Personal Finance Essentials
How Blockchains Work
How Blockchains Turn Data Into an
Unbreakable Chain of Truth
Suppose you have a document – a text, a doctoral dissertation, or a banking record showing you owe your brother $10.
Whatever the data, we’re going to convert it to a hash. A hash is a string of computer code that represents the data. If anything changes in the original document, a new hash would be created, and it would be linked to the prior one. That’s how a property’s deed that is linked to an owner is then linked to the buyer.
Each linked hash is distributed among computer nodes worldwide. Together, the linked data provide a single record that all participants agree is the single source of truth.
Some blockchains link data linearly. Others do it differently. Here’s a comparison of the Bitcoin and Hedera Hashgraph blockchains.
Each linked hash is distributed among computer nodes worldwide. Together, the linked data provide a single record that all participants agree is the single source of truth.