Want to explain to a toddler how Blockchain protocol works or your father asked you recently about blockchain or cryptocurrency stuff?
Here, I’ve tried to explain it in 6 simple steps for different persons in your life.
For your toddler –
- ‘A’ wants to send money to ‘B’
- A block is created representing a transaction
- Block is broadcast to every node(miners) in the network
- Node verifies the block and create a consensus
- Block is added to the existing chain
- Money moves from ‘A’ to ‘B’
For your manager –
- Your cousin Seema in the USA wants to send money to you in India and she doesn’t want to put his hard earned money in the hands of some middleman like banks and wiring service providers for which they take a ‘brokerage’.
- Seema sends you some bitcoins which get recorded in form of a ‘transaction’ over the bitcoin cryptocurrency network.
- The ‘transaction’ that ‘Seema sent some bitcoins to you’ is shared with everyone in the network in a secure way.
- Every node in the network reads this ‘transaction’ and actually verifies that Seema has actually sent some bitcoins to you.
- When all the nodes or miners have created a consensus that this transaction is legal, it gets added to the public distributed ledger.
- You get your money without any middleman in secured, fast and anonymous way.