Well, I don't think it's a topic you can explain to a five year old, but I will try. I hope you're a smart 5 year old xD
It's a decentralized system, which means that instead of having all the data in one server (or multiple, but operated by a single entity) they are distributed across multiple entities (called nodes), which all need to be synced.
Blockchain usually refers to decentralized systems for alternative currencies, instead of currencies being managed by banks or centralized authorities, they're managed and verified by a network of nodes. These nodes, and what are called miners are in charged of verifying the transactions by running some algorithm. Once you make a transaction they can't be modified, giving us a greater level of trust in the system (kinda).
All the transactions are stored in a chain of blocks, therefor the name, which just means that from any transaction you can follow the chain all the way up to the point where the coins where created (minted). A complete history of all the transactions and movements are stored, so we can track anything in the system.
One negative aspect of this is that currently everyone can speculate with these currencies, making them really unstable and not usable in most cases.
It's a really smart tech, but the use-cases are kinda crap at the moment, and I have not talked about NFTs... which are some of the worst use-cases IMHO.
My tip would be: don't get dragged into this world, it's not worth it for now. Let's see how they evolved and mature and maybe they become useful.
PR: I tried, but it's quite a complex topic to simplify 😅
Well, I don't think it's a topic you can explain to a five year old, but I will try. I hope you're a smart 5 year old xD
It's a decentralized system, which means that instead of having all the data in one server (or multiple, but operated by a single entity) they are distributed across multiple entities (called nodes), which all need to be synced.
Blockchain usually refers to decentralized systems for alternative currencies, instead of currencies being managed by banks or centralized authorities, they're managed and verified by a network of nodes. These nodes, and what are called miners are in charged of verifying the transactions by running some algorithm. Once you make a transaction they can't be modified, giving us a greater level of trust in the system (kinda).
All the transactions are stored in a chain of blocks, therefor the name, which just means that from any transaction you can follow the chain all the way up to the point where the coins where created (minted). A complete history of all the transactions and movements are stored, so we can track anything in the system.
One negative aspect of this is that currently everyone can speculate with these currencies, making them really unstable and not usable in most cases.
It's a really smart tech, but the use-cases are kinda crap at the moment, and I have not talked about NFTs... which are some of the worst use-cases IMHO.
My tip would be: don't get dragged into this world, it's not worth it for now. Let's see how they evolved and mature and maybe they become useful.
PR: I tried, but it's quite a complex topic to simplify 😅
Thank you for posting this! 👍