Bitcoin and public blockchain

Abstract

This chapter is about the Bitcoin blockchain and its cryptocurrency. True to the spirit of this book, however, it does not discuss Bitcoin and its cryptocurrency as an investment asset in financial portfolios. We are instead interested in understanding how the Bitcoin blockchain enables the exchange of value through digital cryptocurrency tokens (represented by the cryptocurrency balances stored in the Bitcoin ledger). The chapter is organized around the three elements of a blockchain defined in Chapter 3 . We first discuss the characteristics of the Bitcoin network. Then, we discuss the nature of the data handled by the Bitcoin blockchain. Finally, we present the consensus mechanism used by the Bitcoin network to ensure that nodes can agree on the content of the ledger at any point in time. The chapter ends with a brief discussion of the history of Bitcoin.