On the Blockchain nobody knows you’re a Fridge…

If you haven’t heard of blockchain I am fairly sure you will have heard of BitCoin. BitCoin along with other cryptocurrencies are in and out of the news headlines at the moment. The thing they all have in common is that they rely on blockchain technology and appear to be making some people a tad rich.

So, for those not yet in the know, Wikipedia offers the following crystal clear explanation: “A blockchain is a permissionless distributed database that maintains a continuously growing list of transactional data records hardened against tampering and revision, even by operators of the data store’s nodes.”

Well as I always say ‘all things are complicated until you understand them’ and I’m not sure this explanation really helps, so here’s my attempt.

Finance people like to keep ledgers.

These ledgers document all spend both in and out in the same way you manage your own bank statement. Financial organisations, like banks, manage and monitor their own ledgers and know everything about you including where you spend your money…

Now imagine if they didn’t. Imagine if the ledgers of all transactions were managed by people who did not know each other, but they all had a copy. Each copy is only valid if everyone agrees the transaction is valid and matches the ledgers held…