Lesson 1: Why Blockchain?

This lesson is designed to create an immersive experience for students, where they participate in an activity or simulation which motivates the learning goals of the lesson. This creates a social, memorable, and engaging experience for students that helps transfer learning from this lesson to other aspects of their life, especially if this is the only lesson students engage in on this topic.

The pedagogy and teaching moves used in this lesson are based on Experiential Learning, which follows an Experience <> Reflect <> Think <> Act cycle. The teacher curates and guides an experience that students participate in, then students reflect on the experience leading to abstraction and meaning-making of the concepts embedded in the experience.

Because of the experiential nature, this lesson may feel messy and the classroom may feel chaotic. However, there may also be moments to elevate students' lived experiences and to capitalize on "teachable moments".

This lesson centers around the How Blockchain Works: Why Blockchain? video - watch this video first before exploring the lesson plan. In this particular lesson, students watch the video last which helps summarize and codify their experiences during the lesson.

(Optional) If you want to dive deeper into blockchain and cryptocurrency concepts to be prepared for student questions, consider reading the Teaching How Blockchain Works - Tips & Resources doc.

If you intend to teach all of the lessons and this is your first time using Code.org, consider watching our Getting Started with Code.org video series for an overview of how to navigate lesson plans, setup a classroom section, and other important features of the Code.org platform. Each video also has a support article if you'd prefer to read or print instructions - click here to learn more.

Prompt: Most people purchase things using cash, credit cards, or online apps. Can you think of an example where you were able to buy something with something other than cash, such as with a trade?

Discussion Goal: This prompt encourages students to think about situations where people can trade or exchange goods, and start considering other forms of currency used for trading. Students might think of collectibles or video games, where people can trade “cards” with each other. They may also think of bartering with services, such as helping to pick fruit in exchange for some of the fruit that was collected. If this lesson is being taught in conjunction with other Blockchain lessons, you may decide to explicitly mention cryptocurrencies (such as Bitcoin) as an example of something other than cash or credit cards used to make purchases.

There are a lot of ways to exchange goods or services - paying with cash or credit cards is just one possibility. Today, we’re going to investigate different systems that could be used to make trades or exchange goods. Then, we’re going to learn about a brand new system called Blockchain which uses new, innovative technology to exchange goods and services digitally.

Big Question: What are the tradeoffs when exchanging goods and services with other people?

Today we’re going to participate in a simulation of some of the original economic marketplaces where people trade directly with each other. If there’s no currency involved and people trade things directly, this is called a bartering system. The class will split into groups of 3 that will participate in the simulation - afterward, we’ll all discuss the benefits and consequences of a system like this.

Modern Examples: It may be helpful to share modern examples of decentralized markets, but be sure to pick examples that your students can relate to. Some potential examples include:

• Farmer’s markets where vendors can barter or trade with each other
• The popular website Craig’s List, where people can interact directly with each other Markets for collectibles, like trading cards, where people trade directly with each other based on the type of collectible
• Discord is an app where each person can host their own servers and communicate directly with each other. Even though everyone must use the same tool (Discord) to communicate, the messages themselves are not going through any Discord company servers

Group: Split the class into groups of 3, but so there are no more than 8 groups. If there are more students in the class: some students can be observers or groups of 4 can be created but it will be more difficult for those groups to succeed in the simulation.

Every group starts with a certain amount of resources, which you will be able to trade with other groups. As I distribute these resources, keep them a secret - for now, only your group knows the resources that have been allocated to your group. I will also be participating in the simulation and you have my own set of resources you can trade with.

Distribute: Distribute the pre-cut Decentralized Market Resources [Cutouts] to each group (for example: by having them pre-sorted in envelopes that each group opens). Groups can look at their own resources, but should keep them a secret from other groups for now.

Display: Show the next set of slides which explain the rules of the simulation and the rules for trading.

(Optional) Model: Show a short demonstration for how a trade could work:

• Ask a group if someone would like to trade for a resource
• Fold up the card and have the other group fold up their card
• Trade the cards with each other
• Unfold and verify that the cards match what each party agreed on

Trust Matters: The rules of this game are deliberately designed to allow emphasize the need for trust, and the potential for people to break that trust. Some students may pick up on this in this example - for example you could have traded a blank card or a different resource than the one you said, or the other person could have done the same. If students pick up on this and ask about it, acknowledge that this may be possible and trust is important, but try to keep the discussion short and don’t explain so much that it could impact the simulation. This is a point that will get emphasized and revisited after the simulation is over.

Do This: Set a timer for 10 minutes and allow students to barter and trade with each other to try and "win" the game.

Circulate: Monitor students as they begin to barter and trade with each other, and be sure to participate in the activity itself by instigating trades with students.

Managing Emotions: Some aspects of this simulation are meant to highlight the limitations of a system like this and how it can create inequitable outcomes. Putting students in the position of someone impacted by this system can help build empathy and understanding for how this system can benefit or harm real people, and will be useful during the debrief. If students find themselves significantly impacted or getting upset, reassure them that this will be a great topic to discuss during the debrief and the simulation will be over soon.

Where are your resources? It doesn’t matter what resources you have access to when participating in the simulation - it may be best to print an extra stack of each resource to have available to you. Depending on the groups involved in the simulation, it may become apparent that there aren’t enough of a certain resources for everyone to have a chance to survive. If you notice this happening, consider trading that resource with groups to add more into circulation.

Regroup: After 10 minutes have elapsed, have students regroup and continue through the slides.

