What is Blockchain?
With all the hubbub and hullabaloo about cryptocurrencies and their flag carrier, the bitcoin, an extremely promising and transformative technological foundation has been well hidden and much less talked about, well, until recently. Everyone is talking about it now! That foundational layer, which the bitcoin application has been built on, has been unostentatiously and, perhaps, geekishly called the Blockchain, simply a chain of ‘blocks’! The blocks can contain a single transaction or a group of transactions and each block of transactions is linked in a chain with each other. Hence, the name, the blockchain. However, it is not simply a ‘linked list’ of blocks of transactions in the classical sense of a linked list. Each succeeding block is linked to its preceding block of transactions through a complex cryptographic ‘fingerprint’ of the preceding block. If anything in any block is changed, intentionally or maliciously, its fingerprint and all the fingerprints of succeeding blocks get changed and the chain is ‘broken’ and alarm bells start ringing everywhere in the decentralized and global community watching over the chain. If a change does happen, the cryptographic fingerprints will need to be calculated again, which is a massive undertaking because it takes a huge amount of energy to verify the validity of each block before it gets added to the chain. To verify the validity of one block can take as much energy as is used by more than 150 countries in the world! So, by construction, the blockchain has a long memory and, indeed, its ‘unforgettable-ness’ is an asset beckoning to be leveraged. It is changeless, it is immutable. It is decentralized, it is anonymous and is cryptographically fingerprinted and, thus, secure. Simply stated, it is changeless, faceless and self-policed!
While the world and the media have been busy debating whether the bitcoin and its more than one thousand cousins, the alt-coins, will ultimately survive or not and, if they do survive the onslaught by ‘sages’ like Jamie Dimon and Warren Buffet, the question being asked is in what avatar they will reincarnate themselves. Albert Camus, the philosopher, needs to be reborn to answer this existential question. But one thing is certain, regardless of what happens to cryptocurrencies, the bitcoin and its cousins, the blockchain technology is here to stay to fuel the next revolution and business transformation the way the internet and the worldwide web did around twenty five years ago. I recall the excitement of one of my employees in Boston when he ‘dragged’ me into his office and showed me the first version of ‘Mosaic’ and how he could search for information using it. Even then, there were many key skeptics and detractors, especially in the banking and finance community. The worldwide web and the internet survived and thrived and the detractors adopted it lock, stock and barrel.
The way the modern world can’t be imagined without ‘www’ and the internet, the blockchain technology will be the basis of imagination of the world in the making. The businesses which disintermediated other businesses in the internet era, are now themselves prone to be disintermediated in the ‘blockchain era’. The way the internet defined life in our generation, blockchain will do the same in our children’s generation, the millennials. Some of the disintermediating applications of the immutable, anonymous and secure blockchain technology will be talked about in future blogs.
First Published On https://3lines.vc/