Understanding the Fundamentals of Bitcoin Technology

Bitcoin stands as the pioneering decentralized cryptocurrency, introduced by Satoshi Nakamoto in 2009. It now facilitates approximately 400,000 transactions daily. Exploring Bitcoin's technological foundation is essential as digital currencies may shape the future of financial exchanges. At the core lies blockchain technology—a transparent, secure, and distributed ledger that records all Bitcoin transactions from the very first block to the latest. Each participant maintains a copy of the blockchain, enabling independent verification. Miners create new blocks by consolidating transactions and solving computational puzzles known as proof-of-work (PoW). Once validated, these blocks are linked via cryptographic hashes, forming an immutable chain. The blockchain's integrity relies on each block referencing the previous one through its hash, ensuring continuity and security. When competing miners produce blocks simultaneously, the network adopts the longest valid chain as the main ledger. Bitcoin's network comprises nodes—computers connected peer-to-peer—that validate and relay transactions. These nodes can operate in different roles: - Full nodes: Store the entire blockchain and ve...