What is the Blockchain? The Plain English version

By Bill Hess, Founder of Pixel Privacy.

 

The word blockchain is on everyone’s lips right now. Although you might not really understand what “blockchain” means, chances are you’ve heard people talk about it (a lot).

Some people believe it will change our world for the better, and it will replace the banks that we currently know – or similar extravagant things.

Although the blockchain came to the general public’s attention when the crypto market absolutely exploded, the majority of the people still don’t understand how it works, what it’s used for or what all the fuss is about.

In this guide, I’ll answer all of your questions in regards to the blockchain, nodes, the ledger(s) and the security of the blockchain. The goal is to explain the blockchain in plain English, so anyone can understand it.

Note: In this guide, I’ll be explaining how the concept of the blockchain works – I won’t be explaining how the blockchain technology is implemented in detail, as that’s beyond the scope of this article.

Let’s get started.

What Is the Concept of Blockchain?

First, it’s important to understand two different, basic terms.

1. Bitcoin (a digital currency)

It’s important to understand that Bitcoin is not a blockchain. This is something that has many people confused. Bitcoin is merely a digital currency based on the blockchain technology.

2. Blockchain

Blockchain is the technology that enables the movement of digital assets – Bitcoin, for example – from one individual person to another individual.

So, what is the concept of the blockchain, exactly?

To get a better understanding, let’s look at an example of an existing problem that the blockchain attempts to solve. I’m talking about transferring money.

Imagine I (Bill) want to send money to my friend Jenny. Traditionally, this is done through a trusted third party (bank or credit card company) between us.

For the sake of the example, let’s say that I live in New York, while Jenny lives in London.

When I want to send some money to Jenny, I ask the third party to send it to her. In return, the third party will identify Jenny and her bank account.

When that’s completed, the third party will transfer the money to Jenny’s personal account, while also taking a small transaction fee.

This process typically takes 3-5 days. Some banks process such requests faster than others, but it takes some time.

Now, the entire concept behind the blockchain technology focuses on the elimination of that trusted third party, the middle man.

In addition, the blockchain aims to complete this process much faster than the current system – almost instantly!

Finally, the blockchain attempts to do this process at a much lower rate (very low transaction fees).

To read more, please click on the link below…

Source: What Is the Blockchain? The Plain English Version – Pixel Privacy