What Is the Bitcoin Blockchain?
Cryptocurrencies are certainly intriguing, but how secure are they? In the case of Bitcoin, security is not really an issue as a result of the Bitcoin blockchain. This is the name that’s used to refer to a method of coding that independently verifies everything done with the related object: in this case, the individual Bitcoins themselves.
The blockchain Bitcoin uses is based on making and updating a ledger full of every transaction that’s ever happened with the coins. This ledger is then openly shared, to be viewed through a Bitcoin wallet blockchain viewer, for those who have a wallet. You can also confirm transactions have happened by using a blockchain search application.
|Play at The Best Bitcoin Gambling site|
|CloudBet||Up to 5BTC||Play now!
|FortuneJack||100% deposit||Play now!|
|mBit Casino||Up to 1BTC||Play now!|
|Check out other Bitcoin casinos!|
How the Blockchain for Bitcoin Works
This is the general order of how the Bitcoin blockchain works:
1. Bitcoin transactions are made
Blocks in the chain all hold verified transactions. In order for those to be present, people must make transactions using Bitcoin. Each time any transaction occurs, it will initially become an unconfirmed transaction listed temporarily in a new part of the block ledger.
2. Transaction information is sent out to multiple parties (“nodes”)
Unconfirmed transactions are sent out to different nodes of miners. Miners are incentivized to receive this information because they will be awarded transaction fees if they can confirm the transaction and create a block.
3. Transactions are verified or rejected by nodes
Mining software will check to make sure that the bitcoin transactions sent to a specific node were actually carried out, that the user sending the coin had the right to send it and that the one receiving it did indeed receive the currency. This confirmation is done by multiple entities for the same transactions.
4. The Bitcoin block chain is updated with new entries
If more of the nodes confirm and verify the transactions that reject it, it will be considered a valid, completed transaction. Every confirmed transaction is created into a new block to be added onto the existing blockchain.
In this way, all Bitcoin transactions can be confirmed independently without the need for a central body to govern which transactions were legal and which were not.
5. All confirmed entries are permanent and irreversible
Once a block is created, it cannot be rewritten or edited in any way. Similar to writing on paper with a permanent marker, you cannot erase the entry or change it in any way once it’s there. This helps to secure the payments and make them irreversible, effectively helping to prevent fraud or payment issues within transactions.
Blockchains, even those that don’t have to do with Bitcoin, are all used in a similar manner. The nature of any blockchain is that every new entry of data is confirmed by multiple sources and added to an unchangeable public record.
The Bitcoin blockchain gives the digital currency a much-needed sense of trust and transparency that it might not otherwise have.
Want to learn more? Read out other articles!