Understanding Blockchains
Learn how blockchains work, explore different consensus mechanisms, and understand what makes each chain unique
What You'll Learn
What Is a Blockchain?
Imagine a notebook that everyone in the world can read, but no one can erase or change what's already written. That's essentially what a blockchain is—a permanent, public record of transactions that's maintained by thousands of computers around the world.
The term "blockchain" comes from its structure: it's literally a chain of blocks. Each block contains a bundle of transactions, and these blocks are linked together chronologically, creating an unbreakable chain of history.
The Chain That Can't Be Broken
Each block contains a unique fingerprint (hash) of the previous block. If someone tries to change an old transaction, it would break the chain, and everyone would know immediately.
How Blocks Work
Think of each block as a container that holds three main things:
1. Transaction Data: All the transfers that happened during that time period—who sent what to whom.
2. Timestamp: Exactly when this block was created, providing a permanent historical record.
3. Hash: A unique fingerprint for this block, plus the hash of the previous block, creating the chain.
See How Blocks Connect
Who Validates Transactions?
In traditional banking, the bank validates your transactions. In blockchain, this job is done by validators (or miners in some systems). But here's the revolutionary part: anyone can become a validator.
Different blockchains use different methods to choose who gets to add the next block. This is called the consensus mechanism, and it's what keeps the blockchain secure and decentralized.
Security Through Consensus
For a transaction to be confirmed, the majority of validators must agree it's valid. This makes it virtually impossible for any single bad actor to corrupt the system.
How Different Chains Reach Consensus
Your Keys, Your Crypto
In the blockchain world, ownership is controlled by cryptographic keys. Think of it like this:
🔑 Private Key: This is like the password to your bank account, but much more powerful. It's a long string of characters that proves you own your crypto. Never share this with anyone!
📬 Public Key/Address: This is like your email address—you can share it with anyone who wants to send you crypto. It's derived from your private key, but it's impossible to work backwards.
Critical Security Rule
"Not your keys, not your crypto" is the golden rule. If you don't control the private keys, you don't truly own the cryptocurrency—you're trusting someone else with it.
How Transactions Work
When you send cryptocurrency, here's what happens behind the scenes:
1. Create: You create a transaction saying "Send X amount from my address to recipient's address"
2. Sign: You sign it with your private key, proving you authorized this transaction
3. Broadcast: The transaction is broadcast to all nodes in the network
4. Validate: Validators check you have enough balance and the signature is valid
5. Confirm: The transaction is included in a block and added to the blockchain forever
Try a Simulated Transaction
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Check Your Understanding
Explore Real Blockchains
- Visit blockchain.com/explorer and look at the latest Bitcoin blocks
- Click on any block to see the transactions inside it
- Visit etherscan.io and search for Vitalik's address: vitalik.eth
- Visit solscan.io and explore the fastest blocks being produced
- Compare block times between all three chains - notice the differences!
- Find a transaction and identify: sender, receiver, amount, and fee