What Is Blockchain? A Beginner’s Guide to Blocks, Mining, and Applications

What is Blockchain?

Blockchain (the English term for 区块链) is essentially a decentralized distributed database. Anyone can run a server, join the network, and become a node.

A blockchain stores data in blocks. Each block consists of a block header and a block body.

Block Header

The header contains the previous block’s hash (PreHash), the current block’s hash (Hash), a timestamp, and other metadata.

Block Body

The body holds the detailed data, which can be transaction records or other information.

Hashes are cryptographic digests. While MD5 is a simple hash, blockchains use the more complex SHA‑256 algorithm, producing a 256‑bit hash such as

a8fdc205a9f19cc1c7507a60c4f01b13d11d7fd0

. The hash uniquely identifies a block.

Blocks are linked by storing each block’s PreHash equal to the previous block’s Hash.

What is Mining?

Mining is the process of calculating a block’s hash to create a new block. The server performing the heavy calculations is called a mining machine, and the operator is a miner.

The hash calculation follows the formula:

Hash = SHA-256(previous block hash + new block info + transaction data + nonce)

The difficulty comes from finding a nonce that makes the hash start with a certain number of leading zeros (e.g., the first 72 bits must be zero). This requires massive computation, and the network adjusts difficulty so that, on average, a new block is produced every ten minutes.

Blockchain Applications

Bitcoin, introduced by Satoshi Nakamoto in 2008, is a peer‑to‑peer digital currency built on blockchain technology. It uses a decentralized P2P network instead of a central bank.

Each Bitcoin transaction is recorded as a line in the block body, containing a timestamp, transaction details, and a digital signature generated by asymmetric encryption.

Miners who successfully create a new block receive a reward (initially 50 BTC, halved every four years; 12.5 BTC as of 2018).

Advantages and Disadvantages of Blockchain

Advantages

Decentralization – no single central node; the whole network maintains data.

Immutability – data in a block cannot be altered without changing its hash, which would break the chain.

Disadvantages

High energy consumption – generating a block requires extensive computational power.

Network latency – transaction data must be synchronized across all nodes, causing delays.

Additional Notes

The article’s illustrations are based on Rui Yifeng’s “Blockchain Introductory Tutorial”. Topics such as Merkle Trees and asymmetric encryption are mentioned but not detailed.