The Basics of Bitcoins and Blockchains: An Introduction to Cryptocurrencies and the Technology that Powers Them

by Antony Lewis

Bitcoin is a bunch of protocols: rules that define and characterise Bitcoin itself—what it is, how ownership is represented and recorded, what constitutes a valid transaction, how new participants can join the network of operators, how participants should behave if they want to be kept up to date with the latest transactions, and so on. These protocols, or rules, can be described in English or any other human language, but are best articulated in computer code, which in turn can be compiled into software—Bitcoin software—that enacts those protocols, i.e. makes them operate. When the software is run, Bitcoin coins are generated and can be sent from one account to another. These actions are recorded as transaction data, and this transaction data is bundled into bundles or blocks, and linked together to form the Bitcoin blockchain.