But We Didn't Finish! It's okay for the simulation to end early, and it's fine if no groups "won" - there are still takeaways and moments of reflection that can be discussed just from the time students spent so far.

Prompt: What is an example where this system worked as intended and you were able to get the resources you needed? What’s an example where this system wasn’t working effectively or disadvantaged certain groups?

Discussion Goal: Use this discussion to pull out any significant exchanges during the simulation, especially ones that you architected using the strategies above. Students may comment that, when someone had a lot of one resource and another group had less, it was easy to trade. However, students should also call out when students were taken advantage of or when not everyone was able to have their needs met. You should also point out any observations you made about student behaviors, such as forming “cliques” or hoarding resources. Students should leave this discussion with examples of potential flaws in this system.

Prompt: How did trust play a role in the situations we just talked about? Would you have made different decisions based on whether or not you could trust someone when making a trade?

Discussion Goal: This question is meant to focus on “trust” being a central component to both the issues and successes with this system - untrustworthy behavior can lead to some of the issues seen so far, but being able to “trust” another person can lead to successful trades. Help students make these connections on their own, but if the class struggles surfacing this themselves, you can make this explicit in the transition to the next activity.

The simulation we just did was an example of a decentralized market because there’s no central authority helping to manage or validate trades. As societies evolved and got bigger, these decentralized markets continued to cause issues, especially when trading with someone far away and you don’t know if you can trust them. To help with this, societies created centralized markets which use a central, trusted entity to manage transactions. For example: a bank is a central entity that people trust with their money. We’re about to participate in a new simulation, but using a centralized entity instead!

Modern Examples: It may be helpful to share modern examples of centralized markets, but be sure to pick examples that your students can relate to. Some potential examples include:

• Banks are centralized sources for wealth and transactions. They help manage transactions between users, and can help mediate in cases of fraud or theft.
• Ebay is a centralized, trusted source for online auctions between people, verifying trades and holding people accountable. Ebay can be thought of as a counter-example to Craig's List from earlier.
• App stores on your devices - especially the Apple App Store - vet, verify and regulate all apps on the marketplace so you can’t just install whatever app you want, but you’re ensured that the apps are secure.
• Many major tech companies provide centralized email services, such as Google or Yahoo or Apple. This is a counter-example to the Discord scenario from earlier - unlike discord, all messages are processed and relayed by a central server owned by one of these companies.

Group: Decide on one group to help with the bank transactions. This group will be removed from the game and instead will act as “bank tellers” to process transactions and update the ledger. Let students know you will also be acting as a bank teller who can help complete transactions.

Distribute:

• Pass out a pre-cut Centralized Market - Individual Group Resources [Cutouts] slip to each group so they know how many resources they start with
• Pass out one Centralized Market - Bank Ledger handout to the bank group (do not distribute one per student - distribute one for the whole group)
• Have a stack of Centralized Market - Bank Trading Note [Cutouts] available for groups to use for trades

Display: Show the following slides with the rules for the simulation and trading.

Do This: Set a timer for 10 minutes and allow students to barter with each other to meet the demands of the game. You should also circulate and participate in the game.

Circulate: Monitor students as they begin to trade with each other, and be sure to participate in the activity itself as a bank teller. It may take longer to initiate trades because of the added layer of presenting bank slips to tellers to complete trades.

Regroup: After 10 minutes have elapsed, have students regroup and continue into the slides.

Prompt: What is an example where this system worked as intended and you were able to get the resources you needed? What’s an example where this system wasn’t working effectively or disadvantaged certain groups?

Discussion Goal: Use this discussion to pull out any significant exchanges during the simulation, especially ones that you architected using the strategies above. Students may comment on how trustworthy the system is, but may not like how long it takes to get anything done. You should also point out any observations you made about student behaviors, such as forming “cliques” or the potential for overdrafting with so many transactions occurring. Students should leave this discussion with examples of potential flaws in this system.

Prompt: How did individual freedom play a role in the situations we just talked about? Even though there’s more trust in this system, were there times when you were restricted from making certain choices?

Discussion Goal: This question is meant to focus on “individual freedom” being a central component to this system as a counter-balance to trust. Trades are more likely to be successful because of the central authority managing it, but you may not always be able to trade when you need to or you may be restricted on where you can trade if the bank is located somewhere else.

Today's activities introduced two types of economic markets that evolved throughout the history of human beings: decentralized markets, where people can trade directly with each other. And centralized markets, where people interact with a central entity. As technology also continues to evolve, there are new innovations and new systems that try to solve the problems in these markets. One of those technologies is called the Blockchain.

Video: Watch the How Blockchain Works: Why Blockchain? video. After the previous activities, students should recognize and be able to relate to many of the themes in the video.

Prompt:

• What is one issue from today that could be improved by Blockchain?
• What is a potential new issue that you think could occur because of Blockchain?

Have students think on their answer first and discuss with their groups before sharing as a class.

Discussion Goal: Answers will vary depending on the experiences students had during the simulation - however, hopefully students see how their experiences are reflected in the lead-up to blockchain technology as presented in the video.

We'd love to learn more about the folks teaching these lessons and the classroom experience. Please let us know in this How Blockchain Works Teacher Survey.

Depending on your goals and student interests, you may decide to offer optional extensions related to blockchain and cryptocurrencies. Additional resources and the rest of the How Blockchain Works video series are available on https://code.org/blockchain, including a Blockchain & Cryptocurreny Hour of Code Activity.