How Blockchain Stores Your Data

16 Wed, Feb 2022



A blockchain does not rely on any one single entity to keep a record of data; rather it allows all parties involved with the ecosystem to own their own copy of the data and simultaneously update that copy as time moves forward. This is referred to as a consensus. A blockchain stores data in a chronological time stamped manner, meaning it is completely auditable and difficult to change any previous accounts of data entered on the blockchain. The result is an immutable copy of a transaction that does not require the trust of any single entity, instead it’s maintained by the entire ecosystem. It is protected by the need for a consensus on each transaction before it moves forward with the protection that no previous transaction can be changed. This concept of allowing everyone involved in an ecosystem to have a copy of the data is also known as a distributive ledger. It is the distributive ledger principal which makes blockchain a decentralised way of storing and using data.

Cryptographic Ledger

A cryptographic distributed ledger is simply a copy of the data that is stored on a blockchain, however, rather than this data being fully transparent, it is hidden under cryptography. The only way that you can deconstruct the cryptographic ledger is by having the keys which unlock that data. For example, consider your key as the password to your bank account. If you know the password to your bank account, then you are able to access that account and view how much money is in it and make transactions. Your key is your access to the portions of the cryptographic distributed ledger which you have access to, in which we commonly refer to these as private keys.


A node is essentially a computer which is responsible for processing information and updating data on a blockchain. Think of a node as a teller at a centralised bank. The node is responsible for supporting the blockchain; it does this by processing transactions and keeping a record of all user information pertaining to money and/or data.

Like tellers at a bank, a node is also responsible for ensuring that funds entered into the system are legitimate. A bank teller does this by looking for counterfeit notes and making sure people don’t maliciously put fake money into the bank. The nodes within the system simultaneously check all of their records (cryptographic distributed ledger) against each of the other nodes records, and once all matches, the transaction is considered correct and added to the chain.

Of course these nodes do not operate for free, the job that they are performing is called ‘mining cryptocurrency’. If you own a miner, you will be the one receiving the fees that it earns for processing transactions and supporting the blockchain network.