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Here's the thing: Recently, my roommate Hasaki has been asking me about blockchain and Bitcoin. I tried many different ways to explain what blockchain technology is in a simple, intuitive, and vivid manner, but I ultimately failed. Therefore, I came up with the idea to write a piece titled BlockChain for Babies (also known as: How to Explain Blockchain to Your Less Informed Roommate) to introduce blockchain technology or Bitcoin to those who are unfamiliar but want to know what blockchain is.
Since the intended audience is those who do not want to know the specific technical implementations but want to understand blockchain, this article avoids some underlying and algorithmic details and uses a more subjective approach to present my intuitive understanding of blockchain technology. If you are just interested in blockchain and do not plan to study it in depth, or just want to show off like I do when others ask, this article should be a good "introduction."
Overview.
Blockchain is essentially a decentralized distributed ledger database (thanks to @Cheng Jianyu for pointing out: this term can be used in blockchain applications related to Bitcoin, but blockchain technology may not necessarily include a 'ledger'). It itself is a series of data blocks generated using cryptography, each containing information about multiple effective confirmations of Bitcoin network transactions.
This is the definition of blockchain, so to gradually understand blockchain, we need to step by step understand the following things.
Decentralization.
Let’s first consider a centralized processing process. You want to buy a mobile phone on a platform, and the transaction process is: you transfer money to Alipay - after Alipay receives the payment, it notifies the seller to ship - the seller ships - you confirm receipt - Alipay transfers the money to the seller.
Figure 1: Centralized transaction model.
In this process, although you are trading with the seller, this transaction also involves a third party besides you and the seller, which is Alipay. Both your transaction and the seller's transaction revolve around Alipay. Therefore, if there is a problem with the Alipay system, it can lead to the failure of this transaction. And although you simply bought a mobile phone, both you and the seller have to provide extra information to the third party. So, considering extreme situations, if Alipay goes bankrupt or takes the money but denies your transaction, or if the city where Alipay is located forces everyone to leave because of the G20 meeting (?), then you will be in trouble.
The decentralized approach seems much simpler; you just need to exchange money and the phone with the seller, and then both parties declare that the transaction is complete, and that's fine.
It can be seen that in certain specific situations, decentralized processing can be more convenient, and there is no need to worry about leaking unrelated information during transactions.
In fact, if we only consider the transactions between two people, we cannot fully demonstrate the benefits of decentralization. Imagine if there are thousands of transactions occurring, the decentralized approach would save a lot of resources, making the entire transaction autonomous, simplified, and eliminating the risks of being controlled by centralized intermediaries.
Decentralization is a disruptive feature of blockchain technology; it does not require a centralized intermediary, achieving a direct peer-to-peer interaction, making high-efficiency, large-scale, decentralized information exchange a reality.
Of course, the above example has a significant potential problem: without an authoritative centralized intermediary, how can the accuracy and validity of each transaction be guaranteed? For example: if there is no authoritative centralized intermediary, one day Zhang San borrowed 100 yuan from me, but refuses to pay back and denies it, what should I do? This brings in other features of blockchain.
Two fundamental challenges.
After decentralization, there is no authoritative centralized intermediary in the entire system, which means that the credibility and accuracy of the information will face issues.
Question 1: The two armies problem.
The first time I heard about this issue was in a TCP class, where it roughly talked about two armies far apart needing to relay information. The Red Army sends a messenger to the Blue Army saying, "You better bring out the Italian cannon!". The Blue Army receives the message and sends a messenger back to the Red Army saying, "Received the order!". Then the Red Army sends another messenger to the Blue Army saying, "I know you received the order!". Then the Blue Army sends another messenger to the Red Army saying, "I know you know that I received the order!". Then the Red Army sends another messenger to the Blue Army saying, "I know you know that I know you received the order!" ... and it goes on endlessly.
Figure 2: In distributed computing, achieving consensus in asynchronous systems and unreliable channels is impossible.
In this case, because it is peer-to-peer communication, it is impossible for both parties to achieve information consistency. To be more precise, "In distributed computing, it is impossible to achieve consistency in asynchronous systems and unreliable channels."
Question 2: The Byzantine Generals Problem.
