Let's agree to one thing. None of you reading this short article have never heard of blockchain by 2020. You see and hear that magic word almost everywhere. And at the same time a fair amount of you don't really know much about it, except maybe that some people almost made a religion of it.
Tomasz ŁakomyThe trend we’re seeing in software development can be summarized as “abstracting the problems away”
- React abstracted DOM manipulations
- CloudFormation abstracted building AWS infra
- SLS/CDK abstracted away CloudFormation
- Blockchain abstracted away something, I guess22:12 PM - 24 Jun 2020
Tomasz noticed blockchain is already a big thing, but (just like me not long time ago) he is not exactly sure in what way. Since I'm recently a bit more into that topic, due to my work @bitwala, I have decided to share what I have discovered there for myself.
So what's the big deal, what's a blockchain and why is it such an invention?
Forget about the confusing fancy wording - at its core it's just a regular database, with the only difference of the chain-like structure.
Why chain and not something else?
The chain-like data structure makes it proof for unauthorised modifications, making it sort of "self secure" without any security man standing over it (for details on that see the short video below). That's all there is to it.
Doesn't sound like much, but is it?
Having a database that doesn't require any maintenance, security or "ownage", that is self secure, where you can either follow hard-coded rules, or create your own instance, and there is no other way around it
...well that's actually a big thing. Why?
The reason is you can share it among literally everyone, make it public, and nobody can moderate it. So even the person who initiated the algorithms, has to accept its rules forever it exists. And it can't ever get deleted, except if we all agree to delete it and do so. And when everyone holds a copy of something, obviously someone will try to modify it - the self secure structure that you can trust no matter what (due to its nature) is a key here.
If you ever wish to have your own copy, you just ask the network for that copy, and it is provided to you (the typical blockchain database is shared using regular P2P network protocols)
So again forget about everything that has been said... imagine a shared database, owned by literally everyone who ever wishes to have a copy of it and equal access...
...yet it can't be moderated by anyone, and its record history can't ever get modified due to its structure.
So how about...
You can easily prove to anyone you are the owner of a specific home at a given address, by simply showing him your record in that database.
Do you ever wish to pass that ownership on someone else? No problem, you just tell the network (broadcast) who do you wish to pass your rights to, that information is then added on top of the chain, and becomes visible to everyone. (and it will soon get buried by other users making their updates on top, but still all visible)
...aaaaand it's gone. you are no longer the owner, everyone knows this, every person, court, government, regardless of borders, anyone who has internet access can confirm that on the network.
If the internet isn't owned by anyone, how come a single company under a specific boss, office, employees and jurisdiction is in control of all the domain names? How is it that someone can charge money for a domain that is not owned by anyone yet? Where does that money go? Who decides on the price? Are they the "owners" of the internet or what? What if something happens to that company? Are we all going to lose all the global data about our domain names?
I know I'm simplifying a few things here, but trying to make a point: having a shared database here, that everyone has equal right to, sounds like a perfect use case for blockchain, like it was tailored just for this.
Let's say I need some cash, you have some to lend to me. I ask you for 100, you give me that, but so we don't forget, we will write down that information to the database.
Later, I'm giving you back your 50 first, we can write that down to the db too, so it's all clear that I still owe you half of the money.
Ok, so our db says: you gave me 100, I gave you back 50, so obviously I still have 50 with me. Easy.
Now if everyone can see the records, they will know that I got 50 with me. And it can't be wrong because you see all the transaction history, math is right, nobody could falsely modify it, all checked - that means I can make a transaction with a third person now, and write part of that 50credit to that new person's account
In that case you introducing his new balance record to the db, and now everyone can see by transaction history he has specific credit, coz math don't lie: there was a dude with 50, dropped 10 to another person, now they got 40 and 10, and there is still a guy at the bottom of chain who started by lending 100, but got only 50 back, and so 50 is his credit - all checks.
Sounds familiar? Do you see where this goes to? Well, we can slap a name on that transaction list database, and we got a "cryptocurrency".
Is that really what cryptocurrency is? A list of transactions? So is it db or a currency? Wtf, right?
That's exactly it. Database. Nothing more, nothing less. There are no files, items, coins, sticks or stones being exchanged. It is just a record of credit flowing from hand to hand.
If you get it right, you will possibly see how value flows, and it doesn't matter if it's made of paper, metal, or online transactions, and what name you will slap on that transaction history. Wire transfers already work that way (regular dbs, but stored in specific "chosen" institutions), yet nobody questions that, like they do the cryptocurrencies - but that's a topic for a different article.
We could discuss much more examples, like insurance records, car registrations and so on. Imagination is the only limit here
So by now you should see that blockchain is nothing fancy and nothing mystic. It's a database we all know, with it's only difference in chain-like structure, that makes it fully secure, while there is not a single owner securing it.
But! The genius concept of self securing databases is an undeniable invention and I believe in the coming years it will revolutionize many different parts of our typical life, just like the internet did. You can only imagine how many use cases it can have, and how many doors it unlocks. We already witness big things being built around that concept, but I believe it's a tip of an iceberg, and it's hard to predict today how big of an impact the blockchain databases held by the entire internet will have on all of us in next 5-10 years.
If you got somehow inspired, and have any creative idea what kind of data would be great to store on blockchain share it in the comments below! 👇
I am also happy to answer all your questions.
disclaimer: I purposely simplified a few topics and tried to avoid terms like ledger, decentralised, cryptocurrency, or even blockchain itself. I find these only confusing cryptonimes for things everyone knows, and my goal here is only to explain the high level genius of a matter