I feel like I’ve had to repeat this too many times to count and so I’m finally writing this down so I can reference it for future use.
There are 4, count them, four key innovations relating to Bitcoin which one should never forget. I have simplified the explanations but one could easily deep-dive into each technical innovation and spend days (months and years, actually) trying to understand not only their importance but the far-sweeping implications:
- The Bitcoin Protocol: A decentralized peer-to-peer network
- Blockchain: A public ledger of transactions
- Consensus: A rule set for independently validating transactions and the issuance of currency
- Proof of Work Algorithm: A mechanism and system to reach consensus, globally, in a working and valid decentralized blockchain
One of the biggest issues that I have with mainstream media (and general ignorance at large) is that they separate bitcoin from blockchain at a fundamental level. The general argument is that blockchain is the “tech” and powers bitcoin but that is disingenuous at best, fundamentally wrong at worst.
Bitcoin IS a technology and without its marriage with the other 3 technological innovations we wouldn’t have what we have today. Go back and review The 10 Days of Bitcoin to learn more about the history of Bitcoin and how many of these technologies existed wayyyyyyy before Bitcoin, as we know it today.
But it was the unique and wonderful combination of the 4 technological innovations that brought what was once thought impossible into being.