Short answer: You do not need bitcoins for running "a" blockchain. You obviously need bitcoins to participate in "the" Blockchain. Longer answer: Blockchain is the/a protocol that implements a "decentralised consensus" which is a mechanism where participants on the infrastructure achieve a high level of (irreversible) certainty that nobody fiddled with the history of all the previous transactions (the ledger). To achieve this confidence you need participants confirming the transactions independently which requires computational effort - also called "work". This computational work obviously requires (at the moment a lot) of energy. So you need to motivate the workers to perform their proofs. This is done through a (monetary) reward in a form of a newly minted bitcoins (when we talk about Bitcoin's blockchain). A blockchain as a generic open protocol does not need 'bitcoin' but you need to find a reward mechanism to have a high number of nodes competing in the independent transaction verification process. You may have private blockchains where the participants (or nodes) have other motivation to join your network. Since the Blockchain that ran nothing else but a ledger of transactions of Bitcoins gained massive adoption we have now a fairly decentralized network of nodes. That is basically what reflects "some" of Bitcoins value. Fundamentally this value should be the cost of energy put into the proof of work effort plus some hysteria premia. For a comparison consider the TCP/IP protocol that now runs on every single device that is connected to a computer network. This protocol solves transfer of data packets on the wires and it was agreed to by the first players (DARPA etc). The blockchain is also a protocol and it solves independent verification of transactions among (optionally) anonymous parties that is authoritative and (if all goes well) cannot be hijacked. In a way, running around and promoting "blockchain technologies as a business model" should sound as idiotic as running around and promoting TCP/IP or other protocols. Protocols indeed have value and blockchains solves the very interesting problem of trust but it is the applications that will be "investable". Microsofts and Googles appeared decades later after TCP/IP was created.

Thank you!

Follow up question, if I may: a lot of people are calling Bitcoin up based on enlarged use of the blockchain technology, as you describe in your answer, Robert. Would it not be more logical for BTC to actually settle to the "value of the work" (mostly energy costs + small margin?) price, as you describe? Which would make it stable at an economic price to run the technology? Any views?

Important question Nick. Given the volatility we are obviously at a very speculative stage. As you suggest creating alternative widely adopted blockchains should be detrimental to BTC's value. Which is indeed contrary to the current mania. Creating new block-chain networks can be done literally in a few hours by a teenage enthusiast. Gaining critical mass of adoption by the community is the actual challenge. I think these factors could play an important role in determining the fate of BTC: [1] large scale adoption: quite grim given the limited capacity of the network (only 1 block every 10 minutes by definition). People are fiddling with the size of the block to improve on this (so more transactions can fit in a single block). Looks very hack-y. It is basically impossible to see a scenario where there would be a world-wide adoption of Bitcoin and you'd be able to pay for your groceries with BTC. [2] mining costs: humongous*. Price paid for "trust" seems to be huge. I honestly think given all the carbon footprint and environmental pressures there is a serious risk Bitcoin mining will be banned by governments. In my book this would be the ideal scenario for bitcoin so it could go back to its original purpose - allowing anonymous transactions of anonymous parties run by independent private participants. This scenario was basically hijacked by mass adoption and retired ex - Wall Street hedge fund blokes who after doing soul searching on Goa got bored and discovered a new playground (like Novogratz). In this scenario BTC would be probably valued dramatically lower. * https://digiconomist.net/bitcoin-energy-consumption

Great points Robert! A few comments: > One should not see the Bitcoin blockchain as a payment system but rather as a settlement layer. Each confirmed block (1 block every 10 minutes) contain many many transactions. And each of these transactions can represent the *net value* of thousands of other transactions made on a separate payment system (such as the Lightning Network). So a global payment system powered by Bitcoin is not impossible at all. In fact, it is already possible. > The world energy consumtion have always risen. If this is inherently something negative then there's lots of other stuff that should be banned as well (electric vehicles for instance). With that said, I agree that it would be good if the power consumption could be reduced, but I don't think it will be what determines the fate of of Bitcoin.

Blockchain has become a BIG buzzword. It is a type of a database and there's nothing magical with it. It's a relatively slow technique that's hard to update and maintain when it's up and running. But it's found one big use case, money. Bitcoins blockchain makes it possible to have a decentralized and immutibile ledger. That means, no one can change the money supply and no one can censor transactions. Everything that's added to the blockchain needs to follow the consensus rules. Anyone that solves a Bitcoin "mining-pussle" can add new transactions to the blockchain (as long as it follows all rules), that means that no transactions will be censor since someone is gonna add them.

^The comments section on this website really needs to allow you to paragraph your posts. It just stuffed all my paragraphs into a wall of text, ugh.

Spot on critique. There is a lot of buying the dream assuming it will get figured out by smart people. Here’s the thing. If you stamp the Id from the block chain onto the banana and distribute the ledger such that third parties can audit it then you will have a had time swapping an unsightly fact out with a newly generated chain.

http://www.dtcc.com/annuals/2013/superstorm-sandy-recovery/index.php

https://www.americanbanker.com/news/you-dont-really-own-your-securities-can-blockchains-fix-that

very good example. a thumb up ;)

Understanding the technology and its application's is not out of reach but it's also not simple. It is nuanced enough that even very seasoned and excellent money managers could pass is it off because they aren't sure about it, missing out on historic gains. S curve playing out in real time for all of us. I humbly estimate that we're in the middle portion of the S and ascending, with respect to this tech. The early, insanely rapid gains are over...but there's a 2nd half to the S and it is just as potent...it's large scale adoption growing on the condensed early starters (the currencies) like Bitcoin, Ethereum, Litecoin, Dash, etc. will yield numerous winners in companies who properly implement the technology. The currencies, in my view, will appreciate long term and sometimes at a rapid rate...but blockchain companies providing legitimate hash power and companies that use the ledger to track data rapidly will have very good to incredible equity valuation gains.

It's a good question. My understanding is that the core public key algorithms are thought to be cryptographically secure, even though the Satoshi author (or authors) remain unknown.

The blockchain software is open source. The underlying logic for the network was 'no single point of failure' and that applies to the code as well.

Good idea, lets see another video on smart contracts. Would love to see some more videos covering bonds etc.

Some of your questions on 51% attack and how blockchain works can be found on-line if you wish to read more about them. Just let you know if you have some understanding of how pub/private keys and comp. sci. background works will help.

I was able to download the audio, you might wish to try again.