Blockchain For Dummies

Published in

Backyard Programmers

4 min readNov 3, 2022

Blockchain and Cryptocurrency are the new buzzwords of Genz. I think knowledge without understanding is meaningless because it is information, not knowledge. The information doesn’t have meaning on its own, does it?

This scene from the movie “The Matrix” always intrigues me to know more and have a deeper understanding. The blue pill describes a continuity of the current state of life i.e. living life without knowing its meaning or running away from the truth in order to stay as is. The red pill is described as the solution to knowing the real truth in life.

So today here is your red pill for blockchain, to you understand this in the most simple way I can.

Assume that there are two individuals: Bob and Alice. Bob lends Alice some money, and Bob records it on a document that Alice has signed. After a few days, Alice disputes the existence of such a document and asserts that Bob faked it. It would now be challenging for Bob to demonstrate that Alice genuinely owed him money.

In this example, Alice and Bob are two nodes.

Consider the same situation now, but this time it’s a society. As a result, “k” pairs of people are interacting with one another. And that piece of paper is the only evidence each duo has. Kate offers a remedy after considering this situation. She advises that the entire society keep a shared journal of transactions. She chooses town hall as the location for all conversations. Every couple records their transactions in the shared notebook, which is subsequently stored securely. People are happy with Kate as their leader and accept her.

That notebook can be called a database.

But the notebook gets wine on it one day. The notebook is now impossible to read. Alice takes advantage of this circumstance and refutes taking money from Bob once more.

This is the problem databases face: a single point of failure.

Angered by this issue, Kate finds a different remedy. She advises keeping several notebooks. She selects a few reliable people from the community and gives them each a notebook. Now Kate tells some of those reliable people to record every transaction or exchange that occurs between two people in their notebooks. The information is therefore repeated in the notebooks. Now, even if one notebook is lost or destroyed, it’s likely that the collection of other notebooks will still include all the transactional data.

This is a distributed database, and multiple notebooks are numerous nodes.

But the following day, a new issue appears. Bert, a friend of Kate’s, owes a lot of money to various members of society. When he asks Kate for assistance, she grants it. She tells everyone who has a notepad to cross out the lines where Bert received the cash. Based on the notebooks, Bert is now debt-free.

This is the problem with distributed databases — they are centralized. That means one single entity owns all the nodes and resources and can make changes as they deem fit.

When the members of the society know of it, they remove Kate from the leadership.

They choose to each keep a notebook. Every time there is a transaction between any two individuals, all the residents of the town gather and record it in their individual notebooks. There are therefore n notebooks in the community if there are n people, and no one person has authority over how the transactions are represented overall. This is decentralization.
They also decide to never remove or delete an already mentioned transaction from the notebook. This is immutability.
Now, every person in society must make the same adjustment when members of a different group, let’s call them group CHO, attempt to alter a record in their notebooks (as mentioned in the first point above, all the people write all the transactions in their notebooks). All of the other participants see that the transaction proposed by group CHO is incorrect before it is written. They thus recognize that CHO is attempting to engage in fraud. They consequently dispute that transaction and omit to record it in their notes. Additionally, they resolve to bar Group CHO from participation in the group going forward. This is how consensus is formed, and voting is done to decide the validity of a transaction on the blockchain.
A very enthusiastic kid suggested that the transactions form a chain, so they decided to call the collective set of fully replicated, decentralized, immutable notebooks Blockchain.

then, okay. The simplest illustration of blockchain I can think of is this.

Blockchain is a decentralized, peer-to-peer, immutable storage network that is free from censorship and regulation due to the lack of a central authority. A majority of nodes vote on each written transaction, and it is computationally very challenging to change something that has already been recorded in the chain.

Hope this is helpful in making you understand the terminologies and concepts. If this encourages you to know more about the blockchain, these links will be helpful.

For any doubts and suggestions, you can reach out on my Instagram, or LinkedIn. Happy Coding!

I will well appreciate one of these 👏

Blockchain For Dummies

Written by Debanshu Datta