A morning at your school with Blockchain

It was early morning at 8:00 AM at a School. It is required by the school authority for the students to maintain 80% Attendance. There were 60 students in that math class. At 8:15 AM, every day a Teacher comes in to mark the attendance of these 60 students in the class and submits it to the school authority. Teacher calls Every student’s Roll Number (Some Identification number), then every student has to shout out “present sir” in class, so that Teacher can hear it mark the attendance in the Attendance Tracker book

Photo by Avel Chuklanov on Unsplash

This article explains you the Blockchain with this simple situation and later on deals with demystifying Cryptocurrency.

Let’s see the same situation in couple of different ways

1. Teacher can come late to the class resulting in not taking the attendance on time at 8:15 AM
2. Any student may shout out his friend’s attendance to be marked along with his attendance when the Teacher doesn’t notice.
3. Teacher may have his son/daughter coming late, but due to relationship coming into picture the teacher may mark him/her attendance for her presence.
4. The Attendance Tracker is lost

In all of the above cases, There is some or the other problem if we think little bit about it and It’s because we’re humans, and it may happen sometimes.

Let’s take this situation little bit more serious!

What if the school authority has come up with the rule that every student should have 99.9% attendance. In case of failure, student has to pursue the same year again and is not eligible for graduation.

Do you think we will have chance to make space for such situations happening? Absolutely No.

What If?

All the students have the Attendance tracker sheet with them and all of them come on time and exactly at 8:15 AM they check for each other in the class to initiate the attendance marking process by guessing each other's Roll Number absolute correctly in the Trackersheet by dismissing all the external forces of time, relations & emotions aside.

Unfortunately, the only thing that works on time, and has no relations and emotions is a Computer.

Now

1. What if all the students were computers?
2. To mark each other’s attendance students have to do lot of math work and guess the Roll number, so they can get some reward such as a medal. At the same time all the computers have to know the Roll numbers to update in their own Attendance Trackers
3. All the computers have Attendance trackers with them to verify each other’s attendance.

That becomes the basic concept behind the blockchain.

Attendance Tracker — Ledger

A Student doing math — A Miner

Results of Math work to guess Roll Number — Hash

Each piece of data such as Present/Absent — Data or Block

Everyone are having Attendance Tracker — Distributed ledger or Decentralization.

Teacher Taking care of Attendance — Centralization

Photo by Clint Adair on Unsplash

Well, That’s fine. But where does the Blockchain Comes from?

All the 60 students can talk to each others because they have privilege of using sight for seeing and ears for hearing. But, if they are computers they are connected to each others with LAN or Wifi or Internet or any Network. The communication will be so fast, because there’s not ear, air, brain for taking much processing time.

The each piece of the Data(The Attendance) is called a Block. When one Student’s attendance(The Block) about his presence or absence(Validation) has to be taken place in the Attendance Tracker (The Ledger) after each student does math(A Miner) to find a Roll Number(A Hash).

For a Computer, it can traverse to each Block only with the help of links. When there are lot of blocks they look like a chain of blocks.

Like this as Chained Structure.

PrevLink Data NextLink
PrevLink Data NextLink
PrevLink Data NextLink

May be that can give you a brief picture about the BlockChain.

Cryptocurrency?

Now, a anonymous guy called Satoshi Nakamoto(pseudonym) has proposed this structure. When the students of our classroom do a math work, that is the miners do lot of computational work they are rewarded some thing called Cryptocurrency.

Now various Companies grew in this space and named its own cryptocurrency called Bitcoins, Ethers so on. Among which the Bitcoin became so popular.But the twist in the plot that makes Bitcoin valuable is that the Algorithm which runs this will stop after producing Bitcoins after 21 Million BTCs. Which makes it limited such as Gold, Platinum, Oil which are limited so implies to be valuable and right measure to use it as Value/Currency.

Photo by David Shares on Unsplash

How does it’s value Change?

Just like depending upon the oil that is produced everyday, Gold that is found everyday impacts over the price of Gold. Similarly, depending upon demand and supply of Bitcoins the value of it changes.

It’s a simple thing talking about the Demand and the Supply.

1. If the Demand is more and the Supply is less, the thing becomes more valuable.
2. If the Demand is less and the Supply is more, the thing becomes less valuable.

The same happens with the Bitcoin.

Hope this solves your quest to understand Blockchain and Cryptocurrency.