My understanding and explanation of Crypto/Blockchain

[imjustp]

My friend was asking me to explain the cryptocurrency world and blockchain technology to him in a way which he understands and it made me think that it can be entirely confusing, and that I may not be the best person to be explaining the system to him.

The following is the analogy I used, I wanted to ask you guys if I am completely off the mark and have given him terrible info really!

The analogy was using Starbucks coffee and their reward system as the point crypto currency and blockchain.

I explained it that, Starbucks have released a new digital token which rewards your loyalty, this digital token is their cryptocurrency, call it an SBUCK. The way in which a token is acquired is by mining on their blockchain (mining being going into the store and buying a coffee to be repayed with a stamp on your loyalty card (crypto wallet)) and their blockchain is their entire network of stores worldwide.

Once you have mined a certain amount (6 SBUCKs) you are able to withdraw your funds from your wallet and trade them in the real world (free coffee).

Everytime you walk into a Starbucks you are covered by an ID shield and noone can see how many times you've been to Starbucks or how many SBUCKS you have, and the tokens which you mine can be used in any of the stores which are on the blockchain, worldwide.

The value of the company is in their blockchain - do they have enough stores to fulfil demand worldwide? Can their stores process the number of people wanting to buy their coffee? Do the mined tokens get accredited instantly? etc etc.


That is my understanding of the whole concept! Am I wrong?

[ikilledcobain]

The biggest hole that I can find in your explanation is that Starbucks' rewards program is centralized whereas most crypto's are de-centralized.

This is my favorite video explaining the blockchain: https://www.youtube.com/watch?v=bBC-nXj3Ng4&feature=youtu.be

I think it does a great job of breaking it down into easy to understand information. If your friend has half an hour, I'd send him that to get a basic idea of what's going on.

[imjustp]

The biggest hole that I can find in your explanation is that Starbucks' rewards program is centralized whereas most crypto's are de-centralized.

This is my favorite video explaining the blockchain: https://www.youtube.com/watch?v=bBC-nXj3Ng4&feature=youtu.be

I think it does a great job of breaking it down into easy to understand information. If your friend has half an hour, I'd send him that to get a basic idea of what's going on.

Thanks a lot mate!

Ah right, I forgot about that! Would I be right in assuming that, in my analogy, if the distribution of the tokens was regulated by all users of the stores world wide opposed to the owners ot the company that would represent a decentralised company?

Going to give the video a watch on Friday when my internet is installed at my new house and I no longer have to destroy my mobile data via tethering

[ikilledcobain]

The biggest hole that I can find in your explanation is that Starbucks' rewards program is centralized whereas most crypto's are de-centralized.

This is my favorite video explaining the blockchain: https://www.youtube.com/watch?v=bBC-nXj3Ng4&feature=youtu.be

I think it does a great job of breaking it down into easy to understand information. If your friend has half an hour, I'd send him that to get a basic idea of what's going on.

Thanks a lot mate!

Ah right, I forgot about that! Would I be right in assuming that, in my analogy, if the distribution of the tokens was regulated by all users of the stores world wide opposed to the owners ot the company that would represent a decentralised company?

Going to give the video a watch on Friday when my internet is installed at my new house and I no longer have to destroy my mobile data via tethering

Yes, I think it would make a better analogy if you changed the premise to that particular set up.

Understood about the data - that can be brutal. It's well worth the watch though. Very straightforward and understandable even without a math/technology background.

[imjustp]

Great, glad to know I somewhat have an understanding of the system! Thanks for taking the time to reply, man.

Yeah it's literally like I've gone back to 90's in that I can't really use any of the amazing revolutions of the interrnet through fear of being disconnected from the world via using all my mobile data!

On Friday I'll be surfing like never before, might even click on a popup or two 

[nskendrovic]

Not bad except that Starbucks is centralized and the point of Bitcoin is to dis-intermediate third parties via it's trust-less immutable ledger. The Bitcoin network also has a scarce amount of coins on the network making them valuable to mine.

[imjustp]

Not bad except that Starbucks is centralized and the point of Bitcoin is to dis-intermediate third parties via it's trust-less immutable ledger. The Bitcoin network also has a scarce amount of coins on the network making them valuable to mine.

Yeah I forgot about the whole pertinent fact of decentralisation in my initial post 😂 got there in the end though!