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Blockchain is a recent invention. It is still in early stages of its development, and yet a burgeoning new blockchain-related industry is already emerging. Improving the technology, finding new use cases, developing the ecosystem… and of course looking to change the world are some of these new endeavors.



This section is dedicated to exploring different facets of the blockchain and bringing answers to an array of questions one might have - from “Why do we need it” to “How does it work” or “What is it used for”. The structure of Explore descending from general concepts to specific notions, you are welcome to choose your own path according to your interests and go down the rabbit hole. 



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<h2><a href="https://d.center/explore/blockchain-philosophy" class="ek-link">Blockchain philosophy</a></h2>



Why are crypto enthusiasts so enthusiastic? Blockchain is not a trivial technology, but the one that has a potential to change the very way our societies operate. Every organization and every community rely on trusted third parties, responsible for storing and managing data, with all the related risks . Replacing these trusted third parties with a decentralized data handling mechanism would eliminate much of the system’s deficiencies, and that’s exactly what blockchain does. 



<h2><a href="https://d.center/explore/bitcoin" class="ek-link">Bitcoin</a></h2>



The very first implementation of the blockchain, Bitcoin was created to solve the deficiencies of the monetary system and replace the so-called fiat money (dependent on Central Banks) with cryptocurrency, a completely independent alternative that runs on a decentralized peer-to-peer network.&nbsp; 



<h2><a href="https://d.center/explore/blockchain-fundamentals" class="ek-link">Blockchain fundamentals</a></h2>



A blockchain is a collection of technologies and methods that allow gathering data into a ledger, which is stored and updated by the network’s participants (which anyone can become). Data handling is its main role, although it also allows embedding more complex programs and running them in a decentralized way.&nbsp; 



<h2><a href="https://d.center/explore/blockchain-in-practice" class="ek-link">Blockchain in practice</a></h2>



Most blockchain encounters today are about cryptocurrencies - Bitcoin and many others that have appeared since. However the understanding of the technology becoming increasingly subtle, other blockchain real-world use cases appear, notably with the development of decentralized applications, or Dapps. A developed ecosystem makes these functionalities readily available and opens up previously restricted-access industries, such as finance.&nbsp;&nbsp; 



<h2><a href="https://d.center/explore/crypto-regulation" class="ek-link">Crypto regulation</a></h2>



Blockchain and its products are becoming an increasingly important part of our lives and our economies, which inevitably attracts the regulators’ attention. This is not a bad thing, though, for the right laws can support the technology and protect its users against related scams. Depending on a country however the attitude varies greatly, from progressive to autocratic. 



<h2>Beginner’s path </h2>



If you do not yet have a clear idea of what it is you would like to explore, let us suggest you a suite of 8 articles that will smoothly introduce you to the world of cryptoassets and Bitcoin in particular: it will help you to understand what it is used for, how it works and some necessary tools allowing to buy some of it.



<a href="https://d.center/explore/blockchain-philosophy" class="ek-link">Blockchain philosophy</a>



<a href="https://d.center/explore/bitcoin" class="ek-link">Bitcoin</a>



<a href="https://d.center/explore/how-does-bitcoin-work" class="ek-link">How does Bitcoin work</a>



<a href="https://d.center/explore/bitcoin-mechanism " class="ek-link">Bitcoin mechanism</a>



<a href="https://d.center/explore/blockchain-in-practice" class="ek-link">Blockchain in practice</a>



<a href="https://d.center/explore/blockhain-ecosystem" class="ek-link">Blockchain ecosystem</a>



<a href="https://d.center/explore/crypto-wallets" class="ek-link">Crypto wallets</a>



<a href="https://d.center/explore/crypto-exchanges " class="ek-link">Crypto exchanges</a>

What is Bitcoin and why it could be a valuable alternative to our usual currencies such as dollars and euros?



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<h2 class="wp-block-heading">Bitcoin and bitcoin</h2>



Bitcoin is both the blockchain and the cryptocurrency that exists on it. To distinguish the two, Bitcoin as the blockchain is usually written with a capital B. 



