[palmer]

The blockchain is the ledger for bitcoin. The fact that it has not been forged in its existence (2009?) means that if a miner mined some bitcoin or someone else bought from that miner, it was legit. (I think there was a bug a forgery once, but it was fixed.) The miner mined their bitcoin from nothing and buyer gave the miner some clam shells or dollars, so the value was/is what it was is. If there was such a thing as forging the blockchain the value of that bitcoin would remain zero.

The blockchain records relatively small transactions, not a lot of data. It records who is giving up their bitcoin, by address, and who is getting them, by address. The address of the bitcoin being given up is already on the blockchain. There can be N address inputs and M address outputs where N and M are 1 or more. There are potential complications that make it more useful like requiring multiple signatures for the seller (the buyer doesn't sign anything). In that case two or more sellers have to sign with their private keys in order for the bitcoin to be transacted.

Signatures are the heart of the blockchain. You have a private key on your person. Can be on the computer, phone or encoded on a small piece of paper. It's just 256 bits (32 bytes) so very short. But it can't be guessed or derived from the public key or from the address which is made public on the blockchain and derived from the public key.

When someone transacts some bitcoin to your address and that transaction gets placed on the blockchain, you are identified, essentially anonymously, by that address on the blockchain. Proof of your identity is the private key corresponding to that address, unless your private key has been stolen or you lost it. Security is important and backups are important, but they are relatively easy to accomplish. To prove you have the private key and you "are" the address derived from the private key, you can sign a transaction. The most obvious is to sign away some of your bitcoin that was transacted to your address. But there are more modern ways to prove your identity with new derivations of blockchain. But they all involve signing with your private key.

This simple fact and the indelible nature of the blockchain has created a slew of new opportunities for business recording, transaction recording, record keeping, etc. I'm not fully up on the latest, but it's really just getting going.

[grania]

Thanks for that explanation of "blockchain" which is as clear as possible, considering the topic. I did some quick research about "what is blockchain" and wow. This is already huge for transactions. It is keeping lots of stuff out of federal and global banking scrutiny, regulation, and taxation.

What happens when the gov and the "invisible hand" finds a way to bring it down? Will it have a doomsday impact on the global banking fake-money system? And, oh yeah, is there a way to do some short-term investing in companies that are making profits from blockchain platforms?