bitcoin blockchain explained

What is a Bitcoin Blockchain and How it Stops Hackers Spending Your Bitcoins!

As you may already know a Bitcoin blockchain is used to record all transactions ever made with Bitcoin. This blockchain allows anyone’s current balance to be checked.

The original concept of blockchain dates back to 2008 and is very well illustrated in the following diagram:

Bitcoin Blockchain
Bitcoin Blockchain formation. The main chain (black) consists of the longest series of blocks from the genesis block (green) to the current block. Orphan blocks (purple) exist outside of the main chain. source

So we can see that the blockchain represents a series of transactions or transaction addresses added to each other within the blockchain like links in a chain, each block will represent each step of the bitcoin’s history to track its changes.

The blockchain is a continuously growing list of records, called blocks, which are linked and secured using cryptography.[1][6] Each block typically contains a hash pointer as a link to a previous block,[6] a timestamp and transaction data.[7] By design, blockchains are inherently resistant to modification of the data. A blockchain can serve as “an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way.”[8][not in citation given (See discussion.)] For use as a distributed ledger, a blockchain is typically managed by a peer-to-peer network collectively adhering to a protocol for validating new blocks. Once recorded, the data in any given block cannot be altered retroactively without the alteration of all subsequent blocks, which needs a collusion of the network majority. source

The blockchain also ensures that any transactions that are being made are definitely authorized by the individual sending the bitcoins. Cryptography is used to ensure the bitcoin blockchain cannot be interfered with or become corrupted. In addition, Private Keys (like very long randomly generated passwords) are used on every transaction to act as digital signature for the person spending the bitcoins. This ensures hackers cannot spend other people’s money. The whole system runs on a peer-to-peer network, relying on individuals personal PCs rather than a central data center.


Bitcoin Blockchain for Mining

This huge collection of individual’s computers all process the data needed to ensure the fast running of transactions. This processing is called mining.
Bitcoin blockchain miningHighly randomized algorithms are used to ensure that any one person can never possibly predict or know whose transactions they might be processing. This further removes the possibility of abuse mining for bitcoin. As an incentive to individuals to provide their hardware for performing these services, the mining process also periodically mints new Bitcoins, and rewards them to the owners of mining equipment. Bitcoin has a defined maximum number of coins that will ever be produced. This keeps the scarcity and desirability in check. As at the time of this report there are around 13,000,000 bitcoin in circulation this amount will be capped to 24,000,000


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