Steve Hordman compares Bitcoin to the game of Monopoly just to make it more understandable. Assume we are a bunch of 5 playing the game of Monopoly in where, one is the banker and all others are going through this one banker to buy and sell houses/hotels, so there is one person whom you give all your money to and the same person gives the money to a third party but the money has to go through him.
Now assume there is no banker, we ourselves are bankers. I give the money directly to the seller instead of going via the bank. But now who knows that you have done the transaction? How would everyone know that now the property belongs to the other guy and not the guy who actually owned it in the beginning? This data is encrypted with a hash and stored in the block. Only the person with a right key can go and look on the further details.
The whole point is block chain allows the data to be transparent, anyone can read it but O’reily publishers compare this with a home address. It’s like anyone can view what your home address is but you will need a private key to go into your private home.
It’s just that now you own the address and nobody else can own it as it is already owned by you! Like you already have your signature on it but only hold the private key to secure the data which only you can access it.
Ability for a duplication?
- The whole bitcoin is based on a decentralized scheme, meaning no central authority which enables its nodes to continuously and sequentially record transactions on a block which is publically available by creating a chain which is unique.
- Each successive block contains a unique ID, just like your fingerprint which is unique to that of the previous block or code to secure the information and removes the need for the third party to be involved
- The combination of this crypto + blockchain technology together would make it highly impossible to record a duplicate transaction