The blockchain is a public ledger that records bitcoin transactions. A novel solution accomplishes this without any trusted central authority: the maintenance of the blockchain is performed by a network of communicating nodes running bitcoin
software.Transactions of the form payer X sends Y bitcoins to payee Z are broadcast to this network using readily available software applications.Network nodes can validate transactions, add them to their copy of the ledger, and then broadcast these ledger additions to other nodes.
The blockchain is a distributed database – to achieve independent verification of the chain of ownership of any and every bitcoin
amount, each network node stores its own copy of the blockchain. Approximately six times per hour, a new group of accepted transactions, a block, is created, added to the blockchain, and quickly published to all nodes.
This allows bitcoin
software to determine when a particular bitcoin amount has been spent, which is necessary in order to prevent double-spending in an environment without central oversight. Whereas a conventional ledger records the transfers of actual bills or promissory notes that exist apart from it, the blockchain is the only place that bitcoins can be said to exist in the form of unspent outputs of transactions.