What Is Blockchain Technology And How It Works

what is blockchain technology and how it works.

What Is Blockchain Technology And How It Works

What is Blockchain Technology

Almost everyone has heard of blockchain. But not everyone understands how it works. This article will show you what blockchain technology is and how it works.

Also Read: Definition of Cryptography (Cryptography) and Examples


1. What is Blockchain?

2. How Does Blockchain Work?

3. Blockchain Features

4. Decentralized

5. Peer-to-Peer Network

6. Immutable

7. Tamper-Proof

8. Types of Blockchain

9. Public Blockchain

10. Private Blockchain

11. Conclusion

What is Blockchain?

Blockchain is a technology used to create digital databases containing information such as online transaction records. Information is collected through the internet network. In the simplest terms, blockchain can be described as a data structure that maintains transactional records and simultaneously ensures security, transparency and decentralization.

You can also think of them as chains or records stored in the form of blocks controlled by a single authority. Blockchain is a distributed ledger that is truly open to anyone and everyone on the network. Once the information is stored on the blockchain, it is very difficult to change or change it.

Every transaction on the blockchain is secured with a digital signature proving its authenticity. Due to the use of encryption and digital signatures, the data stored on the blockchain will not be corrupted and cannot be changed.

Blockchain technology allows all network users to reach an agreement, commonly known as consensus. All data stored on the blockchain is digitally recorded and has a common history available to all network users. In this way, chances of any fraudulent activity or duplication of transactions are eliminated without the need for a third party.

How Does Blockchain Work?

Blockchain is a chain of blocks that contains data or information. Although invented earlier, the first successful and popular application of Blockchain technology appeared in 2009 by Satoshi Nakamoto. He created the first digital currency called Bitcoin through the use of Blockchain technology. Let's understand how blockchain works.

Each block in the blockchain network stores some information along with the hash of the previous block. Hash is a unique mathematical code that belongs to a particular block. If the information inside the block is changed, the hash of the block will be subject to modification as well. Block connection via a unique hash key is what makes a blockchain secure.

While transactions occur on the blockchain, there are nodes on the network that validate these transactions. In the Bitcoin blockchain, these nodes are referred to as miners and they use the proof-of-work concept to process and validate transactions on the network. For a transaction to be valid, each block must refer to the hash of the previous block. The transaction will take place when the hash is correct. If a hacker tries to attack the network and changes the information of a particular block, the hash attached to that block will also be modified.

Violations will be detected because the modified hash will not match the original. This ensures that the blockchain is immutable as if any changes made to the block chain will be reflected across the network and will be detected easily.

Blockchain Features


Blockchain is decentralized which means that no single person or group holds the authority of the entire network. While everyone on the network has a copy of the distributed ledger with them, no one can modify it themselves. This unique feature of blockchain enables transparency and security while giving power to users.

Peer-to-Peer Network

By using Blockchain, interaction between two parties through a peer-to-peer model is easy without the requirements of a third party. The blockchain uses a P2P protocol that allows all network users to hold identical copies of transactions, enabling approval via machine consensus. For example, if you want to make a transaction from one part of the region to another, you can do it with the blockchain alone in a few seconds. In addition, additional interruptions or costs will not be deducted from the transfer.


The immutability property of the blockchain refers to the fact that any data that has ever been written on the blockchain is immutable. To understand immutability, consider sending an email as an example. Once you've sent an email to a group of people, you can't retrieve it. To find a way out, you have to ask all recipients to delete your email which is quite tedious. This is how immutability works.

Once the data is processed, it cannot be changed. In the case of blockchain, if you try to change a block of data, you have to change the entire blockchain that follows it because each block stores the hash of the previous block. Changes in one hash will cause changes in all of the following hashes. It is very complicated for one to change all the hashes as it takes a lot of computational power to do so. Therefore, the data stored in the blockchain is not vulnerable to changes or hacker attacks because it is immutable.


With the immutability nature embedded in the blockchain, it becomes easier to detect any data tampering. Blockchains are considered tamper-resistant because any changes even within a single block can be detected and handled smoothly. There are two key ways to detect tampering namely, hashes and blocks.

As explained earlier, each hash function associated with a block is unique. You can think of it like the fingerprint of a block. Any changes in the data will cause changes to the hash function. Since the hash function of one block is linked to the next block, in order for a hacker to make changes he has to change the hashes of all the blocks which is quite difficult to do.

Blockchain Types

Public Blockchain

As the name suggests, a public blockchain is a permissionless ledger and can be accessed by anyone and everyone. Anyone with access to the internet has the right to download and access it. Apart from that, one can also check the overall history of the blockchain along with making any transactions through it. Public blockchains typically reward their network users for mining and maintaining the immutability of the ledger. An example of a public blockchain is the Bitcoin Blockchain.

Public blockchains allow communities around the world to exchange information openly and securely. However, the obvious disadvantage of this type of blockchain is that it can be compromised if the rules around it are not strictly enforced. In addition, the rules decided and applied initially have little scope for modification at a later stage.

Private Blockchain

As opposed to a public blockchain, a private blockchain is one that is only shared among trusted users. Overall control of the network is in the hands of the owner. Moreover, the rules of the private blockchain can be changed according to different levels of permission, exposure, number of members, authorization etc.

The Ptivate blockchain can run independently or can be integrated with other blockchains as well. It is commonly used by companies and organizations. Therefore, the required level of trust among users is higher in a private blockchain.


Blockchain is a technology that records all information collected through a network that is on top of the internet to ensure security, transparency and decentralization. The information recorded on the blockchain can be anything. Blockchain is also a core technology for cryptocurrencies like bitcoin.

Hopefully, this article about What Is Blockchain Technology And How It Works, gives you a little insight. Also, read an article about What Is Coding And How Does It Work? that you may need to know. Thank you.

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