As a newcomer to Bitcoin it is easy to feel overwhelmed and become confused by all the jargon. Not to worry! I only want to make your journey into Bitcoin and crypto more digestible so let us go into the fray together.
Today I want to talk about the core technologies that Bitcoin is comprised of. One of these technologies is blockchain, which is arguably the most overused and misused word in the entire crypto space right next to Bitcoin. I will not go into the details of how it works — such as explaining how miners solve cryptographic algorithms to confirm transactions which add new blocks to the blockc…zzz — nope, I will instead discuss blockchain’s general role and how it won’t, by itself, ‘change the world’ as many claim.
The thing about Bitcoin is that we use the same word to describe the network and the money. The Bitcoin network is a protocol or agreement that has a built-in asset or money by the same name, Bitcoins.
Now, lets focus on the Bitcoin network and briefly discuss the four technologies behind it:
Peer-to-peer network — open to anyone, where you interact person to person and there is no central power or group(s)
Proof of work consensus — A.K.A mining, whereby network participants use computer power to confirm transactions
Cryptography — technology that ensures secure transactions
Blockchain — a type of ledger or database keeping track of transactions
As you can see blockchain is only one of four pieces which makes the Bitcoin network possible. The Bitcoin network is open, distributed, trust-less, and unchangeable due to these four technologies working together, which results in its most important benefit of all, decentralization. Let’s take a pause here because this is where things get out of whack.
I think about it