Blockchain Basics
Unlock the fundamentals of distributed ledgers with clear explanations and real‑world examples.
What Is a Blockchain?
A blockchain is a decentralized, immutable ledger that records transactions in a linear chain of blocks. Each block contains a cryptographic hash of the previous block, a timestamp, and transaction data. This structure guarantees security and transparency without a central authority.
Core Components
- Blocks: Packages of transaction data.
- Hash Functions: Ensure data integrity.
- Consensus Protocols: Mechanisms like Proof‑of‑Work (PoW) or Proof‑of‑Stake (PoS) that validate new blocks.
- Nodes: Participants who maintain the network.
- Smart Contracts: Self‑executing code on the chain.
How It Works
When someone initiates a transaction, it is broadcast to the network. Nodes gather transactions into a block and compete to solve a cryptographic puzzle (PoW) or stake a portion of their holdings (PoS). The first node to solve it adds the block to the chain, and all nodes update their copies.
Pros & Cons
| Pros | Cons |
|---|---|
| Decentralization & transparency | High energy consumption (PoW) |
| Immutable records | Slow transaction throughput |
| Opens up new financial models (DeFi) | Regulatory uncertainty |
Further Reading & Tools
Want to try something fun?
Check out the Interactive Blockchain Simulator or play our Blockchain Quiz Game for a quick refresher.