Blockchain in 10 Minutes

Beyond the Hype

Introduction

For 10 years, blockchain has been hyped as a revolutionary technology. At the end of the day, when we look beyond cryptocurrency, we have very little to show for useful applications of blockchain. When it comes to adoption of the technology in an enterprise setting, many struggle to understand the core value of blockchain. Setting blockchain hysteria aside, this article introduces the practical, core value of blockchain technology in an easy-to-understand way. Only when blockchain is well understood can it be properly applied.

When was blockchain invented and who created it?

There are a few components to answering this question. While bitcoin and blockchain were both simultaneously released in 2009, they are two separate entities. These were both created by a still-unknown person or group “Satoshi Nakamoto.” A very important distinction to make about bitcoin and blockchain is while both were developed by Satoshi, Bitcoin is a digital currency and blockchain is its underlying technology.

Original Bitcoin White paper

Blocks, Chains, Blockchains?

So where does the name blockchain span from? It’s actually quite simple, and breaking it down will help better describe how the tech works. A block is its simplest form. After a specified time, say 10 minutes, a new block is created. If your transaction comes within the first 10 minutes, it’ll be grouped into Block #1 and if it occurred a second after 10 minutes, it’ll be grouped into Block #2. By having this system it allows us to accurately identify what time a transaction occurred. Additionally, to connect these two separate groups we need to “link” them with a chain. When Block #3 happens we’ll simply just add another link to the chain. In simple terms, when a block has been added, its content can never be changed or deleted. Put the two together and you have a blockchain! Easier than you thought right?

Blockchain Network

What Innovations has Blockchain brought us?

For the first time ever blockchain allows us to store data in a truly permanent way. This process is facilitated by everyone having access to a “distributed ledger”. You can think of this as your online bank ledger where you can see a history of all transactions. Now combining a ledger with permanent data, someone can’t dispute that a transaction has occurred. While one may be concerned with privacy, your true identity isn’t used on blockchain networks and is usually represented with a “username” in a long string like: “0xA9280c9A36b48E3fdDaF3Ec9d980431A95E9e3dB”. Putting that all together we have a transparent and permanent ledger which ultimately allows organizations to remove 3rd parties for transactions for things such as document transfer, banking, etc.

What is the value Blockchain provides Enterprise?

With blockchain we can identify when a transaction occurred with unalterable timestamps, see who created a transaction, and ensure the contents haven’t been altered. Additionally, there is no specified type of data that can or cannot be stored on a blockchain. Together, these benefits provide enterprise with transparent and robust audit trails for their data in any business process.

“Public” vs “Private” Blockchains

Perceived limitations of blockchain technology has led to new iterations. There are an abundant amount of discussions about “public” or “private” blockchains. The easiest way to describe the public network would be that anyone can access it and can see everyone’s “username” and transaction history. While this may be a downside to the public network, the security of blockchain network depends on the number of participants. Alternatively, a private blockchain is something that can be used internally within a company or shared collectively between a small group of companies. By having this, it allows companies to avoid broadcasting their data across a network of millions of users. The issue with this, however, is that with fewer users on the network, data is more susceptible to manipulation and hacking. A blockchain operated by one individual or enterprise provides nothing more than a traditional database, as the permanence of data is lost.

Hybrid Networks, the solution?

As stated in the previous section, both public and private networks have their pros and cons. Intuitively, many individuals believe that by leveraging the security of the public network and data privacy of the private network we will be able to find the “sweet spot” for blockchain utilization. As such, the creation of these hybrid networks that combine both methodologies are becoming a popular trend in the blockchain space.

What Industries are utilizing the Technology?

There are many different industries looking to utilize blockchain in various ways. Most notably finance has been a heavily targeted area for using the technology. However, as time has passed the imagination for use cases has broadened significantly. One industry that has received a lot of attention as of late is healthcare. Blockchain has been seen as a way to enhance Electronic Health Records, Clinical Trials, the Pharmaceutical Supply Chain, and Electronic Lab Notebooks. It will be interesting to see what other use cases of are conceived as the technology matures!

What work still needs to be done before we see greater Adoption?

This question has many answers. However, the first thing that comes to mind is education. There are currently many misconceptions about what blockchain is and isn’t that either makes it a mystified “do-all technology” or a “scary bitcoin thing.” Before true adoption can happen, people need to understand what the technology really is.

From a more technical standpoint blockchain in its current form has very expensive barriers to entry and does not integrate well into existing systems. In my enterprise blockchain experience, taking our Proof of Concept application and utilizing it within the company we built it for would have radically changed their existing process. Additionally, in order to have taken the application from a pilot to full-scale production would have required a significant budget consisting of blockchain engineers and consultants (these significantly contributed to a $2.2 Billion spend on blockchain infrastructure creation last year.)

Where can I learn more or start using Blockchain today?

In the spirit of practical use of blockchain, I work on a project which allows users to easily build blockchain-based applications. You can check out our site here:

www.immuto.io

Other great resources for blockchain information

www.coindesk.com

www.cointelegraph.com

If you have any questions feel free to shoot me an email at derek@immuto.io , thanks for reading!