What Is Blockchain? What Makes Blockchain Special?
Explaining Blockchain To A 5-Year Old
Today, everybody talks about and uses the internet. Through the internet, we interact with people. We buy things, use services, and make inquiries about things or people through the internet. Somehow, you might have come across the word, “Bitcoin” or “Blockchain”. Search engines such as Google are buzzing with the use of these words.
At first, the subject of Blockchain was like another language I couldn’t grasp. I had a lot of trouble understanding the many terms used, and it took me a while to understand. Now, to a kid who wants to know all about this revolutionary invention, this article is for them. But, adults can learn a lot from this article.
You want to understand what Bitcoin or Blockchain is? Stay with me. This is going to be a long but interesting ride. In this article, I will help you understand what Blockchain is, in a way a child would understand.
But first, everything has a beginning.
History Of Blockchain
In the year 2008, on the 31st of October, a document which is known as a Whitepaper (this is a report, paper, or a guide which is written to inform people/readers about an issue which looks difficult. It helps the readers understand a problem, helps to solve problems or help make a decision). No one knows who the mystery author of this whitepaper is. But, the Author goes by the name, Satoshi Nakamoto.
In the document, Satoshi Nakamoto explained a way in which money can be sent from one person to another in a better way. The money has been exchanged is called Bitcoin. It was also explained that the exchange of money would be done without the help of a third person. This means that the exchange would only take place between the sender and the receiver through a medium an outsider cannot get access to. Because it has a high level of security known as cryptography, this new way of exchanging money was is known as Cryptocurrency.
Although the main purpose of Bitcoin was for exchanging money, some others (researchers) felt that the technology behind Bitcoin could be used for other purposes. The technology behind Bitcoin is known as Blockchain.
Still looks like some other language? Stay with me. In a while, I would explain what Blockchain means.
What Is Blockchain?
Imagine a school environment with a playground, classes, and a locker room. The locker room is where students keep their books, lunch boxes, and what have you in for safe keeping. As a student, you are to have access to a single locker which has two keys. One of the keys is for your personal use, while the other is for people who might want to keep items for you in your locker. The key which is for personal use is the Private Key in Blockchain. This is like a password you use for making transactions while using the Blockchain. The other key is the Public Key/ Address. This is like the account number you give to others who might like to send some money into your account.
For security purposes, each locker has connections to the locker before and after it. This means, that no authorized person can have access to your locker. This is because for anyone to open your locker without your permission, he/she has to have access to all the lockers before yours. This is how security works in Blockchain.
Furthermore, there is no particular person or group of people who are in charge of the locker room. You are free to give your Public Key to anyone without having to report to your room teacher or principal. This is Decentralization is Blockchain. There is no central authority over the transactions done on the Blockchain. The transactions are also irreversible. Besides this, as more students gain admission into the school, the more the lockers. The lockers and will be arranged in the order of how the student was admitted. If there are 50 students in the school, the lockers will be numbered from Locker 1 to Locker 50. This means, that if any person tries to open locker 5 with permission from the owner of locker 5 with another key which is not the private key, the lock has to be changed from locker 1 to locker 4. Remember, that each locker is connected together. The above-described locker room setting is this case is our Blockchain.
You can also refer to Blockchain as a large storage area which allows you to record information. It is like a large digital book where you record transactions. The data stored on the Blockchain form Blocks which in turn forms a chain. This means the Blocks are linked to each other to form a Chain. Unlike Banks, the information of those involved in the exchange of money is not known by the other person. The amount it would take to send money to another person is also cheaper. Like a bank account, each person has a wallet where his/her bitcoins are kept. Once the information about a transaction or transfer is stored on the blockchain, it cannot be changed. This unique property is immutability. The use of Blockchain is thus secure.
What Makes Blockchain Special?
1. Blockchain is cheaper and faster. It cost less to send money to the other person.
2. The identity of those using blockchain is not known. This means it is private. This is possible through Cryptography.
3. Blockchain is a public ledger. Anyone can make use of it. All you need is a private key and a public address. It is not restricted to a particular set of persons.
4. There is no central authority assigned to regulate the use of Blockchain. The security measures make it possible for the person at the other end to trust the system.
Understand what Blockchain is now? I bet you do. In my next article, I am going to explain the many uses of Blockchain. You might want to watch out for that.
