How Does Blockchain Work?

Blockchain operates through a network of computers (nodes) that maintain a shared ledger. Here’s how it works:

1. Transaction Initiation: A user initiates a transaction, such as sending cryptocurrency or recording a data entry.
2. Validation: The network nodes validate the transaction using consensus mechanisms like Proof of Work (PoW) or Proof of Stake (PoS).
3. Block Formation: Once validated, the transaction is grouped with other transactions to form a block.
4. Cryptographic Link: The new block is linked to the previous block using a cryptographic hash, ensuring data integrity.
5. Addition to the Chain: The block is added to the blockchain, and the ledger is updated across all nodes in the network.
6. Immutability: Once added, the data in the block cannot be altered without consensus from the entire network, making the blockchain secure and tamper-proof.