Well, here we are. Another post on blockchain fundamentals, put forth in a non jargony, fun way. This is the beauty of it. I could go ahead and scare you with words like protocol, decentralization, BFT etc. but that will defeat the entire purpose of spreading awareness around blockchain.
So this article will help you in multiple ways. It will give you a bird’s eye view of what blockchain is all about. And if you happen to have some context about it already, it will give you a way to teach the same to your kids.
The day isn’t far when you’d probably hear this from your offspring, “Daddy, what is blockchain?”. And at that point if you decide to Google and answer that question, that conversation might take you to a different tangent altogether.
So to simplify stuff, let’s take the example of a kid called Sharry. Sharry is 7 years old and wants a dog for this Christmas. But Sharry’s father kind of hates pets. He definitely doesn’t want a dog in the house. Now let’s see what happens next.
Sharry and Christmas Letter:
Since his dad won’t get him a dog, Sharry decides to write a letter to the Santa Claus. Very carefully, he mentions all the details of the dog that he needs. The size, breed, colour, everything. He also affirms Santa that how much he’d take care of that dog and would treat him as his best friend.
However, since Sharry is just a kid, he couldn’t post the letter himself. Therefore, he asked his dad to post it on his behalf.
But then something very unfortunate happens. Sharry’s dad decides to open and read the contents of the letter. He goes ahead and replaces the word dog with a Baseball bat.
As soon as Santa receives the letter, he starts working on Sharry’s gift.
So what does Sharry get for Christmas that year? Yup, it’s a baseball bat. Sad but true.
No funny business here. I am just trying to draw a correlation between the story above and how real life blockchains work.
So what I depicted above is one of the key problems that blockchain is trying to solve. Everything we do today, has a middleman involved. Transferring money to a friend through a Google Pay? Your transaction has to go through Google, your bank, your friend’s bank, and finally, the friend’s UPI application. This involves duplication of efforts in terms of maintaining the ledger, at each step. Not to forget that all these intermediaries charge you for enabling this (transaction fees)
Let’s take another example. Say you are building a career through Instagram. You drive leads to your website and your social media presence is par excellence. What if one day Instagram decides that you cannot post any more. Okay, let’s tone down a little? What if they get to pick the type of content you can post? You are at the absolute mercy of Facebook (parent company of Instagram) to run your entire business.
Scary much? You could come up with endless examples if you start pondering over this.
Sharry and the Blockchain:
Now, the next year, Sharry decides to post his letter on a blockchain. Say this is called the North pole blockchain. This would mean that Sharry would create a digital copy of his letter and put it on a blockchain. This blockchain is nothing but a group of people connected through internet.
This group can include anyone: Other kids like Sharry, parents‘ of kids, Santa Clause himself, anyone!
Here’s when the things get crazy. By design, every time a letter is posted, everyone on the blockchain network receives a copy of that letter. So, at any given point, everyone is aware of everyone else’s Christmas wish list.
Now Sharry’s father is also there on this blockchain. As soon as he finds out a letter seeking a dog, he realizes that it must be his son.
So once again, he changes the word dog with a book this time.
However, since his father’s copy of letters is now different than everyone else on the blockchain, the change is caught immediately and his father is removed from the North Pole blockchain.
For everyone else, it’s business as usual.
What you just saw is a perfect use case of distributed trust. No single user can change the state and entries of the blockchain as per their will. This makes blockchains highly secure and immutable.
This property of blockchain hints at the fact that it is an extremely transparent system of transacting as well.
In an actual blockchain, the people on the network are called miners. They validate each transaction by expending their computational resources. In return they get incentivized through a currency (eg. Bitcoin).
I hope your bed time stories with your kids are turbo charged after reading this article. I just touched the tip of the iceberg with this post in terms of blockchain. The world of crypto is endless and I hope to come up with more such analogies to spread the word.
Have a burning question? Would love to hear from you!
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Until next time..
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