Cryptocurrency transactions are recorded in a public ledger that is maintained by a network of nodes across the world. This ledger is commonly referred to as a blockchain, and it provides a secure and transparent way to track the transfer of value between parties.
When a transaction is initiated, it is broadcast to the network, where it is verified by multiple nodes to ensure that the sender has sufficient funds and that the transaction is valid. Once the transaction is verified, it is added to the next block of the blockchain, which acts as a permanent record of all transactions that have taken place.
Each block in the blockchain contains a list of transactions and a unique code called a “hash”. This hash is generated by solving a complex mathematical equation, and it serves as a timestamp for the block and a link to the previous block.
Once a block is added to the blockchain, the information it contains is publicly accessible and cannot be altered or deleted. This makes the blockchain an immutable record of all transactions, providing a high level of security and transparency.
In addition to verifying transactions, nodes in the network also perform a process called “mining”, which involves competing to solve mathematical equations to generate new blocks and receive a reward in the form of cryptocurrency. This reward incentivizes nodes to participate in the network and helps secure the blockchain against potential attacks.
Overall, the process of recording transactions in a cryptocurrency network is designed to be secure, transparent, and decentralized, providing a reliable and tamper-proof record of all transactions that take place.
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