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I don't need those. When people
say I'm not so interested in bitcoin,

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I'm more interested in its underlying technology, the blockchain, what they're basically saying

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is that they don't understand blockchain.
But not only have they misunderstood blockchain,

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they have also failed to understand what
the underlying technologies of Bitcoin are. So

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the narrative blockchain, not Bitcoin,
is backwards. Bitcoin is what matters,

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not blockchain. What is blockchain,
how does it work? And how does

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it serve bitcoin? The short backstory
is that Satosha Nakamoto invented blockchain in two

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thousand and eight when she or they
created bitcoin. In one sentence, this

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is what blockchain is. Blockchain is
a tamper proof data structure used to store

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information in a decentralized manner. I'll
briefly go over a few things here.

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Listen, The information stored in the
blocks in the Bitcoin blockchain is bitcoin transactions.

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In other words, bitcoin is a
ledger. Each new block is just

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like a new page with new entries
new transactions in a ledger. For example,

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Alice sent one bitcoin to Bob.
Bob sent zero point five bitcoins to

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Charlie. Charlie sent zero point two
bitcoins to Alice. About one thousand,

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eight hundred of these transactions or ledger
entries fit in a standard one megabyte bitcoin

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block, and about four thousand,
five hundred if they are set with transactions.

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Every ten minutes a new block with
new transactions a new page with ledger

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entries is added to the bitcoin blockchain. Easy enough, the blocks contain transactions.

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Moving on. The second thing to
note here is that bitcoin uses blockchain

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to achieve decentralization. When we talk
about decentralization we mean two things, and

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I'll exemplify using bitcoin here. First, Bitcoin is politically decentralized, meaning that

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there is no one who controls the
Bitcoin network. There's no central authority.

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This is crucial. Second, Bitcoin
is architecturally decentralized, meaning that the software

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isn't run from a central server somewhere
like PayPal or Facebook. Instead, the

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Bitcoin software is run from computers all
over the world in a peer to peer

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network. The users run the network
and they are geographically distributed all over the

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world. So how does blockchain work. Imagine that Alice sends Bob a file

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over the internet. Bob will receive
a copy of that file and not the

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original. This is how we wanted
to work with most digital files when we

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send them over the internet, but
not money. If Alice sends Bob money

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over the Internet and he gets a
copy of her money, and she still

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keeps the original money, that she
can spend that same money again, that's

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less than ideal. This is the
so called double spend problem that Bitcoin solves

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in a very unique way. And
in order to solve the double spend problem,

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we need to create a digital scarcity. This is what Bitcoin has achieved

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and this is truly unique. Traditionally, we have solved the double spend problem

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by using a bank as an intermediary
for the exchange. If Alice wants to

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send money to Bob, the bank
debits Alice's account and credits Bob's account,

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and they trust the bank to make
the exchange for them. Bitcoin uses a

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different approach. Bitcoin solves the double
spend problem without having a bank in the

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middle. Instead, Bitcoin is appear
to peer network where people send money directly

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to each other. Here's how.
Since there's no bank in the middle or

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any other central authority to keep track
of the transactions with a central ledger,

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everyone in the bitcoin network has a
copy of the blockchain. When Alice sends

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money to Bob. The transaction is
broadcasted to the network so that everyone hears

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about it and can update their copy
of the ledger. So instead of having

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a bank to keep track of the
transactions, everyone keeps track of everyone transactions.

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Okay, so now you know what
blockchain is and how it works and

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how bitcoin makes use of it.
And here's the second part. All coins

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don't need blockchain. Blockchain has become
this magical busword, which is to say,

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it has become a meaningless word that
people throw money at, much like

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a dot com website in the nineties. Today we know that having a website

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isn't what's going to make a company
successful. In the nineties, we didn't

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know that. We thought that having
a dot com address or investing in a

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company that had a dot Com address
was the key to becoming a millionaire.

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Today it's the same with blockchain,
only worse a lot worse. Actually,

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thinking that blockchain will make you rich
and solve all your problems is worse than

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having a website and thinking it will
make you rich and solve all your problems,

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Because having a website is actually a
good tool for your business. Having

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a blockchain is not. Blockchain is
the world's most inefficient and expensive type of

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data storage, but the blockchain hype
has attracted a lot of scam artists that

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promote their own centralized good for nothing
in shit coins. A company using blockchain

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for their product or service defies the
very reason of using blockchain, which is

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to achieve decentralization to replace intermediaries and
centralized authorities. A project that has a

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founder that can influence or control the
project in any way is politically centralized.

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Listen, it doesn't matter if the
product or service they provide is somewhat architecturally

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decentralized. If the project is politically
centralized, then their product is also centralized.

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A company using blockchain is a contradiction. It's nonsensical. Bitcoin, on

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the other hand, is truly decentralized
and requires blockchain to be decentralized. So,

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finally, and this is my conclusion, using blockchain comes with huge tradeoffs.

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Blockchain is the world's most inefficient and
expensive form of data storage, but

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these tradeoffs are worth making if the
aim is to decentralize money. Decentralized money

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as an alternative to centralized banking is
a huge deal. Bitcoin's value proposition comes

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from it being decentralized, open and
neutral, and censorship persistence. Hard money,

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no altcoin. Not one can make
that claim for their currency or service.

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Bitcoin is the answer, not blockchain, and Bitcoin's properties obviously aren't solely

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thanks to blockchain. Just because someone
creates their own blockchain does not mean they'll

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be able to replicate Bitcoin's properties or
create any other valuable properties for that matter.

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In fact, they won't if they
use blockchain. Blockchain is Bitcoin specific.

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Blockchain has no purpose outside of Bitcoin
other than to make the founders of

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shitcoins very rich. Today, there's
nothing to suggest that blockchain even can be

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applied in any other context that than
decentralizing digital currency, or that any other

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network than Bitcoin will ever need it. But that's really up to future innovation

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and the market to decide. If
you enjoy what you're learning on this channel,

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please like and subscribe and join me
on Facebook at Ione Appleberg explains Bitcoin.

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There's also a podcast. You'll find
it where you find podcasts, and

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you'll also find me on Twitter at
Ione Appleberg. That's it for today,

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guys. I'm happy if you share
the contents and I'll talk to you soon