Blockchain: A simplified understanding of Hash, Block, Blockchain & Distributed Blockchain

What is a Blockchain? 

A blockchain can define as a constantly growing ledger that keeps a permanent record of all the transactions. That has taken place in a secure, chronological, and immutable way.

That information is kept in a very secure manner because there are thousands of copies of identical blockchains worldwide. There’s not just one blockchain that you can hack and destroy. it’s distributed and there are thousands of copies worldwide for it; moreover, information is preserved using highly advanced cryptography. Every block that gets added to the blockchain is added as a new block and chronologically ordered. Lastly, all the information that’s recorded on the blockchain is immutable. That is, nobody can change it once it’s actually recorded inside.

What is Bitcoin? 

In simple words, it is a type of digital asset. That can buy, sold or transferred between parties securely over the internet. Because of this, bitcoin can use to store value, much like buying gold, silver, and other types of investments. But unlike those other types of investments, bitcoin also serves as a form of digital currency. And you can use it to buy products and services, make payments, and exchange value electronically.

However, it is different from other types of traditional currency, such as dollars or euros. Which you can also use to buy things and exchange value electronically. There are no physical coins for bitcoin or paper bills. And when you send bitcoin to someone or use bitcoin to buy anything, you don’t need to use a bank, a credit card, or any other third-party clearinghouse. Instead, you send bitcoin directly to another party over the internet, and it will arrive securely and almost instantly.

Use of Blockchain in Bitcoin 

If you do a simple transaction between two parties, .you need to be able to verify that both parties have done what they need to do in an actual exchange. But if the double-spend problem presents such a challenge, how can you send bitcoin to someone else over the internet without needing a bank or some other institution to certify that a transfer took place? The answer lies in a global network of thousands of computers called the Bitcoin network and a unique decentralized ledger technology called a blockchain.

Blockchain is one of the critical technologies that underlies bitcoin, as it keeps a decentralized record of all the transactions that have ever taken place on the Bitcoin network. All the information is captured securely by using maths and cryptography to protect it. The data is stored and verified Across the entire network of computers. In other words, instead of having a centralized database a third party. Such as a bank, certifying that a transaction took place. Bitcoin uses blockchain technology across a vast, decentralized network of computers to securely verify, confirm and record each transaction. Because the data is stored in a decentralized manner across a vast network instead of a centralized database.

There is no single point of failure. This makes the records stored on the blockchain more secure and less prone to fraud tampering or a general system failure than keeping them in a single centralized location.

Role of Bitcoin Miners

Miners are a group of participants within the bitcoin network that create the blocks. The beauty of being a miner is that anybody can be a miner in bitcoin because of its decentralized nature.

What miners do is a process and confirm transactions. Transactions are confirmed when they are added to a block, and that block gets added to the bitcoin blockchain. When the miners create the blocks on the Bitcoin blockchain, the more miners there are, the more secure the network is. All of this is done by solving cryptography maths problems.

Components of Blockchain

  1. Hash 
  2. Block
  3. Blockchain
  4. Distributed Blockchain

1. Hash

A cryptographic hash is a digest or a digital fingerprint of a certain amount of data.

It is an amount of data alphanumerically in a certain length.

You can visit the beautiful website demoblockchain which the blockchain institute of technology hosts. We will use this site to explain all the following topics.

  1. Click on the first tab named hash.
  2. You have a cryptographic hash equivalent down here. SHA stands for Secure Hash Algorithm, and the SHA 256 hash algorithm was developed by the NSA National Security Agency.
  3. And this entire program is a hash generator that we’re using right now.
  4. If you start adding data to the data field, you will see the hash changes for each change in your data. You are creating a message digest of that one specific amount of data right here.
  5. Hashes are one-way functions. There is no way for you to get this entire text from this one hash down here. This is different from what would be traditionally called encryption, in which when you encrypt something, you can use the correct key, decrypt that message and retrieve the original. But with hash, you do not.

2. Block

The miners are actually in the process of building blocks and the blocks are added to a blockchain to build out what the blockchain would be.

  1. You can click on the second tab named block. 
  2. You see here that this block is composed of a block number. It has a field called data, A nonce which is a random number that is used for figuring out how you can make this specific block give you a valid hash.
  3. If you look closely, you can observe that this hash has four leading zeros, and whatever amount of data is here has four leading zeros. Therefore it is a valid block.
  4. But if I were to make any change here, for example, by adding a single character, you get a completely different hash, and since it is now not starting with four leading zeros. It’s an invalid hash.

3. Blockchain

Blockchain is a series of blocks assembled chronologically.

  1. You can now switch to the third tab named blockchain.
  2. Block number one is followed by block number two, then block number three, then block number for block and then block number five and you could continue as long as you wish.
  3. Some elements are common in every one of them. Every block in a blockchain is cryptographically tied. It refers to the hash in block number three and that you could continue to the front of the chain.
  4. If you were to change any block, any amount of data within any of these blocks, it also invalidates every single block in front of it. It’s so simple that it works like a domino effect. It simply tears down the whole structure to the front if you break a block.
  5. Now, if we try to make it a valid block we need to mine every block to the front of the chain.

4. Distributed Blockchain

Distributed BlockChain is a property of blockchain where a no. of the exact identical copies of blockchain is distributed across a full node across a network.

  1. You can switch to the next tab named distributed.
  2. So we have a blockchain that’s held by peer A. We have Peer B, we have Peer C. And what you’ll find is that block number two, which is in peer A, is the same as block number 2 in Peer B. Same block number 2 in Peer C, same going all the way to block number five.
  3. If we try to modify a block in any of the Peers. It will break the whole blockchain.
  4. Now even if we continue trying to mine his way to the front and “Remine” each block trying to create a new block of transactions and have the corresponding numbers of zeros, we will still find that the cryptographic hash for this block number five would not match the cryptographic hashes for the other nodes. Because of this, the rest of the bitcoin network will reject this version of the blockchain because the cryptographic hashes do not match.


This will give you a basic understanding of blockchain and how it works.

For any questions and inquiries, visit us at thinkitive

Anurag Anand

Software Engineer @Thinkitive

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One Comment

  1. Good post. I learn something totally new and challenging on blogs I stumbleupon every day. It will always be interesting to read through articles from other writers and use a little something from other sites.

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