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Blockchain is the technology that enables the existence of cryptocurrency. A Blockchain is a decentralized and distributed digital ledger that is used to record transactions across many computers so that the record cannot be altered retroactively without the alteration of all subsequent blocks and the collusion of the network.

How the Blockchain Works

Once a number of miners confirm a transaction, it is added to a block that is then added to the blockchain. This is done by hashing.

Hashing is the process of taking data of any size — from a single transaction to a group of transactions to the entire Internet — and putting it through an algorithm that then spits out a hash of a specific size. In Bitcoin, the size is 256 bits, so no matter how much data goes into the algorithm, the hash is always 256 bits.

It will always look something like this: e3b0c44298fc1c149afbf4c8996fb92427ae41e4649b934ca495991b7852b855

The hash from the previous block is always included in the hash of the next block, so once a transaction is put in a block and joined to the blockchain, it can’t be changed. Altering a single hash alters everything that follows, exposing any tampering.

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