ExecutiveChronicles | What is Bitcoin Blockchain? | The blockchain is basically a public ledger where all cryptocurrency transactions are recorded. It can be accessed through the internet and it contains every single bit of information about every single transaction that has ever happened in the history of Bitcoins, including medical records, what your mom bought on her credit card last year, and who knows what else. Bitcoin System is one of those authentic platforms which is helping many bitcoin investors for earning huge amounts of profits.
The main part of Ledger
The main part of this ledger consists of a long list of blocks, which is basically just a bunch of individual accounts/transactions that have been neatly organised as to how much bitcoin you have now as opposed to before your transaction took place. In other words, if I send one Bitcoin from my account to yours, it will appear as one block minus one Bitcoin on my account, and one block plus one Bitcoin on yours.
The way people are able to see these transactions is because everyone has access to this public ledger and you can actually go through it yourself and see what other people have bought with their Bitcoins. However, the real magic comes in when we start talking about “mining blocks.”
Minng blocks basically means that someone will use their own computer to link together a bunch of unconfirmed transactions into a single block which is then added as a permanent part of the blockchain rather than just being temporary like all the other 500 billion transactions that happen each day as more bitcoins are mined. This is where those powerful computers come into play that you keep hearing everyone talk about. The way it works is that other than just recording transactions and adding them to the blocks, these computers also lend their processing power which effectively enables them to solve incredibly difficult mathematical problems.
The first computer that can solve this problem is entitled to a reward of 12.5 Bitcoin as well as all the transaction fees from everyone else’s unconfirmed transactions included in this block as well as all blocks mined thereafter. To be more specific, it takes about 10 minutes to mine a block but only on average mind you so it does fluctuate due to variations in mining power and such things which is why people use pools for Bitcoin mining purposes. With an increasing difficulty rate coupled with a decreasing amount of bitcoins being mined every day, there simply won’t ever be enough Bitcoins to go around in order to make mining one profitable.
This is where the blockchain comes in because all of these transactions are recorded on it and if you mine a block, you will get your reward but also be taxed 25% (at the time of writing this article) through transaction fees from everyone else’s transactions included with that block as well. The problem with this system is that there is absolutely nothing stopping people from copying their unconfirmed transactions on multiple computers and working away at solving different blocks and then waiting for someone else to first solve it before finally broadcasting their own copy of the solution which would result in them receiving both rewards as opposed to just one.
There exists a mechanism known as “Proof of Work” which serves to solve this problem and it basically involves the computer that mines the block and proves that they did in fact work on solving it by including a specific piece of data from the prior block. This way, no one would go through all of that effort because there is no benefit for them when everyone else does it anyway and the only people who stand to make any money are those who actually finish first.
Recently, people have been talking about Bitcoin Blockchain. Many are confused by the term blockchain. What is Bitcoin Blockchain?
Bitcoin is a kind of digital currency or cryptocurrency that can be used as money to purchase items or services online. While paper currencies are made from physical things such as cotton and ink, there’s no physical aspect to cryptocurrencies like bitcoin. Instead, they are entirely digital coins that are created by computers through complicated maths problems that process transactions called blocks in a specific timeframe. The “blocks” or transactions that occur after your initial payment or deposit require more time for processing since it takes many encrypted computers to solve the complex problems before an update can be added to what is known as the blockchain – a decentralised public ledger where all confirmed transactions across each computer are stored.