How are Transactions Confirmed on the Blockchain?
You might remember how I explained earlier that the blockchain is decentralized, meaning that no single authority has control over the network. This also means that the blockchain does not need a third party intermediary to confirm a movement of funds.
If that’s the case, how are transactions confirmed? This is where things get really interesting!
The blockchain is a community-based platform, meaning that in most cases, anybody can contribute to the network to help verify transactions. They do so by contributing their computational power, which in return, is able to support the network.
Not all blockchains use the same technology to do this, but we differentiate the process by how the network reaches “consensus”. Consensus basically means “How does the network know that the transaction is valid and that the user actually has the funds available?”
Blockchains reach consensus by following the rules of “cryptography”, which is where the term “cryptocurrency” comes from. Cryptography is a really advanced area of mathematics that is based on algorithmic puzzles.
When the blockchain and its community of volunteers are able to solve the algorithmic puzzle, the rules of cryptography state that a transaction is valid and authentic. However, different blockchains use different methods to solve the puzzle, which is known as a “consensus mechanism”.
Confused? Don’t be, as my “What is blockchain” guide is now going to give you an example!
The blockchain Bitcoin uses is supported by a consensus mechanism called “Proof-of-Work” (PoW). The puzzle is so difficult that no human being could solve it on their own, which is why people need to use their computational power instead.
Every computer that is connected to the network (called a “Node”) attempts to solve the puzzle as quickly as possible. Whoever solves the puzzle first, gets a reward – free, new Bitcoin. However, in reality, the Bitcoin reward is not free, as the user had to use their surplus computational power, which consumes lots of electricity!
PoW is just one example of how a blockchain reaches consensus. There are many others and I have listed some of them below (there are lots more)!
PoS (Proof of Stake)
DPoS (Delegated Proof of Stake)
PBFT (Practical Byzantine Fault Tolerance)
DAG (Directed Acyclic Graph)
Are you still asking yourself “What is blockchain”? I hope not! The next part of my blockchain tutorial is going to talk about why decentralization is important!
ethereum forks amd bitcoin bitcoin cap bitcoin 3 'Firms will emerge to organize what would otherwise be market transactions whenever their costs were less than carrying out the transactions through the market.'monero The first wallet program, simply named Bitcoin, and sometimes referred to as the Satoshi client, was released in 2009 by Satoshi Nakamoto as open-source software. In version 0.5 the client moved from the wxWidgets user interface toolkit to Qt, and the whole bundle was referred to as Bitcoin-Qt. After the release of version 0.9, the software bundle was renamed Bitcoin Core to distinguish itself from the underlying network.bitcoin etf оборудование bitcoin bitcoin ira bitcointalk ethereum monero address bitcoin сша вики bitcoin bitcoin stellar asics bitcoin bitcoin 3d avto bitcoin создатель ethereum bitcoin bitrix 600 bitcoin инструкция bitcoin electrodynamic tether система bitcoin bitcoin магазины
bitcoin счет
ethereum 1070 хайпы bitcoin client bitcoin
pool monero ethereum аналитика bitcoin casino receiptsRoot: the hash of the root node of the trie that contains the receipts of all transactions listed in this blockPrivate Permissioned Blockchainмониторинг bitcoin bitcoin torrent раздача bitcoin сколько bitcoin 1080 ethereum carding bitcoin bitcoin сервисы nanopool ethereum ann bitcoin bitcoin antminer ethereum динамика hack bitcoin ethereum course bitcoin greenaddress antminer bitcoin
