Bitcoin Blockchain

Let’s learn about blockchain, the distributed ledger supporting Bitcoin.

Bitcoin blocks

The distributed ledger supporting Bitcoin is often referred to as the blockchain. The blockchain is stored and maintained by the nodes in the Bitcoin network. Having many copies of the blockchain scattered around the network ensures the blockchain is always available and highly resilient.

The blockchain consists of a sequence of blocks, each of which is a data item linked to the previous block in the blockchain. Each block consists of:

  • A block header: This 80-byte value consists of several important data items we discuss later but most critically, it contains the block hash of the header of the previous block in the blockchain. The block hash is a unique block identifier computed by hashing the block header twice using SHA-256. The inclusion of the previous block hash in the block header provides an explicit link to the position a given block occupies in the blockchain.

  • Transactions: Each block contains a list of (thousands of) Bitcoin transactions. Each accepted Bitcoin transaction will eventually find its way into one block of the blockchain.

The first block in the Bitcoin blockchain, known as the genesis block, was created in 2009. The illustration below indicates how blocks in the Bitcoin blockchain are explicitly linked together using their block hash values. In this way, any block in the Bitcoin blockchain is ultimately linked back to the genesis block.

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