How does a blockchain achieve transparency?

A blockchain achieves transparency through the ability of all participants in the network to view the complete history of all transactions. This open access means that every transaction that has ever occurred on the blockchain is recorded in a distributed ledger that is shared among all nodes in the network. Each transaction is immutable, meaning it cannot be altered or deleted once it has been added to the blockchain. This visibility into the transaction history allows participants to verify the authenticity and integrity of the data without the need for a central authority, fostering trust among users.

This transparency is a foundational characteristic of blockchain technology, enabling various applications such as cryptocurrencies, supply chain tracking, and decentralized finance (DeFi). Participants can independently confirm the legitimacy of transactions, which reduces the likelihood of fraud and increases accountability within the system.

Other options may involve important aspects of blockchain technology, but they do not directly pertain to transparency in the same way. Advanced encryption methods contribute to security but do not impact the visibility of transaction data. Limited access can enhance security but contradicts the principle of transparency inherent in blockchain networks. Smart contracts are useful for automating processes but are not a primary mechanism by which transparency is achieved in the overall blockchain framework.