In the following you will find an explanation for blockchain, Bitcoin, how mining works, where a Bitcoin comes from and most importantly - why it matters to you.
Imagine you had a can of beer, only it was empty. People walk past pouring small amounts of their own drinks into the can, the next person doing the same. When the can is full, you seal it up and place it down. You get another empty can and people continue to walk past and pour a small or large amount of their drink into the can until full and you seal it up but you also seal it in place on top of the last can you filled. You continue to do this over and over until you have a stack, or chain, of sealed cans full of different drinks all in unique ratios, stacked and sealed so you can’t move, re open or change the contents.
Imagine the drinks being poured into the cans are “information”, information of transactions made, a record. Just information that says, “this amount of this drink came from here, and is now here” or, “this amount of bitcoin came from here, and is now here”. When people send bitcoins from one person or wallet to another, imagine they are pouring the information of the transaction into the can and when full, the can is processed and thus so are the transactions, the bitcoin moving from place to place and the information of that transaction, stored inside the can forever. Sending or receiving more bitcoins? A new can is created, filled, and stacked. What are the cans?
A full can is just like a file with the information of the transaction inside, stacked atop one another to create the chain. A chain of files containing information of who and where bitcoins are sent, sealed, and stacked. These files are stored on the computers of all the people that are sealing the cans. To seal a new can it needs to be verified - the information saying, “bitcoin was here, now here” is correct and not fake. Once verified it is stacked and added to the chain. This is the blockchain. The chain built by blocks upon blocks of information containing transaction records or who owns, and how much bitcoin.
People compete to verify a block of information, this is called mining and is how bitcoins are created. To confirm that a “bitcoin was here, now here” (verify a transaction), computers on the network compete against each other to solve complex computer problems, the first to solve gets the bitcoin as a reward which verifies that transaction as true. The file is added to the chain forever. These people maintain the blockchain (the blockchain is the chain of files containing the information of, “bitcoin was here, now here”, that once verified are sealed and stacked so they cannot be altered) by continuously verifying the transactions, or where the bitcoin is. This is so someone cannot double spend or alter the location or number of bitcoins. A copy of the bitcoin blockchain is stored on all the computers verifying the transactions (mining) bitcoin.
To alter the location or number of Bitcoins (the information inside the blockchain) you need to alter that block on all copies of the continuously growing chain, on all computers mining, simultaneously.
Writing down transactions or locations of Bitcoins is called a ledger. Verifying transactions is a process called mining, because by verifying a transaction and adding a block of information to the chain, a bitcoin is created as a reward. Bitcoin is the incentive to maintain and verify the chain of blocks containing ledgers and process new ones.
Bitcoin is a powerful tool for current and future digital transactions by sending bitcoin instead of cash, you can buy a book from the other side of the world and rather than the cumbersome process of sending it via your bank to theirs, who each take a slice of your payment and then convert it to your native currency. If sending a bitcoin, in theory the book could be shipped within the hour of you sending it. Not days later. It speeds up the process of transactions and takes out any unnecessary interference such as financial institutions like banks or PayPal. The people that may benefit from the transaction are those verifying it and those who maintain the chain of files, sealed, and stacked.
Now let’s go back to the basic feature of Bitcoin and blockchain again, the who owns and how much Bitcoin - its most impressive and undervalued feature yet.
This is the feature that will shape the world, this is the feature that will allow blockchain to disrupt every industry, this is the feature that most don’t know because this is the feature that takes the everyday person from “Bitcoin is a scam” to “blockchain is here to stay” or “Bitcoin to the moon” to “blockchain bro”. Let me explain by looking at how society works, to show how we will disrupt it.
Society works, on a basic level like this - I have this, you have that, I owe this and you owe that - if we had no way to measure or sustain this society would collapse. We need to have this information written down and stored somewhere.
Now let’s take a step back on society, way back.
Our first form of wealth was probably precious or rare items, livestock and stones or metals then gold. This determined our position and ability to trade within the tribe and our wealth passing through inheritance. Then we began to write this down in ledgers, who had and how much gold. This is basic accounting, single entry accounting. Only it wasn’t so hard for the keeper of ledgers, like kings and queens or other royals, to alter this or erase completely. While this system increased trade and society on a massive level it only helped those in control of the ledgers having the ability to manipulate and distribute them.
This was until the printing press came along, giving the ledgers the ability to be distributed on an unprecedented scale with trade, wealth, society, technology, and culture having the same moon-like gains. This was double entry accounting, you and I have a copy of the book now. But like anything, the dust settles. This was until the third stage of this foundation to society arrived, solving even more problems, providing solutions and industries never thought of. Again.
