Understanding Cryptocurrency For Beginners
Clarifying Examples
In efforts to clarify your understanding of how cryptocurrency and blockchain technology work, here are a few comparable examples that parallel how cryptocurrency and blockchain technology work.
Example #1: The Internet
Most of us are familiar with the internet, in fact you're reading this right now via the internet. The internet is made up of billions of computers that are digitally connected via internet satellite and broadband technology.
In order for one to hack or shut down the internet, one would need to break into and shut down billions of computers, satellites and broadband connections. By tampering with just one computer, the internet is far from being hacked as a whole platform.
Blockchain technology records cryptocurrency transactions and stores cryptocurrency data in a way that is similar to how we are all connected to the internet.
Each individual computer is to the internet, what a node is to blockchain technology. Each individual user of each respective computer is to the internet, what cryptocurrency miners are to blockchain technology.
In order for a transaction to be verified and posted, the majority of the nodes need to have verified the transaction before it is published to the public cryptocurrency ledger of transactions.
Example #2: Microsoft Word Docs vs Google Docs
We're all familiar with Microsoft Word and Google Docs. Both are pdf document creators that allow us to write and produce documents digitally. What is the difference between the two?
Word Documents are housed in one location. If I create a new word document and title it "Grocery List", only myself or anyone who has access to my computer would have the ability to change or alter that document.
Google Docs are unique in that they allow you to create a pdf document, and share, edit and change in live real time
among many users at once. If I create a Google Doc and titled it "Grocery List", and shared it to each of you individually, we could all access the document and change it as seen fit.
Word documents are to bank statements, what Google documents are to blockchain ledgers.
The blockchain technology allows everyone to view and access the already verified transactions, who cannot be altered or changed once added to the ledger. This makes it near impossible to alter, duplicate or hack any transaction that has been verified and posted to the blockchain ledger.
