Bitcoin may have generated countless salacious news headlines, but it’s a cameo player in a much bigger act. The blockchain is the real innovation that that makes Bitcoin work, and could well outlast the upstart currency. But it’s in trouble – and Silicon Valley has forked out millions to try and save it.
The blockchain is a regularly updated ledger detailing all of the transactions on the Bitcoin network. It doesn’t run on any one server, though: it’s decentralized, with countless copies distributed around the network. It’s also cryptographically sealed, so that no one can change it. That’s what stops someone spending Bitcoin, claiming that they didn’t, and trying to spend it again.
Every ten minutes, a new block of data is added to the blockchain, detailing the latest transactions that have taken place. Each block includes a cryptographic hash of all its transactions.
A hash is unique, and is computed based on the transaction data that it represents. If any part of the underlying data changes, the hash changes too. Any fraudster wanting to tamper with a block’s transactions would need to also alter the hash recorded for that block to match the new, fraudulent set of transactions. Given that the computing