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RE: BLOCKCHAIN FOR DUMMIES - what would be your explanation? [question from my recent interview]

in Project HOPE5 months ago

Because I like to be funny how about a funny answer? Blockchain is like the social media of money. On social media, people post things as proof of their activities, whether they are trips or only some random thoughts. You know the saying "pics or it didn't happen".

Blockchain is exactly like that, but instead of pictures, the proof that something (meaning a transaction) happened is a long string of numbers and letters. Depending on the blockchain there are many ways this string can be obtained, but the general idea is that there are a bunch of people that look at your transaction and decide if it's valid or not, in the end, they record it in a sort of archive. This archive is called the blockchain, it retains all the past transactions people did on the network.

In a way, you can say that the validators are giving you hearts 💖 just like on social media, thus proving you post(transaction) is great(valid). Another thing that resembles social media is that, in public blockchains, everyone can become a validator. However, for most blockchains, you're going to need to have some resources in order to be able to validate transactions. On proof-of-work blockchains, you're going to need performant hardware, while on proof-of-stake types you need to hold a certain amount of their native currency to become a validator. Those are the two main consensus mechanisms.

What's a consensus mechanism?

You can think of a consensus mechanism as a like/dislike ratio. On YouTube for example, if a video has 95% likes and 5% dislikes, the consensus has decided that the video is great. But why do people dislike a great video, and how is it similar to blockchain?

There are many reasons why a validator might consider a good transaction invalid or a bad one valid. They range from a malfunction in the system, like how you meant to click like but you hit dislike by mistake, to foul play, or how we call them on YouTube, haters.

A consensus algorithm is meant to not let the haters dictate the fate of the blockchain. As their name implies, the first consensus type makes its validators work hard, which is why you need performant hardware, while the other one is based on the idea that if you've got money in the game you won't be tempted to try to rig the system.

This would be a short introduction to blockchain systems and how they work, without having to understand any of the technical stuff that happens in the background.

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 5 months ago 

Thank you for this amazing comment @alexbalan

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