Blockchain Explained

Blockchain Explained.

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, the blockchain architecture was driven by a radical rejection of (government-guaranteed) money and bank-controlled payments. Blockchain is a Distributed Ledger Technology (DLT) that was invented to support the Bitcoin cryptocurrency. The developer of Bitcoin, Satoshi Nakamoto envisioned people spending money without friction, intermediaries, regulation or the need to know or trust other parties. Technically, the original blockchain is separable from Bitcoin, but this report will show that the blockchain design is so specific to Bitcoin 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 an umpire. Blockchain monitors and verifies Bitcoin transactions by calling upon a decentralised 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. Credit: Steve Wilson for ZDNet.

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