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  • Isabelle Flore

How Do Blockchains Work?

Blockchains have been the talk of the town for a while now. Anyone who has sensitive data online or on their computers most likely has heard about this term and if you haven’t come across blockchains yet, shame on you. You are missing out big time on data security.

But don’t worry, we are here to enlighten you and take you through the security network that is the blockchain system.

So, let’s start at the beginning:

What is a blockchain?

It is just what the name says. It is a chain of virtual blocks. And all of these blocks contain a ton of information. Each block can store a lot of data and which information is stored in specific varies.

A very popular and known online currency is utilizing the blockchain technology. You probably have heard about it, it starts with a ‘B’ and ends with ‘-itcoin’. Yes, that one!

If we take a look at the bitcoin blockchain we can see that these blockchains contain data in regards to ‘WHO send WHICH AMOUNT OF MONEY to WHO’. So we have information about the sender, the recipient and the amount. Other blockchains focus on other data.

The data in a blockchain plays a major role in the composition of the block. It is essentially the heart of the block.

We also need the hands of the block. Those are the ‘hash’ and the ‘hash of the previous block’.

A hash is comparable to a fingerprint, It is a unique code which identifies the block and its contents. If any alteration is done to the data, the hash will be regenerated and a new unique code functions as the identification tag of the block.

The hash of the previous block is just that. It is the code of the previous block that links to our current block to maintain the correct order and create an additional security layer.

Each change or entry that is made to the block is given a timestamp to prevent fraud and to exactly identify the entry.

The blockchain network is a distributed ledger that is open to anyone. Everyone who pleases to do so can access it and keep track of what is happening.

But if the network is basically ‘open to the public’, is it that safe?

Why is It so secure?

The hash plays a major role in the safekeeping of the data because once an entry is changed, e.g. through a hacker, the hash will automatically change. Yet the ‘hash of the previous block’ in the following block will not change, so there will be da mismatch.

Let’s assume the hash of our block was 123, so the ‘hash of the previous block’ of the following block is also 123. If someone makes any changes the hash will change, for example, 321 but the hash of the previous block on our second block remains 123. This mismatch will give away any attacks right away.

Couldn’t the hacker simply reprogram the hash of the following blocks?

Yes and No. There is the possibility to recalculate the mathematical-based hashes of the following block but the ‘Proof-Of-Work’ mechanism thwarts the hacker's plans. This mechanism slows down the recreation of blocks and their hashes. It calculates the duration of reprogramming the blocks, in the case of Bitcoin, one block takes about 10 minutes to reprogram.

Another big factor that contributes to the safety of blockchain is the fact that the network is decentralized. Unlike other systems, blockchains are not only registered in one location. Actually, it is the opposite. Every user that joins the network is given a digital copy of all the blockchains, meaning there are countless copies of the original, non-hacked blockchains that are distributed across the world. When a new block is created, it is sent to each user and everyone has to approve the validity of the new block to make sure it was not tampered with.

Can the blockchain network still be hacked?

Technically yes, but if we take a lot at what a hacker would have to do successfully infiltrate the network, you will quickly realize that a fruitful attack is highly unlikely and almost impossible.

The hacker would have to

  1. Gain access to ALL the blockchains that are distributed amongst the users

  2. Recalculate the Proof-Of-Work for EVERY SINGLE blockchain

  3. Be in control of more than 50% of the peer-to-peer network to validate their activities

It is simply impossible to achieve all of that considering all your activities are public. Users supervise the activities taking place and to manage a successful attack is highly-highly-highly unlikely.

So, there you go, if you didn’t know about blockchains before, now you do.

Our ERP system works with blockchain technology and keeps your data safe and sound.

Check out our profit-enhancing business solutions on

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