Discovering GeoDB 3. Blockchain 101

“Trust starts with truth and ends with truth”
Santosh Kalwar, 2010 [1]

We continue with the series of posts Discovering GeoDB. So far, we’ve reviewed the great value of private location data [2] and reasoned how in a free and competitive market, the price will be dictated by both sellers and buyers [3]. Now, it’s the turn to talk about technology, or rather, it’s time to talk about technological paradigms. It’s time to talk about blockchain technology.

Nowadays everyone talks about blockchain technology. They talk about its virtues and the opportunities that it offers; and they argue over whether it’s the next technological revolution or the next economic bubble.

The main reason that lies behind all the fuss is that blockchain is an enabling technology, i.e., a technology that allows some things that were impossible until it’s conception [4].

This kind of technologies imply a paradigm shift, which is why they’re so difficult to be understood and/or to be accepted. In addition to that, in this case there is a strong economic component, so there is a huge amount of information about it, which in many cases is inaccurate or completely wrong.

For all the above, prior to detailing any proposal that uses this technology it’s convenient to spend a little time to clarify the pillars on which it’s built.

Just enough to reassure the reader who fears to find a handful of complex concepts we want to clarify that blockchain technology is absurdly simple. If until now it seemed to you a complex and convoluted technology it’s because nobody has explained it to you properly.

What is a blockchain?

A blockchain [5] is a collection of information structured in such a way that guarantees certain properties such as the immutability of the data (this means that the historical records cannot be modified) or its authenticity (and this, that the creator of the data is the one who claims to be).

The distinctive component of a blockchain is the block, which by making an extreme simplification, can be divided into three subcomponents:

  1. A content.
  2. A reference to the previous block.
  3. A resume value obtained from the two previous subcomponents.

A minimum change in a single value of the content of a given block will cause the change of the resume of the modified block and of the subsequent ones, so it isn’t possible to modify a historical block in isolation.

Although the distinctive component of blockchain is the block, the distinctive component of blockchain technology is the network in which the blocks are generated and added to the chain.

Multiple nodes can participate in a blockchain network, each with its own copy of the blockchain. Using algorithmic negotiation techniques based on consensus, all the nodes decide in a decentralized way how to generate new blocks and how to add them to the distributed blockchain, which is considered valid by all of them.

This ability to generate immutable information in a decentralized way is what makes the blockchain technology an enabling technology with which it’s possible to carry out inconceivable actions until its emergence.

Well, what do you think if we tell you that the blockchain and the blockchain technology is just that, wouldn’t you think it’s borderline simple?

You may consider that the above explanation is incomplete and you may be missing the use of certain terminology commonly associated with blockchain. Well, let us tell you that the previous explanation is not incomplete, we might even consider it too extensive.

This terminology that you miss and that usually appears in any blockchain talk (transactions, consensus protocol, tokens, smart contracts and so on [6]), is what generates confusion and makes it look more complicated that it actually is. Believe us, those terms are only nuances in the definition of this technology.

What use has a blockchain?

As it has been remarked previously, blockchain technology is an enabling technology that allows unthinkable things so far.

A common error when a technology of this type appears is to try to use it to replace systems in production, forcing new and convoluted mechanisms that, in many cases, are far from improving existing ones.

It’s true that blockchain technology allows us to improve certain processes, but we can be much more ambitious.

The main value of this technology lies in the fact that it allows the decentralization of trust. This allows us to design tools in scenarios in which entities that do not know each other can trust each other with guarantees.

At the dawn of the internet, the vast majority of the applications that appeared only sought to replace existing processes (digital press, personal sites, landing pages for brands, …). Time has shown us that even the most visionary people were unable to conceive the potential of this technology.

We’re at the dawn of the blockchain, and we’ve in front of us a huge number of scenarios in which, the decentralization of trust, will allow us to create new and unique solutions.

Why use blockchain technology in GeoDB?

To trust.

In our previous posts [2,3] we’ve talked about the great utility of location for big data analysis, but also about the huge cost of these analytical techniques for companies and about how harmful could be for a business to obtain conclusions from the results of a big data analysis in which wrong data has been used.

The use of blockchain technology allow us to capture location information immutably, allowing us to guarantee, among other things:

  1. That the locations were captured by whoever claims to have captured them. The only thing you can say is where you’ve been.
  2. That the locations were captured at a given moment. We capture stories. A person, in a place, at a given time.
  3. That history isn’t mutable. It’s not possible to enrich the results to require a higher compensation or remove certain information so that it cannot be used by our competitors. There is no place for a minitrue [7].
  4. That the results are verifiable. Everyone can check that for each data query asked for, what’s returned is the information that must be returned. There is no noise or hidden information.

You might ask us, are you proposing a proof of location system? Not for the moment. We’re aware that users can use different mechanisms to distort their real position, and for that reason we’ll make available and SDK optimized to minimize, not eliminate, those cases. Our locations therefore have no validity as proof for a third party, they only have value because they’re valid for a big data analysis. Paradoxically, as users have no incentives to cheat, the vast majority of data will be real and therefore of high quality for big data analysis.

But the advantages of using blockchain technology aren’t only in the processing of information, but also in the access to it. A blockchain infrastructure give us the necessary tools to transmit the economic value in the ecosystem, adequately rewarding all the stakeholders of the system and fostering the development of an ecosystem based on trust and economic equity.

In the next entry we’ll talk about modular blockchain architectures, a type of blockchain architecture in which the interoperability and the interconnection are the central pillars of the infrastructure.

References

  1. Quote my everyday, Santosh Kalwar, 2010. ISBN: 9781446118634
  2. https://medium.com/@GeoDataBlock/discovering-geodb-1-the-power-of-place-fb97a935b3d9
  3. https://medium.com/@GeoDataBlock/discovering-geodb-2-game-theory-c6dc5c6985c9
  4. https://en.wikipedia.org/wiki/Enabling_technology
  5. https://en.wikipedia.org/wiki/Blockchain
  6. https://medium.com/my-blockchain-bible/101-blockchain-terminology-874f007c0270
  7. https://en.wikipedia.org/wiki/Ministries_of_Nineteen_Eighty-Four#Ministry_of_Truth