Blockchain – 2
From IBM.com: “Blockchain is a shared, immutable ledger that facilitates the process of recording transactions and tracking assets in a business network. An asset can be tangible (a house, car, cash, land) or intangible (intellectual property, patents, copyrights, branding). Virtually anything of value can be tracked and traded on a blockchain network, reducing risk and cutting costs for all involved…A blockchain network can track orders, payments, accounts, production and much more. And because members share a single view of the truth, you can see all details of a transaction end-to-end, giving you greater confidence, as well as new efficiencies and opportunities.”
The Economist describes blockchains as databases which represent an immutable shared history: “A blockchain is a database that contains the history of whatever information it was designed to store. It is made up of a string of “blocks” of information that build on top of one another in an immutable chain…What distinguishes a blockchain from other databases is that its ledger is distributed, publicly available and replicated on thousands of computers—or “nodes”—around the world. Rather than a centralised entity, like a bank or a tech platform, ensuring that the ledger is accurate, it is verified by a decentralised network of individuals… Unlike private networks, open, public blockchains are transparent (anyone can view them), permissionless (anyone can use them) and censorship-resistant (no one can stop them).”
Tim Roughgarden: “Blockchains are not about payments per se. They’re about a new computing paradigm—a programmable computer that lives in the sky, that is not owned by anyone (or rather, is owned by thousands of people all over the globe, including yourself if you like) and that anyone can use. (There might be a usage fee you have to pay, but there’s no access control—you don’t need anyone’s permission.) When thought of this way, how could blockchains not unlock a totally new generation of applications?”
He describes the blockchain stack thus starting from the bottom: “Layer 0 [is] the Internet. That is, it provides at least a semi-reliable method for point-to-point communication between untrusted parties…Layer 1 is the consensus layer, and its job is to keep a bunch of computers (potentially scattered all over the globe) in sync, despite possible network failures and attacks…Layer 2 [is] the scaling layer. Essentially the goal here is to implement the same functionality exported by a layer-1 protocol, but a lot more of it…Finally, on top there is an application layer (as there is in the Internet stack), which refers to the applications built on the functionality provided by the previous layers.”
Builtin elaborates on a key innovation that has taken blockchain beyond just being a platform for cryptocurrencies: “Originally created as the ultra-transparent ledger system for Bitcoin to operate on, blockchain has long been associated with cryptocurrency, but the technology’s transparency and security has seen growing adoption in a number of areas, much of which can be traced back to the development of the Ethereum blockchain, [which] lets developers create sophisticated programs that can communicate with one another on the blockchain.”
Jesse Frederik: “Blockchain generalises the bitcoin pitch: let’s not just get rid of banks, but also the land registry, voting machines, insurance companies, Facebook, Uber, Amazon, the Lung Foundation, the porn industry and government and businesses in general. They are superfluous, thanks to the blockchain. WIRED made a list of 187 things that blockchain could supposedly fix .”
Decentralisation, transparency and trust are the fundamental ideas in the blockchain. Indian politics needs all three of them.