The hype word "blockchain" has been explained all over the internet and in news articles all over the world. "The Economist" called blockchain "The trust machine" and they explain that the blockchain is a distributed database that holds trust, but they did not explain how. A blockchain is a type of database. In its simplest form, it is many sets of data, called blocks, connected by cryptography to form a chain. It records data to a ledger that in most cases is distributed. Many people believe that trust magically appears from the security derived of cryptography. It does not. In this article, I will explain what ultimately gives a blockchain its trust property. I wrote this article intended for people that rely on trust to do business.
Unconditional trust is binary, ether you trust or you do not trust. In other words: 99% trust is not trust. If you want a computer system, a blockchain database, to deliver unconditional trust, the blockchain must be 100% trustworthy on the entire scale. This type of trust cannot be affected or shaken by business interests, geographic boundaries, political agendas, traditional values, religious views or even technological advances. The person that must trust the information form the blockchain, should be able to check the 100% trustworthiness at any time.
Let's say that a CEO of a company wants to implement a blockchain for his company because he wants the customers to trust the supply chain of goods which make up the company's brand. On the surface, it might look like a blockchain can satisfy this demand. This is because the blockchain software has distributed the data over several servers, and they might even be geographically separated. Can the customers trust this company because the company is running a blockchain? No, they cannot. The blockchain only inherits the trustworthiness of the polices, political and traditional views and/or values of the company. In fact, what the company built, was a slow distributed database backup and not a trust of any valuable scale. So, what about a consortium of companies where the blockchain is distributed globally? Can the most paranoid customers trust this blockchain unconditionally? No, they cannot. Even though the different companies are validating each other's data, the companies have the same inherent business interests and probably global polices and political regulation they need to adhere by. What about distributing the blockchain to the customer, thus making them apart of the blockchain. This would enable the customer to review and verify the information quietly in their sofas at home. But how would you accomplish that? What would motivate the customer to download huge amounts of data and fill their personal computers with this consortiums ledger?
In comes the black swan event; Bitcoin. Bitcoin is not run by a company, government or an organization. Bitcoin is run by anyone that wants to opt-in. Anyone can check the 100% trustworthiness at any time through many different web sites. You could make your own site or program if your tech-savvy. The Bitcoin Blockchain is a protocol, like e-mail or http, and has several software components, that are compatible with each other. Just like different browsers on the web. The different software components are run in almost every country in the world, by people with different religious views and different traditional values. The only business interests they have in common is that Bitcoin continues to be resilient and decentralized. This is a major contributor to its trust because the people running the Bitcoin Blockchain software components do not agree on everything or anything. When two opposing views and values share a common interest, trust is created for the 3rd. party. The Bitcoin Blockchain is immutable by strength of a proof of work algorithm. This algorithm requires many users to contribute their computing power to do work. The work that the computers do is guessing the right solution to a complex combination lock. At the time of writing this article, the computing power contributing to the strength of the network is 3.438 ExaHash per second. Thatβs 3 870 843 879 724 940 guesses per second and climbing. This contribution is the strength of the Bitcoin Blockchain ageist disruption by hackers and sudden technological advances. But how does the Bitcoin Blockchain motivate users to put computers to work and downloading huge amounts of data? One gets payed of course, in Bitcoin. By verifying transactions, you get rewarded form the transaction fees and the inflation that creates a set number of new Bitcoins from thin air. The Bitcoin Blockchain became a black swan event because it grew when no one believed trust on this scale was possible. A lot of users was thought to be wasting their time and resources on this experiment, but now this seems to be very successful. By the time it was realized by the masses, it was already too late to stop it. Short of the internet completely collapsing globally, a massive solar flare that takes out all the power stations on the planet or a meteor hitting the earth, the Bitcoin Blockchain will continue to be resilient. The chances of a blockchain system like this happening again are slim.
Trust needs to be verifiable by anyone. Ultimately decentralization on a massive scale is what gives a blockchain its trust property. As I highlighted in this article, the beliefs that the trust and security of a blockchain coms from cryptography algorithms, simply is not the case. The cryptography algorithm, proof of work, is just the tool, but the strength comes from motivating decentralization of all the aspects of the the blockchain. There are many aspects but I only mentioned a few like business interests, geographic boundaries, political agendas, traditional values, religious views or even technological advances. I wish to leave you with this video form Andreas Antonopoulos: What should π―π°π΅ go on a blockchain?
Link source:
The trust machine β The Economist
http://www.economist.com/news/leaders/21677198-technology-behind-bitcoin-could-transform-how-economy-works-trust-machine
Proof of work algorithm
https://www.acando.no/thedailypassion/201120/blockchain-two-major-questions-we-need-to-understand
Andreas Antonopoulos: What should π―π°π΅ go on a blockchain?
