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