Ledger-Based Authorizations As Explained to an Eight Year Old

Jakub Ner
May 3 · 5 min read

Consider a group of people.

There is Fred, Alice, and Mick.

Fred always puts things in red bags, but no one knows he does.

Alice always puts things in green bags, but no one knows she does.

Mick always puts things in blue bags, but no one knows he does.


They live close to three caves, each containing stuff.

The caves are closed off with gates.

One cave has some “good stuff”, one cave has some better “great stuff”, and the final cave has the best “wow stuff”.


The gate to each cave is opened by a gate-keeper operating three levers.


The first lever opens the gate to the “good stuff”.

The second lever opens the gate to the “better stuff” and the last lever to “wow stuff”.


The gate-keeper only opens a gate when he knows he’s been paid at least once before.

He will always open the gate to the “good stuff” if he knows he’s been paid one coin before.

He will always open the gate to the “great stuff” if he knows he’s been paid two coins before.

He will always open the gate to the “wow stuff” if he knows he’s been paid three coins before.


The caves are on top of a huge cliff.

And the gate-keeper with his levers is at the bottom.

He has no way of knowing who’s at the top: he cannot see that far up.

The only way for him to know he has to pull a lever and open one of the gates is for people up top to throw things down to him.


Fred comes to the edge of the cliff and desires “great stuff”.

Fred puts two coins in his red bag and tosses it down the cliff.


The gate-keeper at the bottom finds the two coins.

He pockets the coins.

Puts a “paid” receipt in the red bag.

And puts the bag with the receipt on his shelf.

Finally he pulls the second lever to open the gate to “great stuff”.

As someone — he doesn’t know who — did toss two coins down to him wanting to go into that cave.


From then on, whenever Fred wants to go into the cave with “great stuff”, he comes to the edge of the cliff and tosses one of his red bags. He doesn’t put coins in the bag anymore. He fills the bag with a bunch of dirt.

The gate-keeper at the bottom finds the new bag of dirt. It’s a red beg with no coins. He checks his shelf and sees a red bag with a receipt in it. The gate-keeper knows that some time ago a mystery person tossing red bags over the cliff’s edge already did toss him two coins.

The gate-keeper tosses away the bag with dirt and pulls the second lever.

Clearly — whomever the mystery person at the top of the cliff throwing red bags is — they did already pay him two coins in the past.


Fred gets into the cave.

And the gate-keeper never knew he’s opening the gate for Fred.


In the story above the coins represent crypto-currency coins or US dollars when using overhide-ledger (https://overhide.io).

The bags indicate each person “signing” a transaction, be it Fred, Alice, or Mick. The bag color is very individual. Only the person throwing the bag has access to that particular color of the bag.

The act of throwing a coin-filled bag is equivalent to a subscription into a service tier (gate). In our story the subscriptions are lifetime for simplicity; it’s taken for granted that the receipts could include timestamps and expire.

The gate-keeper is the ledger-based authorization service itself. It’s the service checking the ledger — the shelf — for payment.

Each gate represents some access-tier desired by whomever is using the ledger-based authorization.

To learn more about ledger-based authorizations please visit https://overhide.io.

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