Do you even Blockchain?
A simple walk-through to understanding the ‘Blockchain’. ( For Dummies & Non-techies)*
Blockchain is an algorithmic system (a system consisting of a certain set of rules) that uses the basics of a ledger to manage the transactions involving crypto-currencies (Bitcoin, IOTA, Ether etc.). The only difference is that the ledger is public or I would rather say, distributed to multiple people.

Now, let us simplify this:
Traditional Scenario
Suppose, a man named ‘Popeye’ wants to pay a man named ‘Bluto’, a certain amount of money say, $200 . Popeye can pay upfront cash of $200 after withdrawing from his bank account or rather write Bluto a cheque which later Bluto can encash from the bank. Either way, the bank is involved. A bank is an intermediary which regulates all such transactions and validates them.

Now, let’s just take this ‘Bank’ out of the scenario. Who would validate such transactions? Will there be any record or proof that Popeye really paid Bluto an amount of $200? Bluto (that cheat!) might never accept the fact that Popeye paid him $200 and rather confront him again and again cause Popeye has no certain proof! What a shame indeed!
Voila! Blockchain!

Now, for suppose, Popeye has a friend called ‘Flintstones’ and Bluto has a friend called ‘Jetsons’. Popeye goes to the grocery store with Flintstones, to buy, say, a can of ‘Super Spinach’ from Bluto and promises to pay $20 for the can. Bluto’s friend Jetsons is also present there. Now, Bluto goes home, fires up his laptop and adds a transaction into his ledger with the following description:

Bluto adds Popeye as a customer, the principle who has promised to pay him $20 . Bluto also assigns Jetsons and Flintstones as an authorized node so that they could verify the transaction (they were the witness of the transaction). Thus they each have a similar ledger created once Bluto adds them up into the network.

Now, each one of them knows that Bluto is not paid as of yet and Popeye still owes him $20 . So now, Popeye decides to pay him $20 via his E- wallet. After Popeye pays Bluto the amount, online, he updates the ledger.

The nodes present in that network chain get a notification that Popeye has paid Bluto via his E-wallet.

Thus, each transaction is verified here by Flintstones and Jetsons.
Now, back to the definition!
So, Blockchain is based on a distributed ledger system, where no one person is authorized to verify/read/write a transaction or create a block, but rather a decentralized approach is used. Thus, anyone inside the network could read, write, create and modify the transactions or blocks.
Each block contains a ‘Proof of work’ and the action taken to retaliate. Like in the above example, ‘Proof of Work’ is Popeye purchasing a Can of Super Spinach from Bluto and promising to pay $20 is the retaliation. Thus each action is recorded. Not only this, but the authorized nodes can verify the transactions based upon the ‘proof of work’ like in the example above, the Flintstones and Jetsons.
And did you see, how Blockchain hit these bank out of the park for home run! That’s what Blockchain is all about. Removing intermediaries to create a peer to peer, consensus based framework leveraging which, multiple applications can be deployed.
Ah! That’s right. But what are Crypto-Currencies!
Nothing but a digital asset which has a value of its own. Unlike Dollars or Pounds, they don’t have a physical form nor the aroma of the freshly minted bills (They smell so good in bundles of 20!!) Instead, they’re just a series of code, which are encrypted using cryptography and are stored safely in a person’s online Blockchain database or wallet.
Example
Popeye has $20 worth of Witchcoins (No harm intended) online in his database. So, when he buys a can of Spinach, he pays Bluto with Witchcoins. (I love this word, if not the smell!) Now, the Blockchain makes sure that these Witchcoins (series of encrypted codes) doesn’t exist twice, they erase it from Popeye’s database and complete the entry with the transaction of these Witchcoins. Thus, both of them have their respective proof that the transaction was successful.
Crypto-Currency vs Blockchain!
Now that you ask,
Blockchain is just a framework upon which various applications can be made. If put in contrast, Witchcoins: Blockchain what Email: Internet! Get it!
Currency exchange or Wallet is one such use case. On paper, use cases for this expand from Smart Contracts to voting systems to healthcare. Let’s just wait and see how this disruptive tech cuts through the spectrum of already established centralized system, the world functions in!
Credits for Image and Elements:
Images and elements obtained and modified to use for non-commercial/ educational purpose only. No copyright infringement intended. Positively!
All the illustration ideas about Blockchain are my own. Though, various elements have been used from different sources.
