0:02 ever wonder if there's an easier way to
0:04 complete transactions without having to
0:06 deal with online wallets banks and
0:09 third-party applications well it's
0:11 possible thanks to blockchain here's
0:12 everything you need to know about
0:16 blockchain imagine four friends jack ted
0:19 sam and phil meet up for dinner after
0:21 they're done jack pays the bill and all
0:23 of them decide to split the expense
0:25 amongst each other now on the next day
0:28 when phil sends his share to jack via
0:30 online money transfer the transaction
0:32 goes through without a hitch then ted
0:35 and sam send their respective shares to
0:37 jack but their transactions don't go
0:40 through the failed transaction cites
0:42 some issues at the bank that's when jack
0:44 comes to know about the many ways a bank
0:46 transaction could fail it could be due
0:49 to technical issues at the bank one of
0:50 their accounts were hacked daily
0:53 transfer limits being exceeded and
0:55 sometimes additional charges like
0:57 transfer charges associated with
0:59 transferring money to solve these
1:01 problems the concept of cryptocurrency
1:04 came into existence cryptocurrencies are
1:06 a form of digital or virtual currency
1:09 that run on a technology known as
1:11 blockchain thanks to blockchain
1:13 cryptocurrencies are immune to
1:15 counterfeiting don't require a central
1:18 authority and are protected by strong
1:20 and complex encryption algorithms and in
1:22 a market of more than thousands of
1:25 cryptocurrencies like litecoin ethereum
1:29 z cash and so on one reign supreme
1:31 bitcoin now let's go back to our
1:34 previous example and have phil ted and
1:37 sam send jack two bitcoins each as their
1:39 contribution to the previous night's
1:41 dinner let's assume phil ted and sam
1:43 have three bitcoins in reserve while
1:46 jack has five first phil sends two
1:49 bitcoins to jack a record is created in
1:51 the form of a block the transaction
1:53 details between them is permanently
1:56 inscribed in this block this record also
1:58 holds the number of bitcoins each of the
2:01 friends own so after phil's transaction
2:04 jack has seven bitcoins while phil has
2:07 one following this sam and ted send two
2:10 bitcoins to jack a new block is created
2:12 for each of these transactions these
2:15 blocks hold the transaction details as
2:17 well as how many bitcoins sam ted and
2:20 jack have in reserve these blocks are
2:22 linked to each other as each of them
2:24 takes reference from the previous one
2:26 for the number of bitcoins each brand
2:29 owns this chain of records or blocks is
2:32 called a ledger and this ledger is
2:34 shared among all the friends which acts
2:36 as a public distributed ledger this
2:39 forms the basis of blockchain so what
2:42 happens when phil has only one bitcoin
2:44 left and he tries to send two more
2:47 bitcoins to jack the transaction will
2:49 not go through this is because all his
2:51 friends have copies of the ledger and
2:53 it's clear that phil has only one
2:56 bitcoin left his friends will flag this
2:58 transaction as invalid a hacker will not
3:00 be able to alter the data in the
3:03 blockchain because each user has a copy
3:05 of the ledger the data within the blocks
3:08 are encrypted by complex algorithms all
3:10 of this is made possible with the help
3:13 of blockchain technology blockchain can
3:16 be described as a collection of records
3:18 linked with each other strongly
3:20 resistant to alteration and protected
3:23 using cryptography now let's have a
3:25 closer look at the bitcoin transaction
3:28 between jack and phil and find out how
3:30 it works every user in the bitcoin
3:34 network has two keys a public key and a
3:36 private key the public key is an address
3:38 that everyone in the network knows of
3:40 like an email address of a user the
3:43 private key is a unique address that
3:45 only the user has knowledge of something
3:48 like a password first phil passes the
3:50 number of bitcoins he wants to send to
3:52 jack along with his and jack's unique
3:54 wallet address through a hashing
3:56 algorithm all of this is part of the
3:59 transaction details these details are
4:02 encrypted using encryption algorithms
4:04 and using phil's unique private key this
4:06 is done to digitally sign the
4:08 transaction and to indicate that the
4:11 transactions came from fill this output
4:13 is now transmitted across the world
4:16 using jack's public key with this the
4:19 message or transaction can be decrypted
4:22 only by jack's private key which only
4:23 jack has knowledge of different
4:25 cryptocurrencies use different hashing
4:28 algorithms while bitcoin uses the
4:32 sha-256 algorithm ethereum which is also
4:34 a famous cryptocurrency uses one known
4:36 as ethash
4:38 this transaction and several other
4:40 similar ones are taking place all around
4:42 the world these transactions are
4:46 validated and then added block by block
4:47 the people who validate these blocks are
4:49 called miners
4:52 for a block to be validated and added to
4:54 a blockchain miners need to solve a
4:57 complex mathematical problem the miner
4:59 who solves this first adds the block to
5:02 the blockchain and is rewarded with 12.5
5:04 bitcoins the process of solving the
5:07 complex mathematical problem is called
5:09 proof of work and the process of adding
5:11 a block to the blockchain is called mining
5:12 mining
5:14 with this phil and jack's wallets are
5:17 updated just like every person in the
5:19 network who has completed a transaction
5:21 now that you know about blockchain and
5:24 its important concepts time for a small
5:27 quiz what is the concept of blockchain
5:29 that ensures data cannot be altered by
5:32 any of the users within the network a
5:35 public distributed ledger b
5:37 proof of work c
5:37 c
5:39 proof of stake d
5:42 hash encryption let us know what you
5:43 think is the right answer in the
5:45 comments below three lucky winners will
5:48 get amazon gift vouchers details are
5:50 mentioned in the description below let's
5:51 have a look at how walmart uses
5:53 blockchain to provide its customers with
5:56 better service walmart was facing
5:58 problems in delivering quality products
6:00 to its customers they were facing a high
6:03 return rate and large amounts of refunds
6:05 due to their products bad quality they
6:07 were unable to determine the point of
6:09 failure in the supply chain which
6:12 started from farm to storage to
6:15 transportation to processing all the way
6:18 to the customer then walmart adopted
6:21 blockchain technology with blockchain
6:23 the quality of the goods at each step
6:25 was permanently inscribed within a block
6:28 for example when a customer flags a
6:30 product as damaged it can be correctly
6:32 identified where the product got damaged
6:35 in the entire supply chain thus helping
6:38 walmart to identify the problem areas
6:41 and fixing them and this is just one of
6:44 several ways blockchain is used in real
6:46 life applications can you think of any
6:48 others let us know in the comments down
6:50 below that's all for now thank you for
