What is Blockchain? 🤷🏼
I’ll let you in on something. I don’t actually have a clue.
I got the idea to write this from the Developer Handbook blog. In his article, Jon suggests writing about topics including “A high-level look at blockchain”.
Challenge accepted. I’ll research a topic that I know nothing about and learn enough about it to write an article, give a presentation, and teach others what it is.🤔
“Something to do with Bitcoin/cryptocurrency? Blockchain seems like something used for niche purposes such as this. I know it’s about decentralised records, that can’t be (or are very unlikely to be) hacked, and are used to record private cryptocurrency transactions.” —me, right now.
I consulted with the great minds of my friends in the Front-End Friends Club™️ and got this response:
- “It's the future of the world and if we don't learn about it our robot overlords will punish us with their laser eyes”
- “I know nothingggg. I know it's a funky buzzword”
Seems legit. Let’s learn.👨🏼💻
This method of learning is referred to as the Feynman Learning Technique:
- Pretend to teach a concept you want to learn about to a child or a rubber duck (being a software engineer, I have many rubber ducks)
- Identify gaps in your explanation. Go back to the source material to better understand it
- Organise and simplify your newfound knowledge
- Transmit - teach it, write an article, give a presentation
Currently, I have no knowledge of this concept - it’s a 100% gap in my knowledge - so I’ll be researching and learning about Blockchain from scratch to gain the knowledge myself and to be able to explain to others what it is.🦆
So what is it?
At the highest level, blockchain is a data structure that holds transactional records of assets in a system of record “blocks” that are linked together and stored in a “chain”, decentralised across a network of computers, so as not to be controlled by a single authority.
In this instance, an asset can be tangible like a house or car, or intangible like intellectual property. Anything can be tracked with blockchain, not just cryptocurrency! That’s the first thing I learned.
There was a need for an efficient, reliable, secure system for recording financial transactions:
- cash is vulnerable to loss and limited to relatively small quantities
- fraud is, unfortunately, prevalent online
- mistakes through inefficient systems are costly
- trust has been lost with the banking sector
Blockchain was originally thought up by the person (or group of people) known as Satoshi Nakamoto in 2008, the creator of the cryptocurrency Bitcoin. The design was implemented as a core component of Bitcoin when it was launched in 2009, where it serves as the secure ledger for cryptocurrency transactions.
Blockchain began to emerge as a real-world tech option in 2016 and 2017. The concept has been heavily supported by IBM, which provides blockchain tooling and products for businesses.🛠
How does it work?
Blockchain technology ensures security and transparency by having copies of the entire digital ledger of transactions distributed across a peer-to-peer network of computers.
Every machine stores the entire history of the chain, so it cannot be modified in a singular place or by a single person. This effectively makes it tamper-proof as the records can’t be retrospectively changed.
When a new block is added, each machine updates its copy of the chain and stores the new data. The changes are secured with a digital signature that proves the authenticity of the transaction.
When the block signatures match, the blockchain allows all peers on the network to reach an agreement or consensus on the authenticity.⛓
My simplified view of how blockchain transactions take place:
- The blockchain makes use of unique keys to create a digital signature proving authenticity and security
- Peers on the network perform verification and reach the consensus
- When there’s a majority consensus, they proceed to create the block
- The created block contains a digital signature, the timestamp, and authentication keys
- The block of information is broadcast through the network and validation begins
- When the new block is added the blockchain is updated for all peers on the network
More than just cryptocurrency, blockchain can be used for:
- Smart contracts
- Financial services
- Video games
- Energy trading
- Supply chain
- Food supply
Blockchain is a good system for businesses due to:
- Time savings
- Cost savings
- More tight security
- More enhanced privacy
- Better auditing
- Increased operational efficiency
I’ve just finished listening to David Attenborough’s A Life on Our Planet: My Witness Statement and Vision for the Future and in it, he references using blockchain in the supply chain context:
“It was initially developed to enable cryptocurrencies like Bitcoin to operate efficiently, but the same technology can be used to trace supply chains, and hence can verify whether a product, such as timber or tuna meat, has come from a sustainable source.”
— David Attenborough, 2020
It’s interesting to see blockchain being thought of for this - as I said previously my initial thoughts on blockchain were that it was inherently linked to Bitcoin/cryptocurrency and was a complex topic, restricted to those with a high level of computer science knowledge.
Understanding how blockchain is used practically in the supply chain opens my eyes to how it really works and its value.⛓
A high-level overview of blockchain is:
- Decentralised - shared over a peer-to-peer network to avoid a single point of failure and single responsibility
- Immutable and tamper-proof - the authenticity verification signatures prevent tampering or hacking of the chain
- Used for keeping trustworthy records, not just for cryptocurrency transactions
At the highest level, blockchain is a data structure that holds transactional records in a system of record “blocks” that are linked together and stored in a “chain”, decentralised across a network of computers, so as not to be controlled by a single authority. —Me, earlier in this article
Resources and further reading
- Your friend and mine, Wikipedia
- Hacker Noon
- Built In
- How it Works: Blockchain
- Don Tapscott’S TED talk
I wrote this article, found this book, read it, and re-wrote the whole article. Invaluable if you want to learn more is:
- Blockchain for Dummies (PDF downloadable book)
I’ve enjoyed the process of learning everything there is that I can learn about this subject.
I’ve instigated conversations with peers, done research online and read books on the topic. I’ve learned something!
I want to continue learning about this topic - it seems like a great time to get into the technology. I agree with the ethics and the importance of having something this secure and reliable, and most importantly, distributed.