What are the blockchains?
That question came to my mind a couple of weeks ago when I watched Don Tapscott’s encouraging speech on TEDXTalks.
Well, making some simple deduction, we can think on a “chain of blocks which contain information rows”.
Essentially, the information is stored in a distributed database – meaning that many computers manage it at the same time -, and each information block is linked to the previous one. These blocks are generated using some hash functions, which main aim is to cipher a data input and compress the output. These calculations are done by some computers known as miners.
Do these computers have any particular specs?
It depends on the range of the project. In the Bitcoin project, everyone can be a miner; you just need to connect to a network, download an application and let your PC calculate.
However, someone might wonder:
And why should this be anything important at all?
Apparently, because it grants an unprecedented security level, which is based on two keys:
- The distributed network of miners. Generally, we watch in films that ‘crackers (= bad hackers) have hacked a server’. Most of the times this happens they just attack a server; a main server which has many virtual machines installed on it, but it’s still a server. Thus, its location and relevant data can be ‘easily’ obtained from it. Nevertheless, when we consider a distributed structure, every computer linked to the creation of an information block should be attacked simultaneously to get access to the block’s data, and this is much harder than the centralized context.
- The correlation between the information blocks. If the previous part seemed hard because of the required coordination, this second property makes the process even harder. When a new block is generated, this block contains on it many data, as well as a link to the previous block and the timestamp in UNIX format (beginning at January 1st 1970 in seconds). So, if an external cracker wants to reach some information in a block linked via blockchain, it will need to cross many other blocks before reaching to the desired information; a process that requires huge computing power.
Graphically, we can understand blockchains as this:
Where the colors represent:
- Green: The most recent block.
- Black: The chain of blocks following the last block.
- Purple: Orphan blocks that are branches of the main chain.
And which are the applications of blockchains?
This idea was initially conceived by an unknown person or group of people called Satoshi Nakamoto for the Bitcoin project. Bitcoin, in a nutshell, is a cryptocurrency (a.k.a. a digital currency) that is totally decentralized, so it doesn’t have anything to do with any government or company that might manipulate it. That’s why the distributed nature of blockchain has sense in this project.
Today (October 23rd 2016), the BTC – EUR trade (Bitcoin – Euro) is at 595,91 €. If you are interested on getting updated information about its value, you can look for it at this link.
Besides, the smart contracts emerged from this technology, which goal is to generate virtual contracts. So, if there are 2 entities that reached to an agreement to exchange goods or services when they both fulfill some conditions, the smart contract will manage it immediately, avoiding any errors that might be created by current intermediaries.
An easier example to understand is the one explained in the Spanish Wikipedia. It says:
“Let’s say you bid 20 € that the football team A will win a match, whilst a friend of yours bids the same amount so that the team B wins. The first step would be that you and your friend put the money in a neutral account managed by a smart contract. When the match ends and the smart contract verifies the result in a news website, it will automatically deposit the money in the winner’s bank account.”
Hence, contracts’ completion is more secure than ever. In fact, there is a project that has gained some recognition lately related to these smart contracts which is called Ethereum. It is a decentralized platform that gives the chance to manage smart contracts between pairs; thus, any developer that has some knowledge on this topic can create applications to manage these virtual contracts.
So, it appears that blockchain has proven to be useful and yet it might be implemented on many other ambits, as experts like Tapscott emphasize. Nonetheless, I wonder:
Is this totally secure?
For instance, in Bitcoin’s case, it is said that the cost of the breaking of the security is mathematically possible, but it is far too big – a computer power superior to tech companies like Google would be required – and it has some inherent error rate on it. In a nutshell, it isn’t worth the effort.
Despite that fact, another technological breakthrough that might lower that cost (and maybe make it accessible) is the quantum computer.
What opportunities do quantum computers bring?
Using subatomic Physics’ properties, these computers can reach boundless computing power levels which might threaten the ‘security’ given by blockchains. If you want to know more about what quantum computers are, I added a Kurzgesagt | In a Nutshell (a channel that tries to popularize science in English) video below that gives some hints about these computers.
But, could a blockchain generated by quantum computers avoid the potential menace this kind of computers might create? To be honest, I don’t have a clue. 😀
Anyway, here I add Don Tapscott’s speech about the Blockchains.
[Originally written at October 23rd, 2016]