The first time I heard of cryptocurrency it sounded like a foreign language, the more they tried explaining it the worse it got, using words and terminology I just couldn’t wrap my brain around. 

So here goes my attempt to try and explain it as best I can, based on my recent learning.

Any online platform should be working on a transparent record of all transactions, think of the back end of any website for example, blockchain technology is a new way of storing that data and running a platform.

The blockchain is where this data is stored. Each transaction is recorded as a “block”. 

In order for the data to be stored securely and to be safe from potential hackers, each block stores within it part of the previous block, creating a chain.

The chain effect ensures that when someone tries altering a transaction it is stopped by the blockchain because the transaction is recorded in multiple blocks. 

One of the main advantages and benefits of the blockchain is the fact that it is decentralized, don’t worry we’ll explain what that means. 

Instead of all the data being stored by one company and by default that entity has control of the entire platform, the data is stored by the users and the decisions related to the platform are made by the community of users. (there are a number of ways this is done and differs based on the platform and their preferred method, but we’ll save that for another time).

This is phase three of the Internet often referred to as Web 3. 

In phase one of the internet, it was one way. the internet provided people with information and by default the entities providing that information had full control of their platforms. 

In phase 2 of the internet (or the internet as we know it today), the social era, the users contribute to the internet but the platform is still developed maintained and controlled by individual entities. 

Think of any social media platform for example, users post contribute however the entity or company that hosts the platform is is taking a cut of the profit of the creators and maintains control of the content. (That is centralized the power is with one entity).

Web 3 is designed to give creators and contributors full control and profit of their work, by owning the piece of the platform that they contribute. 

The community of users collectively own maintain and govern the platform making it a lot more profitable for creators and in the hands of its users, through taking away the middleman (big tech companies).

When it comes to finance the advantage is clear, instead of there being a centralized entity that has control of the worth of the currency and can decide to change it through inflation and the like, it’s now possible for there to be digital currency who’s worth is decided by the holders collectively and there is no singular entity that can change it.

So the blockchain is a kind of technology which allows an online platform to exist without a centralized governance, its hosted by every device that uses it, giving the power to the people. This technology stores its data in an encrypted and safe way by hosting it many different blocks each block linked to the others by holding part of them, creating an unbreakable chain.