<p>It's not just a database, though it might have an interface similar to one. But it does more things.</p>
<p>First of all the chain helps very efficiently compare your state of the database with others. A single 32-byte value &quot;summarizes&quot; the entire state in a cryptographically secure way, so that if multiple people come together and compare their hashes with each other, if they match, they know that they all have exactly the same view of the database. There are other ways to summarize a database like this, using trees etc that might be more efficient for databases you want to read and write to, but a linear chain is the most efficient way for databases where you only want to write extra data to.</p>
<p>A second important property of the Bitcoin blockchain specifically is that proof-of-work is added to each block in the chain. This means that in the case where different people have different of these summaries, we have a very reliable way to come to agreement on which one of them is the one we want to look at. If in the room multiple summaries are presented, everyone can easily come agreement on a single one in a way that will (a) always work and (b) is very hard to exploit by a cheater that wants to convince people to look at the wrong one.</p>
<p>But ultimately, the question could be &quot;why do we need to keep all transactions since ever in the first place?&quot;. That's a legit question. In theory, these summaries could just summarize the current &quot;state&quot; of the database, not all the history. And we would have the same system to decide between histories using the proof-of-work. But then we are trusting the miners that create the proof of work to make honest summaries. The goal of Bitcoin is to minimize trust in unknown third parties, so all history is kept since its inception so that everyone that participates can reconstruct the state of the database by replaying all transactions.</p>
<p>So to conclude, the blockchain is really the thing that enables Bitcoin to run in an almost completely trustless way, where all participants can do all verification on their own and the proof-of-work is only needed to make them decide between two different equally-valid states. This way we have a very robust system of forming consensus on who owns which money and who is allowed to spend it.</p>

CC BY-SA 4.0
2023-10-16T10:10:11.267Z
2023-10-16T10:10:11.267Z
Steven Roose
<p>I am going to focus on why the blockchain is of vital importance to the Bitcoin currency.</p>
<p>As you say, the blockchain is simply a list of transactions. A transaction journal There's not a lot more to it in fundamental data.</p>
<p>Bitcoin's inventor intended to create a system with the following characteristics:</p>
<ul>
<li>Digital cash, not accounts at financial institutions.</li>
<li>Purely peer based, all users have identical roles, there are no trusted institutions.</li>
<li>Free from government control.</li>
<li>Limited money supply - capped at ₿21M.</li>
</ul>
<p>What cash depends on is features that allow end users to detect forgeries. We can bite a purported gold coin to see if it is soft metal, we can look at the printing on a paper banknote to see if it looks like intaglio, we can hold it up to light to look for metal strips in the paper, for watermarks and holograms. Our digital cash needs some equivalent features.</p>
<p>Since Bitcoin is digital and digital data is trivial to duplicate, when we receive digital cash in the form of Bitcoin, how do we know if it genuine or a worthless digital copy?</p>
<p>We do this by every person keeping their own copy of the list of all Bitcoin transactions since the beginning of the Universe. We can each check for ourselves that each transaction has outputs whose total value is no more than the total value of all its inputs. We can each check that those inputs do indeed come from outputs of prior transactions.</p>
<p>Since we get the list of transactions from other anonymous Bitcoin users, how do we know that the transaction data is not faked by some malicious person? Every transaction has digital signatures which we can each check for ourselves.</p>
<p>So the blockchain is absolutely vital to the existence of Bitcoin.</p>

CC BY-SA 4.0
2023-10-16T10:21:33.633Z
2023-10-16T10:21:33.633Z
RedGrittyBrick
<p>The blockchain provides a canonical order to transaction events. Putting transactions in order breaks ties between competing transactions and solves the double-spend problem. It also permits all participants in the scale-free network to converge on a single shared state by applying all instructions in that order. As every participant has processed the full history of prior events, each node can unilaterally track all existing portions of bitcoins, making it trivial to protect against forged funds. The protocol regulates the cadence of state updates in the network per the proof-of-work requirement. This objective requirement guarantees that an open set of authors can collaborate on writing the blockchain updates and that there is sufficient time for all participants to apply the latest set of changes.</p>
<p>The blockchain ensures that all processes in the network are open and auditable to all participants.</p>

CC BY-SA 4.0
2023-10-16T12:32:09.500Z
2023-10-16T13:12:31.960Z
2023-10-16T13:12:31.960Z
Murch
<p>The title says it all. What’s it important for? Is it just important for documenting all transactions and so it’s basically just a database? I know how blocks are made, please remain relevant.</p>

<blockchain>
Why is the blockchain important?
Johnafoon
# Why is the blockchain important?

