What is Blockchain?

Bitcoin is the result of blockchain technology. The idea is that you cannot change the past because the record is shared by the nodes in the network. You would not only have to change your record but the record of every computer that already has an existing record which can go back years. If you are familiar with bittorrent, then basically all transactions are broken up into little bits for computers to process the ‘hash’ this is a unique string that has to be processed and deciphered, after enough of them are deciphered, you are awarded a block or a bitcoin. All of this is math based, a hash is unique and if one piece of data is changed, the hash changes. As a result, anything new, is appended. So if the hardlimit is 21 million, like bitcoin, that’s all there will be. It is mathematically impossible to get more, unless they do what’s called a ‘fork’, which is very intrusive and must be done at a single point because all the peers have to upgrade. This is what many in the bitcoin community are debating about whether to go to bitcoin unlimited and leave existing as bitcoin core.

Bitcoin and Blockchain technology is definitely a speculation but the technology has promise.

For example. Think of blockchain like a strand of DNA, it contains the history of you and all your ancestors. The beginning of the block is called a ‘genesis’ block. Once you find the right person, you have a child (a new block), the parents will continue the original dna chain by adding onto the existing dna. The child or new block starts recording its own transactions or actions. The new block cannot change who their parents are. Each block contains the previous records and cannot be changed. Because of this there are certain limitations, such as you cannot make api calls or do hooks because the results can change when a third party involved.

People originally thought this was anonymous, but in reality, computers can read the chain and see the wallets involved in a transaction. So all transactions are permanently recorded. This is one of the reasons banks are looking into it. There’s no way to fudge numbers after the fact.  The deal with Ethereum, is that you can create gene’s or the idea of actions in the block for different purposes and smart contracts. Say, you want to buy a house, in the blockchain you can make a contract that takes action once you’ve completed certain things a) loan approval b.) inspection c.) downpayment d) title after each step, payment is released or prompted to continue to the next step. Everything is completely transparent, which is also why blockchain can also be used as a reputation system over time. So if the deed went to you and was recorded in blockchain, then it is locked in until the next blockchain where the deed is transfered to a new owner after you’ve received payment and permenantly appended to the blockchain, so you could see all owners of a given property from the start of the time it was put on blockchain.

BTC, is just the first and a unit of measure. Like the dollar, what gives it value is the people who are putting money into it. Some people will take advantage, but it is a very democratic system. There’s not a lot of shorting, so you can sell only what you own. No derivatives which plague the markets. You can do margin, but you are borrowing money to buy, then sell what you have.