This is How Blockchain Works

Blockchain is the technology that can soon change the way we handle information fundamentally. But what really makes the technology so revolutionary? And how does it work? Let’s take a closer look at this technology and how it works.

Blockchain got its breakthrough with Bitcoin in 2009 and today it is hardly possible to mention the technology without Bitcoin talking. But blockchain has come a long way since then, and today is more than just the famous cryptocurrency.

This technology will revolutionize many industries – and breakthrough on a broad front in society.

It is hard to say exactly when it will breakthrough, but it goes very fast. The question is who will take the lead in bringing it out on a broad scale in society. Will it become authorities or companies?

Today, transactions work in such a way that each party involved makes its own listing. The buyer has his version, his seller, his manufacturer, and so on. When money is moved, the bank verifies that money has left one account for another. All information about the transaction is stored with the bank. This not only makes the bank vulnerable to hacker attacks but also slows down the process.

With blockchain, instead, all parties in a chain share on the same digital “lying”. Therefore, adding or changing information requires that everyone’s versions of the information be updated and verified. Also, you can’t delete events, just add new ones. This makes it much more difficult to falsify or destroy the information available, whether for money transactions or sites and articles online.

It thus opens up for safer online shopping where everyone can rely on each other to a greater extent. When you shop, for example, you could see more credible history of both buyers and goods and their origins, as well as avoid theft.

Say you should buy a car. With blockchain technology, you could see the history of the car, damage and how often it has been on service. You can trust each other in a completely different way.

The scope of blockchain is thus very wide. In addition to shipping and transactions, the administration of the authorities could also be simplified. For example, car registration and ID check to name a few.

We have never had access to as much information as we have today, but we cannot trust it. With blockchain, it would be possible to verify and trust information in a completely different way than it does today.

This is how blockchain works

To understand blockchains, it is good to first understand how it works today. If you buy a gadget today, there are many involved parties during its journey from the factory to your home. Factory, shipping company, retailer, buyer, and bank, to name a few.

Each party in the chain has its own documentation, a digital “recumbent”, and in addition their own databases, which are all updated, synced and verified on their edge. All transactions are verified by the bank, freight syncs between factory, buyer and seller, and so on. When something has happened in the chain, everyone’s documentation and various databases must be updated and verified that the information is correct.

Instead, a blockchain is a decentralized data chain, where everyone in the chain has access to all information from all parties necessary for their task. So everyone has a copy of the same digital recliners. When someone carries out a transaction in the chain, all copies of the scanner are updated using peer-to-peer technology. In short: all transactions are stored on all computers that are part of the chain.

Information that is added forms blocks, where each block is encrypted and linked to the block that was created before using a hash (an encrypted code which in theory is unbreakable) and time code. This means that the information added can be verified securely. It is also not possible to delete blocks, just add new ones, which means that changes cannot be made without being noticed.

Today, it is possible to replicate digital information endlessly (think copying a file). With blockchain, it is possible to introduce a restriction and create actually unique digital content, which is a and o for, for example, digital currencies.

Advantages of blockchain

  • More secure transactions
  • More difficult to manipulate data
  • Fewer middlemen
  • More efficient workflows
  • Applications of blockchain

There are many areas where blockchains could – and probably will – have a major impact in the future. Here are some of the benefits that blockchain can bring:


Shopping online requires both high security, for both buyers and sellers, and speed in both transactions and shipping. With blockchain all this could be improved. See the origin of the goods and follow the shipping more precisely. And most importantly: Buyers and sellers can trust each other in a completely different way than today.


All types of administration where identities and other things need to be verified quickly and securely. This could simplify the handling of both ID checks and car inspections. Increased security and cheaper bureaucracy are some of the benefits.


Managing patient records and other sensitive information could be streamlined. In addition, higher security around who can access sensitive information about people and test results.


There is a reason why the phrase “don’t trust everything you read online” exists, or that Wikipedia is not approved as a source in school papers. Today, we can access virtually all the information we want online, but we have no idea if the source is credible, or if someone is mixed with the content. With the blockchain, it would be more difficult to falsify the source of the source or change the content without noticing it.

Transactions and cryptocurrency

You can think of what you want about Bitcoin as a serious currency, but it has undoubtedly proven that it is possible to build an economic system without any intermediaries. With a currency based on blockchain technology, you can make transactions across the world lightning fast. In addition, it becomes much more difficult for someone to hack into the system and steal money.

Electricity certificates

Renewable energy is on the rise. With blockchains, for example, electricity generation from solar panels could be registered and in real-time create electricity certificates for private individuals or companies that want to trade with and support renewable energy.


We monitors and writes about new technologies in areas such as technology, innovation, digitization, space, Earth, IT and AI.

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