Bitcoin’s Blockchain Explained

February 12, 2020, by Interstein N.
Bitcoin is powered by blockchain technology―a system that is an ideal basis for financial transactions and payments. Here’s how it works.

Blockchain technology has been in existence for over a decade. Satoshi Nakamoto, a pseudonym for an anonymous person or group, invented the concept of blockchain in 2008. Then, he applied that idea in order to create Bitcoin, the world’s first ever cryptocurrency, in 2009.

In technical terms, Bitcoin’s blockchain arranges data in a series of “blocks,” each of which holds several Bitcoin transactions. These blocks are connected together to form Bitcoin’s entire transaction history―which is what gives it the name “blockchain.”

Bitcoin has its value, just like any other currency. Money gets its value based on supply and demand.

Why Is Blockchain So Important?

Blockchain is important because it is permanent, transparent, and secure. This makes it the ideal foundation for Bitcoin’s ledger of financial transactions.

The Bitcoin blockchain is, above all, permanent and immutable. The validity of each block depends on the validity of another block in the chain. If an attacker tried to tamper with a single block on the Bitcoin blockchain, that change would be detected immediately.

Bitcoin’s blockchain is also public and transparent. This allows anyone to inspect Bitcoin’s ledger and ensure that its transactions are correct. Transparency doesn’t generally harm user privacy, because Bitcoin transactions do not include users’ personal information.

The end result is that Bitcoin is a highly secure and accountable financial system.

Who Owns the Bitcoin Blockchain?

Unlike banks and credit card companies, which have total control over their payment networks, there is no single entity that owns or controls Bitcoin’s blockchain.

Instead, Bitcoin is decentralized: it relies on a network of independent miners and node operators, who are distributed all across the world.

Nodes and miners work toward consensus, meaning that they agree on which Bitcoin transactions are correct. If a single bad actor tried to manipulate Bitcoin transactions for their own personal gain (or “double spend”), their actions would be overridden by blockchain consensus.

This means that Bitcoin payments cannot be stopped or censored. Bitcoin’s network does not reject transactions based on who you are, or based on how you are using Bitcoin. It only rejects transactions that undermine the Bitcoin blockchain at a basic level.

How Big Is the Bitcoin Blockchain?

Bitcoin’s blockchain currently takes up 260 gigabytes of space, and it is growing every day.

In more precise terms, there are 616,000 blocks in Bitcoin’s blockchain. Each of those blocks carries thousands of transactions, meaning that a very large number of transactions have taken place. Blockchain.com suggests that 520 million Bitcoin transactions have occurred.

Bitcoin’s blockchain is growing at an exponential rate. As more companies, exchanges, and investors begin to use Bitcoin, the Bitcoin blockchain is certain to grow larger.

With so much demand, this is an excellent time to get on board and buy Bitcoin.

Resources:

https://www.blockchain.com/en/charts/blocks-size                 (MB)

https://www.blockchain.com/charts/n-transactions-total        (in transactions)

Disclaimer: information contained herein is provided without considering your personal circumstances, therefore should not be construed as financial advice, investment recommendation or an offer of, or solicitation for, any transactions in cryptocurrencies.

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