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Blockchain is a decentralized database that records transactions in a chronological order. It uses cryptography to secure the data, and it is completely transparent. It is not stored on any single server but across many computers.

Blockchain is also a chain of blocks, where data is stored and changes from one block to another.

To understand how the blockchain works we need to know “what is the blockchain” which was our topic in the previous blog post, we highly recommend that you read it before taking on this one.

What is a block?

A block is where data is stored, the type of information stored inside of the block changes from a blockchain to another.

So let’s make things easy!

The first thing you need to know is that every block in a blockchain contains information about the transaction. This includes who sent money and received it, how much was sent, and even the time it was sent.


Let’s say you want to send someone $100. You enter this transaction into your wallet, which will then create a new block containing all your information about this transaction: your name, address, and phone number.

Now we have our own set of blocks (one for each transaction) that contain all of our information about each transaction. We can then choose which block we want to send our money to (the one with all the correct info), and then broadcast that block over the network using whatever method gives us the best connection speed.

Once we get our transaction confirmed by one node (which means they’ve verified everything inside of that block), we can confirm what happened from other nodes on the network. If someone else has already broadcasted their own version of this same transaction with some extra info in their version (like an address), then we know that our version is correct.

So now that we understood the bases the core of the blockchain and why is it called that. we can start learning how it works in these briefly steps:

  1. A user makes a transaction, the transaction then needs to be authenticated by the technology.
  2. A block is created containing information about the transaction (sender, receiver, amount).
  3. The generated block is sent to every node (computer in the blockchain).
  4. The nodes then verify the transaction and add the block to the existing blockchain.
  5. The blockchain get updated and distributed across the nodes.


There is a lot more to talk about in this subject and as you can see there are many ways of creating blockchains and we will surely hear about them. This might seem like a bunch of numbers and letters being thrown together to you right now, but i really do believe that the blockchain is a big part of our future. But that is another topic for another day, since we are just getting started on the world of blockchain.

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