What is a blockchain?
A blockchain is a distributed database that records transactions in cryptographically linked blocks: each block carries the hash of the previous one, so altering historical data would require rewriting every subsequent block across the majority of the network. Combined with a consensus mechanism (proof-of-work, proof-of-stake and their variants), this yields a ledger that no single participant controls and that is, in practice, append-only. Blockchain is the best-known implementation of distributed ledger technology (DLT), though not every DLT is a blockchain.
Core building blocks
- Blocks and hashes: batches of transactions sealed with a cryptographic fingerprint; any change to the data changes the hash.
- Nodes: independent computers holding copies of the ledger and validating new blocks against the protocol rules.
- Consensus: the rules by which nodes agree on a single version of history without a central operator.
- Public vs. permissioned: public chains (Bitcoin, Ethereum) are open to anyone; permissioned chains restrict who may validate or read, which changes both the trust model and the legal analysis.
On programmable chains such as Ethereum, the ledger also executes smart contracts, and the native units of value transferred on it are cryptocurrencies and tokens. Scaling designs that settle to a base chain are covered under Layer 2.
The legal questions behind the technology
The properties that make a blockchain useful — immutability, decentralisation, pseudonymity — are precisely the ones that strain existing law. Immutability collides with data-protection rights of erasure and rectification under the GDPR and Turkey’s KVKK, which is why regulators steer personal data off-chain and treat on-chain storage of it as a design failure rather than a compliance question to be argued later. Decentralisation complicates the search for a controller, an issuer or a defendant: when no one operates the network, liability tends to settle on whoever built, deployed or profits from the application layer. Pseudonymity drives the AML/KYC perimeter, which attaches to the intermediaries — exchanges, custodians, service providers — rather than to the protocol itself.
Turkish context
Turkish law does not regulate blockchain as a technology; it regulates uses of it. Law No. 7518 (2024) brought crypto-asset service providers under Capital Markets Board licensing, and the payments legislation continues to bar the use of crypto-assets in payments. For companies, the practical question is rarely “may we use a blockchain?” but “does what we put on it — tokens, records, personal data — trigger capital-markets, e-money or data-protection obligations?”
Do: keep personal data off-chain and anchor only hashes or references; document who controls keys, upgrades and validators before a dispute forces the question. Don’t: assume “decentralised” means “no one is liable” — courts and regulators increasingly look through the label to the people behind the deployment.
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