# What the Heck blockchain is?

By [Madhav Goyal](https://paragraph.com/@madhavg) · 2022-01-26

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This post is written by a member of the Dream DAO who humbly agreed to be a guest writer for this post.

In a nutshell, blockchains are essentially a network that allows for transactions to be recorded in a transparent and decentralized way unlike how current transactions are processed through a centralized organization.

E.g., if you are sending money to a friend through e-transfer at your bank (centralized organization), we would hope that your friend receives the money in a fast and secure way which is mostly the case.

Problem: What if the bank happens to misplace your order or decided to freeze or worse delete your account altogether for several reasons based on their personal circumstances? Remember they’re in complete control as such your transaction/money/bank account would potentially be lost.

![](https://storage.googleapis.com/papyrus_images/4c5ac736763e914b6d3d132ba0f612479ccae3188c5ff331c59e9f31408d1643.jpg)

If you were, however; sending money through the blockchain (Bitcoin and Ethereum are the largest chains right now and most popular cryptocurrencies), it would all be recorded transparently "on-chain" which is essentially a massive accounting ledger book of every transaction being processed through the network.

Since all transactions happen “on-chain” you can always trace exactly where your funds are, and the best part is there is no centralized organization processing your transaction - its all done automatically through smart contracts (blockchain developers code these smart contracts).

I would recommend researching the Bitcoin blockchain and the Ethereum blockchain which are very similar, however; currently have different goals. Bitcoin prioritizes being a store of value and medium of exchange, so developers are focusing on that and the security of the network. Ethereum can also be used as a store of value or medium of exchange, however; is focuses on allowing developers to build their own projects on the network such as video games, artwork, music, metaverses, etc. (which can also eventually be done on Bitcoin).

E.g., blockchain-based video games allow players to earn real money (play-to-earn) in exchange for their time spent playing by offering rewards for their achievements and applying real-world value to in-game assets which can be exchanged for money through various marketplaces.

This is much better than the current “Web 2” model of -- buy a game -- spend tons of time playing and money purchasing in-game items – unable to extract value from in-game items because they’re denominated in a virtual currency controlled by the organization who made the game (e.g., V-Bucks, VC) and often do not provide a way for players to sell their assets or redeem them for real money.

Another example is NFT projects which creators and artists of all varieties can digitize their artwork and reach a huge audience of people as an owner. These projects can be whatever the creator desires, some projects are simply a display of artwork, and other projects are more sophisticated in which creators create an entire roadmap around giving back to their customers/owners and build an entire community in the process.

I personally like to invest/engage in projects that have an altruistic component where a % of proceeds are donated to a charity, give back to a certain community, work toward education and/or building toward the future of Web 3, or help with saving the planet.

TLDR; not only are Bitcoin and Ethereum great investments if you’re a believer in the future of technology, but they also provide true ownership and reward to individuals and communities no matter what their objective is (investing, creating, learning, playing, etc.)

PS: Thank you, dear reader, for making it till the end and if you like it I may post some writings on blockchain in the future, and a Huge shoutout to Ryan.

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*Originally published on [Madhav Goyal](https://paragraph.com/@madhavg/what-the-heck-blockchain-is)*