Bitcoin

An insight into the Bitcoin Blockchain.

Being asked what is Bitcoin Blockchain could be somewhat difficult if not confusing. In a conversation about bitcoin, you will likely mention blockchain. Similarly, any time you are talking about blockchain technology, the word bitcoin is likely to feature. Understandably, both bitcoin and blockchain technology came to the fore in 2008 when Satoshi Nakamoto released the white paper detailing how digital currency bitcoin would function on blockchain.

A blockchain is a distributed ledger that can track transactions between parties. All transactions are time stamped and recorded securely and permanently. There is no dispute about the parties to a transaction, the time of the transaction, and that the transaction actually occurred.

So what is Bitcoin Blockchain?

Though related, bitcoin and blockchain are different. Even the term ‘bitcoin’ has two distinct meanings. ‘Bitcoin’ capitalised refers to the bitcoin blockchain (bitcoin ledger or protocol) while ‘bitcoin’ with small ‘b’ refers to the digital currency on the Bitcoin blockchain.

Bitcoin blockchain is a decentralised public ledger. It is politically decentralised in the sense that no single person controls it. However, from the standpoint of data, it is centralised in that all the nodes must agree on the rules and state of the ledger. Bitcoin blockchain is therefore a type of blockchain that allows transactions involving the bitcoin cryptocurrency.

There are two categories of users on the Bitcoin blockchain: the miners and other participants. The participants are the people who use the blockchain to send and receive the digital currency bitcoin in exchange for goods or services. As a participant, you use the bitcoin software to create a bitcoin wallet on your PC or tablet in order to send and receive bitcoins.

Miners update transactions on the blockchain, a process referred to as mining. It involves solving mathematical puzzles to create blocks- sets of verified and validated transactions. To be verified by the network of miners, a block must comply with strict cryptographic rules that ensure that previous blocks are not modified. If this happens, then all the blocks that follow are invalidated.

Blockchains other than the Bitcoin Blockcahin

Bitcoin blockchain protocol is open source, allowing anybody to modify it. As a result, many blockchains have been created, some for cryptocurrencies and others for different kinds of value transactions. The Ethereum blockchain, for example, has gained popularity in recent days for enabling smart contracts. Other leading public blockchains are:

  • Monero Blockchain
  • Dash Blockchain
  • Litecoin Blockchain
  • Dodgecoin blockchain

Organisations are also developing private blockchains with write permissions restricted to the organisation while read permissions may be public or restricted to the organisation as well. These are mainly used in database management and auditing which are internal activities of an organisation. Groups and participants can verify transactions internally. Examples include Monax and Multichain.

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