Blockchains (Non- Technical Introduction)
Blockchains are similar to databases. Blockchains can store any kind of digital asset that you can save in your computer. Encrypted or decrypted. And for someone to steal your digital asset from the Blockchain they will have to steal the password from you. To use an analogy, if you were using Facebook via Blockchain the only way a hacker can have your data is by stealing your Facebook password from you.
Facebook cannot give your data away because they do not have your data. It is stored in the blockchain and only your password can decrypt it. If Facebook gets hacked, hackers can’t steal your data. And since Facebook does not have your password Facebook can’t posts things claiming to be you.
There is however one very important exception when comparing databases to Blockchain. Once you save something on the Blockchain you are not able to delete it.
You can always append onto the Blockchain but there is no method to delete it. There is also no administrator that can modify records on the Blockchain.This is perhaps the most important feature of Blockchain and why it makes it so revolutionary. This way you don’t have to trust anyone except the Mathematics that links the Blocks together.
What would happen if you could delete data inside of Blockchain? For example, lets say Casey uses Blockchain network as a store for his money. Casey in total has 1 dollar. Casey sends that dollar to Bob. That data gets recorded in Blockchain.
Now, Casey tries to use the same dollar (remember our money is digital and we can create as many as we want, also we do not have a central authority auditing it) and sends that dollar to Alice.
Since Casey is not able to delete his previous transactions from Blockchain, everyone on the network sees that he already used his dollar. They can audit Casey’s money by going through the blockchain before accepting that transaction.
Casey’s transaction is now denied by the network.
Blockchains are also incredibly secure. Bitcoin which uses Blockchain to protect and store its value is currently worth over 60 Billion dollars. So there is every incentive to hack the Bitcoin network. They have been trying since 2009. No nation or any corporation have yet been able to hack the Bitcoin network.
The possibilities of Blockchains are immense. Blockchain today has effectively detached Money from Government. Just 5 years ago we needed Government to print and issue money, now the Bitcoin network can issue digital currencies. Money is no longer controlled by a single state. It is global.
Blockchains can be used for electronic voting. It can be used to replace top tier DNS servers. Blockchains can be used to store policies that are crucial for Governments. It can be used to replace current social networks by letting users own their own data. It can be used as a digital identity. There are countless uses for Blockchains and probably many more that we cant even fathom.
Internet connected people globally but Internet still needed central players to work well. Blockchain is an invention that can be used as a layer on top of the this global network (internet) that has the ability to make it decentralized, getting rid of this centrally controlled architecture and leaning more towards a distributed one.