Today, of course, laser is part of our lives and is a solution to many problems: from the entertainment industry (music and films stored on CDs and DVDs, and read with laser), surgical instruments (laser scalpels), dental (used to accelerate the process of resin solidification), data transmission in optical fibers, scientific measurements such as determining the exact distance between the Earth and the Moon (which is 384,400 km).
The beginning of the 21st century also witnessed the emergence of a technology that brings revolutionary promises not only from the technological point of view, but also from the financial, social and personal ones. We are talking about the blockchain. Would it also be a solution in search of a problem?
What is a blockchain?
From a computational point of view, a blockchain is nothing more than a distributed database (that is, present and replicated in several computers at the same time) which is, by definition, inviolable (that is, the data cannot be altered under any hypothesis) and which keeps a historical record of all transactions. Its main and most common purpose is to establish trust protocols between two parties, avoiding intermediaries.
Soon, however, it became clear that the basic structure of a blockchain could be used for any classes of problems involving privacy, data immutability, historical data logging, simultaneous requests and auditing.
Problems at sight
Let’s analyze one of the most common actions in our lives today: making a purchase by credit card. Apparently, all that happens is to choose a product (or select it from a website), insert the card in the machine (or type its number in the website), confirm your password and that’s it! Purchase made.
In fact, the process is much more complicated and involves a series of intermediate steps between you and the store where you are buying. And in each of these intermediate steps (involving banks, card operators, infrastructure companies, etc.), you are being charged a percentage of the total amount of your purchase. This is the price you pay for the existence of intermediaries.
As you may have made clear in the discussion above, the blockchain can simply eliminate intermediaries and link the two extreme and main ends of the transaction. In our example, you and the store where you made the purchase (hence the appeal of virtual currencies).
The fact that we are dealing with data that grow over time (several purchases, several medical exams) and that need security and privacy. We are also talking about keeping them under our control (instead of being scattered and stored on several servers, and being accessed by search engines or social networks).
Blockchain promotes a radical change in the paradigm of transportation, availability and administration of data and values.
The challenge of the new
First of all, the technology is very new and still too associated with cryptomorphs (the most famous being bitcoin). Recent cases of fraud and financial pyramid schemes involving cryptomorphs do a disservice to blockchain. Distrust and fear of new technologies is therefore the first challenge to be overcome.
Second, we can point to the impact on business that can be caused by the adoption of a blockchain on a local or broader scale: if banks, for example, can transact among themselves without the need to go through a central bank, what are the implications for the financial market? We know that transactions would be reliable and auditable – therefore subject to validation or regulation, but without the intervention of a central body.
Changing structures and communication networks that have existed for centuries is not an easy or quick task. The adoption of new paradigms (I repeat: not only technological, in this case) is caused either by moments of crisis or by disruptive technologies. Blockchain can bring both scenarios – and ignoring it can configure a big mistake.
Another challenge is the questioning by experts about the computational cost required to create new blocks (records) within a blockchain or the problem of exponential data storage (think about how many medical exams or card purchases you’ve done or will do throughout your life and the size of the database needed to store it all.
Now, multiply by 8 billion people). These are legitimate questions. In the case of bitcoin, its monetary value derives directly from the computational effort (the famous “consensus”), necessary for the network to validate and accept the generation of a new bitcoin.
It seems, then, that the blockchain is already born with a legacy of problems that were not previously solved.
Blockchains: the evolution of the model
The article that defined what a blockchain is and its subsequent use in cryptomorphs. Since then, new technologies have emerged, the processing power of computers has increased and new people have started thinking about blockchains. Consequently, the initial model proposed was changed, expanded and adapted.
Public platforms emerged, allowing the construction of blockchain-based applications without the need to program one from scratch. Soon, new technologies were developed, bringing more facilities to the market and solution developers. They deserve to be highlighted:
- Smart contracts: they are computer protocols, guaranteeing the execution of certain actions such as, for example, the reading of your exams by a physician in a pre-established period of time;
- Hyperledger: it is a kind of “operating system” whose main objective is to guarantee communication between several types of industries, with a high level of transparency and performance;
- Parity: allows the rapid development of blockchain-based applications, focused on security and high availability.
A new category of database, designed to deal with “data on a planetary scale”, can be easily coupled to a blockchain, efficiently handling the exponential growth of data. Using databases with this approach, the problem pointed out in the case of HL7 can be addressed and solved – with the extra gain of immutability of the data provided by the blockchain.
Together, all these technologies and advances allow the problems mentioned above to be dealt with efficiently. By providing computational mechanisms that deliver and ensure data security, and establish trust between parties, which at first are unknown, blockchain is seen as a mature and reliable technology.
In addition, combinations such as Ethereum + Parity + Hyperledger allow more people to access, test and put into practice blockchain-based applications, spreading their adoption, in order to disassociate the idea that their only application resides in cryptomachs.
The issue of computational cost is also directly linked to the proposed model for bitcoin. For a new block (bitcoin) to be added to the network, thousands of computing hours are needed to perform the decryption associated with that new unit (basically this is called “mining”) and to perform the consensus (that is, to be validated by all the computers on the network).
Also noteworthy is the fact that these platforms allow APIs to be written in most computational languages used in the market, allowing teams and companies to start developing solutions without the need to invest in training in new languages.
The challenge of “freeing” the blockchain from its unique and exclusive association with cryptomaps is the big factor for its popularization and market acceptance. The more successful business applications are presented using blockchain, the easier it will be to accomplish the paradigm shift we pointed out above.
Since blockchain is a middle and not an end technology, it can be largely adapted and embedded in new technologies or work in partnership with existing ones. It’s possible, therefore, to “evolve” a blockchain to meet specific needs and get around your architecture problems.
Looking to the future. And the present
Blockchain technology is very new. It’s not known yet for sure the complete set of problem classes that it can handle and the unique business advantages that can be measured with its use.