What Is The Real Essence Of Blockchain Technology?

Blockchain Technology has been at the center of attention ever since Bitcoin rose the popularity charts. Bitcoin brought the idea of the decentralized financial system to the world, while the underlying technology of Blockchain is being pegged as a very important tool for bringing in the next industrial revolution.

As has been the case with any new technology, even blockchain has seen a lot of debates in recent times over its fundamentals, the business models, various use cases and how it can change the old-age tradition of centralized systems.

While many die-hard blockchain fans believe that Bitcoin is the only real blockchain, many others criticize enterprise-level blockchain for their lack of transparency and decentralization. It is important to note that most of the Blockchain proponents are quite bullish on the decentralization and sees it as the most important aspect of any blockchain based system.

Cryptocurrencies like Bitcoin and Ethereum does leverage Blockchain technology and make use of consensus such as Proof-Of-Work as well as Proof-Of-Stake to maintain the decentralization. However, blockchain proponents need to realize that enterprise-level blockchain projects cannot use a similar working model for the verification or mining process as it amounts to wasting a ton of energy.

There have been several debates in the crypto space as well over the use of consensuses such as Proof-of-work which burns a lot of energy for the verification process. So, enterprise-level blockchain using a similar work model would not be practical as we are already an energy deficient planet.

We Need To Get Past The Pigeon Hole Definition Of The Blockchain

Blockchain has become synonym to the decentralization as well as Distributed Ledger Technology and people often confuses one for another. However, it is important to note that the term Blockchain only came into being after the invention of Bitcoin. The pseudo-anonymous creator of Bitcoin, Satoshi Nakamoto often used the term Block and chain simultaneously on various talk forums, and later it was used to address the database of the Bitcoin i.e “Bitcoin Blockchain.”

Decentralization is definitely one of the aspects of blockchain as it promises shared control than a centralized one. Many engineers and organizations such as IBM who are working on the blockchain tech especially for the enterprise world, has made transparency and security as the two guiding principles for themselves.

Christoper Ferris, the Chief Technical Officer for IBM’s Open source projects believe the real significance of the blockchain tech lies in the core principles of transparency and open source. He explains.

“I believe these principles are as core to our platform as the technology itself: open source development predicated on common standards and interoperability; distributed and transparent governance across multiple network participants; and permission access with bulletproof privacy protections.”

Ferris went on to explain that IBM instead of creating a proprietary platform helped in creating Hyperledger, one of the fastest growing open-source project. IBM went on to help the project develop a code which would be beneficial in building enterprise-grade blockchain platform: Hyperledger Fabric. Hyperledger already boats of 260 members and has grown in stature over time to become a multi-project, multi-stakeholder effort encompassing numerous enterprise blockchain and distributed ledger technologies.

What Is The Real Essence Of Blockchain Beyond Technical Definition

Blockchain is not just about decentralization and distribution of power, it is an amalgam of various technologies, ideas, and thought processes. Bitcoin creator Satoshi did not invent any new technology but used the existing ones like cryptography and Distributed Public Ledger. The main idea was to create a system which is not controlled by any particular organization, but the peers work in sync to help each other and end the dependency on a traditional centralized system.

Blockchain technology brought in the idea of the trustless system, where machine, maths, and database are the kings rather than a particular individual or organization. So, if we really have to define blockchain, we can say that it is a transparent system which puts users privacy and security before anything else.

The views and opinions expressed in the article IBM Elaborates by Extracting the Real Essence of What Blockchain Technology Is and Does for Us do not reflect that of 48coins, nor of its originally published source. Article does not constitute financial advice. Kindly proceed with caution and always do your own research.

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