Imagine you have a notebook where you write down all the things you buy and sell. Your friends have notebooks too, and they write down all their buys and sells.
Now, imagine if every time you buy or sell something, you showed your notebook to all your friends and asked them to check if what you wrote is true. If they all agree that what you wrote is true, they would add their own checkmark next to your entry.
This is what a blockchain is like! Instead of a notebook, it’s a computer file where people write down all the things they buy and sell using something called cryptocurrency. And instead of friends, there are lots of computers all over the world that check to make sure everything people write is true.
When someone writes something new on the blockchain, it gets added to the end of the file, like adding a new page to your notebook. But before it can be added, all the computers have to agree that it’s true. Once they all agree, it gets added to the blockchain forever and can’t be changed.
This makes the blockchain very secure because if someone tries to write something that isn’t true, all the computers will notice and not add it to the chain. And because the chain is spread out over so many computers, it’s almost impossible for anyone to change anything that’s already been added.
So that’s what a blockchain is, a big computer file where people can write down things they buy and sell using cryptocurrency, and lots of computers all over the world check to make sure it’s all true!
So Ethereum is another type of blockchain, just like the one I explained earlier. But there are a few differences.
Imagine that instead of just writing down things you buy and sell, you can write down all sorts of different things on the Ethereum blockchain, like messages or even computer programs! These messages and programs are called “smart contracts.”
And just like with the other blockchain, there are lots of computers all over the world that check to make sure everything people write is true. But with Ethereum, people can use the smart contracts to automatically do things, like send money or buy things, without needing someone else to help them.
For example, let’s say you wanted to buy a toy from a store on the other side of the world. With Ethereum, you could use a smart contract to send the store the right amount of cryptocurrency automatically, without needing a bank to help you. And once the store gets the money, they could automatically send you the toy, without needing a shipping company to help them.
So, in summary, Ethereum is another type of blockchain that lets people write down all sorts of different things, including smart contracts. These smart contracts can be used to automatically do things without needing someone else to help, like sending money or buying things.
In 2021, a man from Texas claimed to have made $11 million in profits from buying and selling Dogecoin. He then used his profits to buy a Lamborghini, which he promptly crashed into a ditch. Talk about a crypto rollercoaster ride!
So imagine that you’re at a big market, where people can buy and sell things. In this market, there are lots of different kinds of things you can buy, like apples, toys, and books. Each seller has their own booth, and they’re all selling different things.
Now, let’s say you really like a toy that someone is selling. You can go up to their booth and give them some money, and they’ll give you the toy in return. That’s like buying something!
But sometimes, people want to sell things that aren’t physical objects, like tokens. These tokens are like special coins that can do things, like give you access to a certain website or let you use a certain app.
And just like at the market, people can buy and sell these tokens too! They use a special website called an “exchange”, where people can trade tokens with each other. So if you want to buy a certain token, you can go on the exchange and see who is selling it. You can give them some money, and they’ll give you the tokens in return.
And if you have some tokens that you don’t want anymore, you can sell them on the exchange too! You can find someone who wants to buy them, and they’ll give you some money in return.
So people buy and sell tokens because they can be really useful! They can let you do things you couldn’t do before, like access a new website or use a cool app. And just like at the market, you can buy and sell them with other people who want them too!
