Why the blockchain matters
But first, let’s understand some words…
Bitcoin is not the blockchain. If the blockchain is a printing press, Bitcoin is a kind of paper money. There are countless things that one can do with a printing press, in fact, it changed the world, but the invention of paper money isn’t even one of the top 100 most important outputs the printed press created.
Cryptocurrency has a terrible name. Most people associate “crypto” with spies and secrets. And a currency is generally backed by a nation, with a treasury, an exchequer and banks.
It’s more accurately thought of as a token.
If you went to an amusement park, you might buy a bunch of tokens or tickets to go on the rides. And if you run one of the rides, you collect the tokens, which at some point, you can trade in for a different sort of value, probably currency.
If people need tokens and they’re scarce, they go up in value. If people think that tokens are going to go up in value, they might buy them in anticipation of that. And the things that people do to get tokens can range from simply buying them with paper money (!) to performing various tasks (like the ride operators in the example above).
And, if a lot of people own tokens, they’re likely to do things that make tokens go up in value. Thus, an ecosystem is born.
Okay, so what’s the blockchain?
It’s a database.
Unlike most databases, it’s (Read more...)