with Bart Simpson of The Simpsons is our buyer and Peter Griffin of Family Guy

Blockchain, to be clear, is not bitcoin. Bitcoin is generated on blockchain technology. Many people refer to blockchain as a bubble that’s bound to burst, and some even say blockchain is a scam. Uncertainty about the process is why many folks are suspicious of blockchain. For instance, “pump and dump” tokens are merely the lowest level of “playing around” with blockchain technology, and that concept makes up only one tiny part of the entire picture.

This article will ease your mind and provide a greater understanding of blockchain technology. After reading through this, you’ll know how to spot and ignore the more superficial explanations of blockchain.

Blockchain is a decentralized ledger.

Let’s clear up the difference between decentralization and the decentralized ledger, using two popular American cartoon characters. Bart Simpson of The Simpsons is our buyer and lendee, and Peter Griffin of Family Guy serves as our seller and lender.

In this example, Bart and Peter’s selling and purchasing behaviors are based on PayPal, and the process is centralized. Both the buyer and the seller have to trust PayPal and PayPal’s underlying technology. Any centralized economy is based on the mutual trust of accredited organizations.

Centralized transacting comes with obvious benefits, but the insufficiencies are just as obvious. All of PayPal’s transactions are powered by PayPal’s servers. Should a hacker bust into PayPal’s system, everyone’s money is gone — yours, mine, Bart’s, Peter’s, anyone’s money.

After the hack, what can you possibly do? Furious, you engage PayPal and declare: “I still have $40,000 in my account!” But because the server is down, PayPal’s ledger is wiped out, and you can’t prove that the company has $40,000 of your money. Kiss it goodbye.

Such real-life catastrophes led many individuals and groups to switch to blockchain technology. If the entire Internet stores your info, which proves that you have $40,000 in your PayPal account, then a server hack won’t affect your financial standing.

Again, blockchain is a decentralized ledger.

As a decentralized ledger, blockchain creates mutual trust. To decentralize is to distribute around different nodes. Let’s take this example of lending money:

1. Peter lends Bart $10.

2. Peter and Bart both recorded this loan on their personal ledgers.

3. Bart broadcasted the $10 loan from Peter to all the nodes on the blockchain.

4. All the nodes verified this loan and recorded it on their individual ledgers.

Once Peter broadcasted that Peter loaned Bart $10 to all the nodes on the blockchain, and every node recorded it, the ledger is almost inalterable. To change or wipe out the transaction, someone would have to change 51% or more of the ledgers on the entire blockchain.

When it’s time for Bart to return Peter’s money, and if Bart denies the loan ever occurred, Peter can summon the whole blockchain ledger and prevent Bart from escaping his obligation.

On their individual television programs, Bart and Peter have gotten themselves into many wacky and unusual business schemes. But even if Bart tells Peter, “Don’t have a cow, man,” Peter knows that the blockchain will keep these transactions secure and transparent.

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