What is a blockchain?

A public transaction ledger keeps a record of all of the transactions of the coins of a cryptocurrency. This list of historical transactions is split into sections called blocks. Together, these blocks form the blockchain. By scanning through the blockchain you can see the target address of every transaction, the size of the transaction and the time the transaction was made. When you want to send some coins from one address to another this is what happens:

  1. Your intention to send some coins is broadcast to the network
  2. The nodes (computers of the network tasked with securing the cryptocurrency and validating transactions) scan the blockchain to check that you have never sent the coins elsewhere
  3. The transaction is committed to the ledger and your coins are sent

The ledger will record how many coins you sent, where they were sent from, where they were sent to and when they were sent. If you try to send coins you’ve already sent elsewhere, the transaction will be rejected. This is usually prohibited by the user interface (the wallet), but the underlying technology protects against it in the eventuality someone tries to do it anyway.

Committing a transaction to the blockchain takes time and costs resources (see What do “mining” and “staking” mean?). Transactions require that the sender pay a transaction fee to account for the cost in time and resources. This transaction fee doesn’t have to be fixed. In general, larger transactions cost a higher transaction fee and the higher the fee you choose to pay, the faster your transaction will be validated and your coins be sent.