In the Byzantine Roman Empire's military operations, a voting strategy was used among generals to decide whether to attack or retreat. This means that if the majority decides to attack, they will proceed. However, if there are spies in the army (such as a general who has defected and deliberately votes incorrectly, or a messenger who has betrayed and unilaterally changed the orders), how can the final voting result truly reflect the wishes of the loyal generals?
The Byzantine Generals Problem, when reflected in the information exchange field, can be understood as having some faulty nodes in a decentralized system that may broadcast incorrect information or withhold information from the outside. In this case, how to verify the accuracy of data transmission.
The birth of blockchain technology.
Now let us gradually solve these issues in a decentralized system and witness the birth of the prototype of blockchain technology.
Let's first establish a decentralized system. To simplify understanding, let's look at a simple decentralized lending model: If A borrows 100 yuan from B, at this time, A shouts in the crowd, "I am A, I lent B 100 yuan!", and B also shouts in the crowd, "I am B, A lent me 100 yuan!" At this point, bystanders A, B, C, and D hear these messages, so everyone silently notes down that "A lent B 100 yuan". You see, at this moment, a decentralized system has been established, which does not require banks, lending agreements, or receipts; strictly speaking, it doesn't even require a long-term trust relationship between people (for example, if B suddenly says, "I don’t owe A any money!", the people will stand up and say, "No, I have it recorded in my notebook that you borrowed 100 yuan from A on a certain day!").
Figure 3: Decentralized lending model.
You may have noticed that in the above model, the so-called "100 yuan" has become unimportant. In other words, anything can be exchanged in this model; you can even fabricate something out of thin air. As long as everyone acknowledges it, you can make whatever you fabricate circulate. For example: I shout in the crowd, "I created 10 chakras!" I don't even need to know what chakras are or care whether they really exist in the world. As long as everyone hears it and records in their notebooks, "LaiW3n has 10 chakras", then I really have 10 chakras. From then on, I can claim I gave someone 1 chakra, as long as passersby A, B, C, and D received and acknowledged this information, then I have completed this transaction, even if chakras do not exist in the world.
Are the three words - "Bitcoin" - flashing in your mind? Because the actual blockchain is much more complex than the model I mentioned above, with many more details, I will still use chakras as an example since this article is Blockchain for Babies. (laugh)
Assuming a long time has passed, the chakras I created out of thin air have begun to circulate in this system, and everyone starts to recognize the chakras. However, there are only 10 chakras in this system, so someone has bad intentions and shouts in the crowd, "I have 10 chakras!!" What should we do? Should everyone directly record that he has 10 chakras in their notebooks? That would allow anyone to forge chakras!
To prevent this phenomenon from occurring, I decided to mark my chakras when I create them (more precisely, I marked the phrase "I created 10 chakras" that I shouted, for example, marking it as 001). So later, during each transaction, when I shout, "I gave someone 1 chakra!", I will add an extra sentence: "The source of this 1 chakra is recorded as 001, and my statement is marked as 002!". We can abstract it further; the format of someone's shouted content becomes: "This statement number is xxx, the previous statement number is yyy, I gave someone 1 chakra!". This solves the forgery problem. In fact, the above model becomes a simplified version of Satoshi Nakamoto's first version of the Bitcoin blockchain protocol.
Figure 4: Comparison of chakra model and Satoshi's first version of the blockchain protocol.
Alright, by this point you should be able to vividly and simply explain blockchain to your less informed roommate without involving any details. But perhaps your roommate is someone who asks questions until the end, so you’d better prepare to answer the following questions.
1. "Why?"
Your roommate might ask: "Why should I help you remember when you shout? Isn’t my notebook worth something?" To encourage everyone to help me relay messages and record, I decided to reward the first person who hears me shout and records it in their notebook: the first person to hear me shout and record it will receive 1 chakra out of thin air, as a reward from the system for their hard work in recording. After recording this statement, they should immediately inform others that they have recorded it, so that others can give up on continuing to record this statement, and provide their own record number for others to verify, then shout my words along with their record number for the next person to record.
