🔍 Overview

Now that you know what blockchain is, let’s break down how it actually works — from the creation of blocks to the verification of transactions and the power of decentralization.

🧱 1. Blocks and Chains

  • Each block contains:

    • A list of transactions

    • A timestamp

    • A unique hash (like a digital fingerprint)

    • The hash of the previous block

🔗 These blocks are "chained" together. If someone tries to change one block, all following blocks will also have to change — which is nearly impossible.

✅ 2. Transaction Process Step-by-Step

Here’s how a typical blockchain transaction works:

  1. User initiates a transaction

  2. The transaction is broadcast to a peer-to-peer network

  3. Nodes (computers) validate the transaction using consensus algorithms (like Proof of Work or Proof of Stake)

  4. Once verified, the transaction is added to a block

  5. The new block is added to the existing chain
    The update is shared with the network, making it public and unchangeable

🔐 3. What Makes Blockchain Secure?

  • Cryptography: Every block has its own hash and the hash of the previous one. If a block changes, the hash changes too, alerting the network.

  • Decentralization: No single point of failure. The ledger exists on thousands of nodes worldwide.

  • Consensus mechanisms: They ensure only valid transactions get added.

⚙️ 4. Key Terms to Know

  • Node: Any device (computer) that runs the blockchain and stores its data

  • Hash: A unique code that identifies a block

  • Consensus Algorithm: The method blockchain uses to agree on valid transactions (like PoW or PoS)

  • Ledger: A permanent digital record of all transactions

🌐 Real-World Example

Imagine sending 1 BTC to a friend. Your transaction goes into a pool, gets verified by miners, added to a block, and finally confirmed when the block is attached to the chain. Now, it’s permanent and visible to everyone.

🧠 Key Takeaway:

Blockchain works through a transparent, secure, and decentralized system of verified transactions — making it trustworthy without needing a middleman.