# Parachain
Parachains are a type of blockchain technology that is designed to enable the secure and efficient transfer of value between two parties. The primary benefit of parachains is that they allow for the creation of more complex, secure, and cost-effective distributed systems than traditional blockchains.
A parachain is a blockchain structure consisting of multiple “parallel” chains connected together in an interconnected network. Each chain has its own consensus mechanism, allowing it to process transactions quickly and securely without relying on external sources or networks. This makes them more reliable than traditional blockchains which rely on centralized ledgers and single points-of-failure such as miners or validators.
Due to their decentralized nature, parachains also have greater scalability potential compared with traditional blockchains since each chain can process transactions independently from one another without having to wait for other chains in order to confirm transactions. In addition, because all information about transaction data and balances is stored within a single system rather than across multiple nodes like in conventional systems, there’s no need for expensive validation processes or costly synchronization operations between different entities running parallel networks.
Parachains are ideal for applications such as supply chain management where participants require fast processing times but must also remain secure from outside interference or manipulation; payments companies looking to scale up while maintaining low costs; enterprises seeking sturdy platforms upon which they can build robust financial services solutions; businesses hoping to use smart contracts with minimal risk; and many others who require highly efficient yet trustworthy infrastructure solutions.
As well as providing security benefits over other types of blockchain technology such as public/permissionless ledgers (such as Bitcoin) or private/permissioned ones (such as Hyperledger Fabric), parachains offer enhanced privacy through obfuscation techniques which hide transaction details from third parties including miners – making them vastly superior when used in areas involving sensitive data transfers (e.g., medical records).
