What is Blockchain and How Does It Work?

Blockchain: What it is and How it Works

For once in our lives, we have all come across the term Blockchain technology. There is so much hype about, what is it, how does it work and how is it useful in today’s era?

I know it is not too easy. But it is not even that complicated to understand the term. Therefore, here is a small article for you, which will keep your knowledge updated regarding the latest trend of Blockchain and its various uses.

A brief about Blockchain

  • Blockchains are distributed databases. Which you may share digitally amongst the computer network. These are decentralized ledgers that store information electronically, in a digital platform. You can always look at these, as the provenance of a digital asset.
  • You can keep your data safe inside these blocks. Also, all of them are connected through cryptography.
  • A new set of data entered by you, will make a new block. Later, it will connect itself to the pervious chain. Hence making blocks of chain together.
  • Blockchain is also known as Distributor Ledger Technology (DLT). It was invented in 1991 by Stuart Haber and W. Scott Stornetta.

In simpler words, Blockchain are distributed but not copied or transferred. These database allow full time access. One can refer to google docs to understand Blockchain more easily. The analogy of both docs and Blockchain is the same.

Three Important Concepts of Blockchain

In order to understand the term Blockchain, you should know the three main terms of the same:

  1. Blocks: These are the foundation of the blockchain. There are multiple blocks in a chain and each of them consist data inside them. Each block contains a Nonce and Hash inside it.
    • Nonce: Each block contain a 32 bit whole number inside it, known as Nonce. It is self generated after you create a block.
    • Hash: The Nonce further generates a block header hash. Which is 256 bit number wedded to Nonce.

A cryptographic hash is generated by Nonce, once you create a block of a chain. With this, the data in the block is considered signed. Hence, remains tied with the block forever, until minded.

2. Miners: To create a blockchain, we need Miners. Miners create new blocks through the process of Mining. This is a very important and critical component of the process, as miners have to carefully hash the previous block of the chain. Miners use special targeted software for this difficult task. Also, many a times Mining becomes a bit more difficult in large blockchains.

Changes in one block, will ask the miners to change all the other ones. Therefore, one has to be very picky while adding the information in the block.

3. Nodes: After the successfully mining process, the blocks are taken to the next level of digital world; Nodes. As I have already mentioned about the decentralized way of the chains. Nodes are the electronic devices that maintain the copies of these chains and keeps the network continuity.

Nodes approve the many minded blocks. They update and approve the same for the network to run normally. Nodes are also responsible to check and view the ledgers systematically.

Uses of Blockchain

  • Your work becomes easy through Blockchain. As, they are transparent and unaltered.
  • These chains play a very crucial role in cryptocurrency system. Therefore, can be used to make payments, cybersecurity, and healthcare digitally easy.
  • You can store variety of information in these blocks. However, a lot of people use it for ledgers for transactions.

  • You can use it safely for cryptocurrency, like bitcoin. As it is decentralized and doesn’t give control to a single user or group. The transaction in these sites are irreversible and are even permanently recorded and viewed by everyone in the community.
  • These blocks have huge storage capacity. Therefore, can be referred by big industries.
  • It becomes very difficult for anyone to hack your data. Because all these blocks are linked, and he/she might have to change every block to hack your data. Therefore, it reduces the risk of fraud.

Why is there hype around Blockchain?

In this digitalized century, a lot of people are wanting to create their own digital money. There have been several attempts for the same, but have all failed. Not because people didn’t had technology or ideas. It was due to lack of trust, that people do not want to invest their money in someone’s new digital currency. People always fear theft, or other kind of fraud activities.

It wasn’t late when bitcoin was invented, by a new safe database called blockchain. It was safe to rely on this database because it wasn’t giving charge to anybody. Unlike SQL or other database, blockchain had nobody in charge. It is run by the people who using the same. No one is authorized in this Distributor Ledger Technology. Hence, everyone started trusting the digital money BITCOIN with the help of BLOCKCHAIN.

As of 2022, there are many active blockchains. 10,000 and more are cryptocurrency based blockchains and hundred more for non cryptocurrency blockchain. There are even public and private active blockchains. Public blockchains are accessible by everyone. Anyone can freely join the network and create a node. However, private will require permission for access.


In this growing world of technology, Blockchain has literally gained a lot of fame. The renowned word now is satisfying needs of a lot of people. Of course, the digitalized information holding chain have a lot of merits. But there are some predictable cons too. There are a lot of illegal activities that take place through blockchain. People secretly trades illegal good though it. Also, many a times, there occurs inefficiency in blockchain. Which leads to a lot of technology and data loss.

Altogether, Blockchain have been a very useful database source. While, it completely depends on us, the way we look at it and use it.

With this, if you wish to learn more about digital marketing trends, strategies, tips and how-to-guide, do check our website for regular updates.



One response to “What is Blockchain and How Does It Work?”