I was confused at first to understand the two concepts of bitcoin and blockchain. Slowly, I start to realized the two pillars of bitcoin (or any blockchain applications would required): crytocurrency & blockchain (*)

Which problems that crytocurrency has tackled?

• Ownership without custodian/ centralized party
• Based on the application of public-key cryptography: system that uses pairs of keys: public keys that may be disseminated widely paired with private keys which are known only to the owner.
• There are two functions that can be achieved: 1) using a public key to verify the sender (digital signature); or 2) encrypting a message with a public key to ensure that only the holder of the paired private key can decrypt it (public encryption).
• Example: Transfering from A to B of digital coin $latex Coin_{k+1}=Sign(Hash(Coin_k, P_B), S_A)$ in which $latex P_B$, $latex S_A$ are the public key and private key of B and A respectively. Imagine it is like you put the receipient name on a dollar note and sign on it to transfer the ownership.
• By this mechanism, everyone can verify A transfer to B “something” using A’s public key and only B can decrypt and hash/sign next time if B wants to transfer to C.
• Not sure how but we need to also ensure that everyone can validate that this asset no longer belongs to A but owned by B by querying the ledger?

(*) mainly after reading the original paper “Bitcoin: A peer-to-peer electronic cash system” by Satoshi Nakamoto