The Blockchain is the fresh Google, TechCrunch
The Blockchain is the fresh Google
The following is an excerpt from The Business Blockchain: Promise, Practice, and Application of the Next Internet Technology by William Mougayar. In it, Mougayar waxes ecstatic about the future of distributed databases.
At its core, the blockchain is a technology that permanently records transactions in a way that cannot be later erased but can only be sequentially updated, in essence keeping a never-ending historical trail. This seemingly ordinary functional description has gargantuan implications. It is making us rethink the old ways of creating transactions, storing data, and moving assets, and that’s only the beginning.
The blockchain cannot be described just as a revolution. It is a tsunami-like phenomenon, leisurely advancing and step by step enveloping everything along its way by the force of its progression. Plainly, it is the 2nd significant overlay on top of the Internet, just as the Web was that very first layer back in 1990. That fresh layer is mostly about trust, so we could call it the trust layer.
Blockchains are enormous catalysts for switch that affect governance, ways of life, traditional corporate models, society and global institutions. Blockchain infiltration will be met with resistance, because it is an extreme switch.
Blockchains defy old ideas that have been locked in our minds for decades, if not centuries. Blockchains will challenge governance and centrally managed ways of enforcing transactions. For example, why pay an escrow to clear a title insurance if the blockchain can automatically check it in an incontrovertible way?
Blockchains loosen up trust, which has been in the mitts of central institutions (e.g., banks, policy makers, clearinghouses, governments, large corporations), and permits it to evade these old control points. For example, what if counterparty validation can be done on the blockchain, instead of by a clearinghouse?
An analogy would be when, in the 16th century, medieval guilds helped to maintain monopolies on certain crafts against outsiders, by controlling the printing of skill that would explain how to copy their work. They accomplished that type of censorship by being in cahoots with the Catholic Church and governments in most European countries that regulated and managed printing by requiring licenses. That type of central control and monopoly didn’t last too long, and soon enough, skill was free to travel after an explosion in printing. To think of printing skill as an illegal activity would be unfathomable today. We could think of the traditional holders of central trust as today’s guilds, and we could question why they should proceed holding that trust, if technology (the blockchain) performed that function as well or even better.
Blockchains liberate the trust function from outside existing boundaries in the same way as medieval institutions were coerced to cede control of printing.
It is deceptive to view the blockchain primarily as a distributed ledger, because it represents only one of its many dimensions. It’s like describing the Internet as a network only, or as just a publishing platform. These are necessary but not sufficient conditions or properties; blockchains are also greater than the sum of their parts.
Blockchain proponents believe that trust should be free, and not in the palms of central compels that tax it, or control it in one form or another (e.g., fees, access rights, or permissions). They believe that trust can be and should be part of peer-to-peer relationships, facilitated by technology that can enforce it. Trust can be coded up, and it can be computed to be true or false by way of mathematically-backed certainty, that is enforced by powerful encryption to cement it. In essence, trust is substituted by cryptographic proofs, and trust is maintained by a network of trusted computers (fair knots) that ensure its security, as contrasted with single entities who create overhead or unnecessary bureaucracy around it.
If blockchains are a fresh way to implement trusted transactions without trusted intermediaries, soon we’ll end up with intermediary-less trust. Policy makers who regulated “trusted” institutions like banks will face a dilemma. How can you regulate something that is evaporating? They will need to update their old regulations.
Intermediary-controlled trust came with some friction, but now, with the blockchain, we can have frictionless trust. So, when trust is “free” (even if it still needs to be earned), what happens next? Naturally, trust will go after the path of least resistance, and will become little by little decentralized towards the edges of the network.
Blockchains also enable assets and value to be exchanged, providing a fresh, speedy rail for moving value of all kinds without unnecessary intermediaries.
As back-end infrastructure, blockchains are metaphorically the ultimate, non stop computers. Once launched, they never go down, because of the incredible amount of resiliency they suggest.
There is no single point of failure unlike how bank systems have gone down, cloud-based services have gone down, but bona fide blockchains keep computing.
The Internet was about substituting some intermediaries. Now the blockchain is about substituting other intermediaries once again. But it’s also about creating fresh ones. And so was the Web. Current intermediaries will need to figure out how their roles will be affected, while others are angling to take a lump of the fresh pie in the race to “decentralize everything.”
The world is preoccupied with dissecting, analyzing and prognosticating on the blockchain’s future; technologists, entrepreneurs, and enterprises are wondering if it is to be considered vitamin or poison.
Today, we’re telling blockchain does this or that, but tomorrow blockchains will be rather invisible; we will talk more about what they enable. Just like the Internet or the Web, and just like data-bases, the blockchain brings with it a fresh language.
From the mid-1950s forward, as IT evolved, we became familiar to a fresh language: mainframes, databases, networks, servers, software, operating systems, and programming languages. Since the early 1990s, the Internet ushered in another lexicon: browsing, website, Java, blogging, TCP/IP, SMTP, HTTP, URLs, and HTML. Today, the blockchain brings with it yet another fresh repertoire: consensus algorithms, clever contracts, distributed ledgers, oracles, digital wallets, and transaction blocks.
Block by block, we will accumulate our own chains of skill, and we will learn and understand the blockchain, what it switches, and the implications of such switch.
Today, we Google for everything, mostly information or products.
Tomorrow, we will perform the equivalent of “googling” to verify records, identities, authenticity, rights, work done, titles, contracts, and other valuable asset-related processes. There will be digital ownership certificates for everything. Just like we cannot dual spend digital money anymore (thanks to Satoshi Nakamoto’s invention), we will not be able to dual copy or forge official certificates once they are certified on a blockchain. That was a missing lump of the information revolution, which the blockchain fixes.
I still recall the initial excitement around being able to track a shipped package on the Web when FedEx introduced this capability for the very first time in 1994. Today, we take that type of service for granted, but this particular feature was a watershed use case that demonstrated what we could do on the early Web. The underlying message was that a previously enclosed private service could become openly accessible by anyone with Internet access. A entire host of services followed: online banking, filing taxes, buying products, trading stocks, checking on orders, and many others. Just as we access services that search public databases, we will search a fresh class of services that will check blockchains to confirm the veracity of information. Information access will not be enough. We will also want to ask for truth access, and we will ask if modifications were made to particular records, expecting the utmost transparency from those who hold them. The blockchain promises to serve up and expose transparency in its rawest forms.
The old question “Is it in the database?” will be substituted by “Is it on the blockchain?”
Is the blockchain more complicated than the Web? Most certainly.
The blockchain is part of the history of the Internet. It is at the same level as the World Broad Web in terms of importance, and arguably might give us back the Internet, in the way it was supposed to be: more decentralized, more open, more secure, more private, more equitable, and more accessible. Ironically, many blockchain applications also have a shot at substituting legacy Web applications, at the same time as they will substitute legacy businesses that cannot loosen their grips on heavy-handed centrally enforced trust functions.
No matter how it unfolds, the blockchain’s history will proceed to be written for a very long time, just as the history of the Web continued to be written well after its initial invention. But here’s what will make the blockchain’s future even more interesting: you are part of it.
Reprinted from The Business Blockchain: Promise, Practice, and Application of the Next Internet Technology by William Mougayar (foreword from Vitalik Buterin) with permission from John Wiley & Sons, Inc. Copyright (C) William Mougayar, 2016.
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