You’re sitting on the lawn. It’s a great evening.
And you're with your crush.
You have chocolate. You gave it to your crush.
Now your crush has chocolate and you've none.
That was easy, right?
This ain't a romantic post. Brace yourselves for the upcoming roller coaster ride.
•••
Let's zoom in on what happened…
Your chocolate was physically put in your crush's hand.
You know it happened. You were there. Your crush was there. You both touched it.
You didn't need your crush’s annoying friend in between for the transfer.
Now the chocolate is your crush's. Your crush can give to anyone. And so on. Now you can't control it. The chocolate has left your possession completely.
So that's how an in-person exchange looks like.
Back to chocolate…
Now, you have digital chocolate. You gave your digital chocolate to your crush. This is interesting…
How do you know that the digital chocolate that used to be yours, is now your crush's, and only your crush's? Think about it.
How do you know that you didn't send the digital chocolate like an email attachment to your crush?
Maybe you had a million copies of the digital chocolate. Maybe you put it on the internet and a million people downloaded it.
It's complicated, I get it. All of a sudden this digital exchange seems like a bit of a problem. Sending digital chocolate doesn't look like sending physical chocolate.
•••
Ledgers
Maybe this digital chocolate should be tracked in a ledger. It's just like an accounting book.
As this ledger is digital, it needs to live in its world and have someone in charge.
Just like Fortnite or PUBG, the online game has its digital ledger for the guns and skins that exist in their system.
•••
Problems
What if some guy on the internet created more? He could just add digital chocolates to his balance whenever he wants?
Is there a way to closely replicate your lawn transaction, just you and your crush, transaction digitally? Seems tough…
•••
The solution
What if we gave this ledger to everybody? All the transactions that have ever happened in digital chocolates will be recorded in it.
The rules of the ledger are already decided in the beginning. The code and the rules are open-source. It's not controlled by one person, so no one can just decide to give himself more digital chocolates. It's there for smart people to contribute, maintain, secure and improve.
You can't cheat it. You can't send digital chocolate you don't have, as it wouldn't sync up with everybody in the system. It will be a tough system to beat. Especially when it got big.
You could participate in this network too and update the ledger.
I simplified it a bit, but the system I explained exists. The Bitcoin Protocol. And those digital chocolates are “bitcoins”.
What does the public ledger do?
It's open-source remember? Within the system, bitcoins are limited (scarce).
When I make an exchange the digital chocolate left my possession and is now completely yours. It'll be updated and verified by the public ledger.
Because it's a public ledger, I don't need governance to make sure I didn't cheat or make extra copies or send twice or thrice.
Within the system, the exchange of digital chocolate is just like physical chocolate. It's now as good as physical chocolate leave my hand and drop it into your pocket. This transaction only needed two people, you and me. And no one else.
Technically speaking it now behaves like a physical product.
It's still digital. We can send 1000 chocolates or 1 million chocolates or even 0.00000001 chocolate. I can send it with a click of a button, and it is in your digital pocket, and I can be in Seoul and you were in Nigeria.
Maybe I can even attach some text or digital notes. Or I can even attach more important stuff; a contract, or a certificate, or an ID.
This is great. How should we treat this “digital chocolate”? They're quite useful, aren't they?
Many people argue over it. Don't listen to them. Some are smart. Some are misinformed. Some say it is worth a lot, some say it's worth zero. Some say digital gold, currency. Some say it's going to change the world. Some say just a fad.
But whatever it is. With cryptocurrency, there's always some kind of risk involved right around the corner. Only put whatever you're comfortable to lose.
I have my opinion about it, but that's for another time.
•••
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