Blockchain Glossary, B

Public and private blockchains, Dapps, ICO software

Bitcoin  

In January 2009, the bitcoin network was created. Bitcoin was the first implementation of the blockchain idea and the first “cryptocurrency”.

Bitcoin functionality is similar to functionality of Electronic Money (e-money). In both cases a participant can make payments. But bitcoin is absolutely decentralized system. So there is no risk of the system bankruptcy.

In a nutshell, Bitcoin is a decentralized system of continuously synchronizing databases which uses PoW consensus mechanism.

In more details, Bitcoin is:

1. A set of databases with simple structure “address-coins”:
Address 1 – 5 coins
Address 2 – 7 coins
Address 3 – 2 coins
.…

2. Transfers of bitcoins between two addresses are possible. The synchronized databases store the information about the transactions.

3. When somebody tries to perform a transaction (it may be a fake, e.g. a try to use bitcoin many times), the nodes make a decision to accept or reject it. The decision is based on the consensus mechanism.

On the one hand, there is a conflict of interests between participants and even fraud attempts.
On the other hand, the rules of Bitcoin ecosystem make the fraud or misusing impossible.

Blockchain  

In January 2009, the bitcoin network was created. Bitcoin was the first implementation of the blockchain idea and the first “cryptocurrency”.

Bitcoin functionality is similar to functionality of Electronic Money (e-money). In both cases a participant can make payments. But bitcoin is absolutely decentralized system. So there is no risk of the system bankruptcy.

In a nutshell, Bitcoin is a decentralized system of continuously synchronizing databases which uses PoW consensus mechanism.

In more details, Bitcoin is:

1. A set of databases with simple structure “address-coins”:
Address 1 – 5 coins
Address 2 – 7 coins
Address 3 – 2 coins
.…

2. Transfers of bitcoins between two addresses are possible. The synchronized databases store the information about the transactions.

3. When somebody tries to perform a transaction (it may be a fake, e.g. a try to use bitcoin many times), the nodes make a decision to accept or reject it. The decision is based on the consensus mechanism.

On the one hand, there is a conflict of interests between participants and even fraud attempts.
On the other hand, the rules of Bitcoin ecosystem make the fraud or misusing impossible.

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