How Blockchain Works

Understanding the mechanics behind blockchain technology is essential for anyone entering the crypto space.

The Block Structure

Each block contains:

**Block Header**: Metadata including timestamp and previous block hash

**Transaction Data**: The actual information being stored

**Nonce**: A number used in the mining process

**Hash**: A unique fingerprint of the block's contents

Blocks are linked through cryptographic hashes:

Each block contains the hash of the previous block

Changing any data changes the hash

This breaks the chain, making tampering evident

Before adding blocks, the network must agree:

**Proof of Work**: Miners solve complex puzzles (Bitcoin)

**Proof of Stake**: Validators stake tokens (Ethereum 2.0)

**Delegated Proof of Stake**: Elected delegates validate

User initiates a transaction with their private key

Transaction is broadcast to the peer-to-peer network

Nodes verify the transaction's validity

Valid transactions enter the mempool

Miners/validators include them in new blocks