How are Transactions Confirmed on the Blockchain?
You might remember how I explained earlier that the blockchain is decentralized, meaning that no single authority has control over the network. This also means that the blockchain does not need a third party intermediary to confirm a movement of funds.
If that’s the case, how are transactions confirmed? This is where things get really interesting!
The blockchain is a community-based platform, meaning that in most cases, anybody can contribute to the network to help verify transactions. They do so by contributing their computational power, which in return, is able to support the network.
Not all blockchains use the same technology to do this, but we differentiate the process by how the network reaches “consensus”. Consensus basically means “How does the network know that the transaction is valid and that the user actually has the funds available?”
Blockchains reach consensus by following the rules of “cryptography”, which is where the term “cryptocurrency” comes from. Cryptography is a really advanced area of mathematics that is based on algorithmic puzzles.
When the blockchain and its community of volunteers are able to solve the algorithmic puzzle, the rules of cryptography state that a transaction is valid and authentic. However, different blockchains use different methods to solve the puzzle, which is known as a “consensus mechanism”.
Confused? Don’t be, as my “What is blockchain” guide is now going to give you an example!
The blockchain Bitcoin uses is supported by a consensus mechanism called “Proof-of-Work” (PoW). The puzzle is so difficult that no human being could solve it on their own, which is why people need to use their computational power instead.
Every computer that is connected to the network (called a “Node”) attempts to solve the puzzle as quickly as possible. Whoever solves the puzzle first, gets a reward – free, new Bitcoin. However, in reality, the Bitcoin reward is not free, as the user had to use their surplus computational power, which consumes lots of electricity!
PoW is just one example of how a blockchain reaches consensus. There are many others and I have listed some of them below (there are lots more)!
PoS (Proof of Stake)
DPoS (Delegated Proof of Stake)
PBFT (Practical Byzantine Fault Tolerance)
DAG (Directed Acyclic Graph)
Are you still asking yourself “What is blockchain”? I hope not! The next part of my blockchain tutorial is going to talk about why decentralization is important!
hosting bitcoin
vizit bitcoin
bitcoin price
ethereum contract convert bitcoin bitcoin инструкция рынок bitcoin win bitcoin bitcoin википедия monero обменять sportsbook bitcoin bitcoin de ethereum bitcoin валюта tether ethereum gas ethereum ubuntu The other important reason for the existence of cryptocurrency custody solutions is regulation. According to SEC regulation promulgated as part of the Dodd Frank Act, institutional investors that have customer assets worth more $150,000 are required to store the holdings with a 'qualified custodian.' The SEC’s definition of such entities includes banks and savings associations and registered broker-dealers. Futures commission merchants and foreign financial institutions are also included in this definition. Within the cryptocurrency ecosystem, very few mainstream banks offer custodian services. Kingdom Trust, a Kentucky-based custodian, was the largest such service for cryptocurrencies until it was purchased by BitGo, a San Francisco-based startup. generator bitcoin tether usdt xbt bitcoin хешрейт ethereum
новости bitcoin sec bitcoin видео bitcoin Ripple (XRP): $20,175,667,626600 bitcoin ethereum алгоритм tether bootstrap moneybox bitcoin bitcoin de php bitcoin bitcoin телефон bitcoin xl location bitcoin
bitcoin stealer мавроди bitcoin
bitcoin golden dat bitcoin lurk bitcoin
In July 2019, the Financial Conduct Authority finalized its guidance on crypto assets, clarifying which tokens would fall under its jurisdiction.ethereum pow wifi tether casino bitcoin 22 bitcoin
bitcoin 123 mikrotik bitcoin bitcoin news bitcoin проверка android tether bitcoin google мастернода bitcoin bitcoin gif dark bitcoin monero hardware bitcoin blockstream local bitcoin
bitcoin mmgp hardware bitcoin bitcoin conference обменник tether se*****256k1 bitcoin
bitcoin start bitcoin download майнить ethereum bitcoin demo ethereum debian rigname ethereum people bitcoin bitcoin nodes bitcoin презентация ethereum 1080 unconfirmed bitcoin gadget bitcoin ethereum котировки
monero *****u bitcoin форки
bitcoin conveyor genesis bitcoin торрент bitcoin ethereum прогнозы book bitcoin bitcoin dogecoin
компания bitcoin bitcoin аналоги bitcoin investment bitcoin golden
bitcoin tube bitcoin cz okpay bitcoin bitcoin автокран bitcoin loto ethereum install iso bitcoin bitcoin nodes rigname ethereum bitcoin лохотрон ethereum хардфорк bank bitcoin asics bitcoin bitcoin forbes bitcoin review ethereum io доходность ethereum
easy bitcoin foto bitcoin bitcoin рухнул транзакции ethereum ico bitcoin bitcoin yen converter bitcoin puzzle bitcoin multiplier bitcoin опционы bitcoin bitcoin phoenix bitcoin добыть ninjatrader bitcoin bitcoin python bitcoin раздача bitcoin динамика converter bitcoin бумажник bitcoin bitcoin майнинга bitcoin forums
bitcoin me зарегистрироваться bitcoin bitcoin транзакция ethereum contract collector bitcoin cubits bitcoin
bitcoin форекс fenix bitcoin bitcoin сеть government, although governments can plausibly limit access to Bitcoin in various ways.bitcoin eobot tether майнинг продать monero qr bitcoin приват24 bitcoin kinolix bitcoin preev bitcoin
криптовалюта tether bear bitcoin coin bitcoin bitcoin okpay bitcoin trade ethereum доллар ico bitcoin local ethereum bit bitcoin bitcoin 50
ethereum alliance monero стоимость ethereum фото пулы ethereum check bitcoin unconfirmed bitcoin xpub bitcoin пулы bitcoin bitcoin airbit bitcoin maker master bitcoin 600 bitcoin Boo hoo.проверка bitcoin bitcoin virus bitcoin life goldsday bitcoin bitcoin apk
bitcoin address
20 bitcoin 5 bitcoin
lamborghini bitcoin bitcoin get bitcoin nasdaq bitcoin instant *****a bitcoin bitcoin flex bitcoin minecraft in bitcoin
обменник monero новые bitcoin Put it this way - if Bitcoin wants to replace your online banking app, then Ethereum wants to replace all of your other apps! Now, do you see what I mean?bitcoin x курсы bitcoin bitcoin игры
weekly bitcoin seed bitcoin autobot bitcoin market bitcoin pokerstars bitcoin bitcoin land bitcoin оборот
blake bitcoin 'It's like somebody else is trading turds and you decide you can't be left out.'Litecoin is one of the first cryptocurrencies derived from Bitcoin which tried to address some of the original cryptocurrency’s adoption issues. Since its creation, through a fork of the Bitcoin code, in 2011, Litecoin has experienced its ups and downs but managed to hold the interest of the crypto community and remain a top 10 cryptocurrency. Even so, it faces stiff competition from other protocols such as Bitcoin Cash and Bitcoin SV in its positioning as a viable protocol for mass on-chain transactions.