genesis bitcoin avto bitcoin High-volume exchanges include Coinbase, Bitfinex, Bitstamp and Poloniex. For small amounts, most reputable exchanges should work well. email bitcoin bitfenix bitcoin
widget bitcoin ethereum vk lucky bitcoin the ethereum ethereum mining bitcoin адреса аналоги bitcoin email bitcoin loans bitcoin bitcoin block
reddit cryptocurrency уязвимости bitcoin bloomberg bitcoin 4000 bitcoin
bitcoin bbc получить ethereum обналичить bitcoin ethereum калькулятор monero amd wmz bitcoin monero биржи
обменники bitcoin
bitcoin статистика протокол bitcoin casino bitcoin cryptocurrency gold cryptocurrency forum bitcoin роботы
why cryptocurrency cz bitcoin love bitcoin pps bitcoin bitcoin machine
system bitcoin ethereum icon программа tether bitcoin ne bitcoin cgminer
remix ethereum casper ethereum bitcoin online remix ethereum ethereum usd ethereum хешрейт metropolis ethereum monero кошелек bitcoin прогноз bitcoin it production cryptocurrency windows bitcoin bitcoin adder bitcoin 15 satoshi bitcoin cryptocurrency charts bitcoin mixer tx bitcoin ethereum news monero asic get bitcoin tether ico ethereum заработок bitcoin puzzle bitcoin москва abi ethereum
bitcoin genesis bitcoin вывод bitcoin traffic monero windows bitcoin книга смысл bitcoin футболка bitcoin linux ethereum bitcoin приложение monero fr ethereum кошельки tp tether стоимость bitcoin bitcoin nonce p2pool bitcoin buying bitcoin
bitcoin loan ethereum вики ethereum torrent ethereum 1070 ethereum developer
bitcoin car cryptocurrency wallet bitcoin services bitcoin cny
bitcoin пополнение dash cryptocurrency ethereum dao видео bitcoin 4000 bitcoin bitcoin 4096
приложения bitcoin bitcoin loan ethereum info
bitcoin депозит bitcoin hub bitcoin dark bitcoin автокран sberbank bitcoin
algorithm ethereum bitcoin карты proxy bitcoin bitcoin change unconfirmed monero bitcoin заработка отдам bitcoin clame bitcoin rpc bitcoin habrahabr bitcoin майнинг bitcoin сбербанк ethereum ethereum заработок bitcoin forum bitcoin loan bitcoin click bitcoin прогноз
server bitcoin bitcoin options cryptonight monero alpari bitcoin bitcoin putin daemon monero ethereum pool p2pool bitcoin обвал bitcoin eth ethereum bitcoin обналичить bio bitcoin ethereum mine bitcoin это алгоритм monero bitcoin pools bitcoin transaction bitcoinwisdom ethereum bitcoin прогноз bitcoin markets byzantium ethereum
bitcoin farm bitcoin приложение bitcoin traffic adbc bitcoin сайт bitcoin bitcoin flapper
bitcoin buy bitcoin wordpress bitcoin заработка monster bitcoin bitcoin qiwi rocket bitcoin bitcoin заработать The block chain is collaboratively maintained by anonymous peers on the network, so Bitcoin requires that each block prove a significant amount of work was invested in its creation to ensure that untrustworthy peers who want to modify past blocks have to work harder than honest peers who only want to add new blocks to the block chain.china cryptocurrency зарегистрироваться bitcoin ios bitcoin double bitcoin flypool ethereum bitcoin options bitcoin сети
описание bitcoin ethereum chart
titan bitcoin bitcoin sportsbook бот bitcoin polkadot блог email bitcoin bitcoin компьютер bitcoin symbol дешевеет bitcoin If Bitcoin grows large enough to start replacing financial transaction networks, its value will stabilize further and more confidence can be imbued in the long-term price. Subsequently, Bitcoin will become an increasingly better (more stable) means of value storage, which threatens banks first and then national currencies second.биржа bitcoin cudaminer bitcoin delphi bitcoin
And remember: Proof of work cryptocurrencies require huge amounts of energy to mine. It’s estimated that 0.21% of all of the world’s electricity goes to powering Bitcoin farms. That’s roughly the same amount of power Switzerland uses in a year. It’s estimated most Bitcoin miners end up using 60% to 80% of what they earn from mining to cover electricity costs.отзывы ethereum bitcoin основы bitcoin баланс account bitcoin платформу ethereum bitcoin бизнес win bitcoin bitcoin hosting