The basis of the technology were first outlined in Satoshi Nakamoto's (pseudonyme) <a href="https://d.center/en/explore/bitcoin-a-peer-to-peer-electronic-cash-system" class="ek-link">White Paper</a> published in 2008 and titled "A Peer-to-Peer Electronic Cash System". 



It was not the first try to create a digital currency, but it was the first to succeed in solving all the intricate problems that led to previous attempts’ failures. Satoshi Nakamoto exploited decades of research, in particular in the fields of cryptography and distributed systems, and brilliantly brought them together to create a fast, secure, independent, and borderless digital money.



<h3 class="wp-block-heading">Bitcoin consists of:</h3>



<ul>
<li>Bitcoin protocol - a set of rules and algorithms that enable bitcoin issuance and transactions validation via&nbsp;network consensus (a way to ensure that network participants are well-intentioned and will update transactions ledger fairly; Bitcoin consensus is called a <a href="https://d.center/explore/proof-of-work" class="ek-link">Proof-of-Work</a>)</li>



<li>decentralized <a href="https://d.center/explore/p2p-network" class="ek-link">peer-to-peer network</a><a href="https://d.center/explore/p2p-network" class="ek-link"> </a>to run the Bitcoin protocol. Without any central server, a P2P network is composed of computers with equal rights that verify transactions and, if they wish, participate in bitcoin issuance and transactions’ recording.</li>
</ul>



Running the Bitcoin protocol results in a public distributed ledger called the blockchain, where all the transactions are stored. Everyone can consult the blockchain and its transactions from the Genesis block up to now.



Bitcoins are issued according to the protocol as a reward for maintaining the network, and their transfer is carried out&nbsp; without intermediaries and centralized authorities. This means that, unlike [tooltip content=" fiduciary money with no intrinsic value backed by and dependent on the government (e.g. dollars or euros) "] fiat [/tooltip] currencies, Bitcoin does not depend on the government or banks to issue money or to settle and validate transactions. 



The only thing that gives control over bitcoins is the private key associated with every Bitcoin address and available exlusively to its owner.



<h2 class="wp-block-heading">Bitcoin alternative to fiat money</h2>



Store of value. No single entity could ever change Bitcoin code: it is stored and run on the network nodes - literally thousands of independent computers all over the world. This ensures that the code is law, and the rules embedded into code won’t change unless the majority of the network decides so. 



This stability is particularly important when it comes to the emission rules: bitcoin emission rate is predefined, with the supply divided by two every 4 years, meaning that there won’t ever be more than 21 million bitcoins. In the world where Central Banks can print as much fiat money as they wish, Bitcoin represents a remarkable store of value.



Free use. Bitcoin is also public and open source, allowing anyone to join, participate or use it. Anyone can open a Bitcoin wallet and send/receive bitcoins, without any approval from whatever organization. 



This is a significant improvement compared to the red tape of the banking system, not to mention a precious access to the world's finance for the unbanked. Furthermore, in the authoritarian countries where access to money is often used as a tool of repression, Bitcoin’s accessibility is vital. 



<h2 class="wp-block-heading">Bitcoin updates and developments</h2>



The rules that define Bitcoin protocol were first introduced by Satoshi Nakamoto, but as every computer program, they have to be regularly revised and updated, in order to reinforce the protocol security and introduce new functionalities. The way such updates are agreed upon is usually referred to as the <a href="https://d.center/explore/bitcoin-governance" class="ek-link">governance</a>, and in Bitcoin case its community plays a critical role.&nbsp;



Beyond the Bitcoin protocol itself, there have been numerous developments of the so-called layer 2, allowing&nbsp; to execute transactions off the mainchain. Such solutions usually aim to improve Bitcoin’s performance or introduce new functionalities.



Bitcoin's most popular layer-2 solution is Lightning Network, which increases dramatically its transaciton throughput and decreases network fees.

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Every software needs upgrades, but how do you implement them within a headless and decentralized system that is Bitcoin?



Blockchain governance is the process by which its operating rules (transaction and block verification, signatures techniques etc) are decided upon, implemented, and improved. In Bitcoin blockchain the governance is implemented through consensus between community members. It is considered an off-chain governance, as the process itself is not inscribed into the blockchain (see <a href="https://d.center/fr/explore/blockchain-governance" class="ek-link">Blockchain governance</a>).



