Blockchain Technology: Imagine a blockchain like a chain of toy blocks. Each block in the chain contains information. Once a block is added to the chain, it can’t be changed or removed, just like how it’s hard to change a block in the middle of your toy block tower without affecting the other blocks. This makes the blockchain very secure.
For example, let’s say you do chores at home and your parents give you digital stickers as a reward. Each sticker represents a task you completed. These stickers are added to your digital sticker book, which is like a blockchain. Every new sticker (or block) has information about the chore you did and when you did it. Once added, no one can change or remove that sticker, ensuring that your hard work is always remembered.
Central Bank Digital Currencies (CBDC): CBDCs are like digital money, similar to the coins and notes you use, but they exist only on computers. Just like the money in your piggy bank, you can use CBDCs to buy things, but instead of using coins or notes, you use digital money.
For instance, imagine you want to buy a new book. With CBDC, instead of giving cash, your parents transfer digital money from their digital wallet to the bookshop’s digital wallet. It’s like sending a text message, but instead of words, you’re sending money securely.
Nice Explanation of Blockchain technology & CBDC.