When I was in the Marines, way before the Internet, I had a reputation of somebody fellow Marines could trust. It started out with some of them leaving $20 or so with me to "hold on to" so that if they got broke before payday, they could come to me to get some money. They knew that I would never steal it or try to deceive them by pretending they never gave it to me. As my reputation as a "solid guy" grew, more and more trust was given to me. They would rather give me the money to hang on to rather than put it in a bank because I could give it to them a lot faster than a bank could (this was before ATMs even).
Blockchain is sort of like building that kind of trust on the Internet. All your transactions are in a permanent database that cannot be altered. In a way, it's like doing business on eBay or Airbnb. You only want to do business with those who have high ratings - who are trustworthy.
Let's say you wanted to buy something from me for $100. You might say, why not just use cash? So we meet, I give you the item and you give me $100 in cash. What's to stop me later from claiming that I never got the cash? You might ask for a receipt but then I might claim that the receipt is fake. So you can see the kind of hassle that can be.
With blockchain, the exchange is done in bitcoin, permanently recorded and cannot be altered. Let's say you have 5 bitcoins in your ledger and I have two bitcoins in mine. So you give me 1/2 bitcoin. Now you have 4 1/2 bitcoins and I have 2.5 bitcoins in mine. The records of this are indisputable. A true peer-to-peer transaction but totally transparent. That is, thousands and thousands of computers are tracking the same transaction and recording it permanently. I will never be able to claim that you did not pay me.
Best of all, no banks or credit card companies involved (to take their piece of the action through fees).
Maybe this could be explained better but hopefully you get the general idea.
Very good explanation, thanks. Just last night watched the documentary, “Banking on Bitcoin,” so am wanting to understand more of the process.
Hey, Marine. Enjoyed our story, but somehow I don’t trust tech wizards to be Semper Fi :- )
In fact, the tech wizards are blocking my free speech these days and partnering with globalists who want to put me out of work.
One way or the other, criminals will find a way to scam people. And if the blockchain is theoretically “secure”, then it’s probably in the actual gateway to and from the blockchain where the fraudsters will focus their attention.
Yeah, it all seems cool. But I think we’re opening up a can of worms. I urge caution. The collapse of Bitcoin should make people think twice about blockchain.