The basics of blockchain technology and how it works
Fares
Blocks, hashes, nodes and consensus, explained in plain words for first-time readers.
A blockchain is a shared record that many computers keep at the same time. Instead of one bank or company holding the ledger, every participant has a copy and they agree on what gets added.
The building blocks
- Transactions are grouped into blocks.
- Each block carries the hash, a digital fingerprint, of the block before it, so changing old data breaks the chain.
- Nodes check every block against the rules before they accept it.
How the network agrees
In proof of work, miners compete to solve a puzzle and the winner adds the next block. In proof of stake, validators lock up coins and lose part of them if they cheat.
Why it matters
No single party can quietly rewrite the history. That is useful wherever several parties need to trust the same record without trusting each other.