Blockchain

Blockchain

Blockchain, which is a type of distributed ledger technology, underpins bitcoin, other virtual currencies and the operation of decentralised Metaverse platforms. It has generated significant attention for its potential to reduce error, fraud and cost in a range of scenarios including banking, supply chain management, copyright royalty management and voting to name but a few.

For more information about blockchain and the key legal and regulatory issues associated with it, see Practice Note: Blockchain—key legal and regulatory issues.

What is blockchain?

A blockchain is a shared database containing information recorded in blocks. Each block is recorded on a ledger and linked to other blocks through the use of encryption. This creates a chain which can be verified to ensure that all of the recorded transactions are valid and have not been entered fraudulently.

The core characteristic of blockchain is that the ledger is not held by a single person. Instead, it is decentralised and identical copies of the ledger are distributed to a number of different servers (referred to as nodes) and updated simultaneously. When a new block is entered, all of the nodes communicate with each other and use

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