To understand blockchain, forget blockchain15 January, 2019 12:35 pm
The Industrial Revolution changed the world for ever. Now the Digital Revolution is doing the same. The world wide web and high-speed broadband were in the vanguard, and now the big guns of blockchain are being brought to bear. But what is blockchain, and why do we need to forget the name..?
As the father of the world wide web, Tim Berners Lee could reasonably be labelled as the instigator of the digital revolution.
It was the linking of computers to share information, technology we have embraced and now take for granted, that started it all off. Firstly, we could look up information about just about anything. We could write letters with neither pen nor paper. Then we started to buy and sell goods and services. And eventually, experts predict, money and banks will go out of fashion…
OK, we paraphrased the last part. But haven’t you noticed that money isn’t necessarily money anymore? It’s a string of numbers shown on a screen or printed on a piece of paper. There are fewer and fewer coins in your pocket or purse. Buying a car with cash – real, hard cash – would require a suitcase. Buying a house would be all but impossible.
Bank branches are closing. ATM machines are being taken away. All of this suggests a shift to relying on the net to get business done. Welcome, blockchain.
What is it?
Firstly, that’s a good question. Even experts disagree. Blockchain is just a name. It’s also been described as ‘the trust machine’. Essentially it’s a ledger, recording transactions in their tens of thousands or even millions. The theory goes that rather than keeping our own records, or having banks keep them for us, all the records are kept in one huge shared set. Everyone trusts everyone else to keep records that we believe to be an accurate representation of what we’ve done.
That might draw raised eyebrows and sharp intakes of disbelieving breath. However, the theory goes on that because once transactions are entered onto the ledger they can’t be altered, and everyone agrees them, they’re going to be accurate. And if that seems strange, think of buying your lunchtime coffee by touching your phone’s electronic wallet to a reader at the counter. Funds have changed hands without any hard cash and without the need for a third-party intermediary in the form of a bank – because you didn’t have to go there and get cash (or coffee tokens) there first. And you’ve trusted that technology to work. And whilst we’re talking about trust, it’s perhaps worth remembering that banks have been fined considerable sums for messing about with client funds in what might be called an untrustworthy way…
How does it work?
There’s a school of thought that says you don’t need to know how it works, just that it does. After all, how many people know how a modern car engine works, or how one mobile phone finds another anywhere on the planet, or how Google can tell you, in microseconds, that Tim Berners-Lee’s birthday is June 8th? (He was born in 1955, by the way). In any event, it would be impossible to explain any of those things in detail in a single blog. Blockchain is no different.
However, every user has their unique code to access their part of the ledger. No-one knows who you are; you’re just a string of numbers, and the records can be checked without knowing who anyone is.
But it’s not just about money. Any kind of data can be moved and stored in the same way, and that, say its champions, means blockchain could revolutionise any number of industries.
Perhaps we need to be convinced of that. But consider this. We once needed to be convinced that it was possible to buy coffee with a smartphone.
Tim Berners-Lee might have other ideas about the sharing of data built on what he set in motion. The simple open source code he created has grown and grown and been used in ways far beyond what he ever envisioned. Perhaps that was always going to happen; perhaps no-one could ever have seen it. We don’t know. What we do know is that Berners-Lee is currently engaged on another project, called Solid, seeking to change the way web applications work, and to improve privacy. His objective is to give everyone control of where their data is kept, and who can see it. And that would be really revolutionary…