Yesterday, I attended the annual Dutch Blockchain Conference which was, of course, not about bitcoin, and also, of course, not about the DAO. (Although Gavin Wood was brave enough to make an appearance and give his view on the “theft”.) After the first speakers, an inevitable question started to nag me: what was this conference about? The accountant, the banker, the former special envoy and yet another banker all seemed to have a very different view on what this blockchain thing actually was.
The eminent David Birch seemed to come to the rescue. He started his talk on “Identity on the Blockchain” remarking: “When you want to talk about identity on the blockchain, you first have to answer two questions. What is identity, and what is a blockchain.” Alas, he only had time to answer the first question, or more accurately, to provide a framework for thinking about identity, which is even more valuable.
The only one who made an attempt to define “blockchain” was DNB’s Ron Berndsen:
“So what is a blockchain? It is possible to decompose the blockchain in its underlying technologies, and I think there are three fundamental pieces of information technology involved: 1) public key infrastructure, 2) fault tolerance and 3) consensus algorithms. First, public key infrastructure provides ownership of the data i.e. if you know the private key you can transfer the asset, and tailor-made transparency (who may see what?). Second, fault tolerance delivers resilience of the network. It doesn’t matter if some nodes of the network are temporarily unavailable or compromised, as long as some nodes keep working, the network is protected against outages and malicious attacks. Third, the consensus algorithm establishes the truth of the information in the network. If there is consensus about the validity of a new block, it is added to the chain.”
(You can read the whole talk here.)
Unfortunately, this doesn’t seem to be correct. ‘Public key infrastructure’ can be used in closing and verifying transactions (as in bitcoin) and it can be used in database privilege management, but it is not a necessary component of the blockchain itself. ‘Fault tolerance’ as described here seems to me to be part of the ‘consensus algorithms’: how do you establish consensus in a peer-to-peer network when nodes disagree or are offline? Without a term like “peer-to-peer” or “distributed” it all makes little sense. (“When in doubt, call headquarters” is also a consensus algorithm.) But most of all, a central noun is missing in the defenition. Is a blockchain a database, a ledger (meaning: a database containing transactions), a protocol, a technology, a combination of these things, or still something else?
Anyway, the lack of a common definition didn’t stop the participants in the Dutch Blockchain Conference from being very enthusiastic about blockchains. Blockchains have huge potential, once the technology gets past its teething troubles. All we need now is a consensus algorithm to find out what they really are.