Basic of BlockChain and Bitcoin

Today i am going to talk about Blockchain and Bitcoin.The reason i am going to talk about it because we need to create common language across business and technology about this issue.I am going to simplify this thing cause ALBERT EINSTEIN once said

“IF YOU CAN NOT EXPLAIN IT SIMPLY,YOU DO NOT UNDERSTAND IT WELL ENOUGH”

So first we need to understand two basic terms

BITCOIN:

Bitcoin is a digital coin,Basically its money which is digital.We are not going to talk about bitcoin in this article,we are going to talk about the next term which is..

BLOCKCHAIN:

Blockchain is technology that enables moving digital coins and assets from one individual to another individual.it’s very important to understand that bitcoin is not blockchain

BITCOIN is not BLOCKCHAIN

To understand the basic we need to first understand the problem it attempts to solve which is

MONEY TRANSFER. I am going to explain it conceptually,i am not going to explain about implementation details how it is done in practice.

So today if a person A wants to transfer money to a person B,lets say from Japan to Bangladesh,this is typically done by using a THIRD TRUSTED PARTY(BANK) and it is typically works as follows

1.First A says i want to transfer to B

2.The TRUSTED PARTY(BANK) as it is trusted identify B in Bangladesh identifies B as a person and the bank account and then move the money after taking some fee to the right account in bangladesh.This typically takes about three days or more bt it takes some time.

What blockchain is attempting to solve is

1. to do the transfer money without the trusted entity as two persons can actually talk with each other.

2.to do it faster than 3 days actually immediately

3. To do it cheaper then the fee that the third party collects

How BlockChain Works:

There are two concepts in blockchain

1.Open Ledger(we are going to discuss)

2.Distributed Ledger(not going to discuss)

Open Ledger:

So lets discuss with an example

Suppose there is a network of four people A,B,C,D.In this network everyone can see each others amount and can see the transaction they have made and validate it as everything is public.

A has 10$ in his account

Now A wants to transfer 5$ to B,As its a valid transaction it will be added to a transaction block.Now B wants to send 3$ to C,it will also be added to a transaction block and create a chain.now C also wants to send 1$ to D,it will also added as a block same as before.As everyone can see each other accounts and transaction blocks so they can easily validate the transaction and transaction will be made.Now suppose if A wants to send another 15$ to D,which is not possible cause A does not have 15$,everyone in the network will invalidate the transaction,so it will not be added as a block.

So your mind may have question,what is the benefit in validating others transaction,cause the person who validates the transaction first will get an amount from that transaction,what he will get is called Bitcoin

This is the basic of Blockchain and Bitcoin,there are a lot of things but the basic is same.