Block chain, the idea to replace central authority

Opening

In IT, there is a major revolution every 10 years.  Personal computer in 80s, the Internet in 90s, mobiles in 00s, and I would say “block chain” in 2010s.

All of these revolutions, it was very difficult to understand at the beginning, until we see its applications. We are at the very exciting time, which is similar to the beginning of the Internet with block chain, I would like to share what is “block chain” and why it is so importance. 

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What is block chain?

Block chain is an innovative way to prevent data from being modified or copied without restricting access to the data.  Data in a computer, by its nature, is very easy to copy.  All data in computer is just a series of 1 and 0 patterns.  If we can replicate the exact same patterns of the series of 1 and 0, the original and the copied ones are identical.

Only way to prevent the copy is to establish a single point of authority. Even if the data has exactly the  same matching pattern of 1 and 0, if the authority does not hold the data, we see the data is not genuine nor true.  In this way, there is a systemic risk of having the single point of failure.

But Block chain is different, because each of participants is collectively supporting the integrity of data in a de-centralized environment, where anyone can access through the Internet. 

The attributes of block chain can be summarized into three attributes: 1) no way to copy or modify once recorded;  2) Anyone can access to the record through the Internet; and 3) no central authorities needed. In short, “block chain” is all about the revolutionary recording method in the Internet. Therefore, the application of block chain is enormous, for example, a) registry of property, b) keeping various certificates, such as marriage certificate and c) various contracts.

Another example is car sharing. You have a car ownership recorded in block chain. And you can transfer the ownership only for one hour, by recording the transaction in block chain, to record another transaction to get back the ownership after one hour. This is not currently  practical because we use physical paper and central authorities.  But because block chain is accessible through programing and the Internet, it is possible.

So, can we say the block chain is already real? Yes. The first adaptation of block chain was “Bitcoin”. Bitcoin is using block chain as public accounting ledger to record every transaction and serves as money. Bitcoin is only the beginning and the tip of the big iceberg, as the use of the idea of block chain can create similar money. Bitcoin is important in a way to provide the answer to this question, “Is block chain workable?”

I think the answer yes, since “Money” is the best example to test  “block chain”; how robust is it against hacking, since everyone can be motivated to copy or modify it?

Closing

 “Block chain” is a breakthrough idea to record data with the three attributes: 1) no way to copy or modify, once recorded;  2) anyone can access to the record through the Internet; and 3) no central authorities needed. Since block chain is an algorithm, like “mathematical formula”, there is no way to remove it from the world. Thus, it is the future.