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Blockchain Basics Explained - Hashes with Mining and Merkle treesBlockchain requires a consensus protocol�some mechanism for maintaining a single version of the history of transactions that is agreed to by everyone. Since. The process is largely automated: smart meters create transactions, and blockchain records them. With blockchain-based crowd funding initiatives, users can. Blockchain uses a multistep process that includes these five steps: An authorized participant inputs a transaction, which must be authenticated by the technology. That action creates a block that represents that specific transaction or data. The block is sent to every computer node in the network.