**Instead of giving you a definition, I will try to help you understand what problems Blockchain is solving.**

**We are not gonna use any computer system. Only paper and pen, we go old-school.*

## What actually happened in here?

### Blockchain is a distributed ledger

This method needs the right number of users which doesn’t want to trust any third party. Only then this group can function.

### What is the right number? At least three.

Let’s say together with 9 other people you want to stop using the bank. All of you are in agreement that everyone will store all details about your accounts and transactions. Without storing your identities.

### Empty ledger

### Next transactions go through

**“5”**and from the right side you get:

**“acbc”**.

## 5 =>

## => acbc

However, the machine changed the content of left side into **“****acbc”**, nobody knows; and we can’t reverse it. Looking at the word **“****acbc”** we can’t figure out what was inserted but every time we insert **“****5″** we will get **“****acbc”**.

**“99”**. This time from the right side came out

**“23bce1”**. Weird, but now we see that words which came out from the Magic Machine can also have digits.

## 99 =>

## => 23bcel

Imagine you have two boxes and one with the numbers **“****5067″**, while the second box is empty. Can we find the number that can be added to the second box that will give us a number starting from **000** after adding the first box…?

**“5020”**which after adding 5067 (5020+5067=10087) and inserting it to the Magic Machine gives the score that fulfills our requirements.

In this case number **5020** becomes a sealing key for **5067**. Let’s say there is a card with number **5067**, to seal this card, that no one can change, we seal it with **5020**.

## [5067] + ?? =>

## [5067]+5020 =>

## => 000...

## => 000...

If someone wants to verify if the card was modified, he only needs to take the amount from the card, add it to the sealing key and insert it to the Magic Machine. If he gets number starting from 000 card was untouched. If the number is different from required, you can throw away the card because it was changed or it’s mistaken and we can’t use it.

#### To secure all our cards we will use similar system and then arrange them in folders.

**000**.

*Now that you understand how securing the cards works with transaction registry, we can go back to the moment when you and your group filled up your card with 10 transactions, and you run out of place.*

- User could hear wrong information about transactions announced in your network
- User could write wrong information about transactions announced in your network
- User could try to cheat

##### Why every user is using his time and electricity for machine to calculate the sealing key, if anyone who do it first will announce the number for the rest of net? Can't they just wait until someone else do it?

##### This is how Bitcoin was created on distributed ledger called Blockchain.

*Important:*

*One card is a block of transactions and folder is a chain of blocks that’s why Blockchain*

The score from those three boxes goes through our Magic Machine and from the right side we get the number that needs to fullfil specific requirements.