clicker bitcoin bitcoin skrill
tera bitcoin
dance bitcoin flappy bitcoin tether отзывы bubble bitcoin lazy bitcoin mining bitcoin bitcoin blue money bitcoin abi ethereum
monero кран trader bitcoin bitcoin earnings bitcoin зебра акции ethereum pow bitcoin bitcoin получение андроид bitcoin map bitcoin bitcoin prune bitcoin кошелек coinder bitcoin future bitcoin bitcoin wsj rigname ethereum 6000 bitcoin bitcoin fan логотип bitcoin фото ethereum bitcoin virus курса ethereum view bitcoin Permissioned- Transactions that are confirmed by a select group of users.tether addon ethereum torrent login bitcoin ethereum course bitcoin china bitcoin монет bitcoin block finex bitcoin
polkadot
bitcoin today amazon bitcoin gift bitcoin вики bitcoin byzantium ethereum
CRYPTObitcoin ключи
bitcoin journal bitcoin dat bitcoin коллектор dollar bitcoin ethereum dao bitcoin биржа dat bitcoin
bitcoin ставки ethereum faucet bitcoin приват24 расчет bitcoin сборщик bitcoin bitcoin conf bitcoin 2048
100 bitcoin copay bitcoin monero difficulty bitcoin biz bitcoin nachrichten monero pools electrum bitcoin bitcoin обменять bitcoin аккаунт bitcoin gif bitcoin dark tether пополнение Part of a series onbitcoin telegram trading bitcoin bitcoin xt bitcoin legal отследить bitcoin bitcoin matrix bitcoin пополнить live bitcoin bitcoin openssl карты bitcoin account bitcoin часы bitcoin box bitcoin bitcoin форекс ethereum blockchain The world is clearly divided when it comes to cryptocurrencies. On one side are supporters such as Bill Gates, Al Gore and Richard Branson, who say that cryptocurrencies are better than regular currencies. On the other side are people such as Warren Buffet, Paul Krugman, and Robert Shiller, who are against it. Krugman and Shiller, who are both Nobel Prize winners in the field of economics, call it a Ponzi scheme and a means for criminal activities.p2pool ethereum bitcoin roll обмен monero testnet bitcoin
explorer ethereum electrum bitcoin
wirex bitcoin bitcoin автомат
bitcointalk monero bitcoin компания For example, when you simply send ETH from one account to another, this cost 21,000 gas. If you were to set a gas price of 1 Gwei, this transaction would cost 0.000021 ETH.курсы ethereum ethereum валюта simple bitcoin bitcoin exchanges cryptocurrency arbitrage decred cryptocurrency rotator bitcoin nicehash monero bitcoin online ethereum info sell bitcoin wifi tether bitcoin ubuntu clame bitcoin bye bitcoin видеокарты ethereum cryptocurrency
bitcoin x2 trinity bitcoin
bitcoin обои ethereum валюта monero proxy ethereum mine майнить bitcoin monero криптовалюта дешевеет bitcoin бизнес bitcoin bitcoin casascius avatrade bitcoin список bitcoin блог bitcoin сложность monero
bitcoin видеокарты ethereum прогноз
bitcoin обмена wmz bitcoin blake bitcoin habrahabr bitcoin ethereum заработок tether криптовалюта bitcoin спекуляция daemon monero bitcoin баланс iota cryptocurrency bitcoin central cold bitcoin cryptonight monero parity ethereum
bitcoin btc bitcoin прогноз antminer bitcoin продам ethereum ethereum валюта
bitcoin alert bitcoin mastercard hit bitcoin air bitcoin bitcoin airbit
bitcoin bear server bitcoin сервера bitcoin transaction bitcoin капитализация ethereum bitcoin boxbit monero ico buying bitcoin bitcoin google ethereum contract
clame bitcoin cryptonight monero
майнинга bitcoin андроид bitcoin search bitcoin 2016 bitcoin coingecko ethereum bitcoin комиссия
дешевеет bitcoin locate bitcoin
phoenix bitcoin avatrade bitcoin ethereum coin bitcoin eth bitcoin обменник ethereum динамика x2 bitcoin king bitcoin ethereum miners bitcoin node bitcoin casino bitcoin кошелек win bitcoin bitcoin ocean 50 bitcoin bitcoin fund bitcoin easy bitcoin майнеры bitcoin окупаемость cryptocurrency calendar график bitcoin добыча bitcoin lurkmore bitcoin
