Blockchain technology is synonymous with the creation of Bitcoin and its creator Satoshi Nakamoto.
A digital ledger based system, using proof-of-work and a few other technologies to help verify transactions and create a global, p2p, decentralized cryptocurrency.
Now we are seeing a plethora of companies pour into the field, exploring the uses and benefits of Blockchain technology, and what it entails. Although, many are getting it wrong.
True Blockchain technology contains a few different properties which must be carried out and embedded into the system in order for it to function in its fullest potential.
(Note: If you want to learn about the 4 technologies behind Bitcoin click here)
THE 5 PROPERTIES OF BLOCKCHAIN TECHNOLOGY AND THEIR BENEFITS
When it comes to blockchain it needs to be open.
This is compared to what would be considered a closed blockchain, or a blockchain which is essentially acting as a database.
Take for instance central banking starting to incorporate “the blockchain” when in reality they are creating a closed centralized database, once again with a different structure.
Yes it may be a more secure structure, but it is still a centrally located, closed off database.
Blockchain was designed to be able to be seen, to have an open mechanism where anyone can add to the creation of blocks, and subsequently search/find transactions.
Now what does neutral mean?
It means that the blockchain isn’t working to serve any goals or in favor of anyone specific.
The blockchain is created to have rules, these rules favor no one but the blockchain and its integrity itself, and people who follow them are rewarded while those who don’t are disincentivized from doing so.
It means that the system works in order to come to a consensus that a transaction either went through or didn’t go through.
The blockchain doesn’t label this transaction as a “bad” transaction or a transaction for something malicious, but instead just records the transaction without bias.
If you hear a company create and integrate a “blockchain” that resides only in one part of the world…
Well that’s not a blockchain.
A blockchain doesn’t have borders, it simply is a block of ledgers chained together that can be used and accessed anywhere on the Internet.
One of the marvelous properties about Bitcoin is that it is a global currency, and it can’t be limited to only a specific region because it is a piece of code, in a digitally recorded ledger, that can be accessed anywhere there is Internet.
The same resides with true blockchain.
There are no borders.
Leading us to the next property…
Blockchain has to reside in multiple nations, and have no labeling as a certain county, city, town, etc…
By doing this, it becomes about the network, and not about a location, making it available in all nations.
It becomes transnational in the best way possible.
This is arguably the backbone and one of the most important characteristics of blockchain because quite literally the ability to not be censored make or breaks the blockchain.
If you can censor say a transaction from Bermuda to France, then the blockchain isn’t working because that transaction should have been immutable from the onset of its sending.
The above transaction can be proved, but if censored, isn’t open or borderless or transnational…
It’s just a blocked payment.
Otherwise preventing institutions from blocking, censoring, stopping, freezing, restricting, and blacklisting transactions is what true blockchain does.
What Does This All Mean? (No Trust Intermediaries)
The Blockchain was created to intertwine trust.
It’s a mechanistic way that uses mathematical proofs and helps solve the problem of trust intermediaries and transactions.
When you swipe your card, a host of things can go wrong…
Chargebacks, card denials, account freezes and so much more.
Now on the other hand, when you send Bitcoin or any other cryptocurrency over a true blockchain, the payment is either verified or not.
It becomes something locked in solidity, proved by consensus, and then put into a ledger stored in a block forever.
This is why true blockchain is so powerful, but only if it is true.
Otherwise we end up just recreating locked off databases, controlling data, swapping out the word “database” for “blockchain” in a underwhelming way.
The future will be paved by true blockchain and we at GCA are excited to see it.
Thanks for reading,
The GCA Team
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