A Layman's Guide to Bitcoin and Blockchain

In this chapter, we provide an overview of the Bitcoin blockchain and we describe the underlying consensus protocol (a.k.a., the Nakamoto consensus), which has now been used across many other distributed ledger solutions following the advent of Bitcoin. We also discuss other choices in ledger design (e.g., public versus private, blockchain versus directed acyclic graph), and we discuss other types of consensus protocols. Overall, our purpose is to provide a simple but robust explanation of blockchain's first widespread use case and to dispel common misunderstandings surrounding Bitcoin in particular, and distributed ledgers in general.