Category: Satoshi Nakamoto

In essence, the proposed system for electronic transactions operates without the need for a trusted third party.

Bitcoin transactions are grouped into blocks, which are linked together in a chain.

Instead, privacy is maintained by keeping public keys anonymous.

In the Bitcoin system, transactions involve transferring coins from one party to another.

When you make a payment, other people on the network need to verify that the payment is valid.

This allows old blocks to be compacted by cutting off branches of the tree, and the interior hashes don't need to be stored.

This reward is like gold miners using resources to add gold to circulation, but in this case, it's CPU time and electricity being used.

In this way, a chain of blocks is created, with each block representing a set of transactions that have been verified and accepted by the network.

Once the work is done, the block cannot be changed without redoing the work, which makes the system secure.

Each timestamp also includes the previous one, forming a chain that becomes stronger with each new addition.