What is Blockchain?
Blockchain Technology Keeps Bitcoin Safe
To keep digital currency managed and secure, the underlying software protocol was designed specifically to monitor Bitcoin usage. This protocol is called blockchain.
To understand blockchain, it’s important to first understand that Bitcoin is a decentralized currency. Meaning, there is no bank or central governing authority setting rules, fees, or transaction allowances. Instead, all Bitcoin transactions are recorded on a transparent public ledger.
In approximately 10 minute-intervals, these transactions (examples of which may include “John pays Steve 10 Bitcoins” or “Michelle pays Robert 15.5 Bitcoins”) are collected into large bundles, known as blocks. A series of blocks, strung together in one continuous thread are a blockchain.
Blockchain technology is therefore an incorruptible digital ledger of Bitcoin transactions.
Without it, Bitcoin users could (intentionally or accidentally) sign the same Bitcoins over to multiple recipients, much like writing two checks for one allocation of money. Blockchain prevents this phenomenon, known as a “double-spend”, and others like it by letting users know definitively when transactions have occurred.
All confirmed transactions are included in the blockchain so that the bitcoin wallet can calculate the spendable balance and new transactions can be verified.
Blockchain technology has been so successful that in the past three years alone over 90 corporations have invested upwards of $1.4 billion towards blockchain development and research. Blockchain technology is so secure that the World Economic Forum predicts that by 2017, 80% of banks will be implementing blockchain technology themselves.