Beginners Guide

Blockchain is a technology that uses a chain of blocks, but not in the traditional sense of those words. When we say the words “block” and “chain” in this context, we are actually talking about digital information (the “block”) stored in a public database (the “chain”).

“Blocks” on the blockchain are made up of digital pieces of information. Specifically, they have three parts:

1. Blocks store information about transactions like the date, time, and dollar amount of your most recent purchases, transfer of funds to another person, etc.
2. Blocks store information about who is participating in transactions. A block for a purchase would record your name along with who you sent it to. Instead of using your actual name, your purchase is recorded without any identifying information using a unique “digital signature,” sort of like a username.
3. Blocks store information that distinguishes them from other blocks. Much like you and I have names to distinguish us from one another, each block stores a unique code called a “hash” that allows us to tell it apart from every other block. Let’s say you send a friend $100, and an hour later, you send them another $100. Even though the details of your new transaction would look nearly identical to your earlier purchase, we can still tell the blocks apart because of their unique codes.