Forget the price of Bitcoin. Look at the data structure. A blockchain is a database that nobody can edit, only append to. It achieves this using two cryptographic primitives: Hashing and Digital Signatures.
The Hash Chain
Block 10 contains a hash of Block 9.
Block 9 contains a hash of Block 8.
If you change one transaction in Block 8 (steal money), the hash of Block 8 changes.
This invalidates Block 9. Which invalidates Block 10.
To hack the past, you must rewrite the entire history of the future.
1. Wallets (Elliptic Curves)
A "Wallet" is just a Private Key.
Bitcoin uses the secp256k1 curve.
1. Generate Private Key (Random Number).
2. Derive Public Key (Point Multiplication).
3. Hash Public Key = "Address" (1A1zP1e...).
To spend money, you digitally sign the transaction. The network verifies the signature against your address.
2. Merkle Trees
How do we hash 10,000 transactions into a single block header?
We pair them up. Hash(A) + Hash(B) = Hash(AB).
We keep climbing the tree until we have one single Merkle Root.
Benefit: "Simple Payment Verification" (SPV). You can prove a transaction exists in a block without downloading the whole block, just by downloading the "branch" of the tree.
3. Proof of Work (The Lottery)
Who gets to add the next block?
The miner who finds a Nonce such that `SHA256(Block + Nonce) < Target`.
The "Target" is a number with many leading zeros.
Difficulty: The network adjusts the target so a block is found every 10 minutes.
This forces miners to burn electricity (Energy = Security).
51% Attack
If an attacker has 51% of the global computing power, they can generate valid hash chains faster than the honest network. They can rewrite history and "Double Spend" coins.