Explain Blockchains, Cryptocurrencies Like I'm Five

#explainlikeimfive

Cryptocurrencies and Blockchain are getting huge spotlight from last few years.

I googled, read some articles but couldn't understand how these things actually work.

I want to understand how Cryptocurrencies and Blockchains actually work!

Thank You 😀

Top comments (9)

Anthony Dreessen • Aug 20 '18

Tux0r gave a good explanation on blockchains and summed up my own feelings on cryptoCOMMODITIES pretty well, but a little bit more info about what makes a crypto commodity different than a regular one.

First, a quick term: a "Ledger" is the term for a copy of the database/hashsum of the database of the transactions

Each member of the blockchain has a "wallet" this is the ledger that says how many coins belong to each wallet (including itself)
solving a complex computational problem allows you to add coin to the wallet (this is generally done automatically using bitcoin mining software)
any transaction between wallets is done by confirming that the transaction is possible by asking the number of ledgers. Different coins are set up differently, but I believe that Bitcoin uses a simple majority of ledgers.
The transactions are "anonymous" because the wallets are not personalized

Palash Bauri 👻 • Aug 19 '18

So we can create as many Bitcoins as we want?

bkmalan • Nov 23 '21

The total amount of bitcoins that can ever exist is 21 million, Of which ~18M is mined.

Palash Bauri 👻 • Aug 19 '18

Thank You for Explanation! 😁

tsmoffat • Aug 20 '18

The best way I've seen cryptocurrencies described are "Imagine if you left your car idling overnight so it could produce fully solved sudoku that you can use to buy heroin"