The famous American physicist Richard Feynman once said: “If you are a scientist and cannot explain in a nutshell to a five-year-old child what you are doing, you are a charlatan”. Can you explain without hesitation how blockchain functions to your child? What practical applications does this technology have today? How can it change the world?
If not, we will tell how to establish contact with the child on a difficult topic in today’s article.
According to Buidlbee, everyone is talking about bitcoin and blockchain today – from your hairdresser to your friends who work in the market. Blockchain technology can be explained in such a way that even a 5-year-old child will understand it. But such an explanation would be quite unrealistic, as it would reduce the entire technology to a set of generalizations. If we really want to delve into blockchain, then we shouldn’t simplify the answer. And yet it’s not all that difficult!
But if complex terms are completely incomprehensible to your child, let’s try a super simple example.
Digital oranges
You decide to give an orange to your friend. Now it is in the hands of someone else. That is, both people – you and a friend – touched an orange and are sure that it passed from hand to hand. For such a simple action, both of you don’t need a third person.
But what if you have a digital or virtual orange in your hands? You pass it on to another person. How to understand that it has changed its owner and you will no longer be able to give your friend an endless supply of digital oranges? Maybe you made a few copies of the orange before and sent them to your friends. That’s why in this example, the exchange process is somewhat more complicated – the transfer of digital objects is very different from the transfer of physical ones.
Perhaps digital oranges should be noted in the ledger – a book that contains information about all the transfers of an orange from person to person. Since the objects are digital, the notebook must also be digital. Moreover, it exists somewhere, and someone monitors its completion.
What if we give everyone a digital notebook? So it will be on everyone’s computer. All transmissions of digital oranges will be displayed for each user. This system cannot be fooled, as villains copying oranges will not match the entries in other people’s notebooks.
Moreover, no one alone controls the entire process. The rules of exchange are prescribed from the very beginning, and they cannot be deceived. The system is completely open, so everyone can study all its aspects in more detail. This is how the blockchain and, accordingly, digital currencies work!
Finally, the transfer of digital oranges has other benefits. You can send both a whole orange and a very small part of it – 0.000001 oranges. Also, they can be transferred not only to a friend, but also to a girl or boy on the other side of the world literally instantly.
And what is the revolution?
When blockchain technology was first announced in 2008, it promised revolutionary changes in the way data is managed, transmitted and processed. It took the economy and business more than 10 years to understand this technology, to understand what its strengths and weaknesses are. And only now the first mature options for its practical application have begun to appear on the market.
To understand the potential impact of blockchain on society, and why many influential people are so fiercely critical of blockchain and cryptocurrencies, just look at the following simple scenario.
Imagine that I have a small electronics store and I start accepting bitcoin payments. And so, the authorities passed a law that says that bitcoin is banned in my country. But I can still accept bitcoin payments as the authorities have absolutely no control over the blockchain network and cannot block it.
If I don’t convert my bitcoins into regular money (such as euros, US dollars and other currencies), the authorities will not even know that I have them. So, if the bakery around the corner, the local supermarket, the pharmacy, and the dentist decide to accept payments in bitcoin, I should be able to cover most of my expenses without resorting to fiat money. As more and more companies and people start accepting bitcoin, there will be less need for traditional financial means in society.
Moreover, the blockchain is already actively used in cybersecurity, logistics, manufacturing, and is even planned to be used in elections. All this is because the blockchain is like a necklace. Each bead is a “block” or record of an action. This necklace – or “chain” – cannot be destroyed or destroyed. Thus, the blockchain is an indestructible digital record of actions.
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Now you understand what blockchain is? Would you be able to explain it to your kiddo?