What is a Blockchain?
What is this amazing innovation that the computer programmers and journalists are going nuts over? Why does it matter, and what's so great about it? In this ...
Whats up party people? My name is Chris DeRose, and I am the community director of the Counterparty Foundation, and in this video today, we are going to ask a great question that everyone is really excited about. What is a blockchain? So, I see this a lot. It's a really big thing on the news. The finance networks are talking about it. Paul Krugman is excited about it. I've been a big part of this bitcoin thing for a while, and blockchains come part and parcel with bitcoins.
But people are starting to get really excited about this. They are really starting to understand that perhaps bitcoin itself is one component in a much larger revolution, and that revolution is the blockchain. So the blockchain does a lot of things, but what it essentially does at the end of the day is insert truth in a decentralized way when everybody has an incentive to lie. So you're thinking about the way it is in society. Now, we have many truths, things like our bank our bank account balances, things like what property records we have, things like, even, who won the dolphins game. These are all truths that are typically centralized.
We know that this is a truth because someone told us, that we trust. Now, with the invention of the blockchain, we no longer need this oracle of attestation to tell us what is true or not. We instead we rely on consensus from all actors. Unlike, perhaps, prior proposals and prior ideas, the neat thing about bitcoin is that it forces that there be only one truth. It's at some level a vote. It's at some level a poll of sorts among the actors involved.
But mostly, it is a fairly complicated mechanism for not only asserting truth and keeping that truth in persistence thereafter, but creating this truth from which these other truths can then be had. There is a lot to the blockchain. You can see some of my presentations at universities and such on how that is achieved. But in terms of what this means to society, really big changes. You think about how, right now the government functions in various forms by maintaining property ownership records, and they do a good job, but, you know, we need title insurance still. They are not perfect at it.
There is all kinds of litigation involved, and it's expensive. There are costs associated with this project. We need to pay them to do this. With blockchains, that becomes free and more accurate. That is just one small example, we'll see it for all kinds of things, certainly various tokens, things like currencies, things like points systems. We'll see it for betting transactions used, like what happened in terms of rooting a middleman and modifying bets.
We'll see it probably replace the New York Stock Exchange or the Chicago Mercantile Exchange. These are also sources of truth that will then be moved on to a blockchain. You know, one last point on this that I cannot stress enough is there is a lot of people in the community that feel like "blockchain all the things, we'll need tons of blockchains." I'm not actually one of those people. I think there will be very few blockchains. I think that because blockchains work, there is an incentive to join the longest chain; that chain is bitcoin.
And I think for all the people you see right now, talking about the cool things we can do in bitcoin, they don't want to say the "b-word," that is bitcoin. They don't want to say that bitcoin is useful, but what they'll start to come around on, what they'll start to realize is that if you think blockchains are useful, you are going to have to believe in bitcoin. Bitcoin itself is what makes the blockchain works. It's how this whole system comes together, and it is the smallest unit of scarcity that represents the truth of the system. So that's it. That's the gist of what blockchains are.
It is a non-technical description, but I think you are all going to see a lot coming forward on this in the future. And definitely, if you like what you are seeing, check out my channel, subscribe, ask me questions. My handle is @DeRosetech, and my email is firstname.lastname@example.org. Subscribe to my channel, I'd love to keep you around. Later, party people.