Crynet.io (project manager), vtorov.tech (expert), ICO/STO/IEO, venture & marketing projects
There are always a lot of inaccuracies and disputes around the nature of blockchain. Due to the superficial study of the topic, the blockchain is attributed to unusual characteristics, which causes errors in understanding.
The most common mistake is that blockchain — the database. This error is often even allowed to be used by crypto leaders.
Traditionally, the blockchain is used in two ways:
- Information peer system (like a Bitcoin network)
- The central element of this system is a chain of cryptographically connected blocks where network transactions are packed with information
When one talks about the blockchain in general, one means the system as a whole, that is, a functioning network, not its main element, but sometimes everything is confused.
Because of this, there is a major misconception about the blockchain — that it is a database. In part, we can say that the database is a chain of blocks that is stored and continuously expanded on each full blockchain node, and the program code that forms blocks and reads records from it can be called a database.
Nevertheless, blockchain as an information system does not solve only the problem of reliable data storage. After all, we can come up with a solution both easier and cheaper: take any data, sign it with an electronic signature, put it in several clouds (in fact, in a decentralized repository) and set “read-only” rights.
As a result, the data will not be lost, will not be changed and there is confirmation of the authorship of the owner of the private key. And no blockchain is needed at all.
If you are philosophizing, is the Bitcoin blockchain a database, that is, a depository of coins tied to users’ wallets? Is not. The value of the Bitcoin network in its unique functionality — it provides not only the utmost security of data already recorded in the data blocks but also ensures the unambiguity of operations with this data regardless of the intentions of users, despite any attempts to influence this uniqueness.
In essence, a bitcoin blockchain is a new type of information systems that, on the one hand, provide the functionality of a crypto-protected temporal data store, and on the other hand, support a mechanism for converting and generating data that is resistant to external interference while preserving its validity.
The main thing in the blockchain is not a chain of blocks, but software controllers — “smart contracts” that automatically and unambiguously perform actions with data.
This controller generates and stores the data of the Bitcoin network — creating new records (mined BTC) and exchanging them through network transactions.
Ethereum, as a blockchain network of the next generation, not only supports the token exchange mechanism but also allows users to write smart contract controllers themselves that can refer to the data previously stored in the blockchain to generate new entries. The uniqueness of the blockchain characteristics can be demonstrated by a simple example.
Suppose you need to create a cryptographically protected certificate management mechanism. The first thing that comes to mind at all: let’s take the hashes of the certificates, one can take the certificate files and drop it on the same bitcoin blockchain or broadcast with transactions. We will use the blockchain as an extremely reliable data storage.
Although, as noted above, the same result can be achieved using cloud storages and electronic signatures, which is even more reasonable, related to the state’s legal status. As a result: One recorded — One read. One showed who should. That is all.
Let’s remember that the blockchain is not a database, but something more: a system that implements a protected mechanism for operating with data while preserving its validity.
Well, the blockchain should not be used as a storage, but as an extremely reliable control system. In our case with certificates — our certificate must be placed on the blockchain in the form of a meaningful entry with a digital identifier, owner and expiration date.
And in this form, it can already be used in smart contracts — digital agreements in which you want to check the availability of the certificate from a specific user. When executed, the smart contract saved in the blockchain will check if the certificate has expired. And if overdue, then no bureaucratic tricks, no bribes force the contract to go against the algorithm.
But if authorized persons sign with their cryptographic keys an extension of the validity date of the certificate — and the contract will again be executed automatically.
The blockchain is needed to launch contractual business processes in it with links to the facts of these processes stored in the blockchain. Otherwise, all this can be implemented in the local corporate information system.
Thus, the blockchain is an information system that provides unfiltered data storage and is protected from unauthorized interference by the transformation of this data by third parties. In bitcoin, this process performs only one operation: the exchange of records while preserving their aggregate integrity.
Blockchain platforms with contracts (like Ethereum) can implement almost any complex process. Blockchain is only the first representative of the described type of information systems.
Already there have appeared networks implementing the same functionality based on acyclic graphs. Already today, experts are beginning to use the common name for them — “Trusted Digital Systems”.
Sergiy Golubyev (Сергей Голубев)
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