Bitcoin’s block chain is vital to its function. The block chain is a public, distributed ledger of all prior Bitcoin transactions, which are stored in groups known as blocks. Every node of Bitcoin’s software network – the server farms and terminals, run by individuals or groups known as miners, whose efforts to produce new Bitcoin units result in the recording and authentication of Bitcoin transactions, and the periodic creation of new blocks – contains an identical record of Bitcoin’s block chain.

Because new Bitcoin transactions constantly occur, the Bitcoin block chain, though finite, grows over time. As long as miners continue their work and record recent transactions, the Bitcoin block chain will always be a work in progress. In other words, there’s no predetermined length at which the block chain will stop growing.

On average, miners create a new block chain, which includes all prior transactions and a new transaction block, every 10 minutes. Every two weeks, Bitcoin’s source code is designed to adjust to the amount of mining power devoted to creating new block chains, preserving the 10-minute average creation interval. If mining power increased during the most recent two-week span, new block chains become more difficult to create during the subsequent two-week span. If mining power decreases, new chains become easier to create. For most of Bitcoin’s history, the trend has been toward greater mining power.

Bitcoin’s block chain is the sole arbiter of Bitcoin ownership. No complete record exists anywhere else. The block chain also serves as a payment processing system, like Visa or PayPal, with the miners functioning as the system’s employees.

A Bitcoin transaction hasn’t technically occurred until it’s added to the block chain, at which point it becomes irreversible – unlike traditional payment processors, Bitcoin doesn’t have any standardized facility for chargebacks or refunds. During the window between the transaction itself and the moment it’s added to the block chain, the relevant Bitcoin units are essentially held in escrow – they can’t be used by either party to the transaction. This prevents duplicate transactions, known as double-spending, and protects the system’s integrity.