"No one knows you're a dog on the internet." - Dr. Peter Steiner

"On the blockchain, no one knows you're a refrigerator." Brown, Richard Gendal

Blockchain technology has been dubbed the most significant innovation since the internet.

Proponents of the technology7 claim that it will disrupt every industry currently in existence and affect the lives of nearly everyone on the planet within a few decades.

Is blockchain technology one of the most significant technological revolutions in history, or is it all hype?

Will blockchain technology change the way governments and banking systems process information, or will it remain business as usual?

Are blockchain technology evangelists overly excited and creating another tech bubble in what is essentially just a new way to create a database?

We'll look at the answers to these questions, as well as the various arguments for and against blockchain technology, in this book.

This book will explain what blockchain technology is, how it works, and the potential applications, as well as the technology's impact.

While it will discuss many of the potential applications and benefits, it is not a book that will solely promote blockchain technology as the solution to all problems in governments, banking systems, or industries.

The goal is to provide a balanced understanding of blockchain technology, combining its benefits and potential applications with its risks and drawbacks, as well as addressing some of the hype surrounding it.

This book is written for people who are new to blockchain technology and want a non-technical understanding of it. The book does cover some technical aspects near the end; however, the technical details of the blockchain are not the focus of the book.

When I first started learning about blockchain technology, I discovered that there was a lot of technical information scattered and poorly structured, but no clear guide starting from a non-technical basis.

This is the book I wanted to read when I first started learning about and trying to understand blockchain.

I hope you find this book useful, educational, and insightful in your understanding of blockchain technology.

• There are key points at the end of each chapter that will repeat the information in the chapter in short dot points.

This is for people who would prefer to get key points summarized.

• If you don't like a chapter or don't have time to read it, skip to the key points to get the main information. • The key points will also help with note-taking, revision of material, or quickly finding material to reference later without having to read the entire chapter again.

• If you have already read the entire chapter, you can skip the key points because they may seem redundant.

To put it simply, a blockchain is similar to a database in that it stores records of value and transactions.

Unfortunately, that simple definition will not pique people's interest and will leave many wondering, "So what? "What's the big deal about a new type of database?"

However, referring to blockchain as a new type of database is akin to claiming that email is a new way of sending letters. While the blockchain is a database, that definition does not explain the true genius behind how it stores value and transaction records.

Previously, when any valuable asset or transaction was recorded in a database, people relied on a third party, such as a bank, government, or company, to do so. People believe that because banks are regulated by the government, they will not steal their money. People believe that if a bank fails, the government will ensure that their money is safe.

People trust credit card companies and banks to take the correct amount from their bank account and deposit it into the seller's account when transferring money or paying for goods and services. The seller believes that the credit card company will pay them and that any dispute or fraud on the transaction will be handled through the credit card company.

If a customer pays in cash at a store, the seller believes that the customer can take this piece of paper with a number on it that is backed by the government to another store and exchange it for other goods and services. The sellers also believe that if they take the note to a bank, they will be able to convert it into a digital cash balance in their bank account, which can be used to pay for purchases made with credit cards or through online transactions.

People put their money and information in the hands of these third-party institutions. People have faith that credit card companies and banks will keep their credit card information private and secure. They believe that credit card companies and banks keep accurate records of their balances and transactions in databases. Banks believe governments have databases and records of the notes issued.

This trust in institutions extends beyond the financial realm and into every aspect of our lives. If you've ever borrowed a book from a library, you should know that the library keeps a database of all the books they have. The library also keeps a database of members, all books borrowed, the date each book is due to be returned, and any books that are overdue.

The library keeps a central database of your personal information, home address, and other information. If you don't return a borrowed book, they can fine you and, if necessary, take legal action against you for theft.

Your personal information, the books you've borrowed, your reading habits - all of this information is private and held by the library, and you trust they won't share it with anyone else.

This data is centralized in these institutions, with each maintaining its own records and systems.

The common thread running through everyday transactions is that we trust institutions and the centralized databases they maintain to accurately record our lives.

