How to expalin blockchains and digital money to normies?

Even though for most of us who read this blog, using blockchain services and cryptocurrencies are everyday life, vast majority of humans don’t still know s*** for what is happening in the world of blockchains. So in few simple words and centenses, how would you describe for what blockchains are and what you can use them? Pros and cons?


I always use the good ol’ “You can send money to your relatives on the other side of the planet with minimal fees and taxes” and it has worked pretty well so far :smile:

But jokes aside, for the few that actually like to know I usually explain how much of an advantage a blockchain-based decentralized database has over centralized ones. And while there are many disadvantages too, with time the problems will be solved one by one, leading to a global decentralized ecosystem. At least that’s what I hope is going to happen…


Imagine that you and your friends are all keeping track of money you owe each other on a piece of paper. Every time someone owes someone else some money, you write it down on the paper.

Now, imagine that instead of just one piece of paper, you each have a notebook with many pages. Each page represents a block, and on each page, you write down all the transactions that happened between you and your friends.

But, because you want to make sure that nobody can cheat and change the transactions later, you come up with a clever system. Every time you write down a transaction, you ask your other friends to check it and make sure it’s correct. Once everyone agrees that the transaction is correct, you add it to the page and move on to the next one.

Now, because everyone has a copy of the notebook and every transaction has been checked by all your friends, it becomes really hard for anyone to cheat or change anything without everyone else noticing. And that’s basically what a blockchain is - a chain of blocks where every transaction is recorded and verified by a network of people to ensure that it’s secure and trustworthy.


So this is blockchain covered, but we can take it a step further to hammer down the potential of this technology…

Nowadays, it isn’t just transactions that can be recorded on the books, but the contractual relationships surrounding them (the metadata!). This means that a set of rules can be put in place surrounding a transaction, that need to be satisfied in order for certain transactions to take place. e.g. Alice will send Joe 1ETH IF he has cleaned her windows.

These are what are referred to as Smart Contracts. And because a “rule” is basically a line of code, and we can record many rules in the books, this means entire applications can be built on the blockchain.

(Am I losing them?)


The picture is getting clearer regarding the use of the blockchain. :slightly_smiling_face:

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You can cut out banks without any loss of security or trust and use it as a replacement for money, as well as other things that require an element of trust. It’s basically guarenteed trust as software. Infallible, whereas humans are prone to or tempted by greed and other selfish objectives. Crypto is just one example where blockchain obsoletes a service requiring human trust (ie. banks - and their millions of non-zero chance of error employees worldwide…)

It could just as easily be applied to something like, say, a national voting register. Your energy usage and electricity bill. Your birth certificate…

There’s a reason the speculative value has gone well into the billions. It’s useful.

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This is an awesome explanation BTW. Read it after I posted (Just read OP then spammed away…). Would of just stayed quiet had I seen this first haha