blockchain transactions and their data are append only.
Each computer that participates in this P2P network is called a node. Each node maintains the records of transactions in multiple consecutive blocks. The P2P network is also used in torrents such as BitTorrent; however, torrent networks are not like blockchains, as they are designed to shares files only.
Blockchain technology is also called Decentralized Ledger Technology (DLT), as each node in the network keeps the same copy of the ledger. Please have a look at the following diagram:
In the preceding diagram, each block is connected with a link (also known as a chain). The chain is usually recognized as the chain of all the blocks. The link between two blocks is implemented by having a record of the cryptographic hash of the previous block in each block, so that you can visit the chain in reverse chronological order.
One question that may arise in your mind is, what is the difference between a traditional software application that processes the transaction and a blockchain that also processes the transaction? Then, why you would need blockchain technology? Well, blockchain technology solved one of the hard problems of computer science—the double-spending problem. Let's understand what is the double-spending problem..