Blockchain is one of the most talked-about technologies today, but for many, it's still a bit of a mystery. In this blog, I will break down the basics of blockchain in the simplest way possible, explaining what blocks are, how chains form, the role of miners, and how transactions are secured. By the end of this guide, you’ll have a solid understanding of how blockchain works!
What is Blockchain?
At its core, A blockchain is a digital ledger, like a giant spreadsheet, that records transactions. The key difference from traditional ledgers is that a blockchain is decentralised, meaning no single entity (like a bank or government) controls it. Instead, it’s shared across many computers (called nodes) around the world, making it secure and transparent. All of these nodes will have a copy of ledger of transactions that had occurred on the chain hence making it transparent.
Think of blockchain as a chain of digital “blocks” that store information. Each block contains several transactions, and they’re all linked together, forming a chain. Hence, blockchain. Now, let’s try to understand the structure of a blog.
Structure of a Block
A block is like a page in a digital notebook that records multiple transactions. Every time a new transaction happens (like sending cryptocurrency or recording data), it’s grouped with other transactions to form a block.
Each block contains:
Data (the transactions themselves)
A Timestamp (when the transactions happened)
A Unique Hash (a digital fingerprint of the block)
The Hash of the Previous Block (linking it to the chain)
Block Header (unique block number)
Nonce (unique identifier which is minted by miners to mine the block) - This will be covered in a future blog.
This structure makes each block unique and links it to the block before it, ensuring the integrity of the entire blockchain.
Now, the question arises what about the first block in the chain? So the first block in the blockchain will be called as Genesis Block. In Genesis Block, the Previous Hash will be 0×0000 so it won’t be connected to any other block. That is the only change between Genesis and other blocks of the blockchain.
Blockchain = Blocks connected in chain
The blocks are connected in a linear sequence, forming a chain. This is where blockchain gets its name. Once a block is added to the chain, it’s locked in place and can’t be altered. If someone tries to tamper with the data in a block, it would change that block’s hash, breaking the chain and making the tampering obvious.
This is why blockchain is often described as immutable—it’s very difficult to change the data without being detected.
How Transactions Are Secured
Security is a huge part of why blockchain is so powerful. Here’s how it works:
Encryption (Hashing): Every block is secured using cryptography. Each block has a unique hash, which is created by taking the transaction data and running it through a mathematical function. Even a small change in the data will completely change the hash, making tampering obvious.
Linking Blocks: Since each block contains the hash of the previous block, any change in one block would break the connection to the next block. This makes it extremely difficult for anyone to alter the data in a block without changing every subsequent block, which requires enormous computing power.
Consensus Mechanism: is a process that allows multiple computers (or nodes) in a decentralized network to agree on the validity of transactions and ensure the accuracy of the blockchain. Since there’s no central authority (like a bank), consensus mechanisms ensure everyone on the network agrees on the same version of the blockchain.
Why Is Blockchain Secure?
The combination of decentralization, cryptographic hashing, and the work of miners makes blockchain extremely secure. Here’s why:
Decentralization: Instead of being controlled by one entity, blockchain is maintained by thousands of computers around the world. This means there’s no single point of failure, making it harder for hackers to attack.
Consensus Mechanism: All nodes (computers) on the network must agree on the state of the blockchain before a new block is added. This consensus ensures that only valid transactions are recorded.
Immutability: Once a block is added, it’s nearly impossible to alter it without altering every block in the chain. This makes tampering incredibly difficult and expensive.
Wrapping Up: Why Blockchain Matters
Blockchain is revolutionizing industries far beyond just cryptocurrency. It’s used in finance, healthcare, supply chain management, and even voting systems because it offers something incredibly valuable—trust. By creating a system that is decentralized, transparent, and secure, blockchain removes the need for middlemen and gives power back to users.
For a complete Web3 newbie, understanding blockchain is the first step toward exploring this exciting new world of decentralized technologies. Now that you have the basics down, you’re ready to dive deeper into concepts like Bitcoin, Proof-of-work(POW), etc.
If you want to understand blockchain in video format, click here
This is the first blog in the series of understanding Web3 and Blockchain Concepts. Make sure to subscribe to my newsletter to read any blogs that I publish.
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