Summary

Throughout this chapter, we got a foothold in blockchain by introducing the main economic aspects and challenges, discovering, with the simplest example, what this technology is about and how it works. The Villagecoin case is a realistic representation of Bitcoin, the first blockchain application ever and the most famous one. It is an imaginary situation that illustrates how decentralization and distributed ledgers enhance cooperation between individuals that do not trust each other, allowing them to exchange value without any confiding intermediary. Hopefully, we also demonstrated, in the most comprehensible way, what are hashes and nonces, which enable the blocks to be chained together, bringing security in a decentralized infrastructure, at least in those based on this mechanism. But more on that later.

In the next chapter, we will discover how cryptography, consensus mechanisms, and peer-to-peer networks can achieve mass coordination in a trustless environment. In other words, we are going to explore, in a technical sense, the main features and components of a blockchain.