A blockchain is a cryptographically secured ledger. According to the United States District Court Southern District of New York in SEC v. Binance Holdings Limited, a blockchain uses cryptographically secured technologies to ensure the security of the recording and valid…
A guide to blockchain
The Function of Blockchain
First, the function of such a ledger involves the recording and validating of not only cryptocurrency transactions but also traditional assets, including stocks and bonds. The United States District Court Southern District of New York in SEC v. Telegram also explained how a blockchain records and validates cryptocurrency transactions. Each block of a blockchain contains the information of a group of cryptocurrency transactions, and each block is linked together chronologically to form a chain. Additionally, a blockchain also supports the voting or governance rights within itself, as well as blockchain-based applications and smart contracts. The existence of cryptocurrency is the premise for cryptocurrency transactions to occur. As explained in SEC v. Coinbase, Inc., each blockchain supports a category of cryptocurrency that is unique or native to it, which is also called native token. For example, Bitcoins are native to the Bitcoin blockchain.
The Structure of a Blockchain
The structure of a blockchain is decentralized. Because a blockchain is distributed to an entire community rather than a single authority, a blockchain records and validates cryptocurrency transactions in a decentralized manner; in other words, each validation does not rely on any centralized authority (See Friel v. Dapper). The benefit of such a decentralized structure is that modifying the information stored in a blockchain without the entire community’s agreement is difficult, thereby allowing for a high level of trustworthiness. According to SEC v. Binance Holdings Limited, the mechanism of validating a blockchain is called a consensus mechanism, and all members of each community agree on each consensus mechanism.
The Accessibility of a Blockchain
A blockchain can be public or private. A private blockchain restricts access to only certain approved users, while a public blockchain is visible to anyone.
Why blockchain is relevant in U.S. law
blockchain appears in U.S. legal practice across multiple practice areas. Knowing what it means — and when it applies — can determine the outcome of motions, filings, and negotiations. For non-lawyers, the value of looking up a precise definition is that legal terms often carry meanings that differ from everyday usage; relying on the common meaning can lead to costly missteps.
When and how blockchain applies
In practice, blockchain is invoked when parties, judges, or attorneys need to identify the legal status of an issue, the rights of those involved, or the procedural step required next. The definition shown above is sourced from Cornell LII Wex , which is widely cited in U.S. legal practice. Because U.S. law is jurisdictionally layered — federal, state, and sometimes local — the precise application of the term can vary by court, so check the controlling authority for your specific case.