From a 30,000 foot view, blockchain technology might not look all that different from things that you are already familiar with, say Wikipedia.
A blockchain provides an opportunity to many people to write whatever they want into a record of information, then a community of users can essentially control how that record of information is appended and updated with the existing information. Similarly, Wikipedia passages are not the product of one person or a single publisher. There isn’t one person who controls all of the information on Wikipedia. It is generated by many, many voices and opinions.
Bringing us back down from that 30,000 ft view, however, the nuances that make blockchain technology completely unique become very clear.
While both blockchain and Wikipedia both run on distributed networks (the internet), Wikipedia is completely built on the World Wide Web using a client server network model.
A person (the client) with the correct permissions associated with their account is able to log into Wikipedia and change entries stored on a centralized server.
Then, whenever a new user accesses the Wikipedia page from the front end of the web, that person will see the updated version of the “master copy” of the Wikipedia entry.
Control of the core database always remains with Wikipedia admins allowing for access and permissions to be maintained by one central authority. See the image below for a visual representation of the Wikipedia network:
Does this system sound familiar to any of you yet? Wikipedia’s backbone is extremely similar to the centralized databases that most governments, insurance companies, and banks operate on in this day and age. Centralized databases and assets always mean that the control rests with their owners, which also includes the upkeep and management of updates, access and protecting against hacks and cyber-attacks. That is where the issue lies.
Unlike the centralized database, the distributed database brought about by blockchain technology, has a completely different digital backbone to it. This is also by far the most important feature of blockchains.
Wikipedia’s ‘master copy’ is changed and edited on one main server and all users see the new version go live. Within the case of blockchain technology, every computer (node) in the network is coming to the same conclusion. Each one updating the distributed ledger independently, with the most popular record becoming the official record in light of there being a master copy.
Transactions are broadcast live to the network at all times, and every node is putting together their own updated version of the events taking place across the network.
This is completely against all of the norms that we have been interacting with for years now! Gone are the days of having to rely on one central authority to exist and get paid to do nothing more than monitor and facilitate digital relationships. Blockchain represents a complete innovations in the way we handle information registration and distribution. This is a much safer system.
But in all honesty, the underlying technology we are talking about here is not necessarily brand new.
It is more of a combination of proven technologies applied in a way that has never been done before. Blockchain is the product of these three technologies all merged into one form:
- The Internet
- Private Keys
- A Protocol that overlooks incentivization
This is what made Bitcoin’s founder, Satoshi Nakamoto’s idea so useful and valuable.
What you get from all of this is a system for digital relationships and interactions that will never need a trusted third party in the mix to muddy up the waters. The matter of completely securing digital relationships is of the utmost importance, then couple that with the simple, yet elegant technology of the blockchain network… and you got a recipe for success if you ask me!