Blockchain Simplified | Rohith Salim | Skillshare

Blockchain Simplified

Rohith Salim

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7 Lessons (13m)
    • 1. Blockchain simplified intro

      0:58
    • 2. Lecture 2

      1:58
    • 3. Lecture 3

      1:21
    • 4. Lecture 4

      1:54
    • 5. Lecture 5

      1:08
    • 6. Lecture 6

      2:55
    • 7. Blockchain simplified outro

      2:40

About This Class

Blockchain Simplified is a short series of lectures to help you understand both the need and workings of a blockchain. Without getting into anything too technical, this course will help you understand how consensus is achieved by peers working together on a common network.

Transcripts

1. Blockchain simplified intro: Now it is blocking Bitcoin I CEOs and other cryptocurrencies dominate the news cycle. However, very few people, including most investors in the space, actually understand the potential off the underlying technology as well as its limitations . My name is Roy Selene, and I'm one of the lead instructors at the Crypto University. From my experience as a teacher, I have noticed that stories and analogies are the best way to introduce complex topics to students. We're going to follow that methodology to introduce you all to Blockchain technology. In fact, I'm going to use the same story that I used to explain Blockchain technology to my 13 year old niece, So let's get started. 2. Lecture 2: It's Christmas time, and you decided on a big sailing school to make enough money to buy presents for your family. You wanna make something special that your friends probably haven't tried before, so you decide to follow your family recipe and make double fudge chocolate chip cookies the next day. Do you go to school after baking 100 cookies on with the intention selling them each A $1? Your friend Jim comes over as soon as you set up your big seal wanting to buy a cookie, he gives you $1 and you handle one cookie, too. Let's pause here and examine what just happened. You gave Jim one cookie and got back $1 in the process. You know only have 99 cookies and Jim has $1 left. But he has also gotten a cookie in return for that dollar. This was a transaction that happened in person and in real time. Jim is free to do whatever he wants with that cookie, and you are free to do whatever you want with the $1 you received. While the original intention was to use this money to buy presents for your family, you're both API within your right to change your mind and do something else with it. Another thing to note is that this is a transaction where everything took place between two people. It did not require third person to balloted and confirm this transaction pretty simple, right? 3. Lecture 3: Now let's go ahead and add some more details to the story in order to get a better idea off . How many cookies to bake? You decide to take preorders when customers in order, please this preorders your customers would need to pay you the amount in advance. You will then go on to create a simple invoice for each ordinary receipt and send it as an attachment in an email to them. They can go ahead and print this attachment and clean the cookie from you on the D off your big C. Now, all of a sudden, things are a bit more trickier. When you send this invoice as an email attachment, your customer is actually receiving a copy off that invoice on your computer. Someone could potentially going to print out 10 copies of that in Waas and try to claim 10 cookies from you on the day you run the Big C. All of a sudden, things aren't as simple anymore. Before we want to the next video. Why didn't think about how you could stop your customers from taking advantage of you? 4. Lecture 4: They're a couple of things you could do to make sure that people don't end up cheating the system. Maybe the simplest and most inexpensive thing to do would be just CC, someone trustworthy on the invoice email that you sent to a customer who pre ordered a cookie. It could even be the school principal, Miss Lisa, who has always nurtured your entrepreneurial spirit. Once a person brings the invoice and claims the cookie from you, you would click a picture and send it to Miss Lisa, with the person holding the cookie to conform that the transaction went through. Now, all of a sudden, this Lisa is a source of truth. Or rather, her email inbox is a source of truth, and she is the person in charge off that source of truth. People can't print duplicate copies off your email attachment because Miss Lisa would have a record off how Maney cookies that person actually pre ordered from you. A simple fix, right? But something different has happened this time around from a transaction that originally involved two people. There are three people involved now, the two people who are transacting as well as 1/3 person whose job is to make sure the transaction goes through. As expected. Miss Lisa, or rather mis Lisa's evil It box is a ledger that records these transactions before moving ahead to the next video. Why did you think about what could go wrong here and write a comment below? 5. Lecture 5: in the story So far, Miss Lisa and our email inbox are the source of truth. Miss Lisa's email inbox is the ledger. While she is the person in charge off the ledger, they're obviously a few things that could go wrong here. What if one of your clever classmates managed to hack into Miss Lisa's email and change how many cookies? Everyone was old. What if Miss Lisa ended up leading some of these invoices by mistake? What can you do if this trusted third body makes mistakes or she doesn't act in your best interest? Is there a wait? Closely replicate the transaction that took place in person between you and your friend Jim the one way you handed him a cookie in return for the $1 he paid you that transaction that took place without involving 1/3 person 6. Lecture 6: we know that having a single ledger managed by one person could lead to problems. But what if he gave this ledger to everyone? Every single transaction that ever happened would be recorded in this ledger, and this ledger would exist with everyone. A system like this would become very difficult to cheat, especially if it became very large. One person could try and cheese the entries on his over ledger, but then it would have matched with everyone else's legend. No one person would be able to control this ledger, and the same rules would apply to everyone who is participating in this system. These rules are open source, which means they're open for everyone to see. Every time the transaction takes place, each bus and holding the ledger is notified and they go on to update their respective legends. These people are encouraged to keep updating the ledges with the new transactions that took place by the system itself, offering them rewards to do so. These awards are again defined by the same open source rules that everyone can see this week. There isn't a single third party managing this legend rata. The entire community manages it together Consequently, there really isn't a single point of failure. What a sweet system, right? I simplify this quite a bit. But what I described here in the story is basically how most cryptocurrencies work. The network of ledgers that many people are maintaining at the same time is the blocking and the people managing these ledgers. I'm known as miners on the big blind block team. Whenever a transaction takes please, a certain amount of big point would get transferred from one party to another, and the underlying lodging would record these transactions. It would be easy to tell how many big points on my phones by looking at the underlying blocked. As this ledger is stored with every single participant in the network, it is nearly impossible to manipulate. In fact, the big gun blocking has never been hacked. 7. Blockchain simplified outro: I hope the series of lectures shed some light into what is so special about Blockchain technology. The non Blockchain world is full of examples of companies who act as trusted third parties to facilitate transactions between two other parties. These trusted third parties take the form of finance institutions, real estate brokers and even marketplace companies like Uber and Airbnb. By no means am I saying that these third parties often value. However, the fee, some of them charge is completely outrageous. If you think about it, ah, $100 money transfer between your chase account in the United States on HDFC Bank in India would cost anywhere from five and $10. That really is a lot of pain. In my opinion, most people have just gotten desensitized to the cost. Additionally, as far as security is concerned, the so called trusted third parties have been had numerous times in 2014 JP Morgan Chase, one of the largest retail banks in United States, was hat and sensitive information off always 76 million households was exposed. These kinds of hacks happen not just in finance institutions but also in sectors such a speak, commerce, search and much much more even into the Giants like Yahoo and E. B have been hacked numerous times over the years to put things in context. The big con Blockchain has never been hat since its inception. That really is remarkable when you think about the amount of resource is these large companies put into securing their systems. Blockchain is by no means the appropriate technology to use for all business problems out there. There are some really limitations to this technology. That said, there are numerous industries where this technology could add an enormous amount of value. Our courses at the Crypto University are meant to provide you a balanced view off the innovations that are happening in the Blockchain space.