Difficult concepts, without a doubt, but that can be explained in a simple way if we give examples that anyone can understand.
With that objective, I leave you here with some simple explanations so that a small child can understand what Blockchain is, what Bitcoin is and what all of this is used for.
Imagine that you have a book in which you can write important things. This book is special because every time someone writes something in it, everyone who has a copy of the book can see what they wrote.
It’s like you have a magical journal in your room, and when something is written there, everyone who also has that magical journal can read it at the same time. The magical journal is very easy to find, you can buy it at any store.
Also, it is impossible to erase anything from this book, so everything someone writes will be there forever.
That is the chain of blocks, a place where things are recorded forever, being ideal for storing things as important as the origin of food, or the exchange of money between people.
On the other hand, Bitcoin is a digital currency that is used on the internet to buy things or exchange money. It’s like the money you have in your pocket, but instead of having it in cash, you have it on the Internet.
For example, suppose you want to buy a toy in an online store. Instead of paying with cash, credit card, or check, you can use your bitcoins. You can also trade your bitcoins with your friends, just like you would trade toys or anything else.
Another example is if you want to send money to your aunt who lives in another country. Instead of having to pay high transfer fees and wait days for the money to arrive, you can send her bitcoins and she will receive them immediately and without having to pay any additional fees.
Every time someone buys or sells something with bitcoins, a text is written in the blockchain ledger, in the magic journal. In this way, everyone who has a copy of the book can see what has been bought or sold and make sure everything is in order.
In short, Bitcoin is the currency used on the internet and blockchain is the technology that allows it to work safely and reliably.
What can Blockchain technology be used for?
One of the most common uses of blockchain technology is as a book of digital accounting in which all transactions made with a digital currency, such as bitcoin, are recorded.
Another way that blockchain can be used is as a way to verify the identity of people safely on the internet.
Blockchain can also be used to store important information securelysuch as contracts or legal documents.
Blockchain technology can also help ensure that the votes in the elections are counted accurately and reliably, avoiding electoral fraud.
Blockchain can also be used in the health sector to securely store and share people’s medical informationsuch as medical records and test results.
Whenever something needs to be stored securely, so that it cannot be destroyed or tampered with, Blockchain technology could be used.