What is the Blockchain and How Does it Add Stability to my Bitcoins?
The bitcoin blockchain serves as a public ledger for all transactions. It is an extremely secure distributed database, meaning it is shared among the users of bitcoin while not needing a trusted administrator. All the transactions are placed into a block with it’sown unique key once confirmed. Each confirmed block in this long chain contains a timestamp and a link back to the previous block. One can track though all the blocks if they wished.
This makes all the data (transactions) there tamper-proof and legitimate.
The blockchain has revolutionized the digital asset world. It solves a major issue:
Accuracy of Data
The blockchain is a set of blocks, each block contains every single transaction that took place for about an hour. So the very essence of the blockchain is a secured way of logging online transactions.
It is a decentralized (peer-to-peer) digital ledger which records all of the transactions on computers all over the globe in a way that the cleared transactions cannot be altered after they have been confirmed. The transactions in the blockchain are authenticated by collaboration of the users powered by their own self interests. Miners get a reward of bitcoins by successfully confirming a block.
This leads to high productivity and removes uncertainty regarding whether or not the data is true. The use of a blockchain removes the characteristic of “dupes” or using the same coins in many different locations. It is a way to check that the coins have been spent once. Thus solving the long-standing major problem of multiple spending.
This allows bitcoin too be an extremely secure form of money, and unlike paper money it fits perfectly into the rapidly evolving world with technology.
The blockchain is served via a peer-to-peer protocol. This means that information within the chain is not stored at a central location. No matter how encrypted that is it is still extremely vulnerable, especially considering the mass of wealth contained within the blockchain.
Being decentralized means that it is stored on thousands upon thousands of computers all over the earth. It’s stored on any computer that is mining bitcoins. No user is trusted more than another user so everyone is equal and has the same copy as everyone else. This also shields it from a power failure or EMP or whatever may try to take it down.