A very decent explanation for those not wanting to read the technical paper:
“There’s no easy way to explain Bitcoin, but let me wave my hands and try: When you go to the ATM at a store and get money to buy a six-pack, you put in your bank card. The transaction processor verifies it somewhere in the ether, takes a fee, and spits out cash. It’s all powered by software. OK, deep breath. Acquiring Bitcoin is like using an ATM, except instead of government-backed money you get proof that a computer somewhere solved an automated puzzle faster than other computers, and instead of using an ATM card you’re using an auto-generated token that only you have, and instead of connecting to a bank you’re connecting to a decentralized network of computers that collectively maintain and update copies of a massive historical database of transactions—and that also collectively validate transactions, using, well, math, and spit out new Bitcoins from time to time, to reward the puzzle solvers. Slow exhale. Almost there. And instead of buying a six-pack from someone behind a counter, you’re transferring some amount of Bitcoin to another anonymous token. Over time, all the transactions that people make get lumped into blocks and validated, and they get a special code that takes into account all the codes in the blocks that came before, and thus you have it: a blockchain. According to Bitcoin.org, the Bitcoin blockchain is about 145 gigabytes, though it will be bigger by the time you read this.”
Source: Bitcoin Is Ridiculous. Blockchain Is Dangerous: Paul Ford – Bloomberg
The author goes on to write:
“The current wave of coins will eventually ebb, because it’s a big, inefficient, unholy mess. It’s more ideology than financial instrument, and ideology is rarely a sustainable store of value. Plus, transactions are slow (everyone says they’re fixing that), and you shouldn’t have to use an aluminum smelter’s worth of power to make new currency.”
The article spot lights some very scary ramifications of blockchain technology, such as encoding a permanent record of allegations (not convictions) that would tarnish individuals for life as it could not be deleted.
Read the whole article to get an un-hyped perspective on bitcoin and blockchain technology.
