Understanding The Bitcoin Network ( The Block chain )
Modified on: Sun, 7 Jan, 2018 at 5:35 PM
The Bitcoin Network is the first successful implementation of blockchain technology.
The term "blockchain technology" typically refers to the transparent, trust less, publicly accessible ledger that allows us to securely transfer the ownership of units of value using public key encryption and proof of work methods.
Bitcoin's payment network (also called the bitcoin blockchain) is what makes it possible for us to transact with one another. The network uses distributed consensus to verify and confirm transactions, and consensus is reached via a large global network of high-performance computers (called miners) running the bitcoin software.
In fact, the larger the network grows and becomes increasingly decentralised, the more secure it becomes.
Whenever someone sends a transaction it is broadcast instantly to the network and verified by the miners. Miners are constantly working to confirm individual transactions and include them in the next block of transactions in the chain. Once a new block is verified, all the transactions within it are permanently recorded on the blockchain.
Rewards are paid out in bitcoin to miners who confirm transactions and verify the next block to incentivise productivity on the network.
Each party who participates in the mining process has an identical up-to-date copy of the blockchain or public ledger, which is a record of all the transactions in bitcoin history. Each party's copy of the ledger is updated every time a new block is found.
The potential for blockchain technology is not limited to bitcoin. As such, it has gained a lot of attention in a variety of industries including: financial services, charities and non-profits, the arts, and e-commerce.
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