At a time in which data management and security has become a primary concern of all business sectors, blockchain has emerged as a safe way to digitally record and memorialize financial transactions without needing centralized third-party authentication.

Bitcoin still is the leading digital currency. Like the paper money and coins, bitcoin’s value stems from the fact that it can be used to buy goods and services. Bitcoin (or any other digital currency) and blockchain work together. Here are nine things you need to know:

1. A digital file called a “ledger” is used to keep track of your bitcoin.
2. Your ledger is distributed across a network of private computers (called “nodes”).
3. Every time you initiate a transaction, every node in the network is notified so it can update the balance in your ledger using your public key.
4. Blockchain does not keep track of your balance; it only tracks the transactions you make.
5. Your bitcoins are kept in a “wallet” that is encrypted with a specific public key as well as an encrypted private key. Only you can use your private key to encrypt and decrypt your transactions.
6. You can have as many wallets as you wish. Each has its own private and public keys.
7. Every time you use your private key you generate a digital signature, and blockchain uses that signature to verify your transaction. This signature changes every time you initiate or change a transaction. This makes it impossible to change a recorded transaction.
8. Transactions are grouped into blocks. Each block contains a set number of transactions and a link to the previous block.
9. The blocks are organized in a time-related chain and connected through cryptography that relies on special mathematical functions and codes. Every transaction in each unique block is considered to have happened at the same time.