Blockchain is not an ultimate solution. It is just a wheel in the much more complex machine. In essence blockchain is just a simple database and even really inefficient one. But in Crypto sphere blockchains have s specific role in providing mutability and robust persistence across the Internet by being decentralized. Decentralization is crucial for this slow and cumbersome databases, to provide immutability and resistance to many kinds of vulnerabilities threatening the wast hyperspace of Internet.
Because of this misunderstanding of a blockchain as the component of something bigger and more complex, I decided to share my views and resolve some myths and misconceptions about blockchains in this post.
What, the heck, is blockchain?
As mentioned, blockchain is essentially a distributed database stored on many computers connected via the Internet.
It's main role is to provide a mechanism for storing indisputable facts about important data shared . The main use of blockchains today is recording transaction data of Crypto assets. This assets are mainly some kind of tokens, from non fungible to currency like ones.
With a blockchain is assigned the protocol. A protocol is collection of rules describing a process who and how to add transactions or other type of data records to the blockchain.
There exist a specialized software run by miners in proof of work type (PoW) of blockchains or validators, holding a stake of some number of tokens as collateral, in proof of stake (PoS), and their variants, type of blockchains.
In POW type case miners run a software running algorithms which complexity or difficulty is adjusted in regular intervals to ensure that in predetermined time, (Bitcoin period of block mining is for instance cca 10 minutes) someone among the miners participating, find a solution of the problem defined by the difficulty (puzzle like) algorithm. In PoS type of Blockchains some other set of rules is used to determine which validator wins a right to add block to the blockchain. Usually this process of determining a block adder is done by voting or comparing a share of staked tokens.
A miner or validator who fulfill the requirements for adding a block adds his, in advance prepared, block of data (transactions) to the blockchain and get a reward defined by the protocol. This sequence of events then starts over and over again for every block added.
From what has been said about blockchains, the blockchains are quite a simple animals and there is not a lot of magic and other mumbo-jumbo behind them. They are not a magic technology saving digital world, but rather they are simple and efficient solution designed for a special task which become magical when combined whit some other essential elements. This coexistence is sometimes not enough understood.
What is the bigger picture the blockchain fits in?
The more important bigger structure of any important Cryptosphere project is founded on five pillars or principles. This principles are decentralization, neutrality, openness, borderless or global reach, and censorship resistance. I discussed about this principles in serious of posts available here.
To fulfill this principles an open network on Internet is needed. Anyone can join this network. This network have a nodes (computers with node software) to act as servers for communicating data stored on the blockchain. To ensure as many as possible points of failure every node must have a copy of the blockchain and this is the most important role for this data structure.
Any other combination of network components is more centralized and less robust. We can go to the other extreme to have only one master node having a blockchain attached. This is one point of failure system where blockchain role is reduced to a simple database. Any relational (SQL-like) data base can do the job in this case, but such system can be knocked out whit just one blow. This is obviously the case that is the least resilient.
It is not the blockchain which is powerful. Powerful is the combination of things to whom a blockchain belongs. So the magic mix are five principles having blockchain underground.
Leading by Bitcoin, as the first trust machine of many, blockchain becomes an important wheel under the hood. So important and elegant that had became a true pop star of the Cryptoverse. Pop stars are fancy and shiny, but not always vital for existence.
