The concept of the blockchain
At the moment, all global transactions regarding ownership are registered and controlled by so called “trusted” third parties.
Money is registered by banks, real estate by the land register, specific contracts by notary public etc. If you want to change ownership, you need to contact the “trusted third party”, follow the right procedures (control and tracking) and the trusted third party will transfer ownership.
On the blockchain, the knowledge of ownership is shared with everybody. Everybody has his ‘personal’ register of who owns what. On a regular basis, all ‘personal’ registers are compared to correct errors and ensure agreement about the ‘truth’.
When there is a transaction, both the buyer and the seller broadcast the transaction and everybody has to update his ‘personal’ register, after checking if the transaction is broadcast according to the agreed procedures. The last step is for all ‘personal’ registers to be mutually compared again. When there is disagreement about the content, the most common register is accepted as being the ‘truth’.
The manipulation, errors or failure of an individual register have no impact, it can fail completely and will simply be ignored by the community and every node on the blockchain network – the corrupted register has to accept the ‘opinion’ of the majority, or will be expelled.
- is a permanent, ever-expanding, de-centralised, secure global online ledger of transactions.
- is a software protocol (existing eg’s of protocols include HTML & SMTP) that verifies users & transactions using cryptography, without the need for a trusted 3rd party or broker.
- is made up of linked ‘blocks’ that hold batches of valid transaction data
- can register, confirm, authenticate and transfer ownership of any kind of tangible asset, or exchange of value, in a digital format.
- establishes trust and creates agreements without the need for a central organisation or subjective measures of reputation
- The most common type of digital transaction utilising the blockchain protocol
- A self-regulating virtual currency
- Central bank of the internet
- The bitcoin blockchain is public, open-source and permissionless
- You can view bitcoin transactions happening in-real time