Bitcoin and Blockchain, what are those and how does it works?

Bitcoin as most of us know is currency on the internet. Well, that is right, but how is it different from our dollar? Here I will try to explain a little bit deeper how it works and what are the differences between Bitcoin and our fiat currency (Dollar, Euro, Yen, you name it) and what is Blockchain?

In our daily life if we spend money to buy something with our credit cards the bank will save the transaction of what we bought and how much the thing cost.

Let’s say you buy a desk with a credit card that cost $200 from xyz store on Monday the 1st of January 2018, the bank that issues your card will then write in the ledger that you bought a desk that cost $200 on Monday the 1st January 2018 from xyz store.

In the Cryptocurrency world, these transactions that were made between many parties were calculated by the so-called miners, they are essentially a bunch of computers, doing cryptographic function to calculate and save these transactions.

Let’s say you send 5 Bitcoin to your friend on Monday 1st of January 2018. In the background this transaction that happened between you and your friend are being proofed and calculated by the Bitcoin miners through the cryptographic functions, these transactions will be then saved into a “block” and will be broadcasted to the network, so everyone on the network will have the ledger that contains all the transaction that has happened.

After the first “block” is full, the next transactions will be saved into the second block and the third block and the fourth block and so on and so forth. That is why the technology is called the Blockchain technology.

So instead of counting on a single entity (Bank in this case) the transactions are being processed by everyone and being broadcasted to everyone on the network. Decentralized instead of centralized.

Only peer to peer transactions? Actually no! Bitcoin algorithm alone can do much more than peer to peer transaction, for example, Voting, just as transaction the vote will be calculated by miners and thus the voting answers can’t be tampered with. The transaction itself can be represented as a Currency, digital certificate of ownership, etc.

so that is it for my post! critics and ideas are welcome!