What is bitcoin blockchain technology?
While many of us don’t think much about all the work that goes on behind the scenes of the many Bitcoin casinos that we frequent, one important factor, and it is one which is gaining more and more attention as the popularity of Bitcoin grows and those outside the Bitcoin world become more interested in just exactly how it works, is just exactly how Bitcoin transactions work. Bitcoin transactions rely on what is known as blockchain technology. While blockchain technology is used in several other systems, Bitcoin is the most well-known user of this technology and, as its’ use is crucial for the smooth running of Bitcoin transactions, it would help us all as Bitcoin users and fans to better understand just how this technology works.
Blockchain technology has been described as complicated and, if you get into very technical definitions, it is easy to get lost within the convoluted explanations. However, it is possible to evaluate it in a more simplified manner that doesn’t result in too many headaches for those of us that are not entirely clued in on all things technology-related.
So how does blockchain work?
Essentially, blockchain technology works as a digital ledger. A set of transactions are noted down in each block and once the limit of transactions for each set is reached, a new block is opened. The new block can be linked to the previous block by the hash, which is a tracking number that can be used to recall the correct order of the block in the chain at any time that you wish to check it. All the transactions are marked with a timestamp so it is easy to check instantly which transaction is the latest one and what the current balance is, in the case of its use in Bitcoin.
The big benefit for Bitcoin, and other cryptocurrencies, is that blockchain technology is able to overcome the double-spending problem which previously restricted the growth and development of previous cryptocurrencies. Double-spending is a problem that occurs with cryptocurrencies when a particular unit cannot be accounted for and it cannot be assured if the current holder of the unit is authorised to use it as it cannot be ascertained if it has already been spent. However, with the timestamping and hashes, it is possible to closely monitor and guarantee the movements of units and the transactions they have been involved in.
How safe is blockchain?
Another important factor in blockchain technology’s success is that it is very hard to change the data once it has been established. As it is peer-to-peer software, almost anyone can use it and view it at any part of the process. On top of that, it is hard to change the information as if incorrect data is added to the blockchain, it will not match up with the data established in the block which correctly follows the original source and the one that works will be the one with the correct hash.
And thus, you have the basis for how Bitcoin transactions work and how you can feel reassured that Bitcoin transactions are being carried out in a transparent and secure manner as the money passes from your wallet to your casino account and you can continue gambling.
For a quick informational video with a brief overview of how blockchain technology works, you can have a look at this produced by Comparitech.