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@ -7,11 +7,11 @@ In this chapter we will look at the features offered by the bitcoin blockchain,
=== Introduction
The bitcoin system was designed as a decentralized currency and payment system. However, most of its functionality is derived from much lower-level constructs that can be used for much broader applications. Bitcoin wasn't built with components such as accounts, users, balances, and payments. Instead, it uses a transactional scripting language with low-level cryptographic functions, as we saw in <<transactions>>. Just like the higher-level concepts of accounts, balances, and payments can be derived from these basic primitives, so can many other complex applications. Thus, the bitcoin blockchain can become an application platform offering trust services to applications, such as smart contracts, far surpassing the original purpose of digital currency and payments.
((("blockchain applications", "benefits of bitcoin system")))The bitcoin system was designed as a decentralized currency and payment system. However, most of its functionality is derived from much lower-level constructs that can be used for much broader applications. Bitcoin wasn't built with components such as accounts, users, balances, and payments. Instead, it uses a transactional scripting language with low-level cryptographic functions, as we saw in <<transactions>>. Just like the higher-level concepts of accounts, balances, and payments can be derived from these basic primitives, so can many other complex applications. Thus, the bitcoin blockchain can become an application platform offering trust services to applications, such as smart contracts, far surpassing the original purpose of digital currency and payments.
=== Building Blocks (Primitives)
When operating correctly and over the long term, the bitcoin system offers certain guarantees, which can be used as building blocks to create applications. These include:
((("blockchain applications", "building blocks for (primitives)")))((("primitives")))When operating correctly and over the long term, the bitcoin system offers certain guarantees, which can be used as building blocks to create applications. These include:
No Double-Spend:: The most fundamental guarantee of bitcoin's decentralized consensus algorithm ensures that no UTXO can be spent twice.
@ -53,9 +53,9 @@ The list of building blocks is not complete and more are added with each new fea
=== Applications from Building Blocks
The building blocks offered by bitcoin are elements of a trust platform that can be used to compose applications. Here are some examples of applications that exist today and the building blocks they use:
((("blockchain applications", "examples of")))The building blocks offered by bitcoin are elements of a trust platform that can be used to compose applications. Here are some examples of applications that exist today and the building blocks they use:
Proof-of-Existence (Digital Notary):: Immutability + Timestamp + Durability. A digital fingerprint can be committed with a transaction to the blockchain, proving that a document existed (Timestamp) at the time it was recorded. The fingerprint cannot be modified ex-post-facto (Immutability) and the proof will be stored permanently (Durability).
Proof-of-Existence (Digital Notary):: ((("digital notary services")))((("Proof of Existence")))Immutability + Timestamp + Durability. A digital fingerprint can be committed with a transaction to the blockchain, proving that a document existed (Timestamp) at the time it was recorded. The fingerprint cannot be modified ex-post-facto (Immutability) and the proof will be stored permanently (Durability).
Kickstarter (Lighthouse):: Consistency + Atomicity + Integrity. If you sign one input and the output (Integrity) of a fundraiser transaction, others can contribute to the fundraiser but it cannot be spent (Atomicity) until the goal (output value) is funded (Consistency).