Blockchain is such an important new technology which may change the world as we know it. Unfortunately, most people are confused because of the incomprehensible “techno-babble” flying around. Here are a few definitions that will help you better understand this technology.
Blockchain: “It’s a cool new type of database.” Sorry experts, that’s really the bottom line. “You know how you buy something with a credit card and MasterCard keeps track of what you bought, who you bought from, how much you owe? Mastercard tracks this in its own database. A blockchain does that without need for Mastercard, thereby reducing costs.”
Sure, we all know there’s a bunch more, but people get so enamored of this cool new technology, use technical terms, and make it unnecessarily confusing.
Distributed Ledger: “There are 10,000 copies (OK, numbers vary but there are a bunch of copies) of this database around the world, and they aren’t secret. Anyone can maintain a copy of this database as part of the network (Etherium network, Bitcoin network, etc). Yes, even YOU could join these networks and have your own copy.”
Public ledger: “This is really important. Anyone can see the things you buy if it’s tracked on a blockchain. Don’t worry, though. Your name can be hidden.” Seriously…who really knows what a ledger is? Techno-geeks come up with a cool new technology and start comparing it to handwritten books from a century again????
Mining: “In fact, by having all these copies, no one can cheat because their copy would be the only one different. People, called miners, are checking all the time and if one or a few of the copies disagree, it will quickly be found out. Miners get paid to make sure there is no cheating.”
Hashing or Cryptographic code: You know how most websites say “https” for “secure”? And you don’t really know how that works or exactly what it means? Hashing is like that. It makes certain parts of the blockchain database into a code. The details aren’t really important to understanding this type of database.
Public/private blockchain: “We talked about the public ledger. Sometimes companies make their own private blockchain (database) that only they can see. Kinda like many companies have a private website (intranet) vs something that everyone can see (inter-net).”
Public Key: You know when you’re on Facebook, you’ve got a name that shows on your account? That’s kinda like your public key. It’s what you can share with other people so they know who you are.
Private Key: That’s more like your login information. Don’t share this…
I’m sure the techno-whizzes will disagree, but for most people, this is probably all they need to know.