Here's what happens before you see a transaction confirmation

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🤔 How does a blockchain work?

Typically, the Daily Squeeze gives you the hottest updates on crypto - price moves, regulations, drama, you name it.

But I know some of you are brand new to this world. As in, you just found out Satoshi Nakamoto isn't a car brand.

Now, I'm not changing the main focus of this newsletter - I'll still cover what's happening in crypto - but every once in a while, I like to drop a Crypto 101 edition to help newcomers catch up.

We've already covered:

👉 Different types of trading;

👉 CEXs vs. DEXs;

👉 Hot vs. cold wallets;

👉 How to spot a coin's red flags;

👉 And what dApps are.

You can still catch up if you missed them.

And today, ladies and gentlemen, we're digging into the tech itself. We're answering the question: how does a blockchain actually work?

Ready to find out? Lessgo 👇

Think of a blockchain like a digital notebook that keeps track of transactions - who sent what to whom, and when.

👉 In a traditional system (like a bank), one company owns that notebook and controls all the records.

If their servers go down or someone inside makes a mistake, those records could be changed or lost.

👉 A blockchain, on the other hand, is shared among thousands of computers around the world. Each computer - called a node - has its own copy of the exact same notebook.

If someone tries to cheat by changing a transaction, everyone else's copies will instantly disagree, and the network will reject the fake one.

✅ Result: the blockchain is trustworthy because everyone is watching everyone else's copy.

Instead of recording transactions one by one, blockchains group them into chunks called blocks.

Each block contains:

🧾 A list of transactions - for example, who sent Bitcoin to whom;

⏱️ A timestamp - showing exactly when the block was created;

🔐 A cryptographic hash - a digital fingerprint that uniquely identifies that block.

Once a block is filled with transactions, it gets linked to the one created just before it.

Each new block includes its own fingerprint and the previous block's fingerprint, forming a chain that goes all the way back to the very first one (the genesis block).

Here's why that matters: if someone were to change even one transaction inside an old block, that block's fingerprint would change too, which breaks the chain.

Since everyone on the network has the original version, the fake one gets rejected immediately.

That's what makes the blockchain secure and practically unchangeable - the data is sealed into history.

Now let's zoom in: how does your transaction actually make it into that chain?

🛰️ Step 1: broadcast.

When you hit "Send," your wallet creates a message that says:

"I, [your wallet address], want to send 1 BTC to [Alex's wallet address]."

It includes your digital signature (proof you authorized it) and gets broadcast to thousands of nodes across the network.

🧮 Step 2: verification.

The network checks:

👉 Do you actually have 1 BTC?

👉 Are you trying to spend it twice (double-spending)?

👉 Is your signature valid?

If everything checks out, your transaction is marked as valid and sent to a waiting area called the mempool - basically a queue for unconfirmed transactions.

⛏️ Step 3: inclusion in a block.

A miner (on Proof of Work blockchains like Bitcoin) or validator (on Proof of Stake ones like Ethereum) selects transactions from the mempool, packages them into a new block, and proposes it to the network.

🔗 Step 4: block confirmation.

Other nodes review the block. If it's valid, the network accepts it and adds it to the chain, permanently.

Your transaction now has 1 confirmation, meaning the network agrees it's valid and recorded.

Each time another block is added on top, your transaction gains another confirmation. The more confirmations it has, the more secure it becomes.

That's the magic of blockchain: thousands of computers working together to verify, record, and make digital history.

So, to sum it up:

A blockchain is a shared, tamper-proof digital ledger that keeps everyone honest without needing a middleman. Transactions are grouped into blocks, linked together with cryptography, and verified by a network that never sleeps.

Next time you send or receive crypto, remember - behind that simple "Send" button, a global army of computers is hard at work making sure your transaction is legit and locked into history forever.

And it's... beautiful 🥹

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