When trying to explain Bitcoin to people, one of the things that turns them off is the amount of jargon that they need to deal with – and the fact that a lot of that terminology doesn’t really mean what it seems to mean.
Take the blockchain: The name seems visual enough and clear enough to get your mind around, a series of blocks linked together in a chain. But what are ‘blocks’? The more-or-less correct way to describe it is that it’s a set of hashed output that meets a certain value interlocking the current block with the previous block and containing information on recently opened Bitcoin transactions now being confirmed through consensus inclusion in the chain. The reason they’re called ‘blocks’ is simply because if you print them out, they will form blocks of print on the printout.
There are easier ways to talk about it, of course. I like to say that the blockchain is really a public accounting ledger showing all confirmed Bitcoin transactions. Each page is a block and each page must tally with the one before it before it can be considered valid. Tallying the numbers, though, is not simply a matter of matching numbers: It is doing a calculation of all the information on the page so that the number for the new page can only tally with that specific page.
Finding a simple way to communicate the basics of Bitcoin is crucial to helping people feel more comfortable with it. The notion of hashing is particularly difficult. The name ‘hash’ itself is confusing – is that a drug? The little crosshatch on my phone? What?
Ken Shirriff has created a video showing how to hash by hand. Although most people won’t take the time to really learn how to do this, it is a great resource to point people to so they can understand what is actually going on when we say that something has been hashed.
Take a look: