The Dumbest Explanation of Blockchain Ever Written

Let’s say I go to the grocery store and buy 100 bags of frozen buffalo chicken tenders. Each bag contains about a dozen frozen buffalo chicken tenders, meaning I have 1200 frozen buffalo chicken tenders in all.

I decide to give 100 frozen buffalo chicken tenders each to 11 of my friends—all of whom love frozen buffalo chicken tenders. Now me and my 11 friends all own 100 frozen buffalo chicken tenders.

100 frozen buffalo chicken tenders is a lot of frozen buffalo chicken tenders. How can we keep track of all of them? One option is to store them in our parents’ fridge, but then we’d be providing a third-party with access to our frozen buffalo chicken tenders, and they could potentially lose our frozen buffalo chicken tenders or try and steal them from us.

Instead, we agree to keep track of eachother’s frozen buffalo chicken tenders by buying a giant fridge and putting our frozen buffalo chicken tenders into buckets in the fridge with our names on them.

To ensure there’s no funny business, we each buy 1200 frozen buffalo chicken tender fridge magnets. When someone takes a frozen buffalo chicken tender out of their bucket in the fridge, we all confirm the event by writing their name down on a frozen buffalo chicken tender magnet and sticking it on the fridge. This way, everyone has a record of who’s doing what in regards to their frozen buffalo chicken tenders. No one person has to be relied upon.

So for instance, if I go to the fridge and take out 20 frozen buffalo chicken tenders, but the frozen buffalo chicken tender fridge magnets show I only have 15 frozen buffalo chicken tenders left in my bucket, everyone will know that I’m stealing frozen buffalo chicken tenders from someone else’s bucket, and stop me in my tracks.

Over time we continue to take frozen buffalo chicken tenders out of the fridge and sometimes even trade frozen buffalo chicken tenders with each other in exchange for favors—such as buying blue cheese sauce for the frozen buffalo chicken tenders.

This leads to a new problem…we can only fit so many frozen buffalo chicken tender magnets on the fridge! With everyone putting up frozen buffalo chicken tender magnets every time a frozen buffalo chicken tender exits the fridge, space is going to fill up quick.

So how do we maintain the record of the frozen buffalo chicken tenders if we’ve run out of frozen buffalo chicken tender magnet space? By buying a second fridge, moving our buckets of frozen buffalo chicken tenders to that fridge, and using its magnet space to continue the record, of course!

But before we do that, we need to make sure that nobody changes the magnet record on the first fridge. The only way for that to happen is by making it literally impossible for the fridge record to be altered. In other words, we need to launch the fridge into outer space. We all work individually to find a way to launch the fridge into outer space. As you might imagine, launching a fridge into outer space is very hard. It takes a considerable amount of money, time, and energy.

But to incentivize the work, the one who successfully launches the fridge into outer space earns one buffalo chicken tender. And note, this frozen buffalo chicken tender does not come from the grocery store. It’s literally produced out of thin air!

Once someone launches the fridge into outer space, we all make a record of the event by placing a magnet on the new fridge.

With the old fridge in orbit, its magnet record is immutable (yes, magnets do work in outer space). Now, if we need to refer to the historical record in regards to any activity involving the frozen buffalo chicken tenders, all we must do is pull out our telescope, spot the fridge, and review the magnet record. Nobody can dispute the record and nobody can change it without a considerable amount of effort. Therefore, everyone can trust it, and we can govern ourselves instead of worrying that our parents are going to eat our frozen buffalo chicken tenders.

And so it goes that we continue to buy fridges, fill our buckets with frozen buffalo chicken tenders, make magnet records on the fridge regarding events pertaining to our frozen buffalo chicken tenders, and launch the fridges into outer space when we can no longer fit any more magnets upon them. Make sense?

Now imagine that the frozen buffalo chicken tenders were cryptocurrency, the buckets were digital wallets, our parents are the bank, the individual magnets were one record of a transaction, the fridge was a “block” of transactions, the process of launching the fridge into space was “mining,” the reward for launching the fridge into space was one cryptocurrency, and the record of launching each fridge into outer space is the “chain” that connects the “blocks” that are the fridges.

In other words, all fridges floating in space together are the blockchain! Get it?