15 What Is A Blockchain? Why Is It Important

15 What Is A Blockchain? Why Is It Important

The Blocks of Time

At the core of Bitcoin is the technology called ‘Blockchain’. To understand what this is, lets look at the two parts involved in this word.

Blocks of information

All Bitcoin is, is a collection of 1mb blocks of information. These blocks contain very simple units of information.
  1. The issuance of new bitcoin into the system, given to the miner,
  2. Transactions of Bitcoin from one address to another
  3. The fees the miners will receive for adding transactions to the block
  4. A unique number that will give the hash of that block a ‘special result’
So besides number 1 and 4 above, 99% of the information in each block are just transaction information. Who sends what to who. Bitcoin moving from one address to another.

Chain of history

Once we have these blocks, we need to somehow connect them together into a chain, and this is what makes it special. As we stated in the previous block, a hash of any piece of information gives it a unique fingerprint. Producing a hash is simple, but its practically impossible to reverse a hash to the original information. So one piece of information that information that is added to each block is the hash of the previous block. That makes every block intrinsically connected to the previous block.

This is a visual representation of ‘blocks’ with information inside it, and carrying the hash of the previous block in it. In a continuous chain.

So what this means is that if you tried to change any piece of information in any block, you will break the chain completely. So in summary, the blockchain is a ‘chain of narration’ demonstrating the path of every single Bitcoin ever mined, from when it was born until today. You can trace the path of every Bitcoin, from one address to another. This is why you can’t counterfeit Bitcoin, as you can see where every Bitcoin has come from, unlike Gold or cash in your hand. You cant trace where it came from, and whether it was issued by the government or made in someone’s basement. It is a record of time for money.

Blockchain of Creation

One of the more amazing features about blockchain technology is that it actually proves that creation was ‘created’. How so? Well lets have a look. Every single Block in the block chain of Bitcoin has to include information from the previous chain. Their existence is due built off of the existence of blocks before it. Much like us. We exist because of out parents, and they exist because of their parents going back in time to the beginning. But the very first moment in our history didn’t have something before it. That means that the very first moment in time was the only point in time that existed without something before it. But how? There had to be something, that is not a part of Creation that caused it to ‘kickstart’. And that same issue occurred with Bitcoin. With the very first block, there was no previous hash, or previous block. The system was built to always take information from the previous block, but there wasn’t one. So satoshi Nakamoto had to kickstart the network in a very unique way that was not needed after that moment. Essentially he had to ‘create’ the existence of the First block before all subsequent blocks can be formed. This is a practical demonstration how you cannot have an ‘infinite regression of events’. There is a classic example of this in an impossible riddle. If there was a button that needed to be pressed in order to allow someone to enter your home, but you weren’t able to press it until your neighbour gives permission, so you ask him “should I press the button?”. But your neighbour cant say yes until he asks his neighbour if he should press the button, so he goes to his neighbour and says “should he press the button?”. But his neighbour cant say yes until he asks his neighbour. And this carries on infinitely, one neighbour asking another and another and another. If this carries on into infinity, will the button ever get pushed? And answer is no. Likewise, we cannot every go infinitely into the past to find the beginning as that would mean it will never ever start. That means there needs to be something outside of creation, outside of the system to get the system to start. An interesting observation about blockchain technology.

Footnotes

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Further Reading

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