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As we mentioned earlier, Bitcoin is a large ecosystem consisting of 3 main elements: the Bitcoin blockchain network, BTC cryptocurrency, and network users/validators (also known as nodes).
The Bitcoin blockchain network is the core of the entire ecosystem.
In essence, it's a database that contains a list of all transactions that have ever taken place on the network, which are cryptographically secured
The reason it's called a blockchain, or chain of blocks, is because it consists of blocks that store records of transactions.
The average size of a block is about 1 MB (megabyte).
This means that one block in Bitcoin can contain about 2000 transactions.
Once transactions fill up one block, that block must be linked to the previous one to become part of the blockchain chain.
Before a block is added to the blockchain, Bitcoin network validators check all transaction parameters.
Using the transaction list, or ledger, all network users (nodes) scan the data to ensure that the person making the transaction actually has the amount they are sending and is authorized to send it.
If these conditions are met, the transaction is considered valid.
The Bitcoin network is decentralized, which means that all users must agree that the transaction is valid.
n other words, network users apply a so-called consensus mechanism to determine the correctness of transactions.
All validators must agree that all rules have been followed; otherwise, the transactions will not be stored in the blockchain.
Thanks to such a system of recording and confirming transactions, it is impossible to carry out false transactions.
Thousands of validators (nodes) will stop any attempt at fraud precisely because they have real-time insight into the current state.
The consensus mechanism that Bitcoin network users use to confirm transactions is called Proof-of-Work (abbreviated as PoW).
In public, the process is more commonly referred to as Bitcoin mining.