Are you skeptical about blockchain? I’m not surprised.
For a technology that got its start as the infrastructure that underlay the bitcoin cryptocurrency and then blossomed into a Libertarian’s dream of a decentralized transaction platform that would take down the modern financial world, blockchain has had its share of hype, scams and other nonsense.
However, if we pare away all the silliness and radical politics, a core set of innovative technologies come to light. At its heart, a blockchain is an immutable, secure ledger. Every time anyone writes a record or “block” to a blockchain, it’s there to stay – and no one can change it.
Immutable data stores are nothing new, of course. “Write once, read many times” or WORM technologies date from the 1980s or before. What’s different with blockchain is the notion of distributed consensus.
There are many blockchain technologies with a plethora of confusing consensus mechanisms – and this confusion only adds to blockchain’s reputation as being inappropriate for business use. But at its core, distributed consensus means that all parties in a transaction see the same transaction, and they have a cryptographically secure means for verifying it.
Immutability, after all, is only as good as the technology that supports it – and if one party offers some immutable record, who’s to say if that party is on the level, or if no bad actor has compromised the party’s data store?
Such is the power of an immutable, secure ledger: Not only are completed transactions part of the permanent record, but every interested party can verify that their version of the truth matches everyone else’s. This central capability is why blockchain is such a powerful innovation.
The myth of decentralization
I discussed distributed consensus above, but in blockchain circles, a more common word than distributed is decentralized.
Distributed refers to an architectural approach. We’ve had distributed architectures…