With more and more of our lives revolving around technology, it is no longer acceptable for us to just blindly use them without knowing how they work, especially if your work involves them. Even if you think that you'd never touch on any of these things, they'll affect your life in one way or another.
Is blockchain equals to Bitcoin? What is a decentralized ledger? If these terms have got you confused, fret not. Today, we'll attempt to learn about the scary thing that is the blockchain in the simplest way possible!
Block-
Imagine you're in kindergarten and your teacher asks you to make a record of how much money each of your friends have. You start by writing down everyone's money at the start, and after day 1, you add on the allowance they have received and deduct the money they have spent on a new page.
On day 2, you again sum up the allowance they have received and take away the money they have spent and calculate it all on a new page. This happens every day on a new page of your book. Each page is like a block in the blockchain.
-Chain
Now, since the amount you start with each day depends on the amount of money left from the previous day, each page of your book depends on numbers from the previous page. This is essentially the "chain" in blockchain.
If you try to "steal" some money for yourself by changing one person's allowance in Day 2, you would have to recalculate all the numbers on Day 3, 4, 5, 6...and so on. For a kindergarten kid, mathematics is a big no no! This is one of the reasons why blockchains are secure.
Nodes & Decentralization
Imagine now that every single person in your class has the same copy of the your book. And every time one classmate spends some money, every single person in your class will record that spending in their book. If you try to "steal" some money again (naughty you), the whole class will BOO on you and your wrong book because it is different than everyone else's.
Similarly, in a blockchain, thousands of computers (nodes) have a copy of the entire blockchain, so no single person or company can control or edit the blockchain. This is another reason why blockchains are so secure.
Bitcoin
Instead of recording the amount of pocket money left for each kid, your teacher can ask you to record who played which toy during playtime, or who ate what during lunch time. The blockchain also allows you to record many things such as where did your food come from, or who does this house belong to. Bitcoin is just a type of digital money that is recorded using blockchain.
So again, bitcoin uses blockchain technology, but blockchain IS NOT bitcoin.
Mining & Rewards
Remember that each day you will have to do the plus and minus of all your friends' allowance, and like I said, mathematics is hard for a kindergarten kid. This is why for every single calculation you do, your teacher rewards you with a candy.
In the real blockchain, computers compete to solve super hard mathematical problems to verify a block and get rewarded as well.
So, hopefully by the end of the article, you've learned something about the blockchain and Bitcoin (which, again, is made using blockchain technology). Stay tuned for more articles like this to try to explain complicated technology in the simplest way possible!
