Abstract
Why was Bitcoin created? How do Bitcoin and other blockchain technologies work? Bitcoin was foremost designed to be a system that operates without any single entity in control. This chapter discusses this fundamental goal of decentralization that Bitcoin intended to achieve, and describes how it was implemented via a mechanism called a blockchain. The chapter then moves on to consider Bitcoin’s three layers of governance to coordinate decision-making among a large decentralized base of users: the consensus protocol, mining incentives, and network upgrades. We end with a discussion and critique of some major categories of current applications of blockchain technologies: payment systems, resource sharing, smart contracts, data security, and private blockchains.
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Zhang, S.T. (2021). Bitcoin and Other Blockchain Technologies: Mechanisms, Governance, and Applications. In: Pompella, M., Matousek, R. (eds) The Palgrave Handbook of FinTech and Blockchain. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-66433-6_10
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DOI: https://doi.org/10.1007/978-3-030-66433-6_10
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