The Bitcoin Blockchain
Instead, Bitcoin uses the Blockchain as a public ledger. For reference, every bitcoin transaction is time-stamped and recorded to the Blockchain. It’s a distributed ledger. Meaning, Millions of computers from around the world work together to maintain it’s accuracy.
“Mining” is the process of securing and recording transactions to the Blockchain. Anyone can use their home computer to “mine” for Bitcoin. Miners are what makes bitcoin “decentralized” (without having one central area of command). To understand the fine details of mining read Bitcoin Mining Explained Like You’re Five.
All Crypto-currencies have their own set of rules and protocols. These rules ensure the security and consistency of the network. They are usually described in detail and published as a “White Paper.”
Satoshis “Bitcoin: A Peer-to-Peer Electronic Cash System” defined the original rules for Bitcoin. For example:
- Blockchain Structure
- Block size
- Mining difficulty
- Transaction fees
- Cryptographic Hash Algorithm
You can find a great reference to the Bitcoin Protocol on this wiki page.
The rule of consensus is this, miners understand the rules and need to agree that each block meets the requirements for it to be valid. Therefore, bitcoin rules are set by a democratic “public agreement.” For a rule to change, at least 51% of miners must agree to the change. Otherwise, a “Hard Fork” is necessary.
Usually, Each fork starts with a debate of how to solve a problem. Recently, there were two major debates within the bitcoin community. Both debates have resulted in hard forks, the creation of Bitcoin Cash and Bitcoin Gold.