A blockchain is a public ledger that nobody controls but everyone can verify. Transactions are grouped into blocks; blocks are chained cryptographically in time order; the result is a tamper-evident history running on thousands of computers worldwide. Here is the mechanism from the ground up.
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A blockchain is a shared spreadsheet that thousands of strangers keep identical copies of. New entries are bundled into blocks roughly every ten minutes. Each block carries the fingerprint of the one before it. Change an old entry and every block after it becomes invalid, which is why the history is effectively frozen. No central server holds the master copy. Any computer that downloads the software can verify the entire chain back to 2009.
A traditional bank keeps a private ledger. Deposits, withdrawals, and transfers are entries in that ledger. You trust the bank to record them correctly. If the bank freezes your account, reverses a payment, or quietly edits a balance, you have no independent way to check. The ledger is theirs.
Bitcoin's ledger is public. Every transaction since the first block in January 2009 sits on disk in tens of thousands of machines around the world. Anyone can download the software, verify every signature, and reject any attempt to print a coin that was not mined or to spend a coin that was not received.
The difference is who keeps the record and who verifies it. In banking, one party does both. In Bitcoin, the keeper and the verifier are the same distributed crowd, and anyone can join that crowd by running a node. The ledger stops being an institution and becomes a protocol.
A block is a container. It holds a batch of transactions (currently up to about 4 MB of data per block), a timestamp, the output of the proof-of-work puzzle that was solved to create it, and one more thing: the cryptographic hash of the previous block.
A hash is a fixed-length fingerprint. SHA-256 takes any input, no matter how large, and produces a 256-bit output. Change a single character anywhere in the input and the output changes completely and unpredictably. This is what locks the chain together. Block N carries the hash of block N-1. Block N+1 carries the hash of block N. And so on.
If an attacker changes a single transaction in block 500,000, the hash of that block changes. That breaks the link recorded in block 500,001. To hide the change, the attacker must also redo block 500,001 and every block after it, faster than the honest network is adding new ones.
This is why the data structure is called a chain. It is not a metaphor. Each block is mathematically welded to the one before it by a number that cannot be back-solved.
A transaction is "confirmed" once it is buried inside a block. Each subsequent block mined on top of it adds one more confirmation. Six confirmations is the rule of thumb that Satoshi wrote into the original Bitcoin whitepaper. At ten minutes per block, that is roughly an hour.
Six is a probability threshold, not a magic number. Reversing a six-deep transaction requires the attacker to out-mine the entire honest network for those six blocks simultaneously. The probability of that happening falls off exponentially with each new confirmation.
Most exchanges require three to six confirmations for normal deposits. For very large deposits they may require more, sometimes twelve or twenty. Lightning payments settle in seconds without waiting for confirmations at all, by using a different security model (see Lightning Network).
Protocol upgrades come in two flavors. A soft fork tightens the rules. Blocks that were valid under the old rules may be invalid under the new ones, but every new block is still valid under the old rules. Old nodes keep working. Upgrades like SegWit (2017) and Taproot (2021) were soft forks.
A hard fork loosens the rules or changes them in an incompatible way. Nodes that refuse the new rules break off and follow a separate chain. Bitcoin Cash split from Bitcoin on August 1, 2017 in a dispute over block size. Bitcoin SV later split from Bitcoin Cash in November 2018. Both forks are still running as separate, much smaller networks with their own coins.
The two contentious hard forks that tried to challenge Bitcoin both collapsed in market share. Neither Bitcoin Cash nor Bitcoin SV trades at more than a small fraction of Bitcoin's market price. The lesson of 2017 was that the network effect belongs to the original chain.
Market observation, BTC/BCH/BSV spot prices 2017-2026 [VERIFY CoinGecko]Rewriting an old block means redoing all the proof-of-work that has been layered on top of it. In a 51 percent attack, the attacker controls a majority of the network's hash rate and mines a parallel chain in secret, then publishes it once it exceeds the honest chain in accumulated work. The nodes automatically adopt the longer chain.
At Bitcoin's 2026 hash rate (roughly 700-900 EH/s [VERIFY mempool.space]), executing a 51 percent attack would require building or renting hardware worth tens of billions of dollars, sourcing the electricity for it, and operating undetected long enough to outpace the honest network. Published academic estimates put the cost well into the tens of billions per day of sustained attack [VERIFY].
That is why Bitcoin's history is treated as effectively frozen. The ledger is not legally immutable. It is economically immutable, which is stronger.
Last updated 2026-04-14. Not financial advice. Do your own research.