What is a blockchain?
A blockchain is exactly what it sounds like — a chain of blocks. Each "block" is a bundle of recent transactions (like a page in a ledger), and each block is linked to the one before it, forming a chain going all the way back to the very first transaction.
This chain is stored not in one place, but on thousands of computers simultaneously. No single person, company or government controls it.
How a transaction works
You broadcast the transaction
Your wallet sends a message to the network: "I want to send 0.01 BTC to this address."
Nodes check the transaction
Thousands of computers around the world verify that you actually have the funds.
Miners bundle it into a block
Specialised computers called miners compete to solve a complex mathematical puzzle. The winner adds the next block to the chain and earns a Bitcoin reward.
The block is added to the chain
Your transaction is now permanent and publicly visible. It cannot be altered or deleted.
Your friend receives the funds
Within minutes the funds appear in your friend's wallet. No bank involved. No business hours.
Why is this better than a bank?
Speed
International transfers can take days. Bitcoin can settle in minutes, around the clock.
Transparency
Every transaction is publicly recorded. Anyone can verify the ledger.
Security
Changing a single block would require re-doing all the mathematical work for every block that followed — practically impossible.
No middleman
You transact directly with the other person. No bank, no waiting for approval.
Key takeaway: You don't need to understand the mathematics of blockchain to use cryptocurrency safely — just as you don't need to understand TCP/IP to send an email.
Test yourself
Select your answer for each question, then see if you're right.
Q1. What is a 'block' in a blockchain?
Each block is a collection of verified transactions. Blocks are linked in sequence to form the chain -- hence 'blockchain'.
Q2. What do 'miners' do in the Bitcoin network?
Miners use powerful computers to solve mathematical puzzles. The winner adds the next block of transactions and earns a Bitcoin reward.
Q3. Why is it practically impossible to alter a record already on the blockchain?
Each block references the one before it. Altering any block breaks the chain, requiring all subsequent work to be redone across thousands of computers.
Q4. What does 'proof of stake' mean?
Ethereum uses proof of stake, where validators are selected based on their holdings rather than computing power. Far less electricity than Bitcoin's proof of work.