Your one-stop shop for all blockchain information
It’s no secret that blockchain is a big deal right now and has been for a while now. It’s only about time that you understand what blockchain technology is and get on board with the rest of the world. Come on people it’s 2018!
Let’s start off with explaining what the technology is and what came from it when it was created by an unknown person(s) who has been given the name Satoshi Nakamoto. Nakamoto is also credited with the whole idea of Bitcoin being used as a decentralized peer-to-peer system for handling financial trades/exchanges.
What is Blockchain Technology
The idea behind a P2P platform is to cut out the middleman or third-party and only have the two people that are involved in the transaction. Thereby eliminating the extra cost of that middle person. Plus there doesn’t always need to be a third-party to make sure a transaction is complete. For example, if I have a piece of gum, and you ask for that piece of gum, I give you my only piece. It’s pretty simple at this point, I had a piece of gum but then I gave it to you. So at that point, you have the gum and I have nothing, and therefore I have no other pieces of gum to give away to anyone else. But now you do and you can do whatever you want with that piece of gum (thanks to Nik Custodio for the great analogy).
So now that we have understood the gum analogy let’s plug-in crypto terms, including blockchain technology and bitcoin. It’s the same idea if I have one bitcoin or another digital coin and I give it to you then you have it, and I can’t give any others away because I don’t have anymore. But there’s also no middleman involved because there’s simply no need. In other types of transactions a middleman will come in just to make a profit or commission and at times it can cause problems. This is the peer-to-peer type of system that was mentioned. The blockchain is decentralized from all other systems including the government.
What is Ethereum
Ethereum, similar to blockchain but with a slight difference, is a technology that works with smart contracts. To add another layer to the technology there are smart contracts that assist with the crypto exchanges. Like other blogs and articles have said, a great way to think of ethereum technology is thinking of a vending machine. What we mean is you put money into the vending machine and you will get out a snack or drink or something else. But the idea is that you put money in and get something out in exchange. There always needs to be a give and take for smart contracts to work to their fullest potential, and if something seems off then the contract won’t go through and refunds will be made. When it comes to crypto and other technical terms it’s easier to think of simple real-life analogies.
For more information about getting started, and just understanding bitcoin, blockchain technology, and ethereum, check out these articles!