Wednesday, June 4, 2014

"Bitcoin is a techno tour de force" Reason 2: Open Ledger

The Blockchain is the public ledger that Bitcoin generates. This ledger is what holds the balance of every account and shows the movement of money from one account to another. This information is completely public. That statement is probably worth repeating. All transactions and all account balances on the Bitcoin network are public. In fact, a number of websites allow you to easily browse that data (ex: https://blockchain.info).

The public ledger is significant because it shows proof that the system works. It also makes it impossible for the network data to be lost. Every computer running Bitcoin core software (there are currently thousands of them) holds a complete copy of the Blockchain, meaning, a record of every transaction that has ever happened on the Bitcoin network since the beginning. There are no secret transactions. There are no hidden coins being created. With our current financial system, we don't know how much money is out there. Governments can print more bills and we have no way of knowing for sure, no way of seeing cash move, and no way of verifying how much cash is out there. On the bank side, we have no insight into anything besides what the bank says our balance is, and a list of transactions. Bitcoin is completely transparent. When you send money to someone on the Bitcoin network, you can see they received it through the blockchain. With a bank, you have to get a confirmation from the receiving party to see if they got the money. The Blockchain is a big part of what makes Bitcoin unique and valuable.

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