How to explain blockchain to a 5-year-old

In the previous tutorial, we discussed public key encryption, hash functions, and P2P networks. If you haven't read it, you can go and check out that article, because it explains these "difficult" concepts in a very simple way.

In this article, we will mainly talk about blockchain. The article quotes some resources on the Internet, and the sources are mentioned at the end of the article.

In the next article, we will set up our development environment in just one minute! (Here)

We, sitting on the bench in the park, are a pair of good friends. You are Alice and I am Bob.

I have a toy, but you don't.

I gave you my toys.

Now you have a toy and I have lost it.

Simple, right?

I have a toy and I give it to you. We don't need a third party to participate in the transaction. Now, I can't give this toy to anyone else because I have lost it. But you can give it to anyone you want, and then they can give the toy to anyone they want...

Digital Darth Vader

Now, suppose I have a digital toy.

I gave you this toy.

etc.

How do you know I didn't give the toy to Charlie first, as an e-mail attachment, or that I saved a million copies of it on my laptop and sent it to everyone on the Internet?

So sending a digital toy is not the same as sending a physical toy.

This problem is called the double payment problem (also known as double spending)!

But isn’t the solution simple?

We can maintain a ledger that records all transactions.

Therefore, all transactions of digital toys will be recorded in this ledger. Then, we let someone be responsible for it, such as Danny.

Problem solved, right?

No.

Because we don't know if Danny will cheat and transfer the digital toys to his own or his girlfriend's account at will.

Also, why do we need to involve Danny in a deal that only involves you and me?

Blockchain debuts

If everyone had a copy of this ledger on their computer, every transaction that ever took place would be recorded in it.

This will be very difficult to corrupt, and now Danny won't be able to add toys of his own making because it would make his ledger mismatch with everyone else's.

Everyone who has a copy of the ledger is rewarded with digital toys by verifying transactions. This is how digital toys are generated.

This is the blockchain. We can think of these toys as Bitcoin or any other blockchain assets.

Anyone can access this ledger.

Now, we can maintain our account balance without relying on a third party (Danny).

We also don't need to worry about double spending.

This is a very simple story, but if you can understand the principles, you will know more about blockchain than many people in the industry. And to build decentralized applications, mastering this knowledge is enough.