There’s an assumption when some newfangled, whizbang invention hits the market that we’re all onboard with it – hell, I’m still trying to work out what What’s App is.
So when someone actually pauses and takes the time to explain to us layman plebs, it is much appreciated:
A blockchain is essentially a distributed database. The technology first appeared in 2009 as the basis of the Bitcoin digital currency system, but it has potential for doing much, much more—including aiding in the development of platform cooperatives.
Traditionally, institutions use centralized databases. For example, when you transfer money using a bank account your bank updates its ledger to credit and debit accounts accordingly. In this example, there is one central database and the bank is a trusted intermediary who manages it.
With a blockchain, this record is shared among all participants in the network. To send bitcoin, for example, an owner publicly broadcasts a transaction to all participants in the network.
Participants collectively verify that the transaction indeed took place and update the database accordingly. This record is public, shared by all, and it cannot be amended.
This distributed database can be used for applications other than monetary transactions. With the rise of what some are calling “blockchain 2.0,” the accounting technology underpinning Bitcoin is now taking on non-monetary applications as diverse as electronic voting, file tracking, property title management, and the organization of worker cooperatives.
Very quickly, it seems, distributed ledger technologies have made their way into any project broadly related to social or political transformation for the left—“put a blockchain on it!”— until its mention, sooner or later, looks like the basis for a dangerous drinking game.
On the other side of things, poking fun at blockchain evangelism is now a nerdy pastime, more enjoyable even than ridiculing handlebar moustaches and fixie bicycles.
[H/T the boys]