The Evolution of Money - How Bitcoin and Blockchain Technology Can Change the World

To understand Bitcoin in general and its function, we must first explain the concept of blockchain. So, blockchain is the underlying technology that many cryptocurrencies operate on, but its unique way of securely recording and transferring information has broader applications outside of cryptocurrency. A blockchain is a type of distributed ledger. Distributed ledger technology (DLT) allows record-keeping across multiple computers, known as "nodes." Any user of the blockchain can be a node, but it takes a lot of computer power to operate. Nodes verify, approve, and store data within the ledger. This is different from traditional record-keeping methods which store data in a central place, such as a computer server. A blockchain organizes information added to the ledger into blocks, or groups of data. Each block can only hold a certain amount of information, so new blocks are continually added to the ledger, forming a chain. Each block has its unique identifier, a cryptographic "hash." The hash not only protects the information within the block from anyone without the required code but also protects the block's place along the chain by identifying the block that came before it.

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