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Topic
Board Beginners & Help
Re: Why all the Bitcoin has to be in the Blockchain ?
by
witcher_sense
on 17/08/2022, 05:00:03 UTC
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I want to know why all the Bitcoin has be in the Blockchain ? I also want to learn about how Bitcoin really work ?
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Think of bitcoin as a decentralized distributed ledger that keeps records of all transactions that have ever been conducted. There are no "coins" in this ledger, only messages or "entries" that tell us who gave money to whom, when, and how much. The design of this distributed system is such that it is immutable (no one can tamper with the entries that have already been added), and it is resistant to double spending (no one can spend the same money twice or more times - once it is moved it is final), it is protected from censorship and fraudulent tampering because every single full node keeps a copy of the ledger and independently verifies every single incoming transaction. Bitcoin cannot exist outside of this ledger because if entries aren't protected or don't meet certain criteria of the system, they don't matter to the system and are ignored. Only those entries that have been added to the ledger via the process of mining can be said to have reliable properties (Proof-of-Work) that make them "worthy" to become part of history.