How Does Blockchain Technology Work?

(A simple guide to crypto: part 2)

You’ve probably heard about blockchain already but have no firm grasp of what it means. Simply put, blockchain is the way of organizing cryptocurrencies into blocks of information. The information contained within a certain block relates to the specific crypto’s transactions. When a transaction occurs, miners authenticate the information. This information is recorded on the DLT, or Distributed Ledger Technology, a shared ledger or database, part of the blockchain. Imagine it as a large profit and loss account this makes it easier to visualize, right?

The blocks form part of a series that are chained together to the information contained within that block. An easy way to visualize this would be to think of all the information as being colour-coded. Yellow might be the first block, and the next chain would be another shade of yellow. Eventually, the blocks would change to another colour, but this would be another colour related to yellow, like, say, for example, orange. In this way, the organization of the information is obvious to everyone on the network, and each of the blocks is represented in a cohesive order. Each block is related to the block on either side of it and is connected by colour. This ‘colour-coding’ is done to make it difficult for the chain to be interfered with by an outsider as…