Lost Already (Blockchain)

Don't switch off! (unlike myself, admittedly)


What is blockchain? ⛓

At It's core, blockchain is a large database, typically shared between a publicly accessible, decentralized network. To further understand what blockchain is, the easiest and most logical example to provide is how it originated, Bitcoin.

Bitcoin ₿

Bitcoin has been on a roll recently, with several publicly-traded companies such as Tesla and Square racing to accumulate billions worth, presumably before the rest of the world realizes its true value. 

So far, Tesla have made more money in the past month from holding bitcoin in their reserves than they have selling cars in their lifetime, up over $1Bn.

yeah.

Check it out here -> https://whatsteslasbitcoinworth.com/

But what are these companies buying?

Bitcoin, as outlined in Satoshi Nakomoto's 2008 Bitcoin: A peer-to-peer electronic cash system, is a currency that is not controlled by anyone. Not a company, not a bank, not a government. With that comes the questions:

  • How does one keep track of who owns how many bitcoins?
  • If nobody controls the bitcoin network - how does it change to register a transfer of currency?
  • How does a bitcoin come to be in existence?

Simply, the answer to all of these questions is - Blockchain. Bitcoin can be thought of as currency, but the 'bank' that holds transactions and wallet balances is the bitcoin network, foundationally built using blockchain technology.

Traditionally, banks use a ledger to keep track of how much money their customers have in their accounts. As bitcoin doesn't have a central owner, bitcoin makes use of a publicly accessible distributed ledger, holding every transaction ever made, which wallet balances can be deduced from. Not only does this solve the problem of who owns how much, but it also makes altering the bitcoin network extremely difficult as everyone has a copy of the correct ledger.

When a transaction is made, they are all put in to a pool together, from which a special member of the bitcoin network, called a miner, can pick them up. Miners gather a collection of these transactions and place them in a block, hence block-chain, then compete to have their block of transactions appended to the end of the bitcoin ledger. In turn, the miners are rewarded with freshly minted bitcoin.

There are many variations of the Satoshi's blockchain technology, but this format is the most tested, standing over 10 years of use with no hitches to date. The concept is revolutionary, providing answers to questions cryptographers have been pondering for decades. The smartest thing about this technology is that the blockchain is extremely versatile. Bitcoin is transacted on the Bitcoin network, but this is not its sole use-case. The bitcoin network can, and has been, altered to track the movement of any asset. With blockchain we could verify the ownership of anything from land ownership to personal identification. Blockchain developers from the likes of Ethereum, Polkadot & Cardano are working towards this future.


Ethereum and Cardano logos
Credit: https://tienaoplus.com/


Comments

  1. QuintonApril 19, 2021 at 5:24 AM

    So can you steal Bitcoin?

    ReplyDelete
    Replies
    1. tdalgleish7April 19, 2021 at 5:29 AM

      From the blockchain itself - No!

      From user's mistakes - Yes!

      There is privacy best practice when storing bitcoin. As a general rule, keep your holdings private, and store your passwords physically, not online!

      Delete
  2. UnknownApril 19, 2021 at 9:22 AM

    Great explanation! Don't know much about cryptocurrencies but understand a lot more after this.

    ReplyDelete

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