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Counterfeit currency has been around for as long as we’ve had money. The Secret Service was famously created to investigate paper money forgery. But with blockchains like Bitcoin, that is no longer necessary. So why is that?
The key is that blockchains validate every transaction in a decentralized way. Every time you send someone else some Bitcoin, they check what your balance was before and what it should be after, and do the same for your recipient. Think of a stadium full of accountants, all checking the same transactions, and only if they are all in agreement on the outcome, it will be marked verified and added to the transaction history of the entire blockchain.
And that’s why it’s impossible to just make up fake account balances and send money you don’t have - your entire history lives on the blockchain and every accountant will see it, validate it, and make sure they are in consensus.
You just learned one of the most important things that make the blockchain a blockchain….
Disclaimer: This podcast references our opinion and is for information purposes only. It is not intended to be investment advice. Do your own research and seek a duly licensed professional for investment advice.
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