I really like the following definition of a blockchain from Don & Alex Tapscott, authors of Blockchain Revolution (2016).
“The blockchain is an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value.”
If the above definition is a bit much to digest all at once, my own basic definition of a blockchain is:
"A chronological public ledger of all past transactions that is VERY difficult to tamper with."
What these definitions mean, and what they foreshadow to us, are that the acts of: buying melons at a local farmers market, selling your home, registering your marriage, voting, borrowing money and paying it back, etc, are all possible TODAY by using (and trusting the tech behind) a blockchain.
How is this possible? It's actually a fairly simple explanation...When committing information into a blockchain, 7 Simple steps are taken. They are: 1. Request, 2. Broadcast, 3. Validate, 4. Verify, 5. Add to Block, 6. Add to Blockchain, 7. Completion
1. Request. Someone decides to Request a transaction. Matt wants to send Corrinne 1 Bitcoin.
2. Broadcast. The requested transaction is broadcast by Matt's computer, "HEY EVERYONE! Help me send 1 Bitcoin to Corrinne, here's the necessary info." Matt sends his Broadcast to everyone's computer connected to the blockchain through a Peer-to-Peer network. In this case Matt is only broadcasting to computers on the Bitcoin blockchain, also known as "Broadcasting to the Bitcoin Nodes."
3. Validate. The computer Matt is using to Broadcast puts information in his Request that is required by the Bitcoin Nodes before they can Validate his Request. Matt's computer has already done a Validation of his Request before Broadcasting, but the Bitcoin Nodes decide if he has followed the Rules for a Transaction when he self-validated. The Bitcoin Nodes re-check that Matt's Digital Signature is legitimate, and based off of his prior transactions, re-check that he has 1 Bitcoin to send. If Matt's Digital Signature is legitimate, and his Bitcoin address holds at least 1 Bitcoin, and Matt has followed the Rules for a Transaction, the Bitcoin Nodes consider his Request to be Valid. 3a.Digital Signature definition: Providing the same function as signing a check, a Digital Signature mathematically proves the signee is a known sender (Authentication), that the sender cannot deny having sent the message (Non-Repudiation), and that the message was not altered in transit (Integrity). The Bitcoin blockchain uses your private key, your public key, and some fancy math to accomplish this. 3b.Bitcoin Nodes definition: Computers running a program that connects them to the Bitcoin blockchain. In the use case of Validation they are only looking for transactions authorized by Matt's unique Digital Signature. However, these computers can also access the blockchain, create new Blocks, chain new Blocks onto the blockchain, and can look at any previous transactions. If Matt was bad and didn't have 1 Bitcoin at his address, the Bitcoin Nodes would know and his Request would stop here.
4. Verify. A transaction is Verified after a certain threshold of Bitcoin Nodes is reached who view Matt's Request as Valid. Verification can also be thought of as "The required amount of Trust between Matt and a single Bitcoin Node". As the number of Bitcoin Nodes viewing Matt's Request to be Valid increases, the amount of trust for Matt also increases. As time goes on and Matt's Request is repeatedly shown to be Valid, the chance that a single Bitcoin Node will believe Matt's Request is worth the effort (Time x Electricity) of being added into a new Block continues to go up until, finally, a single Bitcoin Node somewhere decides that Matt is trustworthy, and adds his Requested transaction into a new Block.
5. Add to a new Block. Once Matt's Request for a transaction is Verified, his Request is combined with other Verified transactions by a single Bitcoin Node to create a Block. A Block is merely a list of Verified transactions. Each Block holds a finite number of transactions before it is considered "full", after which a new Block must be created.
6. Add to the Blockchain. After a Block is filled to capacity, it must be added to the Blockchain. The chaining together of Blocks, in a way which is permanent and unalterable (under almost all conditions) is where Blockchain gets its name. This process involves SHA-256 hashing, Merkle trees, and other actions that require a lengthy explanation. The following is a simplified version of the process: Bitcoin Nodes race each other to solve a cryptographic puzzle that uses a LOT of computer resources (Time x Electricty). Whichever Bitcoin Node solves the puzzle first wins the right to chain the Block they created onto the existing Blockchain. Other Bitcoin Nodes will Verify (similar to Validating Matt's Request) that when the winning Bitcoin Node created this new Block, the Rules for creating a new Block were followed. If the Rules were followed, the new Block is mathematically chained onto the most recent Block to also meet this same criteria.
7. Transaction Complete! Matt's Request has now been irreversibly recorded into the Blockchain of Bitcoin. Corrinne's computer can now access the Blockchain and see this Completed transaction. In fact, every single person looking at the Bitcoin Blockchain can see that Matt now has 1 less Bitcoin and that Corrinne has 1 additional Bitcoin.
** This image has a visual explanation for the above outline. hold CTRL + scroll up on mouse wheel to zoom
A parting thought: I would be remiss to not mention that the process of Block creation and Block chaining is where this technology shows us how novel it truly is. Currently, the electricity consumed by those processes is more than N. Korea and quite a few small countries. Every day folks are finding newer, faster, and more efficient ways of bending this technology to benefit us all. It is an exciting time to be a part of what I believe will be another technological revolution. The daily lives of people the globe over will be significantly impacted by whatever we end up doing with blockchain technology.
Thanks for reading, and an extra thank you for seriously wanting to learn more about Blockchain Technology! Please comment below for further explanations, to get an answer on any questions you have, or just to correct me if you wanna be that person. Stay tuned for Parts 2-4. ~Matt www.DenverCryptoGroup.com
Passing the Bitcoin around the World (Starts Tonight!)
The goal here is to pass a transaction of Bitcoin around the world as quickly as possible. Now we have a few participates lined up, and I can see that a website and some support would make this much more fun. Talking to folks, we might make it a "pass the hat" exercise to donate to a charity. Like to the Oklahoma Tornado disaster, or AIDs relief. This particular exercise is going to go to some charity accepting BTC, to be decided in the comments. And to that end, people should pass the BTC along per the rules, and may make a separate donation directly if they wish. You can read the original post for Passing Bitcoin here The list so far:
the origninal link. go there to get the rules and what we are going to do! We will fire this off at 11:59 pm (23:59) this Friday, May 24, (Tomorrow!) central standard time (GMT-5). The list is going to be dynamic. I will PM everyone today. If you don't respond, you are not going to be on the list. From that point, we are going to have to trust everyone to be paying attention. When you get notification that you have been paid, wait for the first confirmation. Then you can send the transaction on to the next person in the list. We are still needing more people. We have:
sfgfd in Fiji 18GANxGQvwoBeDYkVThAZHryR9jF898vw7
cosmic_fool in Newark,DE 1JWRCxDSpPyMnAB29cJnnT1cPA6s7WSvdD
harningt Fort Wayne, IN 15tS29HqiWZ9XBicL5oFmQke3JzzGNp1uW
TheSelfGoverned 1DjPqxFNYaqpKYsaZnksSMcnPELrcniKmY Buffalo, NY
If you know anyone that is outside the US that might want to participate, forward information to me! If you have been on Reddit with an established account, then you can vouch for someone else! I'd really like someone from Africa! Australia! China!
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