Blockchain Technology: How I Explain It To My Friends

Has anyone ever asked you to explain what the hell it is you're buying, when you say you're investing in cryptocurrencies or want to convince a friend to buy as well?

I recently had to explain to my brother what Blockchain technology was so that I could convince him to jump aboard, here's how I did it:

So imagine you have performed a service for me and I owe you 100$, I then pull out a 100$ bill and pay you. Now how is that we know that the transaction has occurred? Well because you now have the 100$ bill, I cannot spend that bill and acts as a proof of transaction.

Now let's say I need to pay you a larger sum of money, so we now use a bank to facilitate that transaction between us. Now the bank has a history of all the transaction within my account and knows how much money I have and how it got there, same as for yourself. Now when I pay you, the bank confirms that I have the funds to pay you that amount and is able to move that money from my account to your own account.

This bank utilizes a lot of resources and people to ensure that these transaction happen flawlessly and that the transaction is recorded. Now imagine a network of computers that is able to maintain a ledger of all transactions that has occurred, and is able to ensure that the ledger is correct with every transaction that passes through ensuring that I do not double spend or copy the funds that I have. This network is not controlled by any one organization and doesn't make mistakes.

This is what Blockchain Technology is in very simple terms, a currency is only a very small function of what it can do but one of the easiest to understand.