How Blockchain Works

How Blockchain Works

To understand how bitcoin works, you need to understand the technology on the basis of which it is made – with the blockchain and nearpay wallet. This is such an open database that contains all the information about all transactions for the entire existence of the network. Blockchain can be translated as a “chain of blocks”, and new blocks are added to it by miners.

Every time a network member sends bitcoins to someone, he creates a transaction, attaching the recipient’s public key to it, and signs the operation with his private key. When a transaction enters the blockchain, all its participants can confirm that the owner of the public key specified in the transaction has become the new owner of the coins.

A user signature on a transaction confirms the authenticity of the transaction. The entire transaction history is stored by each network member at the same time, so anyone can check who owns certain coins.