Blockchain is a network created to enhance digital asset exchanges. It is digital, secured and doesn’t require an intermediary. Imagine Adam wants to give a chocolate [money] to his school friend Abraham. But in order to give Abraham, Adam needs to go to school [bank] and so does Abraham to receive the chocolate. But with Blockchain, Adam can give the chocolate to Abraham from his home without going to school and likewise Abraham can receive the chocolate from his home. So how does a Blockchain work? A person’s transactions are recorded and stored in a block. As more transactions occur, more blocks get created and connects to form a chain of blocks. Think of a transaction as a Lego brick. As more transactions take place, more bricks are placed on top of each other creating a tower. If a change has to be made in a transaction, it should be made by placing another brick on top of the tower, or else the tower might collapse. Blockchain has a function called Decentralization, in which there isn’t simply one tower, rather copies of the same tower built by different kids [computers]. And towers should not be in different sizes than the other to reduce the chances of cheating [Fraud]. Let’s imagine these bricks are special, the studs on top do not have similar shapes [hash-codes] nor do the holes at the bottom. This is to give it uniqueness, so that no one steals the brick! [Cryptography]. Using this foundation, Bitcoins and other cryptocurrencies took shape and might even change how we trade in future.
