What is blockchain, in simple terms?
A blockchain is a record book that many people keep copies of at the same time. Noah Coin’s infographic above puts it as “a database that keeps a record of all transactions made within a computing network” [1]. The US National Institute of Standards and Technology (NIST) adds the important part: blockchains are tamper-evident and tamper-resistant digital ledgers kept in a distributed way, usually without a central authority such as a bank, company or government [2].
Think of a shared spreadsheet that thousands of people hold a copy of. Nobody can quietly edit a past row, because everyone else’s copy would no longer match and the change would be rejected. That is the basic promise: a record that strangers can trust without having to trust each other or a middleman.
How does a blockchain work, step by step?
The infographic breaks a simple payment into six steps [1]:
- A wants to send money to B.
- A block is created containing the details of the transaction.
- Members of the network view the block and check the transaction is valid.
- The network approves the transaction.
- The block is added to the chain as a permanent record.
- The transaction is complete.
In practice a block holds many transactions, not one. Each block contains a timestamp, the transaction data and a cryptographic hash of the block before it, a kind of digital fingerprint [4]. Because each block carries the fingerprint of the previous one, the blocks form a chain. Change anything in an old block and its fingerprint changes, which breaks the link to every block after it [3][4].
Steps 3 and 4 are where the “consensus” happens. The computers on the network, called nodes, follow agreed rules for deciding which new block gets added [3]. Bitcoin uses proof of work, where miners compete to solve a costly calculation; Ethereum moved to proof of stake in 2022, where validators lock up their own coins as a guarantee of good behaviour [5]. Either way, the point is to make cheating more expensive than playing fair.
Why is blockchain hard to tamper with?
Three features work together. First, the hash links mean any edit to an old record is obvious, which is what NIST calls tamper-evident [3]. Second, as more blocks are added on top, older blocks become harder and harder to rewrite, which makes the chain tamper-resistant [3]. Third, there is no single copy to attack: the ledger is copied across many nodes, so a fraudster would have to change most of them at once [3].
That last point is also the main weakness. In a so-called 51% attack, someone who gains control of more than half of a network’s computing power or stake can rewrite recent records and spend the same money twice [4]. Large public blockchains are expensive to attack this way; small ones are much more exposed.
A short history of blockchain
The idea of a cryptographically secured chain of blocks was described by Stuart Haber and W. Scott Stornetta in 1991, as a way to timestamp documents so they could not be backdated [4]. The first working public blockchain was created in 2008 by a person or group using the name Satoshi Nakamoto, as the ledger for Bitcoin, which was released as open-source software in 2009 [4]. Since then the same technology has been used for other cryptocurrencies, smart contracts and record-keeping in areas such as supply chains and finance.
Types of blockchain
- Public: anyone can join, read the ledger and take part in validation. Bitcoin and Ethereum are examples [4].
- Private: one organisation controls who can join. Faster and more private, but closer to an ordinary database because one party is in charge [4].
- Consortium: a group of organisations, such as several banks, share control [4].
- Hybrid: a mix of public and private features [4].
Pros and cons of blockchain
The infographic gives four advantages: it enables decentralisation, it protects user privacy, it uses advanced cryptographic protection and it can be applied in many industries [1]. Its three disadvantages are that it is not totally free from cybersecurity issues, it lacks a clear regulatory status and it can be costly [1].
Most of that still holds, with two qualifications. Privacy depends on the system: on a public blockchain every transaction is visible to everyone, and only the identity behind an address is hidden [3]. And cost includes energy. Before its switch to proof of stake, Ethereum used vast amounts of electricity; the change cut its energy use by more than 99.98%, according to the Crypto Carbon Ratings Institute, while Bitcoin still uses proof of work [5]. Regulation has also moved on since the graphic was made: the US, for example, amended its Uniform Commercial Code in 2022 to deal with digital assets [4].
The graphic also gives three figures on market growth (700 applications, $20 billion of GDP “locked” in blockchain in 2016, and $75 million a year of bank spending) without sources [1]. We could not trace them, so we have not relied on them.
Questions about blockchain technology
What is blockchain in one sentence?
A blockchain is a shared, tamper-resistant digital ledger, kept by many computers at once, in which records are grouped into blocks that are linked in order with cryptography [2][4].
Is blockchain the same as Bitcoin?
No. Bitcoin is a cryptocurrency that runs on a blockchain. Blockchain is the underlying technology and is used for many other things [3].
Can a blockchain be hacked?
The chain itself is very hard to alter, but small networks can suffer 51% attacks, and the wallets, exchanges and apps built around blockchains are often hacked [4].
What is blockchain used for besides cryptocurrency?
Smart contracts, tracking goods through supply chains, settling payments between banks and timestamping documents, the use Haber and Stornetta first proposed [3][4].
Who controls a blockchain?
On a public blockchain, no single party: changes are agreed by the network under shared rules. Private and consortium blockchains are controlled by one organisation or a group [4].
Sources
- Noah Coin, noahcoin.org, the website printed on this infographic.
- NIST, NISTIR 8202, Blockchain Technology Overview.
- NIST, Blockchain.
- Wikipedia, Blockchain.
- ethereum.org, Ethereum energy consumption.
Last reviewed 2 November 2026
