I wish one of you techies would explain it to me, in layman’s language but not as if to a child. I’m sure I’m not the only one here who knows little or nothing about it.
It's a great layman's explanation of block chain and bitcoin I've come across.
Essentially a block chain is a public ledger, that is distributed across many, many nodes (instead of all the bank customers relying on the bank to accurately maintain the balance of all accounts and keep the sole record of authority).
Each of them have the same copy of the ledger, and transactions are added to the block chain in new blocks to every copy that exists of the ledger. The blocks themselves contain a hash result from an encryption algorithm. The information in the ledger block that is being added is the input for the hash that verifies the block. Any attempt subsequently to alter that block of transactions would mean the output of that block wouldn't match the hash. An attempt to reverse a transaction and restore money to another ledger entry is immediately obvious.
Why does this matter? In the current monetary system you can't see when the banks create money (which by its nature devalues yours in relative accordance). But this counterfeiting of value is not permitted in a blockchain based currency like bitcoin. It's a 'hard money', in that the fiscal authorities can't conjure it at will and bail out their favorites in the medium.
The BCT algorithm is heavily mathematical so it won’t be possible to understand its inner workings unless one is mathematically trained.
Let’s talk about what BCT is not.
How many electronic business transactions are there in a week? Ans. Trillions.
How many of those transactions are passed through clearinghouses and other banking infrastructure? Ans. All. Transactions are centralized.
What if these transactions bypassed banking infrastructure? What if these were decentralized? What else is decentralized for transactions? Ans. Cash.
But cash is not electronic.
BCT brings the banking industry’s electronic transactions networks to its knees. It makes banking obsolete.
BCT is Person to Person (P2P), decentralized.
From one computer to another, from one smartphone to another. from one device to another.
BCT makes banks obsolete, puts a bank right into a person’s phone, computer, device.
And it’s not just banking. It can be any transaction that adapts BCT as a means of initiating, completing, storing a transaction. For example, real property titles are recorded and transferred when such property is bought and sold. BCT can transfer those titles in seconds.
Where aviation safety critical parts need full testing records, QA documentation to accompany a part as its pedigree, BCT can carry the entire transaction and validate its genuine status.
BCT is a full pedigree transactional algorithm that carries the whole history, description, nature of a transaction including its validation. And it does it P2P or B2B. Hackers can possibly capture part of a BCT stream but can’t capture all the nodes in a network that validate the information carried in the BCT stream. Nor do hackers know where the validation nodes are and if one node happens to be discovered, the nodal location changes. Hackers end up chasing their own tails.
If BCT was transacting YOU, it would have everything known about you and those around you put into an electronic channel and sent off, such as your biometrics, your DNA sequencing, your fingerprints, your voicegram, your brain rhythm characteristics, your ancestor’s lineage, and on and on ad infinitum, and all data packets would be in different places that respond only to other nodes in a network of information about YOU. It would be near impossible to alter YOU because the nodes in the BCT network retain all the info and confirm, validate repeatedly and on demand all the decentralized data. To ‘hack it’ would require knowing where all the nodes are and what their last status was and staying abreast of streaming changes, in other words, a ‘hack’ would forever be chasing a changing target. And if a ‘hack’ managed to somehow ‘ride’ the BCT transaction, other invisible nodes would report any alteration and sound the alarm.
Banks go bye-bye.
What will banks do to fight becoming obsolete?
They will smear BCT to the nth degree.
BCT is ‘risky’.
BCT needs ‘regulation’.
BCT will be ‘used by criminals’.
BCT will ______________(fill in the blanks)
First off, there are backdoors in BCT Apps for government investigators with a proper warrant to track financial crimes.
Second, decentralized BCT is more secure than centralized bank networks could ever be. BCT security is to banking security as nuclear warhead launch security is to an automobile security system. There’s no comparison.
Many in the financial press will report that a website or corporate computer was hacked and that accounts were broken into and things of value were copied, taken or transferred. The site could be a government website, a commercial website, or a network.
If a website creates accounts for owners of valuable financial documents, contracts, tokens, and so on and security information, then the financial press will usually report a security breach accurately.
But if the means of conducting transactions to and from those accounts is by BCT, the financial press will blow the story out of all proportion at the behest of banks. The story will circulate and amplify for days EVEN THOUGH BCT HAD NOTHING TO DO WITH THE BREAK-IN of the accounts.
Example:
Someone, a friend, a relative, a snoop discovers the login info of another person’s computer or smartphone. Say a smartphone has a BCT App for direct transactions. The person breaking into the smartphone using the owner’s login information didn’t need to know anything about BCT. They can, however, use the BCT App to purchase say money cards at a supermarket and then ditch the phone.
If there were no BCT App, the financial press will not think anything of such a hack. They are not going to print a story on it.
BUT, if the financial press hears the smartphone had a BCT App on it, they are going to blast the world with news of a BCT security breach even though it is false. It was not a BCT breach, it was an account breach. Why do they do this? Because the financial press caters to the finance world and that world wants to put a stake through the heart of BCT.
BCT is an existential threat to the big banks, to Wall Street, to centralized services everywhere.
The above is what you need to know.