How does blockchain work?

Blockchain, one of the latest innovation in the field of technology. only a handful of people understand what it is, but everyone is buzzing about blockchain technology. In today’s post, we are going to take a look at how does it actually work.

Sample Blockchain Workflow Diagram



A wants to send money to B (some kind of digital currency or a digital form of some other possession, such as a property title, birth certificate or educational degree) and registers the transaction.


This transaction is represented as a block in the shared ledger that is packaged with other pending transactions. The block is broadcast to the blockchain systems network of participating computers for solving complex calculations.


At this stage the network of participating computers varifies the block. The participating computers ( also called “miners” in the Bitcoin blockchain) evaluate the transactions and through complex mathematical calculations, to determine whether they are valid, based on agreed-upon rules. When “consensus” has been achieved, typically among 51% of participating computers, the transactions are considered verified.


After verification, each block of transactions then gets added to the ledger with a time-stamp and a cryptographic hash for security. Each block also contains a reference to the previous block’s hash, thus it creates a “chain” of records that cannot be manipulated except by convincing participating computers that the manipulated data in one block and in all prior blocks is true. Such an instance is considered impossible.


The money moves from the account of a party A to the account of party B. transaction completes.

Darren Trumbler

Darren Trumbler

Darrent is a digital marketer, tech enthusiast & blogger.

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