Explained: Blockchain ( Read it before you use read.cash) Part 1

Block-chain explained will be divided into parts so the information provided doesn't turn into infodemic. I would try to simplify the technology through small posts.

Today in this post I would try to explain blockchain in simple and lucid language. Throughout the internet, there are thousands of blogs, videos explaining the blockchain technology, but unfortunately, most of those videos tend to confuse us.

Block-chain??

So post 2007 economic recession, trust in banks had reduced. These gave rise to a more decentralized network of money transfer. This network is called as blockchain.

Few words we will keep coming across

1. Decentralized

2. Ledger

3. Miners

4. Blocks

5. nodes

Why decentralized?

let's explain these things with an example:-

When we try to transfer money to our friend sitting abroad or anywhere within our country, then we take the help of a 3rd party known as BANK. It is a centralized authority. It maintains its own primary server where my details, my transaction details are all logged in.

So suppose I am in the USA and want to send money to my friend in India

So I send Raman who is in India 100$ using my "Bank Of America" account. In this process, the bank will charge some transaction fees and will take a few hours to a few days to reach Raman's account which is "State Bank Of India".

The problem we face here is that none of us know when the money will reach, where is my money right now? all we can do is trust the assurance given by the bank.

The bank between the two countries uses many correspondence banks to transfer money. i.e to say bank of America may transfer the money 1st to the bank of Switzerland, Then Bank of Switzerland would send the money to Bank of Germany, Then it may transfer the money to Bank Of Nepal, The eventually it may reach to State bank of India.

Therefore this process takes days, involves a lot of costs, and sometimes it even fails.

We don't get to know the detail because of its centralized. We have to rely solely on the information provided by our banks.

How Blockchain is different?

Blockchain is a decentralized network. which means, unlike a bank that has a centralized server noting down all details, in this, we eliminate centralized server. We have thousands of computer connected to each other through a peer-to-peer network (it means direct connection, no middleman)

Each computer (known as a miner) has a ledger or a register where transactions are recorded and updated every few minutes. So if I send money to Raman using blockchain. Then I would get to know the status of my money whenever I want becauses each computer would update the ledger. So from the point of its origin to the point of its destination, I will get each and every update and moreover it's way faster than the traditional method of sending money.

This is the end of part 1 of The Explained series. I would like to extend thanks to @scottcbusiness for being my sponsor. Valuable articles by @Cain @Telesfor @micropresident @arslankhalid has helped me to write this article.

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