Bitcoin Blockchain | All about the Blockchain
Bitcoin uses a public and distributed "accounting system" or "ledger" known as the blockchain. Blockchain technology is possibly the biggest innovation Bitcoin offers. Countless companies and service providers, especially from the financial sector, are showing interest in the technology and are even toying with the idea of using it for themselves.
What is a blockchain?
Blockchain and blocks
The records that are added to a blockchain are called "blocks". Because these blocks are cryptographically chained together, it becomes difficult to manipulate these records and is almost impossible. It would take enormous computing power to manipulate the blocks.
In Bitcoin, a block is created every ten minutes and it is chained to the previous block. The processing of these records is called mining. And this stringing together creates a chain of blocks, i.e. a blockchain.
What data does a block contain?
- The Bitcoin blockchain mostly contains transaction data from different transfers, a timestamp and a hash of the previous block.
What problem does Bitcoin and blockchain technology solve?
In the real world, it is easy to prove whether a thing belongs to you or not. It becomes more difficult when the thing is digital. Example:
I own a digital dog and I want to give it to you. So I send the digital dog to you. But how can you be sure that the digital dog belongs only to you? And can you be sure that I have not previously sent the digital dog to Anna as an email attachment? Maybe I also copied the digital dog several times or put it online. With digital things, it becomes more difficult to prove that something belongs to me or to you.
That's why you need an accounting system. So I buy a book that is now the general ledger for digital transactions and write in that general ledger that I give you a digital dog on 08/02/18. But now someone would have to manage this general ledger. If you gave me this ledger, I could change the ledger at any time. If I gave you the book, you could change it. We would have to trust each other that both sides would be honest forever. Also, someone could steal our ledger and put themselves down as the owner of the digital dog.
That's why we need a ledger that doesn't need trust, is decentralised, secure and protected from forgery and manipulation. And that is exactly what Bitcoin has achieved, with the blockchain as a decentralised ledger recording all digital transactions in a tamper-proof way.
Great interest in the blockchain
The decentralised digital ledger is at the heart of Bitcoin and many companies are showing considerable interest in blockchain technology. This technology could improve the entire financial system. On the one hand, administrative costs for one's own account could be minimised and on the other hand, the blockchain automatically records all transaction data, which could significantly simplify accounting.
But not only the exchange of a bitcoin can be logged. Digital goods can also be logged. Smart contracts can be implemented with blockchain technology, as is already the case with Ethereum.
Blockchain.info is not the Bitcoin Blockchain
The website Blockchain.info offers various data regarding the Bitcoin Blockchain. On the homepage of the website, the currently found Bitcoin blocks are displayed, as well as the latest transactions made in the Bitcoin network. In addition, the search function can be used to search for the Bitcoin block height, a Bitcoin address, block hash, transaction hash, hash260 or the IPv4 address.
Bitcoin Block Explorer
However, this website is not the official Bitcoin Blockchain, but only maps the official Bitcoin Blockchain. Therefore, websites that map data on the Bitcoin Blockchain are called Bitcoin Block Explorer. These help with research and provide various statistics: Number of Bitcoins in circulation, number of transactions, difficulty and much more.
The website Blockchain.info also offers a blockchain wallet. This is by no means an official Bitcoin wallet, it is merely an online wallet provided by the company Blockchain.info.
However, there is a high security risk with web wallets. Be sure to choose a better Bitcoin wallet for storing larger amounts of money.
Disadvantage of a blockchain
Unlike centralised databases, blockchain technology requires constant computing power or some kind of working power from different (decentralised) sources to ensure security and timeliness.
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