The Problem
How do you create a shared record that nobody can secretly alter?
Traditional databases have administrators. They can change records. You have to trust them.
Blockchain solves this: a data structure where tampering is mathematically detectable.
A Chain of Blocks
A blockchain is a sequence of blocks, where each block contains:
- Data (like transactions)
- A hash of the previous block
That second part is the key insight.
Why This Works
Each block’s hash depends on everything in that block, including the previous block’s hash.
Change anything in Block 2? Its hash changes. But Block 3 stores the old hash of Block 2. Now they don’t match.
The chain is broken. The tampering is obvious.
To hide the change, the attacker must recalculate Block 3’s hash. But then Block 4 breaks. And Block 5. They must redo every block after the tampered one.
Blocks, Not Individual Records
Why batch data into blocks instead of chaining individual records?
Efficiency. Each hash operation has overhead. Batching hundreds of transactions into one block means fewer hashes, less storage, faster verification.
A block might contain thousands of transactions, all sealed with a single hash.
Not Enough On Its Own
A hash chain makes tampering detectable, but not impossible. A determined attacker with enough computing power could recalculate all the hashes.
That’s where consensus mechanisms come in. Bitcoin’s solution: make each block expensive to create.
We’ll see how in the next section.