To understand blockchain, you have to look at how a "block" actually becomes part of the "chain.

1. The Block

A block is simply a collection of data. In a financial blockchain, this includes transaction details: sender, receiver, and amount. However, it also includes a unique digital fingerprint called a "hash" and the hash of the block that came before it.

2. The Chain

Because each block contains the fingerprint of the previous one, they are mathematically linked. If you try to change even one letter or number in an old block, its hash changes. This breaks the link to every subsequent block, making the entire chain invalid.

3. Decentralization

Instead of one bank or government holding the master list, the blockchain is stored on thousands of computers (nodes) across the world. For a new block to be added, the majority of these computers must agree that the transactions are legitimate.