Blockchain

A blockchain is a distributed database shared across a network of computers (nodes). Each block contains a batch of validated transactions, cryptographically linked to the previous block — forming an immutable chain. Once data is written, it cannot be altered without consensus from the network.

How It Works

1. Transactions are broadcast to the network
2. Nodes validate transactions against the protocol's rules
3. A consensus mechanism (Proof of Work, Proof of Stake, etc.) determines which node proposes the next block
4. The new block is appended to the chain and propagated across all nodes
5. The ledger state is synchronised — every node holds an identical copy

Why It Matters

Blockchain eliminates the need for trusted intermediaries in financial transactions. Instead of relying on a bank, clearinghouse, or custodian to verify and settle transactions, the network itself provides trust through cryptography and economic incentives.

This has profound implications for:

• Financial infrastructure — settlement in minutes instead of days
• Transparency — every transaction is publicly auditable
• Access — anyone with an internet connection can participate
• Programmability — smart contracts enable automated, self-executing agreements

Key Properties

• Immutability — once confirmed, transactions cannot be reversed or altered
• Decentralisation — no single point of failure or control
• Transparency — all transactions are visible on the public ledger
• Censorship resistance — no entity can block valid transactions
• Permissionless — anyone can participate without approval

Types of Blockchains

• Public (Bitcoin, Ethereum) — open to anyone, fully decentralised
• Private (Hyperledger) — restricted access, controlled by an organisation
• Consortium — shared governance among a group of organisations
• Layer 2 — built on top of a Layer 1 blockchain for scalability (e.g. Arbitrum, Optimism)

Limitations

• Scalability — public blockchains process fewer transactions per second than centralised systems
• Energy consumption — Proof of Work chains require significant computational power
• Complexity — user experience remains a barrier to mainstream adoption
• Regulatory uncertainty — legal frameworks are still evolving globally

The Investment Thesis

Blockchain is not a speculative asset class — it is economic infrastructure. The technology provides the foundation for programmable, transparent, and globally accessible financial systems. As regulatory clarity improves and institutional adoption accelerates, blockchain will become the default settlement layer for an increasing share of global financial activity.