Bitcoin and Blockchains explained

A slightly off-camber post here, but someone I trust mentioned that we ought to understand the bitcoin and blockchain development as it could be about to hit the mainstream. Here’s some explanation and videos to help.

The main point I hadn’t fully appreciated or understood is that bitcoin and the underlying blockchain is not just financial, although it is all about transactions – the transaction can be financial, but also information, knowledge, subscriptions, etc.? I think? It’s about the trust the chain has based on the underlying technology.

Bitcoin: “The system is peer-to-peer and transactions take place between users directly, without an intermediary. ^:4. These transactions are verified by network nodes and recorded in a public distributed ledger called the blockchain, which uses bitcoin as its unit of account.”

Blockchain: “The blockchain is seen as the main technological innovation of Bitcoin, since it stands as proof of all the transactions on the network. A block is the ‘current’ part of a blockchain which records some or all of the recent transactions, and once completed goes into the blockchain as permanent database.”

Watch this, see if it makes sense?

YouTube: The Bitcoin and Blockchain Technology Explained

“A block chain is a transaction database shared by all nodes participating in a system based on the Bitcoin protocol. A full copy of a currency’s block chain contains every transaction ever executed in the currency. With this information, one can find out how much value belonged to each address at any point in history.”

From this video I liked the section from 5:27, where I was thinking about the disruption to learning and education, especially how this fits in to the Internet of Things:

“Internet technology is disruptive and breaks the status quo. It opens markets and breaks the position of middle men all the time. Bitcoin and crypto-currencies have caused a paradigm shift. It’s time to explore this new technology constructively and critically and openly discuss potential applications.”

Here are some more links/videos to help explain bitcoin and blockchains:

• Blockchain for dummies: “Non technical explanation of the block chain concept underlaying the Bitcoin network. This video is meant for people who want to get a grasp of this new technology.”
• Understand the blockchain in two minutes: “Over the past decade, an alternative digital paradigm has slowly been taking shape at the edges of the internet. This new paradigm is the blockchain. After incubating through millions of Bitcoin transactions and a host of developer projects, it is now on the tips of tongues of CEOs and CTOs, startup entrepreneurs, and even governance activists. Though these stakeholders are beginning to understand the disruptive potential of blockchain technology and are experimenting with its most promising applications, few have asked a more fundamental question: What will a world driven by blockchains look like a decade from now?”
• Blockchain: “It’s Going to Radically Transform Our Society’s Institutions” (Don Tapscott): “Don Tapscott, a leading theorist of the digital age, explains why the blockchain technology will fundamentally transform the institutions our societies are built upon. Because the blockchain technology powers the digital currency Bitcoin, it will not only affect how business is being made, but also our legal systems. Ultimately, the effect of the blockchain technology will be much more far reaching; it will also transform governance, healthcare, education, and various other pillars of our societies.”
• The trust machine: “The blockchain is an even more potent technology. In essence it is a shared, trusted, public ledger that everyone can inspect, but which no single user controls. The participants in a blockchain system collectively keep the ledger up to date: it can be amended only according to strict rules and by general agreement.”
• Investigating the potential of Blockchains: “The reach of blockchain technology will go beyond the financial sector however, through the use of ‘smart contracts’ which allow business and legal agreements to be stored and executed online.”

What do you think? Is there merit in the simplification of the ‘chain’ and trust of the networks that a blockchain can provide?

Image source: Dimitry (CC BY-NC 2.0)