Another example
suppose you have a Mango and you gave it to your friend.physically you've put your Mango on your friend's hand.
Both of you know what happened.you don't need a third person to be a witness to this event.
This Mango now belongs to your friend, you can not give your friend another Mango because you don't have any. Your friend however can give it to any one.
That's exactly how in person exchange would take place.
Now, let's move a head and say that you own a digital Mango.
You give this digital Mango to your friend.
Now the interesting part is how does your friend know that the digital Mango that he just received is his and not yours?
think for a second!
How does your friend know that you haven't sent it to another friend or kept a copy to yourself or didn't post it online to be downloaded by hundreds of people.
doesn't it look complicated? send a physical Mango was much easier. But with a digital Mango it is complicated.
The problem you just witnessed is called "Double spending problem".
think for a while, how you can solve this problem?
Maybe track Mangoes using a ledger. A ledger is similar to accountant book used to keep track of all transactions. This ledger in the digital world needs someone to keep track of it. We can keep say Mr Martin to keep track of it digitally.
Yaay! we solved the problem.
But there's an issue with it as well. what if Mr Martin added 10 digital Mangoes to his name. He can always do this since he is in charge of the digital ledger.
secondly, having Mr Martin to keep track of the digital ledger is like having a third party watching the transactions take place.
But we would like to replicate the environment where you could give a Mangoes to your friend without the need of any third party being a witness to the transactions.
How you can hand over the digital Mangoes to your friend in the usual way you handed over a normal Mango?
What if we give this ledger to everyone. like instead of Mr Martin in sole charge of the ledger, we can allow the ledger to live in everyone's computers.
All the transactions that have ever happened from day one till today will be stored in everybody's computers.
it would be also difficult to cheat. You can not give digital Mango to your friend if you do not have one. Because if you did, it wouldn't sync up with everybody in the system.
It would be tough system to beat if the number of computer are big in number. Also it is not controlled by one person so you can not add more digital Mangoes to your account.
for the first time in digital world, this is the same thing. All thanks to BLOCKCHAIN.
Now because blockchain is now open, anyone with internet connection can connect to it. There's no restriction on who can and who can't. Anyone can make a transaction of any amount.
Anyone can own and transact on blockchain. It can be a human being or a thing. it can be a car, fridge or a piece of software. to be continued :)
