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Last updated: August 18, 2019 4:17 AM

Simple version:

If I desire to send some of my bitcoin to you, I submit my intention and the nodes scan the entire bitcoin network to validate that I 1) have the bitcoin that I desire to send, and 2) haven’t already sent it to anybody else. Once that data is confirmed, my transaction gets included in a “block” which gets connected to the preceding block – consequently the term “blockchain.” Transactions can’t be undone or tampered with, because it would imply re-doing all the blocks that came after.

Getting a bit extra complicated:

My bitcoin wallet doesn’t really keep my bitcoin. What it does is keep my bitcoin address, which keeps a record of all of my transactions, and consequently of my balance. This address – a lengthy string of 34 letters and numbers – is additionally known as my “public key.” I don’t mind that the entire world can see this sequence. Every bitcoin address/public key has a corresponding “private key” of 64 letters and numbers. This is private, and it’s crucial that I hold it secret and safe. The two bitcoin keys are related, but there’s no way that you can figure out my private key from my public key.

That’s important, due to the fact any transaction I issue from my bitcoin address needs to be “signed” with my private key. To do that, I put both my non-public key and the transaction details (how many bitcoins I desire to send, and to whom) into the bitcoin software program on my computer or smartphone.

With this information, the software spits out a digital signature, which receives sent out to the network for validation.

This transaction can be validated – that is, it can be confirmed that I have the bitcoin that I am transferring to you, and that I haven’t already sent it to anybody else – by using plugging the signature and my public key (which everybody knows) into the bitcoin program. This is one of the genius parts of bitcoin: if the signature was once made with the private key that corresponds to that public key, the software will validate the transaction, besides knowing what the private key is. Very clever.

The network then confirms that I haven’t before spent the bitcoin by using running through my address history, which it can do due to the fact it knows my address (= my public key), and because every transactions are public on the bitcoin ledger.

Even more complicated:

Once my transaction has been validated, it receives covered into a “block,” along with a bunch of other transactions.

A short detour to talk about what a “hash” is, due to the fact it’s essential for the next paragraph: a hash is produced with the aid of a “hash function,” which is a difficult math equation that reduces any amount of textual content or records to 64-character string. It’s no longer random – each and every time you put in that precise facts set via the hash function, you’ll get the identical 64-character string. But if you exchange so tons as a comma, you’ll get a definitely special 64-character string. This total article should be reduced to a hash, and until I change, dispose of or add some thing to the text, the same hash can be produced again and again. This is a very positive way to inform if some thing has been changed, and is how the blockchain can verify that a transaction has no longer been tampered with.

Back to our blocks: every block includes, as part of its data, a hash of the previous block. That’s what makes it phase of a chain, subsequently the time period “blockchain.” So, if one small phase of the preceding block used to be tampered with, the modern-day block’s hash would have to exchange (remember that one tiny alternate in the input of the hash function adjustments the output). So if you desire to exchange something in the preceding block, you also have to trade something (= the hash) in the current block, due to the fact the one that is presently included is no longer correct. That’s very hard to do, specially seeing that via the time you’ve reached half of way, there’s possibly any other block on pinnacle of the cutting-edge one. You’d then also have to exchange that one. And so on.

This is what makes Bitcoin clearly tamper-proof. I say without a doubt because it’s now not impossible, simply very very, very, very, very hard and therefore unlikely.


And if you want to indulge in some mindless fascination, you can sit at your desk and watch bitcoin transactions drift by. Blockchain.info is desirable for this, however if you choose a hypnotically enjoyable version, strive BitBonkers.

(For extra detail on how blocks are processed and on how bitcoin mining works, see this article.)

Article Source: http://www.coindesk.com