Blockchain : As explained to a kid !!

Following are the five basic principles underlying the Blockchain Technology. I have also tried explaining them as I would to a kid who has just entered school. Any feedback is welcomed :)

1.      Distributed Database

TECHNICAL EXPLANATION: Each party on the blockchain has access to entire database and its complete history.

AS EXPLAINED TO A KID: Suppose there is a group of 5 friends. Each one knows how much chocolates each friend owns, from where and when did he buy them, which brand is it and its expiry date.

2.      Peer to Peer Transmission

TECHNICAL EXPLANATION: Communication occurs directly between peers instead of through a central node.

AS EXPLAINED TO A KID: There is no leader among those 5 friends. Any friend can directly approach any other in case of giving or receiving chocolates.

3.      Transparency with Pseudonymity

 TECHNICAL EXPLANATION: Each transaction and its associated values are visible to anyone with access to the system. Users can choose to remain anonymous or provide proof of their identity to others.

AS EXPLAINED TO A KID: Any friend can see how many chocolates one friend gave to the other. The giver or receiver friend can choose to remain anonymous.

4.      Irreversibility of records

TECHNICAL EXPLANATION: Once a transaction is entered in the database and the accounts are updated, the records can’t be altered, because they are linked to every transaction records that came before them (hence the term “chain”)

AS EXPLAINED TO A KID: Friend A gives a chocolate to friend B. Friend B gives the same to Friend C. Suppose there is a fight between friend A and B, and A now wants his chocolate back. This can’t be done since the chocolate has been already consumed by Friend C.

5.      Computational Logic

TECHNICAL EXPLANATION: The digital nature of the ledger means that blockchain transactions can be tied to computational logic and in essence programmed. So users can set up algorithms and rules that automatically trigger transactions between nodes.

AS EXPLAINED TO A KID: If friend A is ready to do a favor for Friend B in return of a chocolate bar, instead of A waiting for the chocolate, he would automatically receive the chocolate through parcel once the favor is done successfully.