Introduction
Blockchain is often described as a “digital ledger,” but how does it actually function? What makes it different from a regular database? The answer lies in three core concepts: blocks, hashes, and chains.
In this guide, we’ll break down blockchain’s inner workings in simple terms. You’ll learn:
✅ What a block is and what it contains
✅ How hashing secures blockchain data
✅ Why chaining blocks together prevents tampering
✅ How miners and nodes keep the network running
By the end, you’ll understand blockchain’s structure well enough to explain it to anyone!
Chapter 1: What Is a Block in Blockchain?
Definition of a Block
A block is a container that stores:
- Transactions (e.g., “Alice sends Bob 1 Bitcoin”)
- A timestamp (when the block was created)
- A unique identifier called a hash (more on this later)
- The hash of the previous block (this forms the “chain”)
Example: Bitcoin Block Structure
| Block Component | Example Data |
|---|---|
| Block Number (Height) | 840,000 |
| Transactions | 2,500 Bitcoin transfers |
| Timestamp | 2024-07-15 14:22:18 UTC |
| Previous Block Hash | 00000000000000000003a… |
| Current Block Hash | 0000000000000000000a1… |
Each new block typically holds hundreds or thousands of transactions, depending on the blockchain.
Chapter 2: What Is a Hash? (The Blockchain Fingerprint)
Definition of a Hash
A hash is a unique digital fingerprint for data. It’s created by a cryptographic hash function (like SHA-256 in Bitcoin).
Key properties:
- Deterministic → Same input always produces the same hash.
- Fast to compute → Easy to generate from data.
- Irreversible → Can’t guess the input from the hash.
- Unique → Changing one letter in input completely changes the hash.
Example of Hashing
- Input:
"Blockchain"→ Hash (SHA-256):ef7797e13d3a75526946a3bcf00daec9 - Input:
"blockchain"(lowercase) → Hash:4f9c2f5031c5c2b5f3a3d3f4e344e3d1
Even a tiny change creates a totally different hash!
How Hashing Secures Blockchain
- Each block’s hash depends on its transactions + the previous block’s hash.
- If someone tampers with an old block, its hash changes, breaking the chain.
Chapter 3: How Blocks Are Chained Together
The Blockchain Structure
- Block 1 → Contains Hash A
- Block 2 → Includes Hash A + Generates Hash B
- Block 3 → Includes Hash B + Generates Hash C
This creates an immutable chain—if you alter Block 1, Hash A changes, making Hash B invalid, and so on.
Why Tampering Is Nearly Impossible
To successfully hack a blockchain:
- You’d need to change a block’s data.
- Then recalculate its hash and all future hashes.
- And do this on 51% of the network’s computers at once.
This is computationally infeasible for large blockchains like Bitcoin.
Chapter 4: How New Blocks Are Added (Mining & Consensus)
Step 1: Transactions Are Pooled
- Pending transactions wait in the mempool (memory pool).
Step 2: Miners Compete to Solve a Puzzle
- They bundle transactions into a candidate block.
- They must find a nonce (a random number) that makes the block’s hash meet certain rules (e.g., starts with “0000”).
Step 3: The First Miner to Solve It Wins
- The winner broadcasts the block to the network.
- Other nodes verify it’s correct.
- If approved, it’s added to the blockchain.
Step 4: The Miner Gets Rewarded
- In Bitcoin, the miner receives newly minted BTC + transaction fees.
Chapter 5: Real-World Example (Bitcoin Blockchain)
Let’s track a Bitcoin transaction:
- You send 0.1 BTC to a friend.
- Miners pick up your transaction from the mempool.
- A miner includes it in Block 840,001.
- The block is hashed and chained to Block 840,000.
- After 6 confirmations (~1 hour), the transaction is final.
Conclusion
- Blocks store transaction data.
- Hashes act as tamper-proof seals.
- Chaining blocks makes the ledger immutable.
- Mining secures the network and adds new blocks.
Blockchain’s design ensures security, transparency, and decentralization—no banks or middlemen needed!
What’s Next?
- Learn about smart contracts (Ethereum’s innovation).
- Explore blockchain forks (how networks upgrade).
Questions? Ask below! 🚀