More than ten years after its birth, the blockchain is today an innovative technology that allows us to give new answers to many different needs of companies, organizations, citizens and consumers.
For several years the knowledge and attention to the blockchain has been limited to the world of developers or in other ways to those who had seen its potential from a financial point of view, in recent years there has been a major leap in terms of dissemination of knowledge and expectations.
The blockchain, as it has happened for the Internet, is gradually entering our lives, often indirectly, in many cases only as a possible solution to platforms that solve in an innovative way our needs. Or those of the companies in which we work or the Public Administrations that provide the services we use.
No matter the way we come into contact with blockchain, it seems increasingly important to understand it, to be aware of its prospects and potential.
In particular, unlike other technological innovations, the blockchain refers to some apparently very different and distant themes and concepts that normally we don’t associate with digital innovation: trust, responsibility, community, decentralization.
In addition, alongside these, there are others that have a strong relationship with technology, but which in turn are not “usual” as the themes of transparency, immutability, sharing, and “competition” in achieving a result.
What is the Blockchain
It is difficult to classify the blockchain in a single definition.
The blockchain can be read and presented from different points of view and from different perspectives.
The blockchain is a subfamily of technologies in which the register is structured as a chain of blocks containing transactions and whose validation is entrusted to a consensus mechanism, distributed on all nodes of the network in the case of permissionless or public blockchain or on all nodes that are authorized to participate in the validation process of transactions to be included in the register in the case of permissioned or private blockchain.
The most important features of blockchain technologies are the immutability of the registry, transparency, transaction traceability and security based on cryptographic techniques.
The blockchain is based on a network and from the point of view of functionality allows to manage a database in a distributed way.
From an operational point of view, it is an alternative to centralized archives and allows to manage the updating of data with the collaboration of the participants in the network and with the possibility to have data shared, accessible, distributed to all participants.
In concrete terms: it allows data management in terms of verification and authorization without the need for a central authority.
For some, the blockchain is the new generation of the Internet, or even better, the New Internet.
It is believed to represent a kind of Internet of Transactions. These definitions tend to place the blockchain alongside the Internet of People, or the Internet of the people we use and frequent every day that has in turn extended to the Internet of Things to create and represent the Internet of Value based on seven characteristics: Decentralization, Transparency, Security, Immutability, Consent, Accountability, and Programmability.
Starting from these principles, the blockchain has become the digital declination of a new concept of trust to the point that some believe that the blockchain can also assume a value in certain aspects of a “social and political” type. In this case, the blockchain is to be seen as a platform that allows the development and the concretization of a new form of social relationship, which thanks to the participation of all is able to guarantee the possibility to verify, to “control”, to have total transparency on acts and decisions, which are recorded in archives that are unchangeable and therefore immune from corruption.
For a certain period the blockchain was identified with the Blockchain of Bitcoin, that is the first Blockchain (which, as we have already mentioned, is identified with a capital “B”).
This has led to “confuse” the blockchain with other areas of innovation such as digital currencies and bitcoin as a currency.
Perhaps for the latter reason, the blockchain has often been associated with a concept of alternative or complementary digital currency and digital payment. In reality, as we will see, the blockchain is a much broader and more articulated phenomenon.
Create and share digital assets
The blockchain represents (also) a solution to create unique digital assets. To understand the opportunities of the blockchain it is important to consider the theme of the uniqueness of digital assets.
This is an issue that we will see later on when we tackle “double spending”, but which can already help us to understand the meaning and importance of the blockchain.
But let us start from a common example.
If we write a text on a word document that text is on our computer and is unique.
The moment we send it to a colleague, that same text as well as on our computer will be present on a mail server and on our colleague’s computer.
Already so we have a series of duplications of the same document.
That text can then of course be shared in turn and sent to others who will have a copy in turn.
As we well know there are no limits to this duplication and as we well know that same document can be modified and changed.
Our word document is a digital asset and as it appears obvious it is certainly not unique: it “started” from our computer and maybe in a very short time it has multiplied in thousands of copies.
That same asset encrypted in a blockchain ledger could become a unique asset.
Exactly as in the physical world: if we pass the same document written in word printed on paper to a colleague we lose possession of it, that document goes out of our control to enter the domain of a colleague.
In other words: if in the digital world the passage automatically implies a duplication, the blockchain allows us to “regain” to the digital world the concept of scarcity of real-world assets and when through the blockchain we pass a digital asset (our document) from our computer to a colleague, that document is no longer in any way under our possession and is totally in the hands of our colleague.
If he too needs to share it, he will lose possession of it in favor of another person.
The document will remain unique and it will not be possible to duplicate it.
One of the characteristics of the blockchain, which will accompany us in our service, is in its ability to create unique digital assets.
In order to understand the importance of unique digital assets, we leave our example linked to a generic word document whose possible duplication does not involve particular problems.
On the contrary, if we think about the duplication of assets that represent a value, it is clear that the guarantee of uniqueness represents an absolute value.
Duplicating an asset designed to represent a currency in digital means to diminish this value until canceling it.
This is why the world of finance first of all understood the value of the blockchain in its ability to guarantee the uniqueness of a digital asset.
The same value is well understood by many other sectors that are representing products and services in digital and have in turn understood that digital allows you to manage much more efficiently exchanges and transactions only and exclusively if you ensure the ability to avoid duplication, i.e. only if you guarantee the uniqueness of the asset. Exactly as it happens in the real world.