Let me tell you a story.
One day, a couple I know was having lunch with their friends who had come visiting after a long time. The couple had a boy named Keshava and their friends, also a couple, had a little girl who was playfully called Pitu.
So Pitu comes along and says “Pappa, mamma, listen na. I want to lend Keshava ten dirhams, but I don’t have a bank account to transfer it from. I am not that old yet na mamma! Can I give it to him in front of you all, so that when the time comes, one of you can remind him to return this to me?”
“Why not?”, replied mamma. “But wait…what will we get in return?”
“But I don’t have any more money mamma. Can I give you a hug instead?” said Pitu, her eyes twinkling.
“I agree!” said papa. The others at the table wasted no time in nodding their heads, and so Pitu handed over the ten dirham note to Keshava, who looked pretty pleased at his newfound fortune. She then headed to her mamma and gave her a tight hug.
The word spread quickly, and within a few days, all the neighborhood children had made a beeline to the couple’s house, eager to get their little transactions “vetted”, and returned the favor with cute hugs, which of course got more parents to the table…The payoff was more than commensurate for the task after all.
Then a set of parents got an idea, and started a “round-table” of their own. So now kids could go to either, or both houses. More options, so more kids jumped onto the bandwagon.
If you are wondering where this story is going – it isn’t. That’s the end.
Now, lets call the parents the “nodes”, and the kids the “users”, who of course had “transactions” to carry out. The table in the house, where the parents sat, can be called the “bitcoin” network or protocol, and the round table in the other house can be called the “ethereum” network.
And what about the payoffs, I mean the hugs? Well, ladies and gentlemen – that is Bitcoin, and Ether. You commonly know them as cryptocurrencies.
You have just got introduced to the world of blockchain.
Nearly everyone I have spoken to has been aware of crypto (less of the underlying tech), but not many seem to understand it. The story above is the basics – and if you understand the story, you pretty much get what the fuss is all about.
More importantly, goes to show that everything can be understood, if you get down to explaining it in the simplest way possible, without jargon and unnecessary complication.
Try it out with other concepts – it always works:)
See you tomorrow!