KOIOS BC-1.1.1 What is a ledger?


Very first section: what is a ledger? A blockchain is a “distributed”, “decentralized”, “ledger”. In this section we will explain what a ledger is. But before we start explaining what a ledger is,
you need to know the importance of a ledger: every time a ledger changes, society tends to change with it. So not only does “blockchain” offer a new way to record transactions, as we will later on show you, it also has a huge societal impact! Which makes this a very, very interesting time in human history, because we are at a tipping point of a possible new society. Blockchain basically is a “trust tool”, because it records transactions in a different way. Of course to understand this, you need to understand what a ledger is. And that we will do in the very next slide. So what is a ledger? A ledger in short is a tool to record transactions. It is a “tool” we humans use to record “transactions”. But what are “transactions”? “Transactions” are nothing more than (economic) activities where people “exchange value” So “exchange” means that the value goes from “one person to the other person” And “value” can basically mean “anything, as long as we (humans) deem it valuable”. So value often represented as money for example, but value can also be a house. A ledger is a “tool”. A tool can be a book for example, but is can also be a database. And it used to be a clay tablet in the very, very long history of ledgers, which we use to record the transfer of this value. So we’ve got a tool, in this case for example a book, which we use to record transactions. So imagine an empty book in front of you. An entirely empty book in front of you, which you are going to use to record transactions in. So what kind of transactions? You can imagine the following example: Just imagine that you are in empty room. And all of a sudden ten of your best friends pop up in that empty room. So what are they doing? They are standing a bit awkwardly. So you are stepping to the sidelines and you are just going to watch your ten friends in the middle of the room. And all of a sudden you will drop a bag of $100 in the middle of the room
and they will start dividing it equally Since they are all friends among them selves as well, everybody will get $10. And that’s where you start kicking in. Because you from the sidelines, with your book (=tool) starts recording. The first moment you start recording the names, the identities of your friends in your book, in your ledger. Behind that name you will note down $10 per person. So you’ve got friend A, friend B, friend C and they all got $10. Now all of a sudden they start exchanging these dollars. So for example: “can you pat me on my back, I have an itch there” “Yeah, sure. But it will cost you a $1” “Ok, so I will scratch your back” “I will give you a dollar” So the back scratching isn’t recorded. But the switching of the dollar from friend B to friend D in this case needs to be recorded. Not only does is go physical, from hand to hand, so friend D has $11 and friend B has $9. You will also need to record this in the ledger. You are on the sidelines, witnessing the transaction, so you record $ -1 at friend B en $+1 for friend D. So the ledger in this case is the tool that you use to record the transfer of value. And value in this example are dollars, but it can be many things. So think for example of the two main categories: Tangible assets & intangible assets. Tangible assets are things that you can actually touch and intangible assets are things that you can’t touch. An example of tangible assets are cash money, so for example a bank note over here, a car, a house. Things you can actually touch. And intangible assets, another example is also money, but not this type of money, but money on your bank account, which is only available in the digital ledgers of banks. Other examples are copyrights, or a right to read an online book. Stuff like that. So they only exist in the ledgers. The intangible assets only exists in these kinds of ledgers. Let me check for a second: did we cover all the things? Uhmmm….yeah Important here is that these ledgers are tools to
record economic activities / transactions / the transfer of value. And a ledger can take different forms, like a book, a database or a clay tablet. Whatever you deem fit to record the transactions. Let me check: jep, that’s a wrap for now. See you in the next one, where we explain WHY ledgers have an important role.

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