Blockchain for newbies – simple explained
Blockchain is the new buzzword various entrepreneurs, manager, developer and nerds use in several conversations. In my last post i described the research about the google trends for our website project. I found out that there are 1 million search inquiries for blockchain each month. Crazy, right?!
What does that tell us?
Blockchain overcame the status of a marginal topic and got fully integrated in our society. Steemians use the blockchain by posting, curating and commenting on a frequent time frame but I am not sure if everyone knows what it really is:
There are several definitions out in the web which are not easy to understand and furthermore quite dull. When people try to get more information about blockchain and surf the web.
The result: they are most of the times more confused than before.
I’ll try to briefly explain the basics without using technical terms and give an overview of several fields where this application could be integrated in the future.
Fun fact before we start: The math teacher of Leonardo Davinci, Luca Pcaioli, described double bookkeeping as we know it today back in the 15th century.
Let’s begin
The blockchain is a distributed database or ledger, which we will call “shared register book” for simplification reasons in this blog. The term new block is called new entry in the register book.
The first important thing to mention describing the blockchain is that the register book is shared along the community. That means copies of the exact same register book are stored on several personal computers and business server farms around the globe. Given the fact that there are numerous duplicates all around the world, the register book is “decentralized” – not stored by only one intermediary.
Source
The application of the blockchain has already touched several industries but since we want to simplify it, we take a simple money exchange as an example. Chiara wants to send me a couple of bucks since she likes my blog. This transaction writes a new entry for the register book and gets distributed to all computers and servers which have a copy of the register book. Before approving the transaction, the computers authorize the transaction and finally agree (or disagree) that everything is legit.
Note: Each copy has to be perfectly equal to process the transaction.
The above described process can be compared to hundreds of witnesses perceiving the transaction in real life. They observe how Chiara kindly hands me the money, as well as the right amount and finally concur on this process.
Which gap does it fill?
Trust! Since the financial crisis and the bankruptcy of several banks, a tremendous amount of people have been loosing their faith in financial institutions. Besides the economic turmoil, several innocent citizens and families lost huge amount of savings. Which alternative do they have?
The blockchain does not need an intermediary, since the register books are held by the community. Moreover, entries are irreversible, meaning that when Chiara requires her money back the last entry will not be deleted but a new register book entry gets created.
Let’s suppose Chiara has criminal intension for a moment, and manipulates her copy of the register book claiming she gave me much more money. This sneaky approach would not work within the blockchain because the duplicates around the globe would unveil the scam and not authorize the transaction.
Are there other application fields?
Sure! There are several fields that could use a trust boost in our current society, which are currently regulated by intermediaries. However even if there are tremendous opportunities to implement the blockchain, we cannot just eliminate intermediaries in a second which were part of the society for several centuries.
Another use case example would be buying a house. The process or the ownership is also registered in a “ledger”. The ledger lies in institutional force and could be simply altered. With the blockchain technology potential purchaser do not have to be anxious since the records are immutable.
Furthermore, it enables rapid access to the information because it is stored digitally. Another advantage is that the interested person has the possibility to see who entered new entries to the register book and at what specific time. Moreover, it offers the chance to keep a whole record of a house by implementing following participants: real estate, architect, owner, builder, insurance, contractors and the government.
Other famous application fields are the manufacturing sector, food, smart devices and many more.
In all places where you see a lack of trust the blockchain could be implemented. The solution and variations are as big as your imagination.
In a nutshell the blockchain provides the opportunity to save time and minimize friction & fraud.
I try to improve my writing skills with every blog I write. I set myself a plan that I add a feature with each blog. I either find them on the internet or other Steemians recommend them to me. In this blog I used the following recommendation:
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Keep up the positive vibe in this community and keep on steeming
M
You have a 50sp delegation for the next 4 weeks from me and will get a MinnowBuilder upvote on a daily basis until you become a Minnow as long as you keep producing quality content. Take a look at this post for details:
https://steemit.com/contest/@thedarkhorse/free-delegations-for-30-days-awarded-to
Congrats on your opportunity to grow by My friend @thedarkhorse. I wish you well and Will keep in touch !
Gr
Britt
Thank you very much. I feel honored and try to improve with each post :)
Hope to see you around.
M
You reached a very great Steem helper in @thedarkhorse, and the @pifc is great too.
Maybe a tip I use : Steemify its a Free app and it gives notifications about your Steem account