What Is Blockchain? How Distributed Ledger Technology Works

Frequently Asked Questions

01.Should my enterprise use a public or private blockchain?

It depends on your trust model. Public blockchains offer censorship resistance and composability, valuable for tokenized assets and DeFi. Private chains offer permissioned access, higher throughput, and data privacy. The majority of FSI executives in Deloitte's Global Blockchain Survey said they would lose competitive advantage without blockchain adoption (Deloitte, 2021). Neither architecture is universally better.

02.How fast is blockchain? Can it handle enterprise transaction volumes?

Layer 1 throughput is intentionally limited: Bitcoin and Ethereum process tens of TPS live. Layer 2 rollups (zkSync Era, Arbitrum One) handle far higher volumes by executing transactions off-chain and settling to Ethereum (Chainspect, April 2025). For enterprise workloads, permissioned BFT chains like Hyperledger Fabric deliver high throughput with immediate finality and data privacy.

03.What consensus mechanism does Ethereum use?

Ethereum uses Proof of Stake (PoS) since The Merge in September 2022. Validators stake 32 ETH as collateral and are chosen pseudo-randomly to propose and attest blocks. The switch reduced Ethereum's energy consumption by orders of magnitude, from roughly 112 TWh per year down to a fraction of that figure (Ethereum Foundation, post-Merge data).

04.How is blockchain different from a regular database?

A traditional database has a central administrator who can edit or delete records. Blockchain distributes control across thousands of independent nodes. Bitcoin runs on 73,886 nodes, Ethereum on roughly 14,000 (Etherscan, 2025). No single entity can unilaterally alter the ledger, making it useful for multi-party trust scenarios where participants do not fully trust each other.

05.What is blockchain in simple terms?

A blockchain is a distributed database shared across a network of computers where records are grouped into cryptographically linked blocks. No single party controls it. Once a block is confirmed, its data cannot be altered without redoing all subsequent blocks, a property called immutability. The global blockchain market is on a steep growth trajectory from 2025 to 2030, growing at a compound annual rate that outpaces most technology sectors (MarketsandMarkets, 2025).