To understand Bitcoin and the blockchain, you can think of them as a book that records all the exchanges of Bitcoins from one person to another. The pages are the links in the blockchain that contain all the transactions. Anyone can read these pages from beginning to end because it is accessible to the public and a copy of the book can be made by anyone at any time. This allows the book to be scrutinized for accuracy, and with many copies lying around, it is not under the control of a single author. This also means the book can also have pages added to it by anyone. However, writing a page to the book is difficult because it has to follow strict rules and it requires a lot of time to follow these rules. This is necessary to prevent bad actors from polluting the book with junk. On the other hand, checking that a page follows the rules is easy to do and takes far less time than trying to write it. Making it difficult to add pages, by requiring effort in time, would force malicious people to dedicate a lot of energy to commit a fraud that could be easily detected and thus not succeed. A bad author attempting to add a junk page with fraudulent transactions would be detected by the other authors who would reject the page by not accepting the page into their copy of the book. As long as the majority of authors agree and accept a page, it will be incorporated as the next page of the book. Consequently, if the majority reject a page, it will never make it into all the copies of the book.
In Bitcoin-speak, there are “miners” that help build the blockchain by adding blocks to it. These miners are analogous to the authors of the book. Remember that anyone can write to the book (by adding pages). Each author gets a copy of the book, and when a page is added to the book by someone, the author of the page is compensated with some uniquely identified currency (like the serial number on a paper bill). In the case of Bitcoin, it is a Bitcoin itself. With this economic incentive in place to add pages to the book, there can be a throng of authors frantically trying to be the next one to get a page into the book. Imagine that the book already has 50 pages, and every author is trying to write the 51st page. The first author to write that page, and follows all the rules of the book, will get compensated for it. Once that 51st page is written and accepted, all the work the other authors have done will be thrown away because now the 52nd page needs to be written, and all the previous work done cannot be re-used for page 52. Everyone will begin writing the next page anew with a blank page.
The authors who want to write to the book must coordinate with each other. The details of the coordination are not terribly important to understand. The one thing to know is that all authors, with no other ulterior motives, will always work from the highest page number available. If an author discovers that there is a page available that follows all the rules and has a higher page number than the page from which the author is currently working, the author will abandon their work and begin anew from the new page with the higher number.
This gives a basic understanding of how Bitcoin works. At this point, you may be asking how the copies of the book and its authors maintain a coordinated version that can be trusted while excluding bad information. The next post will cover that detail.
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