What is a Blockchain and How Does It Work?

Digital coins or Cryptocurrencies such as Bitcoin are based on a technology called blockchain. Each cryptocurrency may be different but they all use blockchains to record transactions. So, what is a blockchain? How do they work? What problems do they solve? And how can they be used? Like the name indicates, a blockchain is a chain of blocks that contain information. You can think of a blockchain as a distributed ledger that is open to anyone. Once data gets recorded inside a blockchain, it becomes very difficult to change. Think of a blockchain like a database that stores information. However, unlike a traditional database where all the information is centralized, a blockchain distributes this information across the network. In other words, a Blockchain is decentralized so the same information gets stored across many nodes (i.e. computers) within the network. Each blockchain on every node are exact duplicates of each other. (more…)