Bitcoin is an internet-based electronic payment system. These bitcoins are numbers in a database. Only the person with the respective key can execute transactions. Each set of transactions between users is compiled into a block. These blocks are time-stamped and stored in several computers across the world. Such infrastructure is called Blockchain which nearly impossible to hack. Bitcoin is the first application of the blockchain with no chance to manipulate as trust is distributed among millions of computers. The processing power for mining bitcoins is up to 250 million hashes per second which are equivalent to 50 million CPUs[1]. The power needed to mine bitcoins is estimated at 36 terawatt hours, enough to power 3.3 million homes[2].


Blockchain-based Social Applications

Bitcoin managed to displace the role of the central banks in guaranteeing trust via new governance mechanisms. The same pattern can be replicated to other assets such as gold, company shares, or property rights. This presents a chance to re-create and re-arrange the society according to the values embedded into blockchain[3]. The blockchain enforces laws replacing legal procedures, or institutional models altogether. Therefore, blockchain started to penetrate the fabric of charities and NGOs community to have an impact in terms of transparency and keeping rights.

[1] – Over 500 Million PCs Are Secretly Mining Cryptocurrency

[2] – No, bitcoin isn’t likely to consume all the world’s electricity in 2020

[3] – Social Innovation and the Blockchain

[4] Stanford Social Innovation Review – Digital Currencies and Blockchain in the Social Sector