What is blockchain in simple words?


Blockchain is a distributed database in which information is stored permanently and cannot be tampered with.

It has the details of each transaction in the network in a chronological order. Blockchain is available 24/7, transparent and inexpensive to operate.

How does the blockchain work?

Blockchain has 3 important pillars essential for its working.

  • Blocks 
  • Nodes
  • Mining


Blocks contain information on the transactions completed during a certain time period. 

Once there is consensus that the information in the block is valid, the block is added to the chain to the previous block having the group of information.

This forms a chain of blocks. Hence the name blockchain.

The blocks are linked with each other using cryptography. Each block contains a unique signature that points to the previous block.

Blocks have a timestamp of when it was added to the chain. 

The first block is the only different block as it does not point to any previous block. the Genesis Block.

So a block contains:

– hash

– cryptographic hash of the previous one

– timestamp 

– transaction data

Incase you want to dig deeper. Here is a Technical Guide – Hashing


Nodes are the computers of the stakeholders of the network which stores the blockchain. A copy of the blockchain is shared among the network of thousands of computers.

This is how decentralization is achieved.

Each of the nodes has a copy of the entire chain. Once a new block is confirmed and added to the chain, the copy of the chain is replicated across all the nodes.


If you are thinking about how the block was added to the blockchain then, this is where miners come into the picture. Blocks are validated and added to the chain by a process called mining

There are consensus mechanisms by which blocks are added. 

For example in the case of bitcoin the consensus mechanism is known as Proof-of-Work (PoW). It requires the miner to solve a difficult puzzle.

This eliminates the need for a middleman.

Types of Blockchain

There are different kinds of blockchain that cater to different use cases. 

Popular ones such as bitcoin and ethereum blockchain are public and they allow anyone to use their technology to build on top of them.

There are private blockchains as well where only the stakeholders can participate.



No single entity controls the blockchain as it is spread across multiple nodes in the network. 

So there is no single point which is likely to fail.


The data is time-stamped and recorded permanently. This makes the blockchain secure from tampering.

If anyone tries to tamper with the information of any block then the other nodes will not be altered. This ensures the bad actor is caught.


All the information in a blockchain such as transactions, miners, size can be viewed by anyone participating as a node in the network.

For a public blockchain, anyone even who is not a node can see the information using blockchain explorers.

Available 24/7

Because of its decentralized nature, blockchain operates around the world almost without any downtime.


Transactions do not need the help of multiple central intermediaries. They are peer to peer in a trustless way where no single entity has complete authority.


Doing away with the need for a central authority makes the blockchain operate at lower costs. 

The Future

Blockchain is rapidly evolving and so is its mass adoption. 

Bitcoin made the transfer of value between two people possible without needing any central intermediary and ethereum enabled developers to build applications leveraging the blockchain. 

The use cases of blockchain are endless and many industries will get disrupted from this innovation.

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