Bitcoin's Shared Ledger Is Like Yap Island's Rai Stones
The Rai stones of Yap Island are a good analogy for Bitcoin's shared ledger since money does not have to travel in order for transactions to take place. A Bitcoin transaction is broadcast to the entire network and verified by all network members, who then credit the recipient's account after verifying that each sender has the required balance.
Author:James PierceReviewer:Gordon DickersonFeb 18, 2022201 Shares201.2K Views
The Rai stones of Yap Island are a good analogy for Bitcoin's shared ledgersince money does not have to travel in order for transactions to take place. A Bitcoin transaction is broadcast to the entire network and verified by all network members, who then credit the recipient's account after verifying that each sender has the required balance.
This is how ownership of a stone was announced in Yap, but in Bitcoin, the transaction is broadcast to all network members and verified by all network members. Until a transaction can be validated and the ownership of the digital currency transferred from the sender to the receiver, they don't really exist. The private key, a string of characters comparable to a password, is used to safeguard access to the coins held by an address.
There Is No Such Issue With Bitcoin
While the actual weight of the Rai stones makes divisibility impractical. With a maximum of 21,000,000 coins, Bitcoin's supply is extremely scalable, making it an ideal medium of exchange for a wide range of transactions. Since everyone with an Internet connection anywhere in the world can view the digital ledger, Bitcoin has significantly greater salability than the Yapese stones, which were only useful on a tiny island with a small population who knew each other very well.
Dishonest Bitcoin nodes would be exposed quickly, which makes lying about one's intentions just as ineffective as doing nothing at all. This is what keeps individual Bitcoin nodes on the up-and-up. Collectively, what stops a majority of people from cooperating to be dishonest is that if they were to succeed in compromising Bitcoin's ledger integrity, the whole value proposition would be shattered and the value of bitcoin tokens would fall to zero. The cost of collusion is high, but the value of the plunder it produces is little. Therefore, since Bitcoin is based on economic incentives, fraud is significantly more expensive than the benefits it offers.
Bitcoin Is The First Example Of A New Form Of Life
The Merkle tree data structure, developed by Ralph Merkle, is used by Bitcoin to record transactions. Ralph Merkle once said the following about Bitcoin: Online, it's a living, breathing thing. It continues to exist because it can pay others to look after it. A valuable service that people will pay for is the only reason it will continue to exist for the foreseeable future. As long as you have a copy of its code, it will survive. All the running copies are continually conversing with each other, which keeps it alive. When a copy is corrupted, it is simply deleted and there is no bother or bustle about it. Anyone can view its code and understand what it is doing, which is why it thrives.
It's impossible to fix it. It's indisputable. It's impenetrable; it cannot be altered. It cannot be tampered with. There's no stopping it. Even if you try, you'll have to stop it. A nuclear war might wipe off half of Earth's population, yet life would go on as usual. Offering its services would continue to be available. As long as it exists, it will continue to pay its employees. Only by killing every server that hosts it can it be shut down. As a result, finding a solution to the problem is difficult since it is hosted on a large number of servers in a variety of locations.
Bitcoin Is A Technology That Survives
It has advantages for those who utilize it. All parties involved in engaging with Bitcoin get monetary compensation, and this is what keeps it running. The parties involved in Bitcoin's functioning are completely independent of one another, which is an important point to remember. In the event somebody want to modify Bitcoin, it is fully capable of operating as it is without any input from anyone on this issue.
Bitcoin's immutable nature will help us comprehend why efforts to modify the Bitcoin code would almost definitely lead to the development of a copycat Bitcoin, but one that cannot possible reproduce the economic balance of incentives that maintains Bitcoin operational and immutable.
Summary
It's possible to think of Bitcoin as a new type of money and a new payment network that emerged spontaneously. This company has no management or corporate structure since all decisions are preprogrammed and automated.
James Pierce
Author
James Pierce, a Finance and Crypto expert, brings over 15 years of experience to his writing. With a Master's degree in Finance from Harvard University, James's insightful articles and research papers have earned him recognition in the industry.
His expertise spans financial markets and digital currencies, making him a trusted source for analysis and commentary. James seamlessly integrates his passion for travel into his work, providing readers with a unique perspective on global finance and the digital economy.
Outside of writing, James enjoys photography, hiking, and exploring local cuisines during his travels.
Gordon Dickerson
Reviewer
Gordon Dickerson, a visionary in Crypto, NFT, and Web3, brings over 10 years of expertise in blockchain technology.
With a Bachelor's in Computer Science from MIT and a Master's from Stanford, Gordon's strategic leadership has been instrumental in shaping global blockchain adoption. His commitment to inclusivity fosters a diverse ecosystem.
In his spare time, Gordon enjoys gourmet cooking, cycling, stargazing as an amateur astronomer, and exploring non-fiction literature.
His blend of expertise, credibility, and genuine passion for innovation makes him a trusted authority in decentralized technologies, driving impactful change with a personal touch.
Latest Articles
Popular Articles