At Amartus, we have always been exploring how cutting-edge technologies can be best used to add value to network solutions. We couldn’t ignore blockchain, the latest disruptor on the market.
It’s impossible to delve into application of a technology without fist understanding its basics. In this part of our blog series, we’ll try to come up with a valuable, rational blockchain definition that will spell out all its benefits for network businesses.
Blockchain definition? Cryptic meanings and opposing views
Type blockchain definition in Google and check the top three definitions that pop up.
Here’s what we found:
- Investopedia: A blockchain is a digitized, decentralized, public ledger of all cryptocurrency transactions.
As sophisticated as it sounds, this definition is not a tiniest bit descriptive. Besides, it may be well-suited for the financial sector, but does not help much networking. Let’s dig in further.
- Wikipedia: A blockchain, originally block chain, is a growing list of records, called blocks, which are linked using cryptography.
Wikipedia to the contrary provides too simplistic a definition. It is all true, and very accessible information, but not sufficient to fully understand how blockchain in this perspective could benefit the network.
- Forbes: Blockchain is a public register in which transactions between two users belonging to the same network are stored in a secure, verifiable and permanent way.
Forbes’ definition seems to be the most comprehensive. However, to gain a better understanding of blockchain in the context of network, and to highlight the most important assets of the technology, let’s extract the vital information out of each definition, and compile it into our own statement.
Blockchain – A system with no central entity
Investopedia as a portal focusing on the financial industry builds their blockchain definition around the cryptocurrency application. Indeed, blockchain is the technology behind all the cryptocurrencies (like Bitcoin, Litecoin, Ethereum, etc.).
However, linking blockchain with cryptocurrencies only seems to be limiting and does not give justice to its immense potential.
The rest of the definition states: “A blockchain is a digitized, decentralized, public ledger(..).” The digitized part is a truism. Obviously, blockchain applies to computer technologies. This word adds nothing to our understanding of the notion.
On the other hand, decentralized is a critical element of blockchain. Blockchain is a system with no central entity. Let’s use an example from networking. The technology is based on a shared-trust model among peers.
Each user maintains a ledger of all information/transactions that occured inside of a blockchain. If you would like to check what events have occured on your “Blockchain account”, it is enough to refer to the local copy of the ledger and display whatever is of your interest.
The mentioned decentralization is one of blockchain features that makes possible secure execution of transactions in an untrusted environment. In other words, you do not have to trust partners (other bockchain users) to trust that the deal went right.