I have been getting more and more requests to answer questions on Quora about cryptocurrencies. Recently, someone asked Currently what are the best OpenSource projects to work on if one wants to start an internet based startup like mobile app, website, etc.? I answered, Follow the money and jump into Bitcoin. Products and services based of of a blockchain-style distributed ledger will be in high demand within the next few years. I then received a PM from the person posting the question. It read, I didnt understand what u meant by blockchain-style distributed ledger . Will u please explain me ? Thanks My reply (edited for spelling, it was late and I had a few barley pops): Think of it like this: When you put your money in the bank, the bank is the one who keeps track of how much you have in your account on a ledger. How can you trust the bank to be honest? Bitcoin (and other cryptocurrencies) solve that problem of trust by broadcasting transactions on its network to every computer that is running special software (it is free and open source) Every 10 minutes, every single computer mining bitcoin comes to a 51% consensus on exactly which transactions took place. This consensus is done by solving very complex math problems to encrypt all the transactions in that 10 minute window, and broadcasts HEY I FOUND IT! over the bitcoin network. If 51% of all computers say yep, that block of transactions matches mine, the first computer to have said HEY I FOUND IT! gets a reward. Once the block is solved, it is mathematically encrypted with input from the previously confirmed block. This is the linkage in the chain of blocks, the blockchain. So in summary, the blockchain is a record of transactions that is globally agreed upon every 10 minutes. If I were to compare bitcoins blockchain technology to the internet, bitcoin as money is like saying that the internet is only email and nothing more. Open elections could be conducted using this technology, notarization (you can encrypt and time stamp a message/document/etc into the blockchain and it is there until the end of time, contract disputes eliminated via blockchain scripts, the possibilities are endless. I could not have hoped for a better reply... thanks for ur answers Michael, that really helped. You made me interested in bitcoin, and at the same time busted a myth that bitcoin is only money!! quora/
Posted on: Fri, 27 Jun 2014 21:58:47 +0000
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