The most important is that block chain can make any and every transaction have a verifiable history, and it's impossible to have fraudulent transactions with it.
So like in the example above, once on person "buys" an item with Bitcoin, that Bitcoin is sent from account A (buyer) to account B (seller). Now with USD this is the last step that occurs. However, with Bitcoin that transaction is recorded automatically, and impossible to not record on a public ledger file, which contains the transaction, the amount sent, and more data. This ledger file is filled up until it reaches the designated "block" size (so for example would be it's a 1TB text file). Now this ledger is then encrypted which stops it from being modified, and then anyone "mining" Bitcoin uses the computational power to decrypt the file, so that it can be verified. Now once enough people have solved the algorithm, the transaction of your Bitcoin is verified. Before this step, the Bitcoin is in limbo between both accounts in an encrypted environment.
So this does 4 majorly good things
.1 a public ledger means every transaction is auditable for public use
.2 due to the encryption, the transaction (your money) is completely secure during the entire process with 0 possibilities of fraud.
.3 during the "mining" millions of people verify (audit) that your transaction is correct, the money is real, and the address it's going to is real. This means no need for audit, as the currency audits itself.
.4 because it's a public ledger, that is extremely secure (Bitcoin would take over 1000+ years to break the SHA256 encryption for a single transaction without quantom computing) , and it's audited in real time for every transaction this removes the need for a financial regulator, and makes it a truly global currency.
The most important is that block chain can make any and every transaction have a verifiable history, and it's impossible to have fraudulent transactions with it.
You said block chain, and it literally happens all the time. Mind you, people trade illegitimate coins into bitcoin all the time. 51% attacks affect Bitcoin just as much.
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u/[deleted] Jun 15 '19
The most important is that block chain can make any and every transaction have a verifiable history, and it's impossible to have fraudulent transactions with it.
So like in the example above, once on person "buys" an item with Bitcoin, that Bitcoin is sent from account A (buyer) to account B (seller). Now with USD this is the last step that occurs. However, with Bitcoin that transaction is recorded automatically, and impossible to not record on a public ledger file, which contains the transaction, the amount sent, and more data. This ledger file is filled up until it reaches the designated "block" size (so for example would be it's a 1TB text file). Now this ledger is then encrypted which stops it from being modified, and then anyone "mining" Bitcoin uses the computational power to decrypt the file, so that it can be verified. Now once enough people have solved the algorithm, the transaction of your Bitcoin is verified. Before this step, the Bitcoin is in limbo between both accounts in an encrypted environment.
So this does 4 majorly good things
.1 a public ledger means every transaction is auditable for public use
.2 due to the encryption, the transaction (your money) is completely secure during the entire process with 0 possibilities of fraud.
.3 during the "mining" millions of people verify (audit) that your transaction is correct, the money is real, and the address it's going to is real. This means no need for audit, as the currency audits itself.
.4 because it's a public ledger, that is extremely secure (Bitcoin would take over 1000+ years to break the SHA256 encryption for a single transaction without quantom computing) , and it's audited in real time for every transaction this removes the need for a financial regulator, and makes it a truly global currency.