What is a blockchain?
The shared ledger behind cryptocurrency, and why changing old records is so hard.
A blockchain is a record of transactions grouped into blocks, where each block contains a fingerprint (a hash) of the one before it. Copies are kept by many computers, so changing an old record would break the chain and be rejected by everyone else.
Blocks, chained by fingerprints
A hash is a fingerprint for data. Feed any text into a hash function such as SHA-256 and you get a fixed-length code. Change even one letter and the code changes completely. Each block stores the hash of the previous block, which is what "chain" means.
If someone edits an old block, its hash changes, the next block's "previous" no longer matches, and every computer checking the chain sees the break. To get away with it they'd have to redo every block after it faster than the rest of the network, which on a large network is practically impossible.
Example: following one payment
- Ana sends 0.01 BTC to Ben. Her wallet signs the payment with her private key and broadcasts it to the network.
- Nodes check the signature and that Ana's coins haven't already been spent, then hold the payment in a waiting area (the mempool).
- A miner bundles it with a few thousand other payments into a block. That block records the hash of the previous block, then the miner finds a valid hash for the new one.
- Every node checks the new block and adds it to its copy of the chain. Ben's wallet now shows 1 confirmation.
- Each later block adds another confirmation. After about six (roughly an hour on Bitcoin), reversing Ana's payment would mean redoing six blocks of work faster than everyone else, so it's treated as final.
Nobody approved the payment by hand, and there's no bank in the middle: the rules and the chain of hashes do the job. The step-by-step version is in what happens when you send crypto.
Why thousands of copies matter
A normal database lives with one company, which can edit it, lose it or be forced to change it. A public blockchain is copied across thousands of independent computers (nodes) in many countries. They follow the same rules and reject anything that breaks them, so no single party can quietly rewrite the record.
Public and private blockchains
- Public (Bitcoin, Ethereum): anyone can read the ledger, send transactions and run a node.
- Permissioned (some business systems): only approved members can take part. These are closer to a shared database between companies.
More, including when a blockchain isn't the right tool: permissioned vs. permissionless blockchains.
What blockchains are good and bad at
| Good at | Not good at |
|---|---|
| Records that many parties who don't trust each other must agree on | Fixing mistakes; reversing entries is deliberately hard |
| Transferring digital value without a middleman | Storing large files or private data |
| Proving something existed at a certain time | Knowing whether real-world information fed into it is true |
| Running programs whose rules nobody can secretly change (smart contracts) | Speed and cost, compared with a normal database |
Common misconceptions
- "Blockchain means it's safe." The ledger can be hard to alter while the coins recorded on it are still easy to lose to a scam, a hacked exchange or a lost seed phrase. Most losses happen around the blockchain, not on it.
- "Data on a blockchain is true." A blockchain proves who recorded something and when, not that it's accurate. If someone enters wrong data about a shipment, the blockchain stores the wrong data permanently.
- "Everything on a blockchain is private" or "…is anonymous." Public blockchains are open for anyone to read. Addresses aren't names, but they can often be linked to people (see is crypto anonymous?).
- "A company with a blockchain is decentralized." Many business blockchains are run by a handful of approved members, much like a shared database.
Where blockchains are used
- Cryptocurrencies such as Bitcoin and Ethereum.
- Stablecoins for moving dollars between people and businesses.
- Smart contracts for lending, trading and other apps.
- Tokenized assets, such as money market fund shares and bonds issued by large asset managers.
- Supply-chain and record tracking, usually on permissioned networks, with mixed results. See real-world blockchain use cases for what worked and what shut down.
The technical version
Each block has a header containing the previous block's hash, a timestamp, and a Merkle root, a single hash summarizing every transaction in the block. Changing any transaction changes the Merkle root, the block hash, and every later block's link. On Bitcoin, the block hash must also be below a target value, which is what makes producing blocks costly (proof of work). Ethereum instead chooses block proposers from staked validators (proof of stake).
Go deeper in the blockchain technology library: hash functions, with a live SHA-256 demo, block headers and Merkle trees, types of nodes and consensus and finality.
Check what you learned
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Frequently asked questions
Is blockchain the same as Bitcoin?
No. Bitcoin is one cryptocurrency that runs on its own blockchain. A blockchain is the general technique, and many cryptocurrencies and other systems use one.
Can a blockchain be changed?
Adding new blocks happens all the time. Changing old ones is what's extremely hard on a large public chain, because everyone else would reject the altered history.
What is a hash?
A short fingerprint of data produced by a hash function. The same input always gives the same hash, but even a tiny change gives a completely different one, and you can't work backwards from the hash to the data.
Who controls a blockchain?
On a public blockchain, no single party. The people running the software (nodes) enforce the rules, and miners or validators add blocks. On a private blockchain, the operating company or group decides.
Is a blockchain the same as a database?
It's a special kind of database: append-only, copied across many independent computers, and secured so no one party can rewrite it. That makes it slower and costlier than a normal database.
Can a blockchain be hacked?
Large public blockchains like Bitcoin and Ethereum have never had their history rewritten by hackers. Small networks have suffered 51% attacks, and apps, bridges and exchanges built around blockchains are hacked often.
What is a block explorer?
A website that lets you look up blocks, transactions and addresses on a public blockchain. See how to use a block explorer.
Where to next
Sources
Written for beginners and checked against the sources listed. Last reviewed November 4, 2026. This page is educational and is not financial, tax or legal advice. How we write and check pages.