How a Blockchain Works
An interactive journey into the core concepts of blockchain technology.
Step 1: A Transaction is Requested
Everything on a blockchain starts with a transaction. This could be anything from sending money, to recording a vote, to tracking a product. The transaction contains details like the sender, receiver, and the amount or data being transferred. Let’s look at a simple example.
From: Alice
To: Bob
Amount: 10.5 Coins
Timestamp:
Step 2: Transactions are Bundled into a Block
Your transaction doesn’t go onto the chain by itself. It’s gathered with other recent, pending transactions into a “block”. A block is like a single page in a ledger book, containing a list of transactions that all occurred around the same time.
Block #278 (Candidate)
From: Alice
To: Bob
Amount: 10.5 Coins
From: Charlie
To: Dave
Amount: 3.2 Coins
From: Eve
To: Frank
Amount: 7.0 Coins
Step 3: Finding the Golden Nonce (Mining)
Before a block can be added to the chain, it must be “sealed” with a unique digital fingerprint called a hash. This hash is created from all the data in the block, plus a random number called a Nonce. “Miners” on the network compete to find a Nonce that produces a special hash—one that starts with a certain number of zeros. This process is called Proof-of-Work. Try changing the data or the nonce below to see how the hash changes! Then, click “Mine” to find the valid nonce.
0000a1b2c3d4e5f6a1b2c3d4e5f6a1b2c3d4e5f6a1b2c3d4e5f6a1b2c3d4e5f6
Step 4: Adding the Block to the Chain
Once a valid hash is found, the block is officially sealed and added to the end of the blockchain. Each block contains the hash of the block that came before it. This creates a secure, chronological chain. If anyone tries to alter data in a previous block, its hash will change, breaking the entire chain that follows. This makes the blockchain incredibly secure and immutable.
Block #277
Hash:
0000a1b…e5f6
Block #278
Prev. Hash:
0000a1b…e5f6
Hash:
Step 5: Broadcasting to the Network
The newly mined block is broadcast to all participants (nodes) in the network. Each node independently verifies the block’s hash and transactions. If everything is valid, they add the block to their own copy of the blockchain. This distributed consensus is what makes a blockchain decentralized—there’s no single authority; the network itself is the source of truth.