Blockchain is a distributed ledger technology. It's like having several active ledgers.
Making sense of Bitcoins & Blockchain
"Blockchain A digital, public ledger that records online transactions."
In the recording of transactions, users don't know the identity of each other. They cannot collaborate. There are checks and balances with more than one user recording. This is blockchain. It's a value registry in the recording of transactions in the state of account.
Cryptocurrency: A digital or virtual currency that is encrypted and decentralised.
Cryptocurrency is a unit of account for the transfer. Like a medium of exchange in a value registry called blockchain.
Each transaction is recorded in the blockchain, not by a single user, but by every user in the world. This allows us to exchange values without the need to rely on or trust any person or intermediary anymore.
How the Internet has Evolved Over Time
When the internet first emerged, it was a miracle that created digital abundance.
Digital Abundance: The state of having access to near unlimited digital resources
What is digital abundance? Whatever is uploaded online can be copied. Be it, work files, photos, audio, or emails.
But the setback is that after we send all those files, we still have the old copies on our computers. We communicate by copying. It's called Digital Abundance.
Every valuable object is still in a physical format, be it bank notes, land deeds, diamonds, or gold. Whereas data is all in digital format; listening to music, communication, adverts.
With blockchain, an incorruptible ledge is created. No one can go and fake it. It cannot be double spent. It effectively creates "Digital Scarcity".
Scarcity = Wants > Available Resources"
Now we can make digital files scarce. A digital file can represent value. We can digitise money into digital format. When I send it out, no copy will be left on my computer.
This means we can now upload "value" online; digital diamonds, digital gemstones, digital gold, digital land, or digital apartments. We can fractionalize an apartment, or large land plot for collective ownership. The same concept applies to stocks or other assets. We can have digital bonds.
Bitcoin is a digital token in the system called bitcoin blockchain. Bitcoin blockchain is an accounting system that allows simultaneous recording of transactions from around the world, with no intermediary (bank, credit card company, etc) involved. It is a system that ensures data integrity or incorruptible ledgers.
With blockchain, we can transfer values across various platforms, speaking the same language. Money can be transferred instantly at any time, without a medium. We are democratising values just like how the internet democratised information in the first 20 years; the Internet of Information.
The Internet of Value
20 years later, with the emergence of Blockchain, we are about to have the Internet of Value. What does it mean? In the future, data or value can have its digital file. One type of digital file can be infinitely copied on the internet, but another type is unique. It cannot be copied and, therefore, can have value when circulated online.
Whether it's a data set or value, we are about to have a 100% digital economy.