Central DAO presents 'All About Web3'

'All About Web3' series of publishing that’ll make you a Web3 Wizard. We’ll take you from the origins of Cryptography and Bitcoin through the rise of Blockchain and Web3, exploring the latest innovations and narratives shaping the space.

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Bitcoin didn’t just introduce a new digital currency—it introduced a new way of thinking about data, security, and decentralization. At the heart of this innovation was blockchain technology. Although the term "blockchain" wasn’t explicitly mentioned in Satoshi Nakamoto’s whitepaper, the concept was there: a decentralized, tamper-proof ledger that records all transactions in an open, verifiable way.

Blockchain technology solved two primary issues that early digital currencies faced:

1. Decentralization: Bitcoin’s peer-to-peer network removed the need for central authorities to oversee and validate transactions. This decentralization meant that no single point of control could bring down the system, as was common with centralized digital currencies.

2. Security: Through cryptographic algorithms, Bitcoin ensured that transactions were irreversible and transparent, creating a permanent record of all activity on the network.

The real breakthrough in Bitcoin’s blockchain was the way it prevented double-spending. Earlier attempts at digital currencies required intermediaries to check the validity of transactions, which reintroduced the problem of centralization. Bitcoin solved this by creating a public ledger—the blockchain—where every transaction was recorded and verified by a network of users (or nodes).

How did this work? Instead of relying on a single authority to approve transactions, Bitcoin created a system where anyone could participate in the verification process. This system was called proof of work. To verify a transaction and add it to the blockchain, nodes had to compete to solve complex mathematical puzzles. This competition required significant computational resources, making it difficult and expensive to cheat the system.

The winner of this competition would add the new transaction to the blockchain and receive a reward in the form of newly minted Bitcoin. If any node tried to submit a fraudulent transaction, the network would reject it, and the offending node would be removed. This decentralized competition made Bitcoin’s blockchain resistant to tampering and corruption, ensuring that the ledger remained accurate and trustworthy. BTW- This competition is called the Proof Of Work!

Another key feature of blockchain technology was its use of blocks—groups of transactions that were added to the chain at regular intervals (in Bitcoin’s case, every 10 minutes). This allowed the network to synchronize and agree on the correct transaction history, even if some participants had slower internet connections or temporarily disconnected from the network.

These innovations made blockchain technology powerful, not just for digital currencies like Bitcoin, but for any application that required a decentralized, secure, and transparent ledger. This paved the way for the development of new applications that extended far beyond money—ushering in the era of Web3.

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