What is BLOCKCHAIN? The best explanation of bitcoin [BTC] technology

What is BLOCKCHAIN? The best explanation of bitcoin [BTC] technology

Blockchain explained in plain English

Understanding how bitcoin [BTC] works and identifying myths about its powers are the first steps to developing bitcoin [BTC] technologies.

Blockchain is an algorithm and distributed data structure for managing electronic cash without a central administrator among people who know nothing about one another. Originally designed for the crypto-currency bitcoin [BTC], the bitcoin [BTC] architecture was driven by a radical rejection of at (government-guaranteed) money and bank-controlled payments.

Blockchain is a special instance of Distributed Ledger Technologies (DLTs), almost all of which have emerged in bitcoin [BTC]’s wake.

HOW DOES BLOCKCHAIN WORK?

Blockchain is a Distributed Ledger Technology (DLT) that was invented to support the bitcoin [BTC] bitcoin [BTC]. bitcoin [BTC] was motivated by an extreme rejection of government-guaranteed money and bank-controlled payments. The developer of bitcoin [BTC], Satoshi Nakamoto envisioned people spending money without friction, intermediaries, regulation or the need to know or trust other parties.

Technically, the original bitcoin [BTC] is separable from bitcoin [BTC], but this report will show that the bitcoin [BTC] design is so specific to bitcoin [BTC] that it’s not a good fit for much else.

The central problem in electronic cash is Double Spend. Because pure electronic money is just data, nothing stops a currency holder from trying to spend it twice. Blockchain solves the Double Spend problem without a digital reserve fund or similar form of umpire.

Blockchain monitors and verifies bitcoin [BTC] transactions by calling upon a decentralized network of volunteer-run nodes to, in effect, vote on the order in which transactions occur. The network’s algorithm ensures that each transaction is unique.

Video created by the Centre of International Governance Innovation.