What if I told you that this is bigger than just making money. That we’re in the middle of a revolutionary breakthrough that can help solve world poverty.
For this post, I just want to simplify the meaning behind blockchain and how it can effectively impact our world.
So what is Blockchain?
The blockchain is a decentralized (log of data) system maintained on a network of computers, rather than a physical ledger.
Typically when you make a transaction, your money has to go through a “centralized ledger” aka a bank. With blockchain, your transactions will go through hundreds of computers that must approve an exchange of currency before it can be verified and recorded into this huuuuuge database. Wait a minute, my transaction is public?!
The integrity and the chronological order of the blockchain are enforced with cryptography. The distributed public ledgers will prevent any missed transactions, human or machine errors, or sneaky exchange that was not done with the consent of both parties involved.
It is an incorruptible computer program that operates themselves without a centralized authority. It is an economic ledger system of value that is fair and transparent. A system that you and I (Millenials + GenZs) are slowly accepting because global banking cartels and huge enterprises such as Youtube, Facebook, Google are taking away our power.
How can blockchain impact us?
The blockchain is a possible solution to combat hyperinflation, financial exclusion, and political corruption. It will disrupt all industries in finance, insurance, and law. Think Panama Papers and Paradise Papers. It will make supply chains transparent when you go food shopping. It will trace the source of contaminated produce. It will eradicate slave labor and put a stop to illegal fishing. Blockchain could track and reward those who have been recycling. It will transmit energy over long distances after a natural disaster. It can create a longitudinal health record for patients. It will change the way we use social media AND the media in general.
Madeline Mann, the head of People Operations Operations at a blockchain technology company, Gem, explained Blockchain in the simplest way:
Imagine you are back in first grade. Your teacher hands out gold stars for good deeds. The teacher makes one kid in charge of keeping a tally in her personal notebook of how many gold stars each student has. You all grow uncomfortable with this…is she giving herself more gold stars? She was absent the day I got my gold star, was it recorded? How accurate is her account? You all decide to change the system from centralized to decentralized. Everyone takes out their notebooks and copies down her account of the class’ gold stars. From now on EVERYONE in the class writes down when someone gets a gold star. Now everyone has their own record of truth and no one can cheat and give themselves more gold stars because when their amount is compared to what everyone else has recorded then it will be proven as a faulty star. This is the principle behind blockchain, it is an archive of actions that is spread across thousands of computers so that it is near impossible to tamper with the information.
Without using terminology like “nodes” or “ledgers,” a blockchain is a distributed record book. Each “block” or “line item” in the book is a transaction that is verified by thousands of other computers not just one person, bank or foundation. It’s basically the equivalent of sharing a photo publicly on Instagram to verify your outfit is smoking hot, instead of sending one photo to your roommate. You now have a record of hundreds of people verifying that your outfit is goals. It takes out the middleman, which makes it decentralized. Our current banking system is centralized. This means we rely on their private record keeping. Centralized banking is basically a controlling ex who tells you to change outfits because your dress is “too short,” according to “their records.”