What is Blockchain? As cryptocurrency is on the rise, with Forbes reporting in August that Bitcoin has increased in value from $570, to over $4,300 – which is an incredible growth of 650% within the last year alone! However, while Bitcoin increases in popularity and value, do we really understand the technology behind it?
This technology is called Blockchain –the new ‘buzzword that has been described as a “technical solution to a social problem. The social problem is one of trust.”
The bitcoin blockchain refers to a shared public ledger that supports the entire bitcoin network. All bitcoin transactions that are already confirmed are included in this blockchain. In this way, Bitcoin wallets are able to calculate their remaining spendable balance as well as verify new transactions so as to be spending those bitcoins that are actually the possession of the spender.
In Internet and computer language, a block chain is the transaction database that is shared by all the nodes that are currently participating in the bitcoin protocol system. Every succeeding block contains a hash of the previous one, thus effectively creating a chain of blocks starting from the genesis block to the present block.
By design, each block in the chain comes after the previous block chronologically. Otherwise, the previous block's hash wouldn’t be known.
One of the most important things to note with Blockchain is that it is not controlled by any single entity, Each client acts as an independent peer node on the bitcoin network and thus maintains a record of all the transactions.
As of February 2018, a single block is added to the block chain approximately every 10 minutes and is quickly published to all the independent network nodes. This allows each node’s bitcoin software to determine if and when every single bitcoin has been spent.
Whereas a ledger used in a conventional banking system records transfers of actual promissory notes or bills that exist apart from the ledger, the bitcoin blockchain is the only place where bitcoins can be said to actually exist.
In conclusion, and as seen from the explanations above, the block chain is the main innovation behind the bitcoin currency system; it is the real solution and the reason why bitcoins are what they are; it is actually the bitcoin itself! The Blockchain revolution is just beginning…..