The recent Bitcoin hardfork once again turned attention to the blockchain tech that lies underneath the cryptocurrency. Bitcoin has split in half on August 1, 2017. Many analysts perceive this move as a new round in the Bitcoin struggle to become a truly international currency accepted worldwide. Consequently, Bitcoin split poses hard questions about the potential of blockchain technology itself and its applications beyond cryptocurrency space.
And there are several good answers! As for 2017, we experience a rising interest in blockchain technology among our customers. Particularly they are interested in the new document exchange and storage solutions. We’d like to sort things out.
Decentralization VS Integrity
Right now corporations en masse rely on the dedicated server infrastructure and cloud solutions like AWS, Microsoft Azure, Oracle, etc. But the business landscape doesn’t stand still. It becomes heavy structured and decentralizes day after day, which requires a decent level of flexibility from big companies.
Once all-in-one, vertical structured automaking industry now dependant on multiple suppliers. On a recent Tesla Model 3 presentation, Elon Musk mentioned that his new mass market car has 10,000 unique parts and thus unique documentation, logistics and manufacturing specifics.
In the modern world whether you’re a big corporation or a small DIY maker you’re still dependent on a supply chain spread across the globe. Adding to this mess security precautions and notary legalizations and you can imagine what a document nightmare big corporations are facing day after day.
Naturally, business is looking for better document management solutions and blockchain is here to help.
What is Blockchain Technology?
A blockchain itself is just a list of blocks sequentially linked and interconnected by the time of creation. The first blog created in 1 may be linked to the second created day later, and so on. Each block has three data values: a hash pointer (this number links block to a previous one), a timestamp (date of creation/modification), and a transactional data itself (amount of money/document info).
Advantages of Blockchain Technology
Unlike the traditional database architecture (including cloud), where data is stored on a centralized server, blockchain is stored on machines of all participants. Each computer in the network stores calculates and applies changes to the blockchain. Such decentralized architecture makes blockchain stronger the more computers in the network. Therefore, if someone forges/erases data from one machine, there are many others that still have the exact same copy of blockchain to protect the authenticity of the information stored in it.
Banks and corporations spend billions of dollars to protect and maintain their server infrastructure, while still having leaks and virus attacks like WannaCry. By applying blockchain to the corporate network, which consists of thousands of computers, a company can gain stable and literally unbreakable system.
Accessibility & Confidentiality
Certainly, storing valuable data on every machine in the office is not a good idea if you have some corporate secrets. Therefore, blockchain encrypts each transaction data file.
After data encryption took place, an owner gets two keys: public key (used to view the document) and private key (used to modify the document). It must be acknowledged that without encryption keys, all files will be only an unstructured mess of bytes, which effectively protect information and secrets in it. This way anyone in the company can access any file at any time, while only an owner can allow someone to view the file.
On the other hand, from the confidentiality point of view, blockchain technology has no advantage over a centralized database architecture. They both can use sophisticated encryption algorithms. Moreover, centralized databases can be completely disconnected from the network and outer world like in “Mission Impossible” movie.
Legal Transaction Facilitation
- Document forgery protection.
- Confirmation of data ownership without showing actual data.
- Protection against plagiarism by applying document timestamping.
By having such a unique set of features blockchain can effectively replace paid notary services. Think of it as a distributed ledger where blockchain can be used instead of third-party intermediaries that are usually used to make legal agreements and verify them.
Sadly, but duplicating all the data and storing it on multiple computers also drains a lot of energy and storage space. Especially if you want to store videos, images, and heavy-weight pdf manuals. By now, a centralized server infrastructure is the only reasonable solution for such type of content.
For instance, we prefer using Amazon Web Services (AWS). AWS is reasonably priced and offers a wide range of services like Load Balancing service that redistributes loads between servers, or EC2 which dynamically moves data to the instances (Europe to Europe, China to China) depending on where demand occurs. We also suggest to use cloud services for high-loaded mobile apps like Drophook.
But if we’re talking about private messages, text documents or any kinds of certificates, this is where blockchain shows at its best. Here’s a simple example.
Back in 2016 Yahoo has turned off its Messenger which happened to be a conventional communication tool for all oil traders since 1998. One of Yahoo’s unique features was the ability to store messaging history, which really helps when your college suddenly changes the price.
Guess who took advantage of this opportunity? The insider company called CME, which introduced its Pivot message system. It wasn’t unique though, but has trade ticket and open messaging features. Sadly, a new messenger could be 10 times more appealing if was based on blockchain technology.
It is also worth mentioning a new paradigm in massive computing that is rising over the horizon. It envisions a tide goes back from cloud computing to decentralized computing performed by end-devices.
And it’s not so crazy as it sounds. The theory states that new machines like autonomous cars, robots, Internet of Things and drones require far higher computing speed than any wireless connection can sustain. The future of such machines is already here and it won’t wait for wireless networks to develop. It will take the simplest path: get back from cloud computing to on-the-ground (edge) computing.
Peter Levine, a general partner at venture capital firm Andreessen Horowitz, and other tech companies are beginning to recognize upcoming shift. The number of high-productive computing devices is already far beyond the number of human beings living on the planet. So why not to use this distributed computing powers in order to supplement future services, in particular, blockchain based services.
It must be acknowledged that blockchains are well-suited as a system of record only for certain industries that has a specific type of data (Legal, Fintech, Banking, Energy Sector), while centralized databases (including cloud services) are appropriate for more content oriented businesses.
While the choice on which one technology to use is certainly up to you, remember that there is absolutely no limitation in how to use blockchain. It all depends on your imagination and coding… you can leave it to us.