|The Science Behind BlockChain and Bitcoin|
The blockchain is a powerful technology that enables Bitcoin, Litecoin, Dogecoin, and other virtual currencies to be open, anonymous, and secure.
The code also empowers countless innovations beyond cryptocurrency. The blockchain is a database of details about every Bitcoin transaction. Often referred to as a “public ledger,” the log contains metadata about when and how each transaction occurred. The ledger is publicly accessible through APIs and torrent sites. To prevent tampering with current and past transactions, the database is cryptographically secured. Encryption allows developers to trust the transaction history and build applications from and around transaction information.
Why it matters
Virtual currencies offer an alternative to government-issued money. These currencies are exchanged like cash for goods and services. They can also be converted easily by a number of services for traditional currency like dollars, pounds, and euros. Because transaction information is obfuscated, cryptocurrency enables legal, extralegal, and illegal behavior. Using Bitcoin, it’s easy to buy pizza, train tickets, stolen data, drugs, and weapons.
The blockchain can also be used as an identity system. Onename and Keybase use the blockchain to generate verifiable identification, like a national ID or driver’s license.
The blockchain is, in theory, future-proof and can be used by private companies and individuals to build private financial networks. This means that a large enterprise could build a financial system internally for use by employees or external vendors.