What is blockchain?

You’ve likely come across the term blockchain in discussions about cryptocurrency, digital finance, or emerging technology. But beyond the buzzwords, what does it actually mean – and why is it relevant? Let’s break it down.

At its core, blockchain is a digital way of recording information that’s:

• Shared across a network, rather than stored in one central place
• Highly secure and extremely difficult to tamper with
• Organised in sequence, so all changes are recorded in order

You can think of it as a digital ledger. Every time a new transaction or update occurs, it’s stored in a ‘block’. Each block is linked to the one before it, forming a continuous ‘chain’ of data – hence the name. Once a block is added, it cannot be edited or deleted without affecting the entire chain, which adds a strong layer of integrity.

How does blockchain work?

Here’s the basic idea in plain English:

1. Someone does something – like send money or update a document
2. That action gets packaged into a digital “block” of data
3. Each block includes a unique ID (called a hash) and links to the one before it
4. Once verified by the network, the block is added to the chain
5. Everyone in the network sees the same version. No edits, no funny business

Each block strengthens the whole system – like adding another unbreakable link to a growing digital chain.

Key terms to know

Getting to grips with blockchain means understanding some key terms. To help you out, here’s a quick jargon buster explaining the main buzzwords you’ll come across:

What is a blockchain in crypto?

In crypto, blockchain is the secure system used to record and verify transactions without needing a bank or middleman. As digital currencies like Ethereum and Litecoin joined Bitcoin, the need for a trustworthy, independent way to track these decentralised assets became essential – and that’s exactly what blockchain provides. It keeps everything transparent, tamper-proof, and easy to trace.

Why is blockchain important?

Because it solves some big problems with how we handle digital data. Things like trust, security, and ownership. Instead of relying on a central authority (like a bank or a governing body), blockchain spreads the power across a network, making things more open and harder to mess with.

What it’s good at:

• It’s secure – once data’s on the blockchain, it’s locked in. No one can quietly go back and change it.
• It’s transparent – everyone on the network has access to the same history, so it’s easy to trace what’s happened and spot anything suspicious.
• It removes middlemen – no need for third parties to verify stuff, which means fewer delays, lower fees, and less faff.
• It’s reliable – even if one part of the system fails or goes offline, the rest keeps working just fine.

Blockchain is especially handy for things like money, legal contracts, medical records, or anything else where accuracy, trust, and a clear audit trail really matter.

The pros and cons of blockchain

Blockchain isn’t perfect and it’s definitely not the answer to every problem. Like any technology, it shines in some situations and falls short in others. It’s brilliant for things that need security, transparency, and trust without relying on a central authority. But for simpler tasks, traditional tools are often faster, cheaper, and easier to manage. The key is knowing when blockchain genuinely adds value, and when it’s just overcomplicating things. 

Is blockchain safe?

All blockchains are decentralised databases. This means that they are restricted to a singular ‘peer-to-peer’ network. Blockchain data is never stored solely in one place.

A peer-to-peer network is a network constructed of separate machines, also called nodes. These nodes are all updated simultaneously with each blockchain transaction. Seeing as these networks can consist of hundreds or thousands of machines, there is no single point of failure within the blockchain network.

So, if somebody wanted to hack or modify an existing blockchain's records, they would need to control the whole network and server, or at least the majority of it, in order to make changes in every single instance of the blockchain's ledger. In practice, this would require massive amounts of time and effort, making blockchains highly resilient to attack.

How to use blockchain

When you want to make a transaction with cryptocurrency, you’ll typically use a blockchain wallet or app. Once you send a payment, your request is shared with a decentralised network of computers (called nodes) that work together to check everything’s legit – making sure you have the funds and that the details add up.

If all’s well, the transaction is approved, recorded on the blockchain, and added to the public ledger. It’s fast, secure, and doesn’t rely on a central authority like a bank. You just open your app, make the payment, and the network takes care of the rest.

How to create a blockchain

If you're curious about how to invest in blockchain technology, the process is not necessarily a simple one. Creating your own blockchain from scratch is a complicated process and well outside the scope of this article.

There are, however, many pre-built blockchain open-sources, such as the one provided by Ethereum, that will make the construction process easier. Blockchains are only becoming more popular by the day, and there are many tutorials you can find online that will explain how to create a blockchain.

Of course, if you want to host your own peer-to-peer blockchain online, Fasthosts web hosting is the ideal platform to do this from. With unlimited bandwidth and smart SSD storage, you'll have everything you need to get your blockchain system up and running.

But we don't just provide web hosting services. With thousands of domain names to choose from, dedicated servers, WordPress hosting and more, Fasthosts is your go-to company for all your internet needs. Get in touch today to see how we can help your business, or read more interesting articles and guides on the Fasthosts blog.

Blockchain FAQs

What is a blockchain in crypto?

Blockchain is the tech that keeps cryptocurrency running smoothly. It’s a secure, transparent way to record transactions – no banks or middlemen needed.

As crypto has grown beyond Bitcoin to include thousands of alternatives like Ethereum and Litecoin, blockchain provides the structure needed to verify and track trades without relying on a third party. Without blockchain, crypto would not be trustworthy.

Why is blockchain important?

Blockchain isn’t just for crypto. It has big potential in traditional finance and beyond. It offers faster, more secure transactions without the usual back-office faff. No middlemen means lower fees, quicker payments, and easier auditing. Plus, the transparency helps crack down on fraud and supports stronger regulation. Outside of money, blockchain can track anything with tamper-proof records that boost trust, traceability, and ethical sourcing. Some even believe it could help prevent voter fraud.

How are blockchain and Bitcoin related?

Bitcoin was the first use of blockchain back in 2009. It created a public, peer-to-peer ledger to track transactions and prevent double spending – laying the groundwork for all modern blockchain tech.

How big is the Bitcoin blockchain?

Pretty huge. Each block is 1MB, and by late 2021 the Bitcoin blockchain had grown to over 300GB. This is a reflection of hundreds of thousands of verified transactions.

How to sell Bitcoin on blockchain

To sell Bitcoin, just head to your crypto wallet and use a peer-to-peer (P2P) trading platform. Find a buyer, send the offer, confirm the sale. The blockchain then keeps a permanent record of the transaction.

At its heart, blockchain is just a better way of keeping digital records. One that’s transparent, tamper-proof, and doesn’t rely on a single person or company in charge. You don’t need to be a tech expert to get the basics. And you don’t need to “get into crypto” to see the value. Just know that behind a lot of today’s digital innovation, there’s probably a blockchain quietly doing its thing.