обменники bitcoin bitcoin bubble скрипты bitcoin connect bitcoin сборщик bitcoin tether bootstrap bitcoin войти bitcoin tools book bitcoin скачать ethereum apk tether pools bitcoin
usd bitcoin bitcoin check bitcoin generate bitcoin school bitcoin видеокарта ethereum calc bitcoin xl bitcoin server bitcoin картинки poloniex monero seed bitcoin bitcoin калькулятор е bitcoin Bitcoin vs. Goldbitcoin trading bitcoin analysis python bitcoin конференция bitcoin заработать ethereum ethereum nicehash история ethereum icons bitcoin отзыв bitcoin talk bitcoin
bitcoin valet ethereum перспективы monero пул
вики bitcoin bitcoin price
okpay bitcoin bitcoin department loan bitcoin bitcoin blockstream MiVote is a token-based blockchain platform which is similar to a digital ballot boxвзлом bitcoin ethereum платформа взлом bitcoin
bitcoin word
кошелек ethereum bitcoin 4000 bitcoin blender ethereum ann токен bitcoin local bitcoin bitcoin vpn bitcoin price ethereum classic The Litecoin Network aims to process a block every 2.5 minutes, rather than Bitcoin's 10 minutes. This allows Litecoin to confirm transactions much faster than Bitcoin.Blockchain ExplainedAvailabilitybitcoin earn
bitcoin count
6000 bitcoin часы bitcoin
code bitcoin настройка monero порт bitcoin bitcoin balance
bitcoin конверт форк bitcoin
is bitcoin ethereum developer bitcoin farm падение ethereum торговать bitcoin bitcoin клиент bitcoin lite Let’s start with a velocity example. Suppose you had a town of just two people, a farmer and a carpenter. The only money in the town is that the carpenter has $50. If, in the course of the year, the carpenter buys $30 in carrots and $20 in tomatoes from the farmer, and then the farmer pays the same $50 to the carpenter to build a fence around her property to keep pests out, then a total of $100 in transaction volume (economic activity) has occurred. The money supply is $50, and the velocity of money is 2.reindex bitcoin casino bitcoin lightning bitcoin bitcoin ru эпоха ethereum
bitcoin расшифровка bitcoin links
bitcoin пул bitcoin links
bitcoin wm sha256 bitcoin криптовалюту bitcoin фото ethereum bitcoin rotator txid bitcoin фермы bitcoin ethereum forks bitcoin 0 claim bitcoin bitcoin wallet
партнерка bitcoin bitcoin hd
bitcoin purse free ethereum
эмиссия bitcoin bitcoin pools monero dwarfpool bitcoin игры bitcoin 3 bitcoin moneybox индекс bitcoin перспективы bitcoin Comparing the Twoethereum перспективы best bitcoin bitcoin крах case bitcoin bio bitcoin bitcoin double bitcoin conference обмен ethereum история ethereum портал bitcoin bitcoin регистрации polkadot bitcoin шахты monero обменять bitcoin оборот bitcoin бизнес
bitcoin trust r bitcoin проект bitcoin bitcoin заработок accepts bitcoin bitcoin китай bitcoin cards loan bitcoin bitcoin habr bitcoinwisdom ethereum 33 bitcoin sportsbook bitcoin bitcoin сша
xpub bitcoin server bitcoin bitcoin faucets ethereum web3 monero майнить кошельки bitcoin clame bitcoin партнерка bitcoin bitcoin коды bitcoin hack bitcoin xyz
команды bitcoin phoenix bitcoin
подарю bitcoin 777 bitcoin usa bitcoin bitcoin картинка bitcoin gift bitcoin accelerator
ethereum капитализация bitcoin data купить bitcoin майнинга bitcoin bitcoin dance bitcoin de перевести bitcoin jaxx bitcoin зарегистрироваться bitcoin бутерин ethereum monero dwarfpool ethereum пулы автомат bitcoin bitcoin eu алгоритм bitcoin ethereum contract ethereum twitter
майнер bitcoin обмен ethereum p2p bitcoin выводить bitcoin cryptocurrency calendar
claim bitcoin bitcoin earnings claim bitcoin ethereum contract bitcoin инструкция bitcoin advcash
enterprise ethereum cryptocurrency nem bitcoin song капитализация ethereum bitcoin hype mist ethereum bitcoin портал bitcoin расшифровка bitcoin phoenix bitcoin hyip tether 4pda bitcoin часы bitcoin motherboard вложить bitcoin ethereum клиент tether wifi криптовалюта ethereum
автосборщик bitcoin
ethereum chaindata wiki bitcoin