Once this rule is established, a group of people in this system will begin to listen closely to the sounds around them in order to seize the right to be the first to record. Right, doesn't the phrase "Bitcoin mining" come to mind?
It is worth mentioning that regarding Bitcoin mining, I will give you a very vivid example:
Single people want to find girlfriends, and the national mother-in-law says I have many daughters. How about this, I will give you some questions; solve one and I will give you one of the girls' WeChat IDs.
Single people compete fiercely, racking their brains to solve the problems. As long as one of the singles solves a problem, they immediately announce proudly to the world, demonstrating to all the single people that this girl is mine, you all give up. Other singles may feel unhappy but have no way to change the situation, so they can only reluctantly rush to solve the next problem. This lucky dog who impresses the girl after being recognized by the mother-in-law can also receive a bride price of 25 currency units, truly a life winner.
2. "Whose word?"
In this system, if I and another person C almost simultaneously shout: "For Azeroth!". Due to the different positions of the listeners, some will hear my words first while others will hear C's words first. If we stipulate that only one person can say this phrase, then who actually said it?
If no conditions are added, the above situation will definitely develop like this: some people believe that this statement was made by me, and after hearing this statement, they begin to record it. Everything they do afterward is based on this fact, and as this information is passed down repeatedly, the chain of information will become deeper; while another group believes that C said this statement first will also develop along this trend. Thus, what was originally a unique chain of information split after we shouted "For Azeroth"!?
Figure 5: "Blockchain" split again.
What situation will this lead to? According to our assumption, everyone’s notebooks should record the same thing, forming a chain that links all information together. But at this moment, the contents recorded in their notebooks are different! How does this work? How can we determine the authenticity of transactions and information in the future?
To solve this problem, I added a new rule: everyone needs to take off their shoes and use their feet to write in the notebook in standard script! With this regulation, since writing with feet is very difficult, each person will need at least 10 minutes to finish writing, and due to varying degrees of proficiency in writing with feet, the time taken will differ. Therefore, someone will definitely finish first and shout, "I finished! That statement was shouted by LaiW3n!" This will cause others who are still writing that statement to stop and restart their writing in the notebook with the new record: "That statement was written by LaiW3n, the previous statement number is xxx".
If you are interested in my above solution, you can refer to my metaphor to understand the following knowledge:
"Whose word to trust" -- Satoshi's algorithm to solve the "Byzantine Generals Problem".
"Recording in a notebook" -- Bitcoin mining.
"Writing with feet" -- the difficulty of Bitcoin mining.
"Writing with feet" -- computing power.
"New rules" -- proof-of-work chain.
3. The "double spending" problem.
At this point, your roommate might ask: If I simultaneously declare that I gave A one chakra and I gave B one chakra, but I only have one chakra, then what should I do? Did A and B both receive the chakra or what?
At this point, you just need to lift his chin, gently look into his eyes, and say: "Little fairy, why don't you try bringing this situation into the above rules?"
Some private message discussions:
1. Why are there currently so few cases of blockchain integrating with physical business?
Theoretically: Blockchain is a new technology, and the general public (including myself) is still in a wait-and-see phase, with only a few radical or clearly targeted entities beginning to venture into blockchain, and the voices of these few entities are not strong enough at this stage.
From an application perspective: Blockchain technology needs further development in technology and rules to connect with physical business. The so-called "trust issue" that blockchain addresses is also limited to data on the blockchain. Therefore, if blockchain is to connect with physical business, it still needs to promote the establishment of cross-domain "game rules" between the physical and data worlds.
2. Will virtual cryptocurrencies ultimately lead to Ponzi schemes?
I also find it hard to answer this question because I am a technician and not a trendsetter in this field. My personal view is that for ordinary people, it is not advisable to hold any digital currency for a long time; digital currency should be seen as a bridge for converting between fiat currencies. For speculators, "trading coins" should be done cautiously, keeping risks within a bearable range. PS: Actually, I don't really care about this issue.
3. Why does it feel like blockchain is somewhat foolish when you explain it?
I have already stated in the text that this is just an introductory article on blockchain technology, aimed at helping you quickly gain an intuitive understanding of blockchain; if you really want to understand the details of blockchain technology, please read relevant literature or visit blockchain communities.
