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How transactions are verified in Bitcoin Blockchain - Longest chain rule explained

have you wondered how transactions get

approved in Bitcoin blockchain why you

need to wait for three to six

confirmations for the transactions to

appear in your wallet this video

attempts to explain how a Bitcoin

transaction is approved and the process

behind it let's assume kobish

transferred Bitcoin worth hundred

dollars from one crypto exchange to

another once he does the transfer the

transaction message is sent to the

network and passed around all the

network participants which are also

called

nodes this is called the transaction

pool currently the transaction is in an

unconformity all the transactions in the

transaction pool will be in an

unconformity TISS now we will understand

who is a minor in simple words those who

validate new transactions and record

them on the global ledger of a

blockchain are called - and this

activity is called mining to make it

simple let's assume there are currently

three miners who are trying to confirm

the transaction from the transaction

pool including go normally

miners will select those transactions

which generate a high transaction fees

for them currently the number of

confirmed blocks in the blockchain

public ledger is 998 once the miner

identify that the 998 block is a valid

block they try to create a candidate

block by adding unconfirmed transactions

from the transaction pool now these

miners are trying to add the 999th block

to add the blocks they have to solve a

complex mathematical problem and this is

as the proof of work let's assume all

the three miners were able to solve this

problem and have a proof of work now we

have three different candidate blocks

let's call them 9 9 8 9 9 9 B and 9 9 9

C now which of these blocks will form

part of the valid block will depend on

the longest chain rule let's understand

what is the longest chain rule now there

are other miners were trying to create

other valid blocks and based upon the

speed by which a block is created other

miners will keep on adding their blocks

on the top of the earlier blocks here in

this case minor C had a better processor

which was able to create a block faster

than miner a and B and hence new blocks

were created on the top of block 9 9 9 C

now the longest chain is the one created

by 9 9 9 C and it will keep on adding

other blocks like 1000 1001 and so on so

what happens to the block 9 9 9 a and 9

9 9 B they have to create the proof work

again with the new set of transactions

from the transaction base each

confirmations represent adding each

block each confirmation will take on an

average of around 10 minutes or more per

block applying the longest chain rule in

the proof of work unconfirmed

transactions will become a confirmed

transaction and add it to the blockchain

ledger once the blocks are added - will

receive transaction fees and block fees

which will be the new Bitcoin created as

an incentive for approving the

transactions block rewards will be

reducing every year and in the end only

the transaction fees will be there as

new bitcoins will not be created as a

general rule the number of confirmations

depend upon the size of the transactions

follows zero payment with zero

conformation considerably reversed

wait for at least one one confirmation

is enough for small Bitcoin payments

less than thousand dollars three enough

for payments between thousand and ten

thousand dollars most exchanges require

three confirmations for deposits six

enough for large payments between

$10,000 and $1,000,000 six is the

standard for most transactions to be

considered secure sixty suggested for

large payments greater than one meaning

less is likely fine but this is to be

safe

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