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What is a public ledger? And why may you not want to send money via crypto if you care about your privacy? - Crypto in Plain English - Episode 178 - by cryptohunt.it
What is a public ledger? And why may you not want to send money via crypto if you care about your privacy?
Welcome to the cryptohunt jam where we spend one minute a day to explain crypto. In plain english.
Here’s a thing most people won’t tell you about crypto: Every blockchain is really nothing other than a giant notebook, stored in the cloud.
That notebook is often referred to as the public ledger. So let’s explain what the ledger is, and then look into the implications of it being public.
Think of your own bank account: Money goes in, money goes out. The result is your account balance. Your bank keeps track of your transactions, and everyone else’s.
A blockchain ledger is the same: It’s one big history of all the transactions. Nothing more, it’s really that simple. But instead of being saved on your bank’s server, an identical copy is saved on many computers that are connected peer-to-peer.
Why many computers? The point here is to eliminate the middle man, your bank. But trusting a single random person to keep this important history of transactions is problematic. They could alter it and steal your money. So many copies exist, and they are publicly accessible. If someone cheats, anyone with a separate copy can quickly find out by doing some simple math.
But that has downsides for consumers like you. By design nothing is private on a public ledger. So when you send money, anyone can see how much and where. And of course, anyone can see how much you have in your wallet as well.
So think about that as one of the downsides of using crypto. Everything is always a tradeoff.
Disclaimer: This podcast references our opinion and is for information purposes only. It is not intended to be investment advice. Do your own research and seek a duly licensed professional for investment advice.
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By cryptohunt
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What is a public ledger? And why may you not want to send money via crypto if you care about your privacy?
Welcome to the cryptohunt jam where we spend one minute a day to explain crypto. In plain english.
Here’s a thing most people won’t tell you about crypto: Every blockchain is really nothing other than a giant notebook, stored in the cloud.
That notebook is often referred to as the public ledger. So let’s explain what the ledger is, and then look into the implications of it being public.
Think of your own bank account: Money goes in, money goes out. The result is your account balance. Your bank keeps track of your transactions, and everyone else’s.
A blockchain ledger is the same: It’s one big history of all the transactions. Nothing more, it’s really that simple. But instead of being saved on your bank’s server, an identical copy is saved on many computers that are connected peer-to-peer.
Why many computers? The point here is to eliminate the middle man, your bank. But trusting a single random person to keep this important history of transactions is problematic. They could alter it and steal your money. So many copies exist, and they are publicly accessible. If someone cheats, anyone with a separate copy can quickly find out by doing some simple math.
But that has downsides for consumers like you. By design nothing is private on a public ledger. So when you send money, anyone can see how much and where. And of course, anyone can see how much you have in your wallet as well.
So think about that as one of the downsides of using crypto. Everything is always a tradeoff.
Disclaimer: This podcast references our opinion and is for information purposes only. It is not intended to be investment advice. Do your own research and seek a duly licensed professional for investment advice.