A blockchain is a distributed, decentralised, append-only ledger in which transactions are grouped into blocks, each block is linked to the previous one by its cryptographic hash, and copies are kept and agreed upon by many nodes, so recorded data is practically tamper-proof.
Key features
- Decentralised: no single owner; every full node keeps a copy of the ledger.
- Immutable: changing an old block changes its hash and breaks every later link.
- Transparent: (in public chains) anyone can verify transactions.
- Secure: uses public-key cryptography (digital signatures) and hashing (e.g. SHA-256).
- Consensus-driven: nodes agree on the valid chain using a consensus protocol (PoW, PoS, PBFT).
Structure of a block
- Header: previous block hash, Merkle root of transactions, timestamp, nonce, difficulty target, version.
- Body: list of transactions.
[Block 1] [Block 2] [Block 3]
prev: 000.. <-- prev: H(B1) <-- prev: H(B2)
txs, nonce txs, nonce txs, nonceHow blockchain works
- Transaction created: a user signs a transaction (e.g. A sends 1 coin to B) with their private key.
- Broadcast: it is sent to the peer-to-peer network.
- Verification: nodes check the signature and that A has enough unspent funds; valid transactions wait in the memory pool.
- Block creation: a miner/validator collects transactions into a candidate block and computes its Merkle root.
- Consensus: in Proof of Work, miners search for a nonce so that the block hash is below the target; the first to succeed broadcasts the block.
- Validation and addition: other nodes verify the block and append it to their copy of the chain (longest/most-work chain rule).
- Confirmation: as more blocks are added on top, the transaction becomes practically irreversible; the miner receives the block reward and fees.
Types: public (Bitcoin, Ethereum), private (single organisation), consortium (group of organisations, e.g. Hyperledger Fabric networks), and hybrid.