When you make a transaction with your bank or financial service, all that information is stored on a database like a ledger entry.
Traditional banks operate with limited transparency. You can’t verify if your money actually exists or audit their financial practices.
The bank allows you see only what they want you to and there’s no way to check if you money really exists or they are robbing another customer to pay you. There’s also no way for you to know how much the bank makes and that’s why they can connive with other banks to offer you peanuts as interest. That’s why blockchains exist in the first place.

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What are Blockchains

Blockchains are similar to the databases your banks use, except that there is no entity controlling it.
Public blockchains are decentralized databases maintained by thousands of computers worldwide, making them censorship resistant and always available.
Blockchains are better because:
  • Anybody can start banking in a minute once there’s a computer and access to internet.
  • This time, all transactions are publicly available so you can verify anything.
  • Multiple computers (nodes) across the world run the blockchain’s database so that there’s no downtime or need for maintainence or holidays.
  • Data is tamper proof. Once it’s recorded, it cannot be changed or deleted, so there’s hardly fraud.
  • You own your assets. Nobody can freeze them without your consent.
  • Anybody can setup and start building without permission.
  • Even cooler, you’re not bound by any app or currency.
With blockchain, you have true ownership of your assets. No third party can freeze or confiscate them without your private keys.
It doesn’t end there. Blockchains do more than finance. It’s also possible to build trustless systems, where rules are enforced by code (smart contracts), not by human intermediaries.

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How Blockchain Transactions Work

When you send a transaction on the blockchain, you pay a network fee (called gas) to compensate the computers (nodes) that process and validate it.
Gas fees vary by network congestion and blockchain. Always check current rates before making transactions.
Here’s what happens step by step:
  • Your transaction is created and sent to a node, one of the many computers running the blockchain software.
  • That node broadcasts your transaction to all other nodes in the network so everyone sees it.
  • The network checks the legitimacy of your transaction. This includes verifying your digital signature, checking that you have enough funds, and making sure it follows the blockchain’s rules.
  • If valid, your transaction is added to a block, which is a batch of transactions grouped together.
  • This block is then added to the blockchain through a process called consensus, where nodes agree on the current state of the chain.
  • Once added, your transaction is finalized and publicly visible, meaning it’s practically impossible to change or remove.
The time it takes to complete this process (called confirmation time) depends on the blockchain. For example, Bitcoin might take around 10 minutes per block, while Sui takes less than a second.
Different blockchains have different confirmation times and fee structures. Choose the right blockchain for your specific use case.
Because all of this is handled by decentralized computers, there’s no need for a bank employee, a clearinghouse, or a middleman. It’s all enforced by transparent code and global consensus.