Blockchain for beginners
29 Sep, 2019
Nerlis Moreau

The term Blockchain gives the impression of something complicated to understand. However, this article gives you an introduction and a simple guide that explains what Blockchain for beginners is and how this revolutionary technology is impacting a large number of industries.

Blockchain, basically works as a massive digital database, or ledger shared and replicated around the network to millions of users.

That is, anyone anywhere in the world with Internet access can write about it and consult it, building organized information blocks.


To better understand the Blockchain technology, it is important to know why and what was created for. The brilliant mind behind all this technological revolution was Satoshi Nakamoto. Who he was also the creator of the first cryptocurrency, the Bitcoin.

The idea of Nakamoto with the invention of Bitcoin was to create a decentralized payment platform, a digital payment system that nobody had ever achieved, in response to the inefficiencies of centralized banking institutions.

Blockchain technology emerged to support Bitcoin, which boosted individual autonomy within the monetary system. The launch of BTC was in 2009, immediately after the financial collapse in 2007/2008.

Blockchain for beginners

The premise of BTC was to make a transaction directly from person to person anywhere in the world, in real time and without a centralized entity.

The BTC platform, allows users to control the process of transactions through the Blockchain technology, which functions as a massive public database and each participant has a copy of each transaction that is executed.

Blockchain for beginners

Transactions that accumulate in blocks are linked to each other when they are validated by proof of work (PoW).

The proof of work is the unique consensus algorithm of a Blockchain network, which is used to confirm transactions and produce new blocks in the chain.

This proof of work is done by a network of users called miners, who compete with each other to conclude transactions on the network and get compensation.

Once the block is validated, the information cannot be deleted or edited. This way ensures the transparency and security of the process, and this is how the world’s first decentralized virtual currency is handled.

How Blockchain works

Previously, we describe that Blockchain technology works like a digital ledger, in which each of the users, called nodes, it has a replica of the full Blockchain.

That is, the information is not controlled by any individual or organization, but is public and replicated around the network.

All information blocks act as a database storing all transactions that occur in the system. The blockchain is:

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Each block has a reference to the content of the previous block. That is why it calls blockchain.

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Is a collaborative database, since all blocks are shared among all users in the network.

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All blocks are encrypted with codes to protect the content of each block, guaranteeing the protection, authentication and integrity of transactions.

The most valuable property of this technology is that it is completely unalterable. Everything that is written in the Blockchain cannot be edited or deleted; it is only possible to add new data.

Each block is closed with transactions that have been made over a period of about 10 minutes. When a block originates, all information is encrypted. To do this, a function that transforms data into an alphanumeric code, called hash is used.


The peculiarity of the hash algorithm is that they are very easy to encrypt, but very difficult to undo.

Moreover, the basis of Blockchain technology is proof of work (PoW). Nodes that are members of a Blockchain network, instead of relying on a third party to mediate and verify transactions, use proof of work. That is, if all nodes have and share the same information, then take it as valid.

The proof of work guarantees the validity of the transaction and reduces the risk of fraudulent transactions, since forgery would have to occur in many places at once.

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Photo by Austin Distel on Unsplash

Validation of the encrypted blocks is executed by the so-called Blockchain miners. The miners are essential for the Blockchain to be operational. Without them, there would be no computers running the network, nor would there be any form to carry out transactions.

The miners have to run two checks by consulting the Blockchain.

This is achieved with the proof of work that involves solving complicated algorithms, which are key to the security of the Blockchain. These agents are rewarded by solving mathematical problems that give validity to the blocks.

If a user with malicious intentions attempts to modify the information in a block, the nodes would detect it immediately and the Blockchain would reject to generate a movement.


The armored Blockchain feature is that a decentralized, immutable and transparent system.

Key fundamentals of Blockchain


The advantage of the decentralized system is that the data is not stored by a single entity that can control the system. There is also no need to compensate an intermediary to do business, but users interact directly with each other.

The blockchain software runs on thousands of computers that are connected to each other over the Internet, from anywhere in the world. This feature makes this technology highly resistant to attacks or failures fakes system, because to make any changes in a block must be a consensus in most nodes.

The blockchain stores the secured and linked data, through cryptographic principles. This principle makes it an incredibly robust technology, when compared as information is handled in banks. They have a centralized system and only through that entity, is that you can get the information.


Immutability means that once information has been entered into the Blockchain, it cannot be modified or deleted.

The hash of a block contains a reference of the previous block and so on with thousands of blocks, so a minimum change in the information of one of them would be immediately suspicious.

This property of Blockchain prevent many cases of embezzlement if people have the knowledge that cannot handle business accounts.


This system despite offering privacy is transparent by nature at a level that never existed before in a financial system.

Since it is a shared digital ledger, the information on the Blockchain it is open so that anyone can see it. However, the identity of a person is hidden through a very complex cryptography and is represented only by its public address.

Therefore, when reviewing the transaction history of an individual, only an extensive code can be observed. This means, that although the user’s real identity is safe you can view all transactions made by its public address.

Some uses in the future

Blockchain was initially designed to support the creation of the revolutionary Bitcoin cryptocurrency to consign transfers.

However, it is an alternative that although it is maturing, its multiple applications go beyond other potential uses in other fields, in which Blockchain technology could be implemented.

  • Financial sector: for fast international transfers and with insignificant commissions.


  • Identity validation: some companies are developing this system, which will save time and effort in data verification.
  • Electronic voting: to guarantee the veracity of the results and the anonymity of the vote.
  • Medical records: obtain a quick and detailed record of patients.
  • Manage property records: files that provide greater protection of property.
Nerlis Moreau

Editor, Tuataras

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