Blockchain

Bitcoin, created in 2008, solved this problem: asynchronous network when decentralizing a ledger. Satoshi grouped transactions into a single ID called the Merkle Root and forced computers to prove that they have spent electricity in order for the Merkle Root to be acceptable by other computers that received it. This results in what is called a Block Header. Furthermore, by requiring the previous Block Header to be included in the new Block Header, he created connections between the old Block Header to the new. This is what he called the block chain and this is what we call the Blockchain.

The Courthouse

Blockchain does one thing and one thing only: creating orderliness where there were none before. The Blockchain is a court that decides which transaction came first in a situation where everyone is spread around. A decentralized network is analogous to a city of people all spread around and in separate places. A decentralized digital payment would be if Bob was shouting that he paid Carol 10 dollars to everyone. Some might hear it later than others and some might only hear it by word of mouth. If Bob yells that he is buying a coffee and shortly after yell that he is buying a pen with his only 10 dollars, someone that is two blocks away might hear that he is buying a pen before they hear that he actually bought a coffee first by word of mouth. He only has 10 dollars but some believe he bought coffee from Carol while some believe he bought a pen from Alice. To whom does the 10 dollar bill belong to? The court decides where Bob spent his money which decide who gets paid. The court is free to choose who gets paid. You can even tip the a judge with money to make sure Alice gets paid.

Limitation of the Judge

Miners can be seen as judges. When the a judge decides on a transaction and has proven that he has spent his a certain amount energy on this case, everyone accepts the judge’s decision on which transaction came first. Let’s say that Bob paying Alice is case #1. Then the judge goes on to work on case #2, which is Alice spending her 10 dollars to David. Then he goes on to work on case #3 and so forth. When the judge has worked up to case #3, case #1 can still be overturned. When the judge has worked up to case #463, case #1 can still be overturned. However, if you want to overturn case #1, a judge or a group of judges have to spend their energy again on cases #2 ~ case #462. If you want to overturn a previous case, all the cases that are in between that case and the latest case must be reworked on. The more cases that have been built on top of the case that your transaction is in, the less likely it is for it to be overturned. Another important thing to note is that when a judge finishes a case, they get compensated for their work. So if you want to overturn case #1 while the judge has worked up to case #463, not only do they have to rework the cases in between, they give up their compensation that they have previously earned for their work. They do not get paid twice.

What if a judge dislikes you and refuses to work on a case that has your transaction in it? Fortunately, there are many judges out there and you can just go to a different one. The judges work for their compensation and are in competition with each other for their salary. If one judge won’t take a case with your transaction, there are others that will.

What if a judge tries to pass off a case that he hasn’t he hasn’t worked on with his energy? We the people reject his case. All the judge has power to do is order transactions. The judges cannot pass off an invalid case. We the people choose what is a valid case.

What a Blockchain is

That’s it. That’s all the Blockchain does. It puts an order to a decentralized network. A decentralized network is just individual computers spread around in the world. Blockchain introduces a court to decide on which transaction came first. Because not everyone receives the transactions at the same time as they are spread around. Because it introduces an extra step to decide which transaction happened first, it by definition introduces an extra step and it becomes more inefficient by having it.

So with all the information that we have now, does it make sense to have a court where everyone is in the same room? Does it make sense to have a court with 3 people? Does it makes sense to have a court where everyone trusts each other? The answer is no. No no and no.

Blockchain doesn’t make a network decentralized. Blockchain brings order to a network that is decentralized. If one introduces Blockchain to a centralized network all they would achieve is less efficiency. Blockchain is the means to bringing order not the means to brining decentralization.

Conclusion

There are many projects in this space that use Blockchain. I invite everyone to judge for themselves to see if bringing a court that achieves order is really necessary for that project. I encourage everyone to go beyond the promises of each team and look at their project with objectivity and with diligence. I encourage everyone to not trust, but everyone to use their own deductions and use their own knowledge to see if the project is worth putting your hard earned money into. Do not trust. Trust has no place in such a place with misinformation and deception. Truth only emerges from verification.