How Does It All Work? Blockchains
Posted: Sat Jul 05, 2025 8:42 am
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andy - September 5, 2017 - CryptoCurrency - No Comments
CryptoCurrency Tutorial – 4 How Do Cryptocurrencies Work?
If you’ve heard anything about cryptocurrencies, you’ve mostly likely heard about Blockchains. In simple terms, a blockchain is a shared database that is constantly being checked and updated in real time.
If you have ever worked in an office and had to share a database, you will know that databases store information. At any time, a user can request information, but to update the information, the database must be locked to prevent the same information being updated at the same time.
Without this locking mechanism, you could be editing a customer’s invoice while somebody from the sales department is editing the same customer’s information – this causes a conflict and somebody’s edits aren’t going to appear in the database, or worse, the whole database could be corrupted.
This might work on a small scale when only a small mobile database amount of information needs to be recorded and edited at a time, such as in an office, but it becomes cumbersome as the database gets bigger. The time taken to lock, edit and unlock a database causes delays which would cause huge problems when recording worldwide transactions across the internet. For a cryptocurrency to be a viable payment method, the database needs to be able to handle millions of transactions simultaneously.
In the context of cryptocurrency, transactions (e.g. Payments) are recorded and do not need to be updated later, similar to how an accountant or a bookkeeper records payments in and out of a business in a ledger. Once a transaction has been verified, it will never need to be updated again so it gets added to the ledger as a permanent record of who paid who and how much was sent.
andy - September 5, 2017 - CryptoCurrency - No Comments
CryptoCurrency Tutorial – 4 How Do Cryptocurrencies Work?
If you’ve heard anything about cryptocurrencies, you’ve mostly likely heard about Blockchains. In simple terms, a blockchain is a shared database that is constantly being checked and updated in real time.
If you have ever worked in an office and had to share a database, you will know that databases store information. At any time, a user can request information, but to update the information, the database must be locked to prevent the same information being updated at the same time.
Without this locking mechanism, you could be editing a customer’s invoice while somebody from the sales department is editing the same customer’s information – this causes a conflict and somebody’s edits aren’t going to appear in the database, or worse, the whole database could be corrupted.
This might work on a small scale when only a small mobile database amount of information needs to be recorded and edited at a time, such as in an office, but it becomes cumbersome as the database gets bigger. The time taken to lock, edit and unlock a database causes delays which would cause huge problems when recording worldwide transactions across the internet. For a cryptocurrency to be a viable payment method, the database needs to be able to handle millions of transactions simultaneously.
In the context of cryptocurrency, transactions (e.g. Payments) are recorded and do not need to be updated later, similar to how an accountant or a bookkeeper records payments in and out of a business in a ledger. Once a transaction has been verified, it will never need to be updated again so it gets added to the ledger as a permanent record of who paid who and how much was sent.