Chapter 03: Blockchain Basics & Terminology

“Any fool can know. The point is to understand.”

― Albert Einstein

Much of today’s discussion on blockchain skips over the essential elements of what makes the technology innovative. This space is still new to many, and as a result, many authors, journalists, and entrepreneurs tend to conflate (wittingly or unwittingly) what are ultimately very different technologies. This oversight is due not only in part to the fact that so many are eager to use the term, but also because so few grasp the core elements of what makes a blockchain work at its most fundamental level.

This chapter is designed to give you a basic introduction to much of the vocabulary and terminology that you will hear when discussing blockchain technology before we take a more in-depth technical dive in chapter 4. The language and descriptions in this chapter come from many years of experience building DigiByte and exploring the Bitcoin blockchain at a deep technical level, and we feel that it is vital for you to familiarize yourself with these terms to better understand the later chapters in this book. 

From experience, there are several excellent ways to simplify many of the more complex concepts involved and help people better understand what blockchain is and what it is not. Occasionally we will rely on analogies since they offer a natural means to ground the concepts in things that you and I are familiar with from our everyday lives, though that isn’t intended to detract from the technical details...

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