Blockchain is a distributed database that allows participants in a network to reach consensus on a digital record of transactions. It uses cryptography and digital signatures to prove identity, making changes to historical records difficult. This solves the Byzantine Generals problem of reaching agreement over an untrusted network. While it provides advantages like removing single points of failure and enabling trustless exchanges, challenges include its nascent nature, high energy use, and cultural adoption barriers. Real-life applications include Yes Bank's use of blockchain with Bajaj Electricals for more efficient vendor financing. The document discusses blockchain concepts and provides examples of its use cases.