Each bitcoin transaction is stored at a public ledger, which ledger is confirmed and maintained by each one the computers participating in the Bitcoin network. This”chain” of trades is referred to as the blockchain, and every transaction is fundamentally a public timestamp that may contain data.
The key facets of the blockchain’s timestamps are: decentralized (no one entity controls the database of timestamps, and everybody in the network confirms that timestamp has occurred — that is”mining”), immutable (after a timestamp has been verified and recorded, you can not un-do it), people (all the timestamps are publicly observable, though some elements of the information are encrypted), and programmable (it’s possible to write code against the blockchain — for example, triggering some type of action dependent on the particulars of a”smart contract” embedded in a timestamp).
Significantly, each of these timestamps contains a package of information which can hold a great deal of items: details of a financial transaction, details about a contract between at least two parties, a hashed version of just about any record, etc..
1 way I have described this is like the way people used to use postmarked envelopes to confirm that something had occurred at a given time. By way of instance, signing a will and placing it in an envelope, and mailing it to yourself — the post office’s postmark on the envelope, which has the date of this postage, proves that whatever was placed in the envelope was done so prior to the date of the postage. IIRC, more than once, a puzzle on Colombo was solved using this technique, where a witness radically unseals a postmarked envelope prior to the judge.
The blockchain is basically a digital, public, programmable version of this. Which we have never had before.
Previously, every program kept its own notion of time. If I post something on Facebook, Facebook saves that article and timestamps it. We must expect them to get that right, rather than to alter it in the future.
Here’s that same thought in diagram form:
In some sense, the Blockchain is a public database — it has the effect of transferring data that was formerly kept within the walls of one or more programs into a shared database. But to get a bit more specific, it is really a public database of timestamps — a new ability for anyone to say, openly and immutably, a particular thing happened at a given time.
Maybe that’s obvious to folks who’ve been working in this area for some time, but I found it to be a very useful way of thinking about things — rather than describing it to people that are new to the idea. Thanks Muneeb!