Blockchain Technology: The Blackbone of Bitcoin

Bitcoin has received all of the attention as the game-changing virtual currency, but the blockchain technology it runs on is what the world should be focusing on. Bitcoin should be seen as an application and a feature of the blockchain, which is a distributed database that is responsible for the ability to transfer bitcoin from one entity to another. Blockchain technology is run on computer code and therefore the inputs and versatility of blockchain is limitless. Bitcoin may revolutionize how we transfer money to each other, but blockchain will be the technology that changes how we live.

The blockchain can be described in a couple of ways. It can be seen as the backbone or a network where digital items travel to go from one individual to another. Another way to look at it would be to look at it as a component of a network that holds all records of transactions on a ledger and interacts with the network to verify each transaction. The most important aspect of the blockchain is the decentralized nature of it. Instead of having a singular third party, such as a bank, to verify all transactions, a copy of the blockchain with a record of all transactions are given to various nodes on the network that can individually verify each transaction.

Bitcoin transactions are verified in this fashion when multiple nodes on the network verify that the sender has enough bitcoin in his wallet and the correct amount is being sent to the correct recipient. If one node is compromised, the other nodes on the network will see that it is compromised and not follow through on validating a transaction. Miners on the network act as validators and add new transactions to the ledger, which can be viewed by anyone on the network.

Bitcoin is synonymous with virtual currency. Bitcoin is programmable to represent more than just money. Despite it’s programmable protocol, bitcoin by itself is simply just virtual currency. On the other hand, the blockchain technology it runs on has numerous functions and applications and gives the programmable bitcoin the ability to execute its function. Not only can it handle transactions pertaining to bitcoin and virtual money, each bitcoin can be programmed, among many other things, to be a digital certificate of ownership, a vote during an election, or a 100 barrels of oil. Various functions can be programmed into the bitcoin, It can act as an escrow where money is released once certain conditions are met. This is all programmed into the bitcoin and can only be executed by the blockchain. The blockchain’s main selling points are the decentralized network, open transparent ledger, and complex mathematical based security protocol.

Blockchain replaces a central authority with a more transparent and more efficient decentralized network to verify transactions. Bitcoin is simply the virtual currency that moves on the blockchain technology. Blockchain technology can play a role in the transfer of goods, voting, prediction markets, among various other applications. Bitcoin functions as a currency and blockchain is the tool that validates and executes the transactions.

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