Blockchain

The blockchain is Bitcoin’s shared ledger: every transaction since the genesis blockGlossaryGenesis blockThe very first block of the Bitcoin blockchain, created on 3 January 2009. It contains a newspaper headline about bank bailouts – and its reward of 50 BTC can never be spent, for technical reasons.In the glossary →× of 2009, in the order in which they were confirmed. Every full nodeGlossaryFull nodeA node that checks every block and every transaction itself against all the consensus rules. If you run a full node, you don’t have to trust anyone to know whether a payment is valid.In the glossary →× verifies all of it independently.

How the blocks are linked

Transactions are bundled into blocksGlossaryBlockA bundle of transactions added to the blockchain roughly every ten minutes on average. Each block refers to its predecessor by its hash and contains the reward for the miner.On the learning path: Stage 1 · Step 3 – How does Bitcoin work? →In the glossary →×. Each block header contains the hashGlossaryHash (hash value)A fixed-length digital fingerprint that a hash function calculates from any data. Even the tiniest change produces a completely different value, and the original data can’t be worked out from the hash.On the learning path: Stage 1 · Step 3 – How does Bitcoin work? →In the glossary →× – a digital fingerprint – of the previous block. If someone changes a single character in an old block, its hash changes, and the link to all later blocks breaks.^[2]

This can’t simply be recalculated: each block costs real computing work (proof of workGlossaryProof of workThe method by which miners prove that they have done real computing work for a new block. It lets the network agree on the valid chain without a central authority, and makes rewriting old blocks extremely expensive.On the learning path: Stage 1 · Step 3 – How does Bitcoin work? →In the glossary →×). The more blocks follow a transaction, the more effort it would take to change it after the fact.^[1]

Try it: change the data in a block and watch what happens to the ones that follow.

What you should know

• Public: Anyone can see every transaction. Names aren’t recorded, but addresses and amounts are. Bitcoin is therefore pseudonymous, not anonymous.^[1]
• Append-only: Nothing is deleted or corrected. A confirmed payment made in error only comes back if the recipient returns it in a new transaction.

The full process is shown in How does Bitcoin work?.