Cryptocurrency Definitions: Ledger

A ledger is a database where every transaction of a cryptocurrency is recorded. For example, Blockchain is the ledger for Bitcoin transactions. It is a global ledger where every transaction of bitcoin that has ever happened is recorded. The complete ledger is well over 100 GB in size, and is growing every day as more and more transactions take place.

Imagine you are playing poker with a group of people without any chips, and no one has any money on them. In order to keep track of all the transactions, everyone writes down on paper how much they are betting, who wins, and who lost x amount of money. At the end of every hand, everyone compares what they wrote down that hand to make sure everyone has the amount of money they are supposed to have. The list of transactions grows significantly as the game progresses. Each page you fill up with the written transactions can be thought of as a block of transactions. Eventually you will have pages and pages of transactions, which will become a chain of those blocks (why the global ledger for Bitcoin is called blockchain).

There are thousands of people separately maintaining the bitcoin blockchain. For Bitcoin, picture the same metaphor, except at this poker table there are millions of people. Some of these people are just exchanging money, but lots of volunteers are keeping ledgers to ensure everyone has the amount of money they are supposed to have. When you want send or receive money, you have to announce it to everyone at the table, so the people keeping track of the ledgers can keep them up to date and accurate.

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