The most widely recognized manifestation of blockchain technology has been the “Bitcoin” Bitcoin, a form of cryptocurrency, was the first truly decentralized digital currency. Bitcoin functions as a P2P system, providing people with the means to transfer value digitally and directly. How does it work? Person A wishes to transfer bitcoins to Person B. To securely and anonymously transfer the bitcoins, two components are necessary: 1. Private key – similar to a password for an email account, it’s kept secret and known only to its owner – only he has access to the account and its contents (i.e. bitcoins). 2. Public key – comparable to an ‘unidentified email address’, although assigned to a specific participant, the owner’s identity is not disclosed and it can be shared throughout the network. Anyone possessing the ‘email address’ can send ‘content’ intended for its owner. Bitcoin Miners’ around the world are alerted of the pending transaction. Miners take it upon themselves to perform a validation process, keeping an ongoing record of all transactions and ensuring that each coin is only being used once at any given time. Miners verify that Person A has enough bitcoins to make the payment. ‘Proof of work’ The verification process involves solving a complex set of algorithms requiring a significant amount of computational power. Miners compete to be the first to complete the process and upon completion broadcast their results to the rest of the miners who will then confirm that the result is indeed correct. When a certain majority of miners confirm the result, the block (containing information regarding transactions that took place within a defined period of time) is cryptographically sealed and added to the blockchain. The algorithm awards the “winning” miners with a certain number of bitcoins. Within 10 minutes of initiating the transaction, Person A and B get a confirmation that the bitcoins were signed over. What about manipulation? Any attempt to manipulate the process by gaining a majority control would necessitate an exorbitant amount of computational power, roughly equal to 13,000 times that of the world’s 500 most powerful supercomputers. 7