Blockchain has been a hot topic for the past few months, especially since Bitcoin’s price surged to about $20,000 in late 2017. Whenever there’s talks about Bitcoin, inevitably the word “blockchain” gets mentioned. Some of you might be wondering what exactly is a blockchain?
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Blockchain Described For The Average Joe
To dumb it down, blockchain is just a complete ledger of all transactions that has taken place for that particular ecosystem. So in the case of bitcoin blockchain, it is describing bitcoin’s ENTIRE list of transactions ever transacted using bitcoin from EVERYBODY.
The ledger is very much like your bank account transaction history, but in this case it includes transactions for every single customer that used bitcoin, including payments, peer to peer transfers, or even personal wallet transfers.
The ledger is not controlled by any single entity, but instead it is decentralized. The new transactions are appended to the blockchain by “miners.” Every miner has access to the same ledger, so the history of the bitcoin transactions cannot be altered.
Example Of Blockchain Transaction
- Mickey sends $10 worth of bitcoin to Donald’s bitcoin address.
- Almost instantly, Donald should receive an unconfirmed payment for $10 worth of bitcoin in his bitcoin wallet.
- The transaction gets transmitted to the internet for miners to find.
- Within the network, miners see this transaction and confirms it, typically takes several confirmations to be considered an official transaction
- After the required confirmations, the transaction gets added to the bitcoin blockchain, and Mickey’s payment to Donald becomes confirmed. This transaction will be seen by all the bitcoin miners in the world and added to their blockchain ledger.