Thread by @akashcodes

The Blockchain ⚡ - Explained Like You Are 5 😀!

The blockchain allows you to safely and securely transfer money without the need for a central authority or trust.

Here's a thread on what could be the greatest invention of mankind 🧵👇:

#Blockchain

1. What's the problem 🤔?

Imagine that I'm going to sell a house to my friend and he gives me a downpayment on the house before he gets ownership of the property.

What's stopping me from running away to Antarctica and using the down payment for a luxury igloo 😂?

My friend has to either trust me, or we go to a 3rd party(like escrow) which locks the downpayment until I give my friend the keys.

What happens if the 3rd party runs away with the money?

We can't really trust strangers, nor enforce a contract as that takes a lot of money.

2. Our Savior 😀

With the blockchain, we write a few lines of code and deploy a contract which handles the down payment.

Both the sides can check the logic to make sure there isn't anything sus 😒.

Once deployed, the contract can't be changed and the house can be sold safely

3. How does this work 🤔?

The blockchain uses a ledger(record) to store the transactions.

The ledger isn't stored in a secure underground server in the middle of anatartica, as that would not be decentralised.

It's shared across computers which have a copy of the ledger.

Each computer or node stores data and executes computations.

Whenever a new transaction is done, each node verifies and secures it.

A group of transactions form a block which is then added to the blockchain.

Think of the blockchain as a book, and each block as a page.

All the transactions are hashed using cryptography

Therefore, if you change even a letter, the has changes.

Each hash stores the previous hash, so the entire chain breaks if a hash is changed.

The blockchain is like a linked list. Those hours of interview prep are now useful.

TLDR;
Blockchain is:

1. Decentralized - no central authority
2. Transparent - Anyone can see the records
3. Secure - It's hard to change the data due it's decentralisation
4. Immutable - Can't be changed once it's added

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