A Crisis of Trust
Embedding trust in transactions is a timeless dilemma. Over the span of six centuries, modern economies have allocated trust in the hands of mediators under the rule of law - banks, professional certifiers, and agencies.
Such deep-seated trust in mediators has created a centralized system, that has become increasingly pervasive and deregulated. It has allowed banks to indulge in reckless behavior - which reached a moment of truth in 2008. Speculation on opaque securities, and trading of toxic assets, led to trillions of dollars in losses, throwing global markets into a panic. Governments rushed in to bail out banking giants with taxpayer money. The Great Recession was reined in, at the great cost of trust.
Bitcoin Blockchain’s open-source protocol builds on established technological know-how: asymmetric cryptography, distributed timestamping, digital signatures, Merkle trees, and peer-to-peer networking. As a result, transactions are secured without the costs and frictions of mediation, or the risk of double-spending.
A New Trust
The Bitcoin Blockchain is a digital ledger, shared at once by thousands of nodes, and powered by millions of mining computers that constantly compete to add new blocks. Potential bad actors find no incentives in trying to attack such a decentralized network.
The key deterrent is proof-of-work. Proof-of-work requires mining computers to tackle onerous mathematical puzzles that are costly and time-consuming to solve, but quick and easy to verify. This complex calculation results in a “hash” - a cryptographically unique, verifiable and irreversible ID for each block of transactions. This hash is dependent on all hashes from previous blocks. Once the network approves the hash, it is practically impossible to tamper with the historic record of transactions on the Bitcoin Blockchain, as it would be computationally unrealistic and enormously expensive.
- Smart Contract Settlement
- Supply Chain Tracking
- Intellectual Property Protection
- Identity Management