Bitcoin Tutorial 2 : How Bitcoin Transactions are stored?

I claim to transfer 1 billion bitcoin to your account !! No one can deny because bitcoin is a virtual currency,precisely there ought to be some approach to store and follow “Bitcoin Transactions and Balance” and on the off chance that I have transfered 1 billion bitcoin then there is evidence as “Block Chain”. Block chain is a way to store Bitcoin Transactions and encryption with hashing is a way to transact.


Block Chain – General Ledger

  • About 

People are sending bitcoins to each other over the bitcoin network all the time, but unless someone keeps a record of all these transactions, no-one would be able to keep track of who had paid what.The bitcoin network deals with this by collecting all of the Bitcoin transactions made during a set period into a list, called a block. It’s the miners’ job to confirm those transactions, and write block into a general ledger (block chain).

This general ledger is a long list of blocks, known as the ‘block chain’. It can be used to explore any transaction made between any bitcoin addresses, at any point on the network. Whenever a new block of transactions is created, it is added to the block chain, creating an increasingly lengthy list of all the transactions that ever took place on the bitcoin network. A constantly updated copy of the block is given to everyone who participates, so that they know what is going on.


  • What is stored in block chain?

When a block of transactions is created, miners put it to “block chain-general ledger” through a process. They take the information in the block, and apply a mathematical formula to it, turning it into something else. That something else is a far shorter, seemingly random sequence of letters and numbers known as a hash. This hash is stored along with the block, at the end of the block chain at that point in time.

Hashes have some interesting properties. It’s easy to produce a hash from a collection of data like a bitcoin block, but it’s practically impossible to work out what the data was just by looking at the hash. And while it is very easy to produce a hash from a large amount of data, each hash is unique. If you change just one character in a bitcoin block, its hash will change completely.

Miners don’t just use the transactions in a block to generate a hash. Some other pieces of data are used too. One of these pieces of data is the hash of the last block stored in the block chain.

Because each block’s hash is produced using the hash of the block before it, it becomes a digital version of a wax seal. It confirms that this block – and every block after it – is legitimate, because if you tampered with it, everyone would know.

If you tried to fake a transaction by changing a block that had already been stored in the block chain, that block’s hash would change. If someone checked the block’s authenticity by running the hashing function on it, they’d find that the hash was different from the one already stored along with that block in the block chain. The block would be instantly spotted as a fake.

Because each block’s hash is used to help produce the hash of the next block in the chain, tampering with a block would also make the subsequent block’s hash wrong too. That would continue all the way down the chain, throwing everything out of whack.



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