The blockchain

Bitcoin uses a unique and novel way of storing and distributing its transaction ledger. To create a database of transactions that is both resilient and transparent, it distributes all its transactions across a global network of nodes. This database is called the blockchain. To understand how the blockchain works, we'll explore how the blocks are used to group and distribute the transactions.

Blocks

The blockchain is a chain of blocks linked together, from the genesis block to the latest block, as shown in the following Figure 4.11. Every node connected to the network maintains a complete copy of the entire blockchain. This redundancy results in a very resilient system.

Figure 4.11 - The blockchain consists of many blocks chained together.

New blocks are mined by the nodes listening for transactions on the network. The nodes can share and relay the transactions amongst themselves. When a new transaction is received by a node, it is added to the new block. The new block is...