Lesson 2 of 2 · 5 min

How a blockchain works

A shared notebook that everyone can read and no one can secretly edit.

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Lesson

Picture a notebook that thousands of people keep identical copies of. Every few seconds or minutes, a new page of transactions is added. That page is a "block," and the pages are linked in order — a "chain."

Why it's hard to cheat

Each new block includes a fingerprint of the one before it. Changing an old entry would change every fingerprint after it, and the rest of the network would reject the altered copy.

Who adds the pages?

Different networks use different methods. Bitcoin uses miners that compete to add blocks. Ethereum and Solana use validators who lock up funds as a promise to behave honestly.

What this means for you

Your balance is really an entry on the blockchain, not a file on your phone.
Your wallet app is a window into the blockchain plus a way to sign new transactions.
Anyone can look up a transaction on a public "block explorer."

Public blockchains are transparent. Anyone who knows your address can see its balance and history.

Key points

A blockchain is a shared, append-only record.
Blocks are linked so past entries are very hard to change.
Your coins live on the blockchain; the wallet just accesses them.
Addresses and transactions are publicly visible.

Quick quiz

1.Where do your coins actually live?

2.Why is it hard to change an old blockchain entry?