Triple entry accounting. The feature of bitcoin, the power of blockchain. Triple entry accounting means that not only do you and I to have a copy of the record for; who owns and how much gold, cash, credit, stocks houses, petrol, or energy, but, a third party. What this means is that if either party wants to alter the ledger for; how much gold, petrol, cash, or stocks one owns, trades or distributes, they must be altered on all three ledgers to be true. But why is this only possible, now? Without the internet, this would not be feasible as access to so much information would be cumbersome without it.
Without a secure means of storing and verifying this information, the internet is of no help. Here steps in blockchain. By filling those cans, or blocks of information and stacking them with the information distributed across multiple servers all being rewarded for first verifying the transaction and access to this via the internet, blockchain was the stepping stone accounting needed again.
By having this system of information of asset, currency, or commodity measurement we open a new era of efficiency, accountability, and sustainability. But with blockchain this is still the first step, there will be a new era of wealth distribution or value transfer also. Through the record keeping and tokenization we will see trades conducted in real time with gold, petrol, iron, energy, paintings, art, real estate, digital assets like Google, Apple, Microsoft, Blizzard all using a combination of their own, each other’s and the standard forms like, maybe, Bitcoin, but most likely the next one. Bitcoin may outlast our lifetime, it may not. But blockchain is here to stay.
You see Bitcoin is exciting not just because of the gains, the control it gives back to the people, but because it’s the poster boy of blockchain, a blueprint to the inevitable digitization of anything and everything.
This blockchain digitisation will not divide the people, the corporations, if we don’t let it. This will force legitimate collaboration. Banks will work with people, governments with people. Not; Banks. Governments. People.
It allows anyone with internet access able to participate in the shaping of the future.
With blockchain, developing countries can hold democratic votes without manipulation from domestic or international groups. They can check and verify their vote. Their decision will be true, final, and auditable.
With blockchain, humanitarian services can be more effectively distributed and monitored. Charities can raise money, and send it over the blockchain, auditable and accountable. Or, send them energy in the form of PowerLedger, PetroCoin or RedCrossCoin (accepted worldwide, most fast food restaurants and major store chains).
In our time, we will see a change in the way we use and distribute energy. Your neighbor might have too many solar panels and sells you his excess for x amount of PowerLedger or accepted coin. Power will be extremely valuable and come from many sources and some will sometimes need more than others, how will we accurately measure, record, and distribute, sell, this energy worldwide? If you said trucks, you need to read again. The answer is blockchain. Blockchain.
People are forgetting the power and potential here and others want them to forget because this slows down the adoption, innovation, and education phases. They use FUD. Fear, Uncertainty, and Doubt, a disinformation strategy used in sales, marketing, public relations, talk radio, politics, religious organizations, and propaganda. This is JP Morgan calling out Bitcoin as a fraud, then buying the dip. This is China banning Bitcoin, again. FUD. They know the power, they know it isn’t going away. They know that when the ball really gets rolling, the more confused people are and the more assets they hold, the easier it will be to gain influence again. So FUD is spread about Bitcoin and blockchain as a means of slight of hand, distraction. Keep the majority unconcerned and uninformed.
How China Sinks Bitcoin - South Park Style (0:31)
(This video was posted 3 years ago, April 26th 2014.)
I think this is why people respond with, “Bitcoin is a scam”, “it’s unstable”, “Ponzi scheme” or “but the bubble”. They are uninformed through suggestion and lack of critical thinking for it’s true potential to disrupt and thrust society upwards, thus they remain unconcerned and unwilling to learn or participate.
We must share the true value of blockchain and Bitcoin to everyone. After all, the more people aware, using, and willing to adopt it the quicker you will get your gains, right? Everyone else just wants to buy real milk too. Realise the real vision blockchain provides and share that with your fellow, not just online, I am talking face to face. This is where it’s most important.
Talk to someone on a real level, show them a link or two, tell them why blockchain is badass.
Fast, secure, cheap payments.
Payments in wealth, value transfer.
Auditable institutions for voting, stocks, accurate records etc.
Secure information.
Worldwide trade access on near instant level for currencies, commodities, resources.
Fair, true and accurate wealth possession, obtainment, and distribution.
I propose a personal challenge to you.
Share this post.
Show someone a marketplace.
Talk about blockchain to someone.
Show a Youtube video.
Talk about your gains
...and losses.
Your hopes, concerns.
Anything. Just start talking!
Someone online worth 1 point, real life 10 points and anyone under 21, 25 points.
Watch for them to "click" in their understanding.
Let them pick a lambo color, too, or at least know why you’ve picked yours.
Bitcoin may or may not outlive our time, blockchain will.
justsayen