Click to learn more about author Kasu Sista.
Let us look at the fundamental technologies that are involved in Blockchain and what they do:
- Block, is a block of storage that is stuffed with transactions. Every database uses the same technology.
- Chain, is a doubly linked list. One of the first known data structures and used extensively in software engineering.
- Encryption, is the process of encoding a message or information in such a way that only authorized parties can access it and those who are not authorized cannot. It has been used for thousands of years. We are much more sophisticated now, but purpose is the same.
- Ledger, is probably the first ever data structure. In use since people started trading goods. The biggest innovation in ledger technology is double entry ledgers.
- Distributed ledger, is multiple copies of the ledger for redundancy. When internet was first deployed, they needed a way to keep new IP addresses in sync among the distributed possessors that served as Internet Message Processors (IMPs for short). They talked to each other through a protocol to keep in sync. Similar technology is used in Blockchain.
- Distributed processing, has existed since the 70s in various forms. Andrew project at CMU (1982) was a good example of building a distributed computing environment.
- Smart Contract, is “a computerized transaction protocol that executes the terms of a contract. In other words, a bunch of code that gets executed when a transaction is added or accessed. It could get more complicated but basically that is it. This sounds suspiciously like a database trigger. Because that is what it is. Here is the definition of a trigger. A database trigger is procedural code that is automatically executed in response to certain events on a particular table or view in a database.
So, what is so great about Blockchain? The genius of Blockchain is not the technology. It is the way it was put together, in a very crude way, to implement a trustless system. That became possible only because of the very public internet. It worked for crypto currencies, because currency transactions are simple and can be easily stuffed in a block. If you think of Blockchain as the operating system and Bitcoin as the application, then you can draw the analogy that if Blockchain is DOS then Bitcoin is Pong. A very simple application.
For more sophisticated applications to be built, Blockchain also need to evolve. It will take time. May be 5, may be 10 or even more years. So, ignore the hype about the Blockchain technology and focus on what can be done with it. It will take some time to figure that out as well.