Another recurring theme is that we don't trust one another.

Consider the scenarios above without the trusted centralized organization involved in the transactions.

Assume you own a shop and someone hands you a piece of paper with the words "I owe you S100" written on it and their name signed on it. They tell you that if you take that piece of paper to another store, you can use it to purchase goods worth $100.

The answer is probably not, but that is exactly what people do with paper money every day. A $100 note is simply a piece of paper with the government's "I owe you $100" written on it. You accept and use these notes almost every day, trusting that shops will accept them, and that shops will accept them from other sellers, and so on.

In countries where people do not trust banks, institutions, governments, currencies, or each other, blockchain has significant potential.

During the Great Financial Crisis, major financial institutions failed in the United States, which has one of the most developed and regulated financial systems in the world. Financial institutions that had existed for hundreds of years had nearly all failed.

In 2015, banks in Greece, a developed country that uses the Euro, froze all bank account deposits and restricted people from withdrawing more than $70 per day from ATMs.

What other option did people have besides putting their money in what they thought were trustworthy banks and companies? Keep all of their money and stash it under a mattress? If someone discovers your life savings are in your home, they may steal it. If your house catches fire, you risk losing all of your money.

If banks in the United States and Europe can fail and governments can freeze bank withdrawals, how can people in less developed and regulated countries trust their banks and governments?

The short answer is that they can't trust them.

There are billions of people in the world who live in countries where military dictatorships rule, governments own banks and steal or seize money from accounts, local currency is not accepted in shops, crime is rampant, and there are no legal systems in place to protect people and their assets.

There are many countries where, even if you believe the banks will not steal your money or fail, your deposits are carefully monitored by the government, and they may arrest, imprison, or execute you based on your transactions.

In the case of a library, a seemingly innocuous centralized database with which you can share information. You may borrow a book from the library that the government of that country7 does not agree with, such as Beginners Guide to Overthrowing a Military Dictatorship or George Orwell's 1984. In some countries, the government may flag your reading habits as suspicious, leading to an investigation into your personal life, arrest, or worse.

Transactions are risky and difficult in countries where there is a lack of trust in companies and governments. When people deposit money in a bank, they run the risk of the bank or the government stealing it. When making a large purchase, such as buying a house, people may be forced to keep the money in cash, gold, gems, or metals to save up for this large purchase, putting their money at risk of being stolen or destroyed in a fire.

Even with all of this risk, if someone is able to save enough money for a large purchase such as a house, they still run the risk of the seller stealing their money and failing to provide them with ownership of the house. There is no stable legal system in place to challenge ownership or report theft. If the purchase was made in cash or gold rather than through an electronic transaction, there is no evidence that the transaction took place.

When there is trust in the system of law, regulations, government, finance, and people, centralized databases and institutions work.

Even when all of these factors in a country can be trusted, this trust is sometimes betrayed, causing people to lose money and assets.

A blockchain-based decentralized database eliminates the need for centralized institutions and databases. Transparency and trust are created when everyone on the block chain can see and validate transactions.

The blockchain is built on trust; it provides a system of trust between people without the need for an intermediary to be involved in the transactions.

The blockchain enables people to conduct value-added transactions with one another. The example provided was for books, but this can be applied to property, shares, money, digital files, and almost anything else.

The first mention of blockchain appeared in the source code of Bitcoin, implying that the first blockchain was created when Bitcoin was created. The history of Bitcoin and blockchain will be covered in the following chapter, so this chapter will not go into detail.

Blockchain is one of Bitcoin's underlying technologies. There is a common misconception that the blockchain is the only technology underlying Bitcoin. However, Bitcoin was created by combining a number of other cryptographic technologies with the blockchain.

Bitcoin is a type of digital currency that is primarily used for payment. The blockchain technology used by Bitcoin is one-way; however, the blockchain can be used to record and transfer anything of value, not just financial transactions.

Blockchain-based systems are being used for a variety of applications in various industries, including digital identities, social networks, voting, cloud storage, decentralized applications, and other topics covered later in the book.