The date is January 3rd 2009, you wake up and get ready for work. You take your usual walk to the bus, and from there to work. On this day, you unintentionally eavesdrop as you are standing on the bus stop and hear of a new currency, Bitcoin. It is said to be a currency that only exists electronically and does not involve the bank or any third party.

The creator of this was unknown to the world, but known as Satoshi Nakamoto. The pseudonym for an anonymous computer programmer or group of programmers. This currency would be followed by many other cryptocurrencies to follow overtime. To many it sounds like nothing but a low life scam, after all, if the money isn’t tangible, it’s not exactly real.

Many are willing to look past the realness of the currency, but they want to know, if it is not the government or the bank overlooking the capital withdrawn or deposited, then who is? The answer is ‘the blockchain,’ that is what’s responsible for keeping records of every transaction.

The Blockchain Explained

According to investopedia.com, “A blockchain is a distributed database or ledger that is shared among the nodes of a computer network. As a database, a blockchain stores information electronically in digital format. Blockchains are best known for their crucial role in cryptocurrency systems, such as Bitcoin, for maintaining a secure and decentralised record of transactions. The innovation with a blockchain is that it guarantees the fidelity and security of a record of data and generates trust without the need for a trusted third party.”

Blockchain and cryptocurrencies have multiple advantages for those looking to use cryptocurrency. Because of the blockchain, cryptocurrency is immune to counterfeits, it does not need a central authority like a bank, and your capital is protected by a secure and complex encryption algorithm.

Blockchain also protects cryptocurrency users from hackers as users already have a copy of the ledger from their transactions and it is almost impossible to alter on the blockchain.

Another way to explain the use of blockchain is by calling it a collection of all the records that have taken place, and it has linked them with each other. This way there is hardly a chance that any sort of information can get lost or altered as this ledger or database is strongly resistant to alteration. This ledger is also protected using cryptography.

The 2 keys of Bitcoin

Every user of Bitcoin has 2 keys, one that is public and one that is private. The public one is the one used to receive crypto from another user. It is basically a cryptographic code that is paired to a key. Anyone can send a transaction to this public key.

However, as much as everyone can send money to the public key, only the private key can access these funds sent to the Bitcoin account. A private key should not be shared with anyone as it gives a person the right to claim ownership of the funds available in the account. The private key comes in many forms, it could be a QR Code, a mnemonic phrase, a 64 digit hexadecimal code, or a 256 character long binary code.

While the private key can come in many forms, it is a large number, and it is large for a valid reason.

Miners in Bitcoin

Some might wonder who is responsible for the ledgers and solving all the necessary equations before the transactions are written in the ledgers. The people responsible for this are called miners.

According to javapoint.com, ‘the role of a minor is to build the blockchain of records that forms the bitcoin ledger. These ledgers are called blocks, and each block contains all the different transactions that have taken place. A new block is added every 10 minutes as a new bitcoin transaction takes place.’

The Blockchain is a complex and secure ledger/database. It is strongly encrypted and almost impossible to decrypt. It does not need a third party to overlook to look over every transaction made as everything is put into the ledger and can not be altered once a transaction
has taken place.