How Blockchain Works
How Blockchain Works
Blockchain is the foundational technology that powers most cryptocurrencies. It’s essentially a distributed ledger — a digital database — that is duplicated and distributed across a network of computers. These computers are called nodes.
Whenever a transaction occurs, it is recorded in a “block.” Once verified by the network, this block is added to a chain of previous blocks — hence, the term blockchain.
Key Features of Blockchain:
- Decentralization: No single party controls the data. All participants hold copies of the ledger.
- Immutability: Once a block is added, its data cannot be changed without altering every subsequent block.
- Transparency: Anyone can view the public ledger, depending on the type of blockchain.
- Security: Transactions are verified using cryptographic algorithms.
Why It Matters
Understanding how blockchain works helps demystify crypto. From Bitcoin transactions to smart contracts on Ethereum, blockchain ensures that all actions are secure, transparent, and resistant to tampering. This is what makes cryptocurrencies trustworthy — without needing banks or central authorities.