What is a blockchain?

A blockchain is a shared ledger that is secure, decentralized, and append-only. It lets users verify data and transactions without a central authority. Blockchain powers crypto networks like Bitcoin and Ethereum, but it also has broader applications.

A blockchain is a decentralized database where all entries are public and secured by cryptography. When people reference “blockchain,” it means two related things:

• The blockchain network: a group of nodes (computers) that maintain and validate the shared ledger.
• The blockchain data: the ledger itself, made up of linked blocks of information.
   

A blockchain wallet is a tool that lets users access and control their assets on a blockchain. Most new users don’t understand that a wallet itself doesn’t store data or coins inside it. Instead, a wallet lets users manage either assets that are recorded on the blockchain.

Blockchain wallets are used to interact with networks (like Bitcoin or Ethereum) or other applications.
 

Yes. It is legal to use, develop, build, and interact with blockchain technology in Canada. There are no laws restricting individuals or businesses from participating in blockchain-based networks.

Canadian regulators encourage innovation but caution users that blockchain-based assets (like cryptocurrencies or tokens) are high-risk. Blockchain platforms that offer crypto trading or custodial services must register with Canadian securities regulators.
 

Public blockchains are secure by design. However, risks still exist when using apps, trading tokens, or managing assets. When evaluating safety, it is important to separate technology risk from user and platform risk.

Blockchain records are hard to tamper with, but users could still fall victim to fraud, lost passwords, or insecure platforms.

Crypto assets are not covered by the Canadian Investor Protection Fund (CIPF) or deposit insurance. Ndax operates within Canadian regulatory requirements. 
 

Using a blockchain typically involves network fees. These are fees passed along to miners or validators who process and secure transactions.

Fees vary by network. On Bitcoin and Ethereum, for example, users pay a fee when sending crypto or interacting with smart contracts. These fees typically increase during periods of high activity.
 

Blockchains work by allowing many independent computers to agree on a shared history of data or transactions. There are several components required to understand how a blockchain operates.

Transactions and confirmations
When a transaction is submitted (such as a user request) to a blockchain, it is verified by the network. Once included in a block, it receives confirmations. More confirmations mean higher confidence that the data is final and cannot be reversed.

Keys and control
Control over blockchain-based assets is determined by private keys. Users can either manage their own keys through a self-custody wallet, or use a platform that holds keys on their behalf.

Consensus and validation
Blockchains use consensus mechanisms to validate new blocks. Popular methods include proof of work and proof of stake. These systems secure the network and prevent fraud.

Blockchain’s use case
Blockchain technology is used to record any type of information. Examples include cryptocurrency payments, non-fungible tokens (NFTs), supply chain tracking, and digital identity systems.

Blockchain is also used in decentralized finance (DeFi) applications, where users can lend, borrow, or trade crypto assets without traditional banks.
 

Blockchain technology is vital in creating trust and transparency in a relatively new system without relying on a central authority. That makes it useful for recording and verifying data across industries.

The most common reasons why users value blockchain technology include:

• Transparency: Records are public and verifiable.
• Security: Data is protected by cryptography and consensus.
• Decentralization: No single person or entity controls the network.
• Immutability: Once a transaction is confirmed, data cannot easily be changed.

Skeptics would point to higher energy use (on some networks), complexity, and the risk of scams or human error.
 

Most public blockchains are pseudonymous, not fully anonymous. Transaction histories are visible to everyone, although individual identities are tied to alphanumeric addresses.

In some cases, real-world activity can be linked to blockchain addresses. A practical takeaway for beginners is to operate under the assumption that addresses and transaction details are potentially traceable.

Is blockchain legal in Canada?
Yes. Blockchain technology is legal to use and build on in Canada.

Can I invest in blockchain?
Blockchain refers to a technology. Users can gain exposure to blockchain through crypto assets or blockchain-related stocks or funds. These investments are not guaranteed and carry risk.

Who invented blockchain?
The first major blockchain was created in 2009 by the anonymous person or group known as Satoshi Nakamoto. It was used to launch Bitcoin.

Can I use blockchain without buying crypto?
Yes, although use cases are limited. Some apps use blockchain for record-keeping or verification without requiring users to buy tokens.

Is blockchain anonymous?
No. Most blockchains are open and transparent. Transactions are pseudonymous but could be linked to real-world identities over time.

Is data on a blockchain permanent?
Yes. Once data is added to a blockchain, it is hard to change. This is part of what makes the system secure.

Are blockchain apps regulated in Canada?
Apps that deal with financial services or crypto ownership must register with regulators. Not all blockchain projects are subject to the same rules.