How is a blockchain characterized?

A blockchain is characterized as a decentralized digital ledger that records transactions, which is a fundamental aspect of its design and functionality. In a blockchain, data is stored in a manner that is distributed across multiple nodes within a network, ensuring that no single entity has control over the entire system. This decentralization enhances security and transparency, as each participant in the blockchain can access the same information and verify transactions independently.

The digital ledger nature of a blockchain allows for an immutable record of transactions, meaning once data is added, it cannot easily be altered or deleted. This is achieved through cryptographic hashing and consensus mechanisms, which promote integrity and trust among users in the network.

The other options describe systems that do not embody the core principles of blockchain technology. A centralized database managed by a single entity lacks the decentralization that defines blockchains. A secured server that stores user data still operates within a centralized framework and does not provide the same level of transparency or immutability. Similarly, a traditional record-keeping system based on paper is entirely different from a blockchain, as it is not digital, lacks automation, and is prone to physical degradation and errors.