What is Blockchain?

Today, most financial transactions are not made in cash, instead by using digital exchanges (paychecks, direct deposit, credit cards, debit cards, PayPal, apple pay, electronic transfers, etc).

Private companies keep the information about your ‘money’ in their centralized  computer networks using private ledgers – which are not transparent and can be manipulated for THEIR profit (banks, credit card companies, on-line shopping sites, big box retailers, APPLE, Google, etc)

These private companies keep electronic records of your ‘transactions’ and co-ordinate with each other in their centralized  computer networks to approve and reconcile your transactions using private internal ledgers (software, protocol, etc.)  It may be ‘your money’ but THEY own the information about how to use/access it.  Additionally, these companies are not legally obligated to share THEIR information about YOUR money with you!

A decentralized computing network using distributed ledger is made up of many computers connected by the internet owned by many different entities (mostly individuals or small companies like us!).

In a decentralized computing network using distributed ledgers – only a small piece of each transaction is ‘owned’ by the component computers that make up the network – and that information is ‘public’, but heavily encrypted.  The ‘ledgers’ in a decentralized computing network are only updated and transactions are only validated when ALL of the computers are in agreement, thus no ONE computer can manipulate or own the information.  No only does this provide absolute truth for each transaction, the system has proven to be ‘unbreakable’ nearly a decade after its debut.

Ok, so what does blockchain mean, exactly?

Each computer adding a ‘block’ to a chain of blocks that is the decentralized data – ‘blockchain.’  In order to gain a large (and therefore secure) participation in the network, blockchain programmers needed to provide an incentive for people to freely join the movement for adding their computing power to solve these mathematical problems (this is called mining)…  The incentive to these individuals for participating in a decentralized computing network is done by awarding cryptographic tokens.

Bitcoin is one type of the many cryptographic tokens – also called ‘cryptocurrency.’