Sometimes the most fundamental topics in life are the hardest to fully understand, and in the world of cryptocurrencies this is no exception. Between the miners and their hash, the blockchains and their “block” understanding what a Bitcoin is can be quite challenging. The average person might not even know what a cryptocurrency is. But I will do my best to explain my understanding of this subject.
Building Blocks to Success
Blockchains are the essence of the Bitcoin. But what is a block? Simply put, it is a record book for all the data involved. Any transaction that happens within a cryptocurrency must be recorded within the block. In the case of Bitcoin, each block is up to 1 megabyte of data compared to Bitcoin Cash with up to 8 megabytes of data. But what makes up this data? Transactions, and every single one is kept track of due to the blocks. Once one block is completed another is added, and so the blockchain begins.
The creation of a new block once the previous has been completed can only happen after the miner completes a mathematical equation or the Hash. And this is important because at the completion of every block more bitcoins are added into the market. Every correct equation solved at the end of a block rewards twelve and a half bitcoins to the miner who completed it. Miners use a certain program in order to complete the hash, and the time averages at about 10 minutes. With the introduction of the “SegWit” or Segregated Witness this is a much faster time than ever before because other miners will verify the answer provided. And lightning network is anticipated to enable more instantaneous transactions to occur.
I hope that some light has been shone the building blocks of Bitcoins. If you would like to know more please feel free to leave a comment.