Bitcoin and Blockchain: how does it work?
It may seem very complex at first glance, but understanding how blockchain works is not such a difficult thing. The technology is quite innovative and is one of the reasons why Bitcoin has won the graces of investors around the world.
The word blockchain already gives part of the process: as we said, it is a chain of blocks. Each block is made up of various information about the various transactions and has a unique digital signature, called a hash or proof of work. This signature works like a fingerprint of the block and helps to give more security to the process, since everything is encrypted.
This hash acts as a link between the blocks, since a block carries its own hash and also the hash of the previous block. With this, the chain, or chain, is formed that connects several blocks of information with each other.
Those responsible for gathering the information in blocks and joining a block to the other are the miners. You probably have heard of them, have not you? These people gather the transactions that have not yet been inserted into a block and add them to the blockchain with the right hash.
However, to do this, you must perform complex calculations, which today are only done by several powerful computers. As a counterpart, the miners receive a reward in Bitcoins for the service provided by validating the information.
How blocks work
Each block has a maximum capacity and is created in a constant rhythm, like a beat of a song or a heart. In the case of Bitcoin, new blocks are added to the network every 10 minutes approximately.
Thus, in that period of time, several purchase or sale transactions of Bitcoins between users are verified and added to the blockchain. Only after an entire block is filled and verified is that a quantity of the coin can come out of the user’s wallet he has sold and pass into the purse of the purse he purchased.
If you are logged in to the network, you can see the encryption for that same transaction. However, without being able to see the identity of those involved or change this process. Because these blocks are sealed by very complex cryptographic codes, it is practically impossible to violate them and tamper with the information contained in them.
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