The Origin of the Blockchain
The fact that the blockchain has emerged as the essential supporting mechanism for a new digital currency will play an important role in our understanding of this technology. The first mention of Bitcoin, a new form of peer-to-peer electronic cash, showed up in a paper written by someone called Satoshi Nakamoto in 2008. As it turns out, this is not a real person's name. Speculation is that it was a group of writers who used a pseudonym.
The mystery of who was behind it continued with the emergence of Bitcoin in 2009 as open-source software, a type of software license which allows anyone to inspect, modify, and enhance it. The Bitcoin software enabled a digital currency that could be used without any intermediaries or governing authority. This means that the currency could pass from person to person without the need for a bank or any other financial intermediary. In this way, it's the opposite of all other forms of typical currency we know and use.
Bitcoin is called cryptocurrency because its existence in the history of a transaction can be seen by everyone, but the contents are only known to the people making and receiving each individual transaction. What cannot be seen by others is encrypted and what can be seen is unencrypted. Thus, this is where the "crypto"or cryptography part of the word "cryptocurrency" originates. As a currency, it does not exist in a physical form. There are no coins or notes, Spice money, credit cards, etc.
Bitcoin lives natively on the Internet. When a transaction takes place, participants who use Bitcoin, their computers specifically, validate the transaction, and it is recorded in a distributed ledger. After Bitcoin appeared, people tweaked the details in Satoshi Nakamoto's Bitcoin paper and created thousands of other cryptocurrencies. These are sometimes known as alternative coins or altcoins. This list on cryptocoincharts.info is in order of market capitalization, which you get by multiplying the number of coins by the value of each coin. The total market capitalization is hundreds of billions of American dollars, with quite a few coins having market caps over a billion dollars each.
It's extremely easy to create a new crypto coin. As of early 2018, most are built on top of another cryptocurrency network called Ethereum and are known as tokens. They function a lot like Bitcoin, and they're released to the public as initial coin offerings or ICOs.
A malicious person would need to fake all the processing and electrical power of the miners to fraudulently add a block to a blockchain. Having miners solve math problems to validate adding blocks is called proof of work. Watching all this unfold, all that financial institutions can do is be bystanders as digital money moves around the Internet without any central authority, without friction, and largely without cost. Better yet, nobody owns the Bitcoin universe or public blockchain database.
Can Bitcoin Be Used to Buy Anything?
Certainly. Wide acceptance is foundational to its success. After all, if it was not accepted, it would be worthless. Of course, as you can imagine, given its decentralized, private, and untraceable characteristics, Bitcoin has found a role in all manner of illegal activities.
Like everything in life, there are always the two sides of a coin, and today, we already find ransomware making use of blockchains, like the "CTB-Locker." I recommend seeking to follow the middle way as a clever ancient millennial concept. In it, the individual finds total balance and control over their impulses and behaviors daily. However, with legitimate currency conversion taking place all the time, Bitcoin enjoys plenty of aboveboard use too. Major brands such as Microsoft, Dell, Whole Foods, and many more accept Bitcoin as a form of payment. Bitcoin is certainly not perfect and is largely considered to be a work in progress.
Who knows? However, blockchain’s underlying technology can be used for many other dimensions of human living.
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