The beginning of the 90s brought the internet as we know it today, a network in which computers can communicate using the TCP/IP protocol. Since the invention of the World Wide Web, the first internet-based application, computers have been able to exchange information endlessly across the network.
This mechanism, covered in Chapter 5, An Economic and Historical Approach of Blockchain, is called replication; the nodes (computers and servers) connected to the network (internet) can replicate the information to pass it on to the other nodes. Replication decreases the value of a digital item as it is transferred over the network. With Bitcoin, the world witnessed digital scarcity for the first time. This is how it works:
- First, an initial level of scarcity is induced by overcoming the double-spending problem, ensuring that a digital asset cannot be replicated when...