Bitcoin - General Concepts (Part 2)

Transactions A transaction is a transfer of money from one Bitcoin address A to another address B. To compose a transaction, the owner of address A signs a transcript of address B (among other data) with the private key associated with address A, so that the network will know that the new legitimate owner is the owner of address B. (This protocol of signatures is done automatically). In conclusion, Bitcoin transactions are digitally signed records that change the owner of bitcoin funds by assigning them to another address.

Blocks It is a structure that groups transactions. Transactions pending confirmation are grouped into a block on which the so-called mining process is performed.
In other words, a block is a record containing confirmations of transactions that were pending. Approximately every 10 minutes, on average, a new block that includes new transactions is attached to the blockchain through mining.

What is a Node? Before continuing, it is necessary to explain what a Node is. In computing and informatics a node is, in general, a physical or virtual connection point where all kinds of data and information can be created, sent and received. Thus, from the point of view of blockchain technology and cryptocurrencies, nodes are constituted by all those computers that are interconnected to the network of a cryptocurrency, running the software that is in charge of its operation.

Therefore, we can define a node as any computer on which the Bitcoin Core software has been downloaded. In other words, anyone who wishes to join and contribute to the Bitcoin system network can do so freely by simply downloading and installing the Bitcoin Core software on their computer.

Blockchain The bitcoin network’s blockchain is a public record of validated Bitcoin transactions in chronological order. When a block has been confirmed, through mining, it becomes part of the chain. When a node in the network manages to create a new block, it transmits it to the other nodes. The other nodes verify that the block is correct, and if so, add it to their chain and disseminate it. By broadcasting the new block, it will eventually be added as long as another branch has not been created in the blockchain in which a larger number of users with more computational capacity have participated.

By the very nature of the blockchain, the ownership history of all coins can be extracted, following the list of transactions. Thus, a user cannot reuse coins that he already used, as the network itself will reject the transaction.

In conclusion, explaining it in a very simple way, Blockchain is like a giant Excel, or a giant notebook. Everyone has it, where everyone can write, which is always updated, but no one can modify what is already written.