Nowadays, the blockchain is considered a technical and economic innovation that revolutionizes various sectors of our society. The idea behind this technology is to switch from a centralized model to a decentralized digital distribution.
The invention of the blockchain is closely linked to the double-spending problem solved by Nakamoto in 2008 and presented in his paper, Bitcoin: A Peer-to-Peer Electronic Cash System. His solution is based on decentralized and distributed architectures: the blockchain.
The blockchain is a transparent and secure data storage and transmission technology which operates without a central point of control. It can be considered a set of digital containers that store all sorts of information: transactions, contracts, property deeds, work arts, etc. In other words, it is a historic blockstack. This blockstack forms a database similar to the pages of a big ledger that can be accessed by all network players. It is a decentralized ledger hosted by no central point of control. The blocks have an inviolable design, being protected by asymmetric cryptographic approaches and the double principle of public/private key. As a result, once validated and added to the chain, it is impossible to forge the information in a block.
Nevertheless, it is important to make a difference between the blockchain as a technology, result of Sakamoto’s research and illustrated by his Bitcoin cryptocurrency, and a dedicated blockchain deployed by a particular organization such as the Ethereum blockchain.
According to Marc Andreessen, inventor of the first Internet explorer (Mosaic, Netscape), “The consequence […] is that, for the first time, there is a way for one Internet user to transfer a unique piece of digital property to another Internet user, such that the transfer is guaranteed to be safe and secure, […] and nobody can challenge the legitimacy of the transfer.”
The blockchain covers three technologies:
- decentralized architecture,
- cryptographic protection,
- issuance of cryptocurrencies.
As a result, the blockchain has 3 essential properties:
- and autonomy.
The first property of the blockchain is to ensure decentralized trust so that users can make exchanges without the control of a trusted third party. Moreover, the concept behind the blockchain in terms of decentralized architecture and the block code guarantees the security of the information recorded on a blockchain. Its robustness makes it useful when handling sensitive data. In the case of a blockchain, the computing power (hash/second) and the hosting space are provided by the network nodes themselves. The hardware investment, the computing power and the storage space consumed by mining are compensated by the issuance of bitcoins (or other cryptocurrencies). The creation of a cryptocurrency remunerates infrastructure costs.
In my next article, I will further explain the role played by these 3 main properties in transaction management in a blockchain.