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Blockchain Network Explained

A blockchain is a network. A network is a group or system of connected people or things. The computers or devices on the network, known as nodes, make up a blockchain network.

The networks we use today are centralized. This means that they have a central point, where all information flows in and out from. One of the reasons that this is not good is because whoever controls this central point has full control over network data and users.

A blockchain network is different from a normal network because it does not have one central point that stores and controls information. Instead, the responsibility to look after the network and store information is shared by different devices, known as peers, on that network. This is why a blockchain network is known as a peer-to-peer network, shortened to P2P. The name comes from the fact that the tasks and responsibilities of maintaining the network are continuously shared from peer to peer. 

In the example above Jacob wants to go to as many rides as possible during his day at the funfair. In the centralized funfair he always has to go to the ticket booth where he needs to queue every time he wants to go on a different ride. This means he has less time to enjoy as many rides as he would like. The centralized model is slower because everyone at the funfair have to all go through the same ticket booth, where the ticket sellers have control in choosing who can go on rides. The central point slows everything down and gives power to one person, the ticket seller. In the decentralized model everyone is free to move from ride to ride as they want, everything flows smoother. Not having a central point can be a lot better as it allows things to move around more freely and safely, in the case of blockchain this would be information.

On a blockchain information is being constantly recorded and interchanged between all of the participants on the decentralized network. This is a huge improvement because data is not held in one centralized point, meaning nothing slows down when more people join. It also makes it less likely that any data will be hacked or lost. A decentralized record of information is better than the central system that we are used to today. 

A peer on the network makes some of their computer power (disk storage, processing power, etc.) available to the network to help with storing the data that the network is recording. A blockchain is an ecosystem where the devices are working together to help the system function. On a P2P network, the type of network a blockchain is built on, information is always being recorded and interchanged between the participants. This spreads out control and responsibility among lots of different peers, while improving the security of the network.

An example of a powerful centralized organization would be a payment network. On the one hand, the payment network would claim they need to collect a lot of information from their customers. How else can we know who to trust online? However, this central point of information has a lot of power over its users, whereas on a blockchain, that power is shared across the whole network.

What is a Node?

Imagine a blockchain as a network of different devices connected to one another through the internet. Those devices are what are called “nodes”. A node can be any electronic device, including a computer, phone, a printer or even a fridge, as long as it is connected to the internet. All nodes are equal in importance on a blockchain, but a node can have different roles in making a blockchain work. For example, a node can:

  • Store some of the information recorded on a blockchain.
  • Store a copy of all of the information recorded on a blockchain.
  • Process transactions, put them into blocks, add them to a blockchain, approve them and broadcast them to the network. This is called mining or forging.

For the nodes processing transactions, doing the mining or forging, it is very important that the node is always up and running. A node that is not running could miss a chance to validate a block of transactions, meaning the miner misses out on their rewards or, even worse, being removed from their role as a miner or forger. 

Mining Made Easy

A block being mined means information is being accepted and added to a blockchain database. There are different ways to mine, forge and safely add information to a blockchain. These methods involve using computer programs, called consensus protocols.

Consensus protocols are what keep all the nodes on a network synchronized with each other, while providing an answer to the question: how do we all make sure that we agree on what the truth is?

For example, in a “proof of work” consensus protocol, the “proof of work” is an answer to a complex mathematical problem, one that requires a lot of work to work out. The answer can easily be seen to be right or wrong, once you have that answer. This is exactly what the “mining” process is, suggesting answers to the mathematical problem, hoping to get it right. This is very difficult and doing this can take a lot of time and incredible computer power, which is why miners normally set up hundreds or thousands of computers to run and solve these questions. 

Can any computer be a mining or forging node?

No, accepting transactions and broadcasting them to a blockchain takes a lot of computing power. A normal computer is not powerful enough to do this. Miners will spend a lot of money on powerful devices known as CPUs (central processing units) or GPUs (graphics processing units) to have enough processing power.


People are happy to do this because for every riddle solved, and every block mined, the miner receives a reward in cryptocurrencies, which can later be sold for fiat currencies, like dollars or euros.

Other types of consensus protocol include “proof of stake” and “delegated proof of stake”, which work in different ways, but carry out the same job, adding information safely to a blockchain.

Let’s recap

  • A blockchain is a network of interconnected devices, these devices are called “nodes”.
  • Any device with a working internet connection can become a node.
  • Nodes can support a blockchain in different ways.
  • One of these ways is to securely add information to a blockchain, which is known as “mining” or “forging”.
  • Miners are rewarded for mining blocks, and adding information to a blockchain, in cryptocurrencies.