Blockchains – How They Work

Unfortunately, this has led to an avalanche of articles along the lines of “over 100 reasons why Blockchains will revolutionise every aspect of your life”.

Coming from a software development, architectural, project and test management background, I found it difficult to find concise documents explaining how a Blockchain works. Once however you understand what is “going on under the bonnet”, a lot of the hype becomes transparent, and it allows you to look at the realistic commercial opportunities.

Don’t get me wrong – I am impressed by the ingenuity of the idea, and there will be areas where Blockchain will indeed change everyone’s lives. However, if you boil it down: Blockchains are ledgers. Yes, highly specialist ledgers with completely new capabilities (like micro-contracts), but also very resource heavy ledgers as demonstrated in August 2017 when a backlog of several weeks built up in the Bitcoin community.

In this white paper I am going to discuss step-by-step how a Blockchain is created and what the building blocks and processes are.