Block Chain

Definition:

A block chain is a transaction database shared by all nodes participating in a system based on the Bitcoin protocol. A full copy of a currency's block chain contains every transaction ever executed in the currency.

Purpose:

Every block contains a hash of the previous block. This has the effect of creating a chain of blocks from the genesis block to the current block. Each block is guaranteed to come after the previous block chronologically because the previous block's hash would otherwise not be known. Each block is also computationally impractical to modify once it has been in the chain for a while because every block after it would also have to be regenerated.

The block chain is what makes the spending of Bitcoins safe and secure. The block chain makes it very difficult to spend the same Bitcoins twice and the block chain is how they keep track of Bitcoin transactions. The length is tallied by the complexity, not by the number of blocks and this is another attempt at keeping the chain secure from attacks. A chain is valid if all of the blocks and transactions within it are valid, and only if it starts with the genesis block.1Blocks in small chains are discarded and the bitcoin client adds the small chain to larger chains and the transactions from the small chain will be queued in the larger chain.

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