How does a blockchain work?
A blockchain is a shared record of transactions, copied across thousands of computers, that grows in linked "blocks" and is almost impossible to alter once written. Here is how that actually works — the blocks, the chain, and the network that agrees on it — in plain English.
Sending crypto is not like a bank transfer that a person approves. Your wallet signs a message, the network checks it, and it is written into a shared record almost no one can change. Here is that journey, step by step.
Simplified for clarity · the exact steps differ a little between Bitcoin, Ethereum and other networks
On this page
A blockchain is a record of transactions that is copied across thousands of independent computers and grows in linked batches called blocks, in a way that makes past entries practically impossible to change. Instead of one company keeping the master ledger, everyone on the network keeps the same ledger and follows shared rules for adding to it. That is the whole trick: no central keeper, but everyone agrees on the same history. The diagram above shows a single transaction's journey; this page zooms out to the record it becomes part of.
A shared notebook nobody can secretly edit
The simplest way to picture a blockchain is a shared notebook. Imagine a group of people who all keep an identical copy of the same notebook, and every time someone pays someone else, everyone writes the new line into their own copy. Because there are thousands of copies, there is no single notebook to steal or quietly rewrite; if one person tried to fudge their copy, it would no longer match everyone else's and would be ignored. A blockchain is that idea made rigorous with cryptography and software, so that the copies stay in sync automatically and the rules for what counts as a valid entry are enforced by the network rather than by trust.
Blocks, and why they form a chain
Transactions are not written one at a time but gathered into blocks — think of each block as a page of the notebook holding a few hundred or few thousand entries. What turns a pile of pages into a chain is a clever piece of maths called a hash. Each block includes a compact fingerprint of the block before it, so block 101 contains a summary of block 100, which contains a summary of block 99, all the way back to the very first block. Change a single letter in an old block and its fingerprint changes, which breaks the fingerprint stored in the next block, and the next, and the next — the tampering announces itself immediately. That linking is why it is a chain, and why the deeper a transaction is buried, the harder it is to undo.
A hash is like a tamper-evident seal. It cannot stop someone editing an old page, but it makes any edit instantly obvious to everyone holding a copy — which, on a public blockchain, is the entire network.
How new blocks get added: mining and staking
If anyone can hold a copy, who gets to add the next block, and how does the network stop cheats? Different blockchains answer this with a consensus mechanism. Bitcoin uses proof of work, or mining: computers race to solve a hard mathematical puzzle, the winner proposes the next block, and the huge amount of electricity this costs is what makes attacking the chain uneconomic. Ethereum and most newer networks use proof of stake, or staking: validators lock up their own coins as a security deposit and are chosen to add blocks, losing part of that deposit if they cheat. Ethereum switched from mining to staking in September 2022, in an event known as the Merge, cutting its energy use by more than 99%. Both approaches solve the same problem — making it expensive to lie — in different ways.
Why a blockchain is so hard to change
Rewriting history on a large blockchain is not just difficult, it is prohibitively expensive. To change an old transaction, an attacker would have to redo the work or restake the deposits for that block and every block after it, faster than the rest of the network is adding new ones — a race against thousands of honest participants. On a big network like Bitcoin or Ethereum, that would cost more than any plausible reward. This is the source of crypto's famous immutability: not a promise that data can never change, but an economic reality that changing it is not worth it. It is also why "confirmations" matter. When someone says to wait for a few confirmations, they mean wait for a few more blocks to stack on top, each one making a reversal exponentially harder.
Public, permissionless, and what that costs
The blockchains behind bitcoin and ether are public and permissionless: anyone can read the whole ledger, anyone can join the network, and no one needs approval to send a transaction. That openness is the point, but it comes with trade-offs. Public blockchains are slower and more expensive per transaction than a centralised system like a card network, because thousands of computers must each process and store everything. They are also transparent by default — addresses and amounts are visible to all, which is not the same as anonymous. Some organisations run private or permissioned blockchains where membership is controlled, but those give up much of the trustless quality that made the idea interesting in the first place.
What a blockchain is not
A blockchain is not magic, not anonymous, and not a guarantee that whatever is written on it is true. It faithfully records that a transaction happened according to the rules; it cannot know whether the thing you bought was real or whether the project behind a token is a scam. "On the blockchain" is not a mark of quality — a fraudulent token sits on the same ledger as a legitimate one. Understanding the mechanism helps you see through a lot of hype: the technology is genuinely clever, but it does not remove the need for judgement. For the bigger picture of what runs on top of blockchains, head back to what cryptocurrency is.