( Yet another note, so matter of testing different ways of saying the same thing to different audiences. )
Recap of how blockchains work :
- 1. at the root : the basic data structure is a distributed ledger ... a complete record of the history of something, given to a number of different parties in a network
- 2. consensus protocols : changes to the ledger are submitted to a certain number of parties ... and the parties must agree, to some majority, or the network fails to function
- 3. cryptography : using cryptographic hashes makes the ledger cheaper to check
- 4. cryptocurrencies : the ledger is used to store the records of a currency's unit creation, transfer, and destruction
- 5. smart contracts : the ledger is used to store computer code that be executed upon the meeting of certain criteria
- 6. governance : some cryptocurrencies carry voting power, like shares in a company, within the rules of their protocol
- 7. incentives : in exchange for computing power, parties in a network may be rewarded with units of the network's currency
- 8. The extrinsic value of cryptocurrencies ... like the extrinsic value of shares in a company ... is not tied to the internal functions of the cryptocurrency's network.
- - If Apple's stock price goes to zero, operations of the company are not internally affected.
- - Likewise the price of bitcoin is only a measure of the faith of the world in the value of bitcoin, in terms of USD or other currencies.
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