Yep! That’s Blockchain

If you have to remember only one thing about blockchain is that it’s all about getting rid of the switchboards. Now: remember those phones? Some of you might be too young to actually remember them, but you must have seen them in the museums. They work this way: you have a phone, you had a switchboard, and then you have the other phone. Technology around those switchboards have become a little bit better but basically, it’s the same as this Long Distance! Within a few seconds can select from countless routes the one that best can take this speech to faraway places. Long distance represent more than the activities of switching and routing, they refer first of all to the routes themselves… Then, in 2003 came skype. Voice over the internet was born. The switchboard disappeared. Your voice got chopped into millions of little packages that were sent all around the cyberspace and across the other side, it got reassemble for your conversation. “hello”! Voice over IP is what changed phone conversations forever. It got rid of this switchboard. Look at what I can do now. I’m in Europe, I’m calling Australia: hi! South Africa: “Howisit” Russia: “Hi!” Brazil: “Hi!” and Kentucky: “Howdy”. Thanks Guys! Blockchain is very similar to this but instead of voice conversation it’s text being written on a ledger. a ledger is a kind of a big book that tracks transactions. When you go to sign in into an office building with your name and phone number that’s in a ledger. My mortgage is written on the ledger of my bank. So how does this work in the analog world – in the traditional world. Let’s see and compare: you have phone – switchboard – phone. you have salary – bank account – cash. you have medical record – archiving system – Doctor Or you have coffee beans – – tracking system – one hundred percent organic Ethiopian. You see you always need a switchboard in the middle to manage the information. This model is prone to fraud and risks because people get get their sneaky hands onto the switchboard and change the information on the ledger. Blockchain gets rid of the switchboard by slicing the ledger in millions of little blocks shares across the world, copied all over the place, and each block knows which other block came before it. So when a new transaction is done on the ledger, that block will be checked by the public ledger distributed all around the world. Once you have multiple validation that it is valid, it gets approved. Okay that’s a little bit hard to grasp right? So let’s go back to the phone example. With voice over IP, your voice was split in millions of little packages and spread across the internet. You cannot “hack” or change that voice because you’ll never be able to catch all those little packages. It’s completely distributed. The same way you cannot hack or change the blockchain – or the blocks because they’re all over the place. They’re copied all over the place and multiple parts of the systems validate and trust that they are good. Once something is written on blockchain, it can never be changed or erase; it’s there forever. So in a blockchain model, you would have money belongs to the employer – money belongs to the employee. There’s no bank. Or I take my own medical record – and I make it visible to my doctor. I see who gets to see it. Coffee beans are at the plantation in Ethiopia – coffee beans are in transit in Djibouti – then as a roasting company in Italy – and then they are in a supermarket. I can prove the chain of transport all the way back to this organic farm. I can see, in blockchains, the transaction of all those steps. By having an open letter, distributed in millions of copies encrypted and verified by the network itself, it makes all the “switchboards” completely irrelevant. But most importantly, it can change the way things work! Look at what I can do: I’m still in Europe and on my phone I have Bitcoin money. It’s real money. Via blockchain, I will send the equivalent of 1$ dollar to my friends as a thank-you note. Australia? “Yep! I got it” South Africa? “Yes! I Got it” Russia?” Got it” Brazil? “okay got it” Kentucky? “oh I got it!” No banks, no currency exchange, no switchboards. Just a ledger that says that my money – a bit – of it now belongs to those people directly. It’s super safe because everybody’s got a copy of that public transaction and they can all verify the blocks are all valid. And this is disrupting a lot of things because you don’t need the middle part anymore. It provides absolute trust between sender and receiver. It’s like millions of little blocks, that create a chain of transactions in a public ledger. No more switches, no more middleman, and everybody owns the ledger!

7 thoughts on “Yep! That’s Blockchain”

  1. I remember those phones. In 1984 there were 384,000 switchboard operators working for American Telephone & Telegraph (AT&T). When was the last time you talked to a telephone operator. In 2009 while working in Guatemala City, I phoned and faxed the office in Houston, TX. I did not talk to a operator. In June 1995 while living in a apartment in South Houston, TX, I talked to the Southwestern Bell Operator about a call to Galveston, TX. I was trying to get out of the monthly bill charge to me. The call was a long distance change of about $2.

  2. Thank you for making such a clear explanation of BlockChain! This will disrupt so many industries…… Thanks Lloyd!

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