Blockchain (captioned)

Explained by Common Craft
We now have a fundamentally new way to manage ownership of things like digital currencies and intellectual property. It’s called Blockchain and it is the foundation for concepts like Bitcoin. This video explains the basics in about three minutes.
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Video Transcript:

For most physical things, ownership is obvious. When someone gives you a camera, it becomes yours. But ownership of other things may not be so easy to manage.

Think about owning land, for instance. You could own a plot of land fair and square. But your ownership isn't obvious. Someone could come along and try to build a house on it without knowing it is yours.

In the real world, authorities like banks and governments account for ownership and help prevent these kinds of problems. But this can be a risk, too. Think about it this way.

Imagine a small village with eight plots of land. When property is bought or sold, the village government accounts for who owns what.

This worked for years, but then something terrible happened. Lightning struck the government building and burned it to the ground, along with all the records. Suddenly, ownership of property was unclear and villagers could claim to own property they didn't. It was chaos.

Today, our system is similar. A central authority, like a company, bank, or government, accounts for ownership. They help us establish and protect what we own and account for it when ownership changes.

While the system has worked for years. The internet has enabled a completely new way to think about ownership, called blockchain. To understand it, let's consider our village again.

When the government building burned down, the villagers saw another opportunity. Instead of having a central authority manage ownership, what if they all managed ownership together in a decentralized system?

Once they figured out who owned what, they created a list with everyone's name and the property they owned. This list was the heart of the system and was shared with everyone in the village who each kept their own copy secure.

When ownership needed to change in the village, the villagers could verify ownership and approve the transaction by confirming that the seller owned the property.

Once the transaction occurred, everyone's list updated automatically. Over time, a record of all these transactions were organized and sealed into blocks that were all linked together and represented a complete and public history that couldn't be changed.

This was the village's blockchain. Using this method, ownership was obvious and transparent to everyone. The villagers didn't need a central authority and didn't have the risk of records disappearing or being manipulated.

This is the basic idea of blockchain, which many people know through the digital currency bitcoin. In the online world, it means that a huge network of independent computers all keep an identical list or ledger of who owns what. When ownership changes, whether it is currency, land, or intellectual property, the lists are all updated simultaneously with each new transaction.

Like the village, these transactions are organized into a chain of blocks that provide a way to verify ownership today and for every transaction in the past.

Blockchain is very complicated and still developing, but could become a fundamentally new way to manage and account for changes in ownership. Like our villagers, we could see whole systems move to using a form of this idea in the future.


What it teaches:

This video provides a big picture look at why blockchain matters. Using the story of a village, it explains how villagers, who had a centralized authority for ownership, discover a new, decentralized way to manage ownership of village property. It teaches:

  • How central authorities (banks, government) currently account for changes in ownership

  • Why a fundamentally new accounting system is now possible using the internet

  • How blockchain works to create a decentralized system that users manage

  • Why this new system is considered safe, secure and transparent

Video Info:

  • Duration:  03m 20s
  • Captions Available:  YES
  • Lesson Plan:  YES
  • Category:  Technology
  • ISTE Standard:  Empowered Learner, Indicator 1d

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