 The original Bitcoin implementation (also called Satoshi client) was the first version of Bitcoin protocol, integrating a wallet. First supervised by Satoshi Nakamoto himself, the protocol was then entrusted to a team of developers led by Gavin Andersen, then Wladimir J. van der Laan; since the version 0.9.0 it took the name of Bitcoin core. As of today, Bitcoin core is by far the most popular “client”, even if other clients exist and in the past some of them could compete with Bitcoin Core. 



<h2>Who finances Bitcoin?</h2>



Bitcoin development is finance in a decentralised manner by any person interested in its security and evolution: tech companies (Blockstream), crypto exchanges (Kraken, Coinbase), personalities of the crypto world (Meltem Demirors of CoinShares, Jack Dorsey of Twitter, Michael Saylor of MicroStrategy), asset management companies (Fidelity Digital Assets)... Donations can be sent directly to the developers or to associations, such as MIT Media Lab’s Digital Currency initiative or Bitcoin Core Sponsorship Program.



<h2>BIP</h2>



When a person thinks that a certain protocol issue should be addressed, whether it’s correcting  a bug, adding or a new functionality or improving an existing one, they submit the idea or solution to the community. It can be a white paper or an email to <a href="mailto:bitcoin-dev@lists.linuxfoundation.org">bitcoin-dev@lists.linuxfoundation.org</a>. The ideas that make sense become Bitcoin Improvement Proposals, or BIPs; they are assigned a number and published on Github forum. The full list of BIPs can be consulted <a href="https://github.com/bitcoin/bips" class="ek-link">here</a>. 



BIPs implementation can take various forms and be really complex, even in cases when the majority of the community agrees on it. 



<h2>Implementing updates</h2>



If the codebase update is incompatible with the existing protocol (not forward-compatible), all nodes have to accept it at a certain point of time. Usually it happens when there’s a need to eliminate certain security risks or add a new functionality. Those who wish to continue implementing old rules will find themselves isolated from the rest of the network and will be de facto working on another blockchain. Such implementation is called a hard fork and it is a way to bring important changes to the protocol, as well as to give birth to new blockchains.



When a suggested update is compatible with the existing validation rules (forward-compatible), each node can choose for itself whether it adopts the update or not (even if after some time they would have to accept the update to better perform their task). Such implementation is called a soft fork.&nbsp;



Even if the majority of actors agree on a soft fork update, its implementation can be very complex, taking into account Bitcoin's decentralized nature. In the past several methods were used:



<ul><li>Miner Activated Soft Fork (BIP9), which measures miner support for soft forks on a rolling basis. Miners “signal” their support for a protocol by leaving extra information in the block header of the blocks they submit. If more than 95% of the successfully submitted blocks show support for the new rules over a period of time, the new protocol is activated. If not, it is rejected.</li><li>&nbsp;User Activated Soft Fork (UASF), by which a majority of the Bitcoin network signals that at a specified date (flag day) it will reject non-updated blocks by running a UASF full node. UASF contributed to a successful SegWit implementation in 2017, showing that the Bitcoin governance system is sufficiently decentralized to be able to adopt decisions that miners do not particularly support. Learn more on different actors of the network <a href="https://d.center/en/explore/bitcoin-network" class="ek-link">here</a>.</li></ul>







Even with different methods, implementation is still a complicated task, as shown by the debates around Taproot - a much expected protocol update desired by the majority of the Bitcoin community. At the time of writing the way of implementing it is still a subject of discussions, so in order to speed it up a proposal called <a href="https://www.mail-archive.com/bitcoin-dev@lists.linuxfoundation.org/msg09604.html" class="ek-link">Speedy Trial</a> was submitted on March 5, 2021. The idea of Speedy Trial is to start early (the nodes start to count blocks that implement the update soon after its release) and end early (if the threshold of 90% is not achieved within 3 months, the activation fails). If adopted, Speedy Trial method could be used for upcoming implementations. 



 



It is difficult to develop a decentralized protocol. Every update takes a lot of time, which potentially could have negative consequences. However it is paramount that every actor can participate in decision-making, ensuring Bitcoin independence and decentralization.