Blockchain is blowing up. Fueled by a combination of VC capital, government interest and investment, and the internet hype machine, experts are bracing for a coming disruption.
And yet — we do not yet have a clear idea of what that disruption will look like. At this point, the blockchain disruption is (like other legendary objects of apprehension and anxiety) “unknowable, but certain”. “Unknowable” because we do not yet know exactly which implementations or variations of this technology will be the most important or impactful. Yet “certain” because it gives the power to the people rather than middlemen, potentially affecting a wide range traditional businesses and their business model. This makes preparing for the coming blockchain disruption both important and difficult.
Think of it like this: the “automobile” has just been invented. It is a compilation of a number of technological advancements that some believe could start to change our everyday lives and even the very structure of our society. Predictions for the technology vary widely. Some believe that these “automobiles” will be flying within two decades, and yet there are also skeptics who think that the “horse and carriage” we already use is still working well enough, thank you very much. Both governments and private businesses are interested in exploring where and how they can use these new “automobiles” to their best advantage. As a business person who might be effected by “automobiles” it is a good idea to arm yourself with an understanding the fundamentals of how driving works and also the basics of engine mechanics. That way you can effectively evaluate the realistic potential of this technology as ideas for implementation proliferate.
This is approximately where we stand with blockchain today. To be ready for the coming blockchain universe, you do not need to know the cryptographic or mathematical theories behind the technology. In our car analogy, this would be analogous to the physics and math behind the combustion engine. But you would be well served by an understanding of the general mechanics of how a blockchain works. This would be like understanding car engine mechanics enough to be able to choose between a 4 and 6 cylinder engine car to meet your specific needs.
The following questions are designed to help point you in the direction of that level of basic blockchain literacy. I hope it can help you decide if you understand the mechanics of blockchains well enough to field the coming disruption. These are key concepts that if you don’t understand already you can learn about by following my blog or subscribing to my newsletter. The better you can answer these key questions, the better you can judge the developments that the blockchain disruption might bring your way, even if you aren’t a “techie”.
7 questions for blockchain
1) A blockchain is a database. In a traditional database (e.g. MS Access or MySQL), data would be saved somewhere on a computer. In a blockchain database, where is data stored stored? How is this different from a folder on your computer?
2) How can data on a blockchain be added, amended, or removed from a blockchain? How is this “special” or different from traditional databases?
3) Where does the blockchain itself “live”? In a traditional database, the folder you save your data to is then saved on your personal computer’s hard drive. To which “hard drive” is data on a blockchain saved? What is the role of the network, user(s), or computer(s) that run a blockchain in this part of the “saving” process?
4) Who has administrative or superuser control over a blockchain, who is in control? What is the relationship between the admin/superuser and network participants?
5) Blockchains replace the “trust” essential to traditional, centralized databases and networks with a “consensus” system. Can you contrast in broad, basic terms how “trust” vs “consensus” affect the systems? Can you describe, in broad, basic terms, at least two different ways of structuring a consensus-driven network system?
6) How does identity and anonymity work in a blockchain network? What can and cannot be verified?
7) How could a user or an account on a blockchain be audited? How can data be verified? Who can conduct a verification and of what data?
This is not the only possible list of questions — there are many valid approaches to analyzing the key components. But it should give you a rough idea of your own knowledge. It can also help to figure out where to dig deeper on technical details.
Did the questions pique your curiosity? Are you left looking for answers on the questions? In dire need of more blockchain information? If you or your organization need support to get your head into the blockchain game, check out our webinars and consulting services over at alatus sigma consulting.
Sign up below and receive my future articles into your mailbox.