Why Does the Blockchain Matter?

March 14th 2013

I moved to Brooklyn today.

One of the first conversations after getting in went, "what are you most excited about right now and why?" I said I learned to use the terminal, I switched over to Linux and went into the machine - I mastered this machine. But the thing that is shaking the foundation is Bitcoin. I believe that changes everything.

The blockchain matters because it's a public ledger of all the transactions that have ever happened in the world of bitcoin. Nothing can 'go missing' or 'arrive out of nowhere'. It's a record, in the same way git records every transaction on a site.

Two nights ago there was a fork in that blockchain. The blockchain, as best explained to me by Mike Hearn, someone who has worked on the dev team for Bitcoin, works like this.

Each transaction, from the very first, is accounted for on the blockchain. Each new transaction acts like a lego, stacking on the one before it. So the very first transaction, from Satoshi Nakamoto, was the genesis block, the first block of bits.

The blockchain works like a merkle tree. The fork had a bug in it and people (the miners) needed to stop allowing transactions through - else there might have been double-spending.

The developer team put out an emergency call to get people to stop transacting on one part of the fork, and to accept the other fork as the official branch. The developer community, and the miners, handled it like masters. It was amazing to witness.

Published 2013-03-13. Updated 2016-07-21 to fix spelling errors.

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