(Asked by: username_0 on 2023-10-15)

The title says it all. What’s it important for? Is it just important for documenting all transactions and so it’s basically just a database? I know how blocks are made, please remain relevant.

**Tags:** blockchain


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## 3 answers

### Answer by username_1 on 2023-10-16. Score: 1

It's not just a database, though it might have an interface similar to one. But it does more things.

First of all the chain helps very efficiently compare your state of the database with others. A single 32-byte value "summarizes" the entire state in a cryptographically secure way, so that if multiple people come together and compare their hashes with each other, if they match, they know that they all have exactly the same view of the database. There are other ways to summarize a database like this, using trees etc that might be more efficient for databases you want to read and write to, but a linear chain is the most efficient way for databases where you only want to write extra data to.

A second important property of the Bitcoin blockchain specifically is that proof-of-work is added to each block in the chain. This means that in the case where different people have different of these summaries, we have a very reliable way to come to agreement on which one of them is the one we want to look at. If in the room multiple summaries are presented, everyone can easily come agreement on a single one in a way that will (a) always work and (b) is very hard to exploit by a cheater that wants to convince people to look at the wrong one.

But ultimately, the question could be "why do we need to keep all transactions since ever in the first place?". That's a legit question. In theory, these summaries could just summarize the current "state" of the database, not all the history. And we would have the same system to decide between histories using the proof-of-work. But then we are trusting the miners that create the proof of work to make honest summaries. The goal of Bitcoin is to minimize trust in unknown third parties, so all history is kept since its inception so that everyone that participates can reconstruct the state of the database by replaying all transactions.

So to conclude, the blockchain is really the thing that enables Bitcoin to run in an almost completely trustless way, where all participants can do all verification on their own and the proof-of-work is only needed to make them decide between two different equally-valid states. This way we have a very robust system of forming consensus on who owns which money and who is allowed to spend it.


---

### Answer by username_2 on 2023-10-16. Score: 1

I am going to focus on why the blockchain is of vital importance to the Bitcoin currency.

As you say, the blockchain is simply a list of transactions. A transaction journal There's not a lot more to it in fundamental data.

Bitcoin's inventor intended to create a system with the following characteristics:

* Digital cash, not accounts at financial institutions.
* Purely peer based, all users have identical roles, there are no trusted institutions.
* Free from government control.
* Limited money supply - capped at ₿21M.

What cash depends on is features that allow end users to detect forgeries. We can bite a purported gold coin to see if it is soft metal, we can look at the printing on a paper banknote to see if it looks like intaglio, we can hold it up to light to look for metal strips in the paper, for watermarks and holograms. Our digital cash needs some equivalent features.

Since Bitcoin is digital and digital data is trivial to duplicate, when we receive digital cash in the form of Bitcoin, how do we know if it genuine or a worthless digital copy?

We do this by every person keeping their own copy of the list of all Bitcoin transactions since the beginning of the Universe. We can each check for ourselves that each transaction has outputs whose total value is no more than the total value of all its inputs. We can each check that those inputs do indeed come from outputs of prior transactions.

Since we get the list of transactions from other anonymous Bitcoin users, how do we know that the transaction data is not faked by some malicious person? Every transaction has digital signatures which we can each check for ourselves.

So the blockchain is absolutely vital to the existence of Bitcoin.


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### Answer by username_3 on 2023-10-16. Score: 1

The blockchain provides a canonical order to transaction events. Putting transactions in order breaks ties between competing transactions and solves the double-spend problem. It also permits all participants in the scale-free network to converge on a single shared state by applying all instructions in that order. As every participant has processed the full history of prior events, each node can unilaterally track all existing portions of bitcoins, making it trivial to protect against forged funds. The protocol regulates the cadence of state updates in the network per the proof-of-work requirement. This objective requirement guarantees that an open set of authors can collaborate on writing the blockchain updates and that there is sufficient time for all participants to apply the latest set of changes.

The blockchain ensures that all processes in the network are open and auditable to all participants.


---

