Introduction
Simply put, Chakra is the energy you use when performing a jutsu. So, in order to perform techniques/jutsu's, the Chakra can come from two locations: the cells in Your body, and the mental and spiritual energy thats gained from training and experience.

Chakra
Ninja's with experienced chakra control can perform jutsus using the minimal amount. However, poor chakra control users will use more chakra than needed to complete their jutsu.

The flow of chakra is possible via circulatory system. From a microscopic level, there are hundred of small channel pathways that are connected to the vital points through out the body. These channels carry the flow of the chakra and allow the user to mold it. However, if these channels are severely damaged, not even the most skilled medical ninja would be able to repair it unfortunately. From a large scale, the chakra circulatory system includes 361 tenketsu, which are tiny points on the system which the chakra is allowed to flow.

The Byakugan and the Hyuuga clan's Juuken, also known as Gentle Fist attack, allows them to eject chakra from their hands and into the tenketsu of other opponents. This type of attack will block the flow of chakra that comes from these tiny points within the circulatory system, rendering chakra flow. With enough tenketsu closed, your flow of chakra will be heavily reduced, if not to nothing; thus, eliminating your ability to perform jutsu. And because ninja can not train their internal organs, the damage done to the tenketsu will also damage nearby organs. Such attacks and be devastating and life-threatning.

Chakra Types

1. Blue Chakra
2. Green Chakra
3. Pink-Purple Chakra
4. Purple Chakra
5. Red Chakra

The Use of Chakra

Chakra can be emitted from the body for both offense and defense. For example, chakra strings used to manipulate puppets in Kugutsu no Jutsu. It can be used for cutting or even as a defensive barrier. By using an equal and steady amount of chakra to a part of the body, ninjas are able to attach themselves to the desired object. This also means that they are able to walk vertical surfaces such a buildings and trees. By releasing a steady flow of chakra from their feet in proportion to their weight, they can also walk on water. Furthermore, ninja can focus chakra on specific areas such a limbs, which will increase the muscles power and strength.

The chakra that's located in the brain and sensory organs are the primary source of Genjutsu. Genjutsu is created when a ninja extends their chakra flow through the cerebral nervous system to control their opponents mind chakra. There are two ways to counter the effects of Genjutsu. First option is to have a ninja who's unaffected by the genjutsu to use their chakra to disrupt the casters flow. The second method requires you to stop the chakra flow in your body and then using an even stronger force to disrupt the casters flow.

The Eight Gates

1. Kaimon (Opening Gate)
2. Kyuumon (Energy Gate)
3. Seimon (Life Gate)
4. Shoumon (Wound Gate)
5. Tomon (Limit Gate)
6. Kiemon (View Gate)
7. Kyoumon (Insanity Gate)
8. Shimon (Death Gate)

In addition to tenketsu, the chakra circulatory system also hold eight valves that regulate the chakra flow. The eight gates are located along the spinal cord, the heart, and the head. It is possible to force open these gates within the body which allows the ninja to use a higher amplified (10x) power.

Consequently, with each gate that is opened, the user does more damage to their body and comes closer to death. For this reason alone, the gate opening has been deemed Kinjutsu (Forbidden). If all gates are opened, the ninja can gain a temporary power that will surpass that of the Hokage; unfortunately, at the cost of their own life. Moreover, if the ninja opens fewer gates than that, they will be severely weakened and rendered defenseless, unable to counter attack if a finishing blow isn't dealt to the opponent prior to the gates' opening taking affect.