A blockchain is a digital, decentralized ledger that records transactions on a distributed network so that stored records are immutable and changes require Consensus of the network.

Process of performing a transaction:

  1. Transaction is broadcasted to nodes.
  2. Nodes must reach Consensus by validating the transaction and the user’s status as the owner of the asset.
  3. Each verified transaction is combined with other transactions to create a new “block” of data.
  4. Each newly created block is added to the existing Chain of Blocks.
  5. New changes to chain of blocks is stored across the Blockchain network.

Process of adding a block to Blockchain network:

  1. A node called Miner is will create a new block, containing list of transactions since last block's creation.
  2. The miner provides Proof of Work (PoW) to produce nonce value which is used to create hash.
  3. The miner broadcasts the new block, it's nonce, and hash to the blockchain network for verification.
  4. New block is verified by nodes and is considered mined and is permanently added to the Blockchain network's distributed ledger, and it's recorded transactions are considered to be complete.


  • Decentralized structure making data more resilient to loss, and more democratic
  • Trust in claim enforced by network rules, cryptographic measures, and Zero-Knowledge Proof.
  • Security and privacy enforced by cryptography and hashing.
  • Free from Censorship
  • Transparency in public transactions.
  • Traceability by creating an irreversible audit trail.
  • Reduced costs for specific use-cases.
  • Improved Speed for specific use-cases.
  • Digital asset ownership using tokens.
  • Immutability, ensure by storing hash of transaction in a distributed network.

Drawbacks and Challenges

  • Higher implementation costs including decentralized network and blockchain system for many use-case.
  • Lower system performance for many use-cases.
  • Data modification and high rate of useless data accumulation.

Considerations in Building a Blockchain Network

  • Purpose and goals of your blockchain
  • Choosing the right Consensus mechanism
  • Choosing the right Blockchain Architecture
  • Implementing the Blockchain System
  • Deploying the Blockchain System on a distributed network.