Not one sentence. Sorry.
A blockchain is a decentralized, distributed and public digital ledger that is used to record transactions across many computers so that any involved record cannot be altered retroactively, without the alteration of all subsequent blocks. This allows the participants to verify and audit transactions independently and relatively inexpensively.
Blockchain is a “payment rail” --
A payment rail is a term used to describe a payment platform or a payment network that moves money from a payer to a payee. Either party could be a consumer or business, and both parties are able to move funds on the network. Credit card rails refer to the credit card payment system.
Blockchain is considered a newer type of payment rail.
So, to some extent, Blockchain is like inventing Credit Cards – or a new type of transaction method.
People do make money inventing stuff like that. But, as a speculative “investment”, I don’t think Bitcoin is a long-term winner. But Blockchain, as a math technique, can change the world.
Thanks to you both.
In simple lingo it sounds like a new way to exchange funds around the world electronically using a mathematical equation(s).
Now how the common person would use it is probably more complicated. Or could it be used as simply as a credit card is used now?
I wonder if the ultimate goal is to get rid of the cash transactions altogether.
A blockchain is, as you noted, a decentralized distributed public ledger. It can be used for many different purposes but at the end of the day it is a public ledger.
When a transaction is posted, consensus must be reached that the transaction is valid. Valid transactions are added to the ledger while invalid transactions are rejected. There are different methods to reach consensus. The two most popular are referred to as proof of work (computationally expensive) and proof of,stake (less expensive).
Blockchains play an important role when the decision making (ie. validation of a transaction) is not centrally controlled. For example, in a typical client server model the server is authoritative and thus a blockchain is not necessarily useful. In a peer-to-peer environment, however, there is no central authoritative model so a blockchain is very useful.
The mistake people make, IMHO, is that they presume all blockchains relate to crypto currencies, which clearly is not the case. Crypto is one such use of a blockchain but there are plenty of useful cases that have nothing to do with crypto currencies.
The big rush in crypto currencies plateaued in June 2018 when a report can out that some 80% of ICOs (initial coin offerings), predominantly on the Ethereum blockchain, were scams. Since then ICOs as a funding source have dropped 74%.
That’s not to say the market has evaporated. In fact, venture cap is now the primary means for funding blockchain, crypto, and AI projects. Of course that is now requiring founders to provide more incentives to the funding sources, but money is out there.
The plus side is this is making the marketplace grow up. It is inevitable just like the dot com bubble crash where folks where plugging smell-a-vision types apps and all sorts of silly things. I remember seeing business plans that were outright rejected if they did not include advertisement budgets and advertisement revenue at the same time. Anyhow, the markets are maturing and what we see is a consolidation taking place.
At the same time it would be short sighted to presume only the current blockchains have merit. We are seeing some amazing advances in blockchain technology on the horizon and expect,some really cool implementations to,be released this coming year.
So what does that mean? Well, when blockchain first started going mainstream people developed their solutions around the particular implementation of the blockchain. That no longer applies. Your intellectual property is not the blockchain. The blockchain is simply a technology you can use to implement your IP.
A great quote I recently saw is 1) your app must likely does not need the blockchain; 2) you cannot live without a blockchain; 3) when 2 applies you will not know you are using a blockchain.