Blockchain Concepts Through Bitcoin/Ethereum/EOS -1 (Introduction)

This is series of blog where I am going to explain the every single concepts of blockchain in depth using the bitcoin as reference implementation and also other concepts used in open source blockchain provider EOS and Ethereum(for smart contract and Dapps). These blog are mainly for the developer who wants to learn and understand the blockchain.

The blog first cover the bitcoin implementation and use of their technology after that I will cover Ethereum and EOS. Why first bitcoin ? because bitcoin is the foundation of blockchain , to get the deep understanding we have to first start form the start. Then will learn what are the challenges of bitcoin and how Ethereum and EOS solved it and provide extra and generic feature so that we can use blockchain in other application rather than only in cryptocurrency .

This is first blog of these series which mainly introduce the Bitcoin/Blockchain terms and basic concepts.

What is bitcoin ?

If you new to bitcoin , you think bitcoin is the digital currency. But it is more than that , it is first kind of innovation which introduce new technology to the world. We can say it is collection of concepts and technologies that form a new digital money ecosystem.

Unit of currency called bitcoin which is used to store and transmit value among participants in the bitcoin network. A bitcoin user communicate with each other using the bitcoin protocol (open source — run on every device).

User can transfer the bitcoin over the network to do just anything that can be done with conventional currency (buy , sell good , send money etc.)

The bitcoin is implied in transaction that transfer value from sender to recipient. Users of bitcoin own keys that allow them to prove the ownership of bitcoin in bitcoin network. With these key they can sign transaction to unlock the value and spend it by transferring it to new owner. Key are often store in a digital wallet on each user computer or smartphone. Possession of the key that can sign the transaction is only the prerequisite to sending bitcoin, putting control is the hands of each others.

Bitcoin is a distributed , peer to peer system. (No central server, or single point of control).

Bitcoin is created through the process called “mining” (which involves competing to find solution to a mathematical problem while processing the bitcoin transaction). Any participating in the bitcoin network (any one who is running the whole bitcoin protocol stack) may operate as a miner using their computation processing power to verify and record the transaction.

Every 10 minutes , on avg., a bitcoin miner is able validate the transaction of the past 10 minutes and is reward with new bitcoin. Bitcoin mining decentralize the currency -issuance and clearing the function of a central bank and replace the need of central bank.

Bitcoin protocol includes built-in algorithm which adjust the mining function across the network. The difficulty of processing task that miner must perform adjusted dynamically so that , on average , someone succeeds in every 10 min .

The protocol also halves the rate at which new bitcoin is created every 4 year , limit the total no of bitcoin that will be created to be fixed total just below 21 million coins. Due to Bitcoin diminishing rate of issuance , over long period of time , bitcoin is deflationary.

Behind the scene , bitcoin is also the name of the protocol , peer-to-peer network and distributed computing innovation.

Bitcoin represents the decades of research in cryptographic and distributed system and includes four key innovations brought together in unique and powerful combination. Bitcoin consists of
1 . A decentralized peer-to-peer network (the bitcoin protocol).
2. A public transaction ledger (blockchain).
3. A set of rules for independent transaction validation and currency issuance (Consensus Rule).
4. A mechanism for reaching global decentralized consensus on the valid block chain (Proof of work algorithm).

To read second of this blog series https://ashwani-the-tiwari.medium.com/blockchain-concepts-through-bitcoin-ethereum-eos-2-c6728ddcc546