What is a blockchain?
How a blockchain records transactions, why blocks are linked by hashes, how thousands of computers agree on one history, and what “confirmed” and “final” mean.
Updated 14 Sept 2026 · Beginner · 4 min read
In short
- A blockchain is a shared record of transactions grouped into blocks. Each block contains the hash, a unique fingerprint, of the block before it.
- Independent computers called nodes keep copies and check every block against the same rules, so nobody has to trust a single operator.
- Rewriting history means redoing the work, or giving up the stake, that secures every later block. That is why each extra confirmation makes a payment safer.
A ledger anyone can check
A ledger is a list of who paid whom. A bank keeps its ledger private and asks you to trust it. A public blockchain does the opposite: anyone can download the complete history, from the very first block to the latest, and verify every entry for themselves.
Each entry is a transaction signed with the sender’s private key. The signature proves that the owner of the funds authorised the payment, and anyone can check it using only public information. Change a single digit of the amount and the signature no longer matches.
Blocks, hashes and the chain
A hash function turns any data into a short fingerprint of fixed length. The same input always gives the same fingerprint, a tiny change to the input gives a completely different one, and there is no way to work backwards from the fingerprint to the data. Bitcoin uses SHA-256; Ethereum uses Keccak-256.
Every block has a header that commits to two things: a single hash summarising all the transactions inside the block, and the hash of the previous block’s header. That second link is the chain.
block 101 contains hash(block 100) · block 102 contains hash(block 101) · …A block’s position in the chain is its block height; the first block has height 0. The Bitcoin dashboard shows the current height and the most recent blocks.
How strangers agree on one history
Anyone can run a node, and nodes do not trust each other. The network still needs a rule for who adds the next block and which version of history counts. That rule is the consensus mechanism, and the two largest networks use different ones.
- Proof of work (Bitcoin). Miners repeatedly hash candidate block headers until one falls below a target set by the network, which takes an enormous number of attempts. The winner collects the fees and newly issued coins. Nodes follow the valid chain with the most accumulated work, so rewriting history would mean out-computing every other miner combined.
- Proof of stake (Ethereum since September 2022). Validators lock up ether as collateral. For each 12-second slot one is chosen at random to propose a block and others vote on it. Validators caught signing conflicting blocks lose part of their stake.
In both systems every node checks every block itself: valid signatures, no coin spent twice, no new coins beyond what the protocol allows. A block that breaks a rule is simply ignored, however much work or stake is behind it.
Confirmations and finality
Once your transaction is in a block it has one confirmation, and each block added on top adds another. Occasionally two Bitcoin miners find a block at almost the same moment, and for a short while nodes disagree about the latest block until the next one settles it. So a single confirmation can, rarely, be undone. Six confirmations, about an hour on Bitcoin, is a common threshold for large amounts; many services credit small deposits sooner.
Ethereum adds explicit finality. After two rounds of votes by validators holding at least two-thirds of all staked ether, usually within about 13 minutes, a block is final. Reversing it would cost the attackers at least a third of all staked ether.
What a blockchain cannot do
- It does not know who you are. Addresses are not names, but every transaction stays public forever, so once someone links an address to you they can read its whole history. Reading an address report shows how much can be inferred.
- It cannot see the outside world. A contract that needs a price or a sports result must take it from an outside source, called an oracle, which then becomes something to trust.
- It does not undo mistakes. There is no support desk. Coins sent to the wrong address stay there unless whoever controls that address sends them back.
- One chain cannot see another. Bitcoin, Ethereum and Base each keep separate ledgers, and moving value between them takes a bridge or an exchange.
See it for yourself
Paste any Bitcoin or EVM transaction ID into our transaction lookup to see its status, the block it landed in and the addresses involved. Open an address in the address checker to see what it has sent and received, and to whom. Ten minutes spent on real transactions makes the ideas above concrete.