Cryptocurrency Tokens belong not to people, but to the blockchains.

I was reading a blockchains textbook and I had an aha moment.

These are the points which produced my Aha moment.

• Blockchains are ledgers or records of all native tokens created and where they went, but all locations are actually on the blockchains.

• Cryptocurrency Tokens are software constructs or pieces of code, which live on the Blockchains.

• Cryptocurrency tokens are blockchain-bound assets, as in assets bound to the blockchain and they never leave.

• Public Keys, Public addresses, Public wallet addresses, these are all locations on the blockchain, where the tokens live. These are designated by public keys, which are like a public street address.

• Your private keys allow you access to these assets and to move them from location to location.

• Your private keys only control the movement of those tokens from the wallet or location you control with your keys.

• Once those keys move those tokens to a wallet or location you don’t control, you no longer control the movement of those tokens.

• When you sell your cryptocurrency you’re really being paid to move them from a location you control, to a location you don’t control.

• The person controlling the new location now can be paid to move them to a location they don’t control by someone else.

• You move them from your public address on the blockchain, to another public address on the blockchain, which is why all transactions have a “from” and “to” address, which is public, and also require the insertion or provision of your private keys. Once the tokens are at this new public address, a location on the blockchains, their movement is now controlled by another set of private keys.

• Your wallet, whether it is virtual or physical, isn’t really a place where the cryptocurrency tokens reside or live.

• It’s a virtual or physical location where your security keys or code resides.

Tokens are never lost or destroyed

• Your keys can be destroyed, but not the tokens themselves.

• Even if your tokens are “burned”, they still exist in a location called “null” and the blockchain or ledger accounts for them and knows where they are.

• The crypto tokens never leave the blockchain, and they are not “lost” when your keys are “lost”.

• Losing your keys only means losing your access to moving those tokens around.

• Which is why if someone steals your keys, they don’t come to your house to take your tokens. They just gain access to moving your tokens from one location to another. All they do is input the from address, to address and the private key allowing them to move the tokens, and your tokens are no longer under your control. They can do this from across the country or across the globe. All they need is access to the internet, because that’s where the blockchains is, and where the tokens live.

Example Explanation:

Bob’s Bitcoin lives on the Bitcoin blockchain.
Bob’s public keys are the address of his Bitcoin wallet, which is the location on the blockchain where the Bitcoin tokens reside, but his actual wallet, although listed as the location for the tokens is really a repository for his private keys, which controls the movement of his tokens from their current location on the blockchain. But once Bob uses his private keys to move the bitcoin from the location on the blockchains designated by his wallets public key address, to the public key address of John’s bitcoin wallet, the bitcoin now resides in a location on the blockchain controlled by John’s private keys. Now Bob can no longer move that bitcoin. It can only be moved by John.

This also means that if John loses his private keys, the bitcoin stays in the location designated by his public wallet address forever. But it isn’t lost. The blockchain knows where it is, but it can’t move until the private keys controlling this location are used to instruct the blockchain ledger to move them to another location designated by a set of public keys and controlled by another set of private keys.

Last Words

The blockchains ledger is where the cryptocurrency tokens live, control over moving the tokens from the location on the blockchains where they currently reside is the private security keys in your wallet.

I hope this increases your understanding of the blockchains, it’s complexity which is also its simplicity. It’s logical interactions are what make tech support seem so salty. They think logically everyday, all day long, while most of the rest of us are trapped in an irrational world, so our thinking reflects the world we live in, the world we are trapped in, and it’s the world many of us are trying to flee.

The End for now.

@shortsegments

Posted Using LeoFinance ^Beta