Five Blockchain intro video’s selected. Debunking!

Two years ago the hack to get an investment in your startup was to shout: “We are using the Blockchain !”. The Blockchain was the magic term that nobody understood, but had the label of “the next big thing”. That is why investors where investing like mad into companies who said they are using it. If only one of those startups would hit the jackpot the investors would become (more) insanely rich.

Did it prosper? is it Alive?

Now two years later we see big companies like ING executing pilots with Blockchain as a way to store contracts. Accenture and the United Nations have created a solution that will register the refugees of the world inside of a Blockchain.

I know next to nothing about the Blockchain technology and want to get some feeling about what is going on, and if it is applicable to all the topics people try to pitch onto this new technology? For almost three years since the introduction of the Blockchain as a new technology in the really bleeding edge tech startups, the registration of people, housing and companies was promised to be open via the Blockchain. But it is still not here. What is this Blockchain and will it really be a revolution?

No reading, here are some videos

Since a picture is worth a thousand words, here are a few videos that explain the complex technology in a way everybody can understand. I have selected these videos in such a way that you can watch then one-by-one and have a clear understanding at the end. There is some overlap between the videos but that will help in getting a better understanding.

Understand the Blockchain in Two Minutes (IFTF 2m25)

This video by Institute for the Future (IFTF) is Clear, Fast and gives a great insight on what the Blockchain technology is.

The real value of bitcoin and crypto currency technology — The Blockchain explained (DutchChain 6m15)

A bit dull :) but clear and helps to refine the message of the previous video. It only takes you 6 minutes te watch. This video is created by the Dutchchain organization.

Blockchain Technology Explained: What is a Blockchain? (PassKit 4m)

Pretty clear story …..

How Bitcoin Works in 5 Minutes (Technical) (CuriousInventor 5m25)

In this video the part of voting in the network takes place. Voting is the essential part of the Blockchain that determines the legitimacy of the transactions in the Blockchain.

Blockchain for dummies the book

IBM has written a very easy to read book. It is a briljant quick read that explains the Blockchain. If YouTube videos are not your thing and you want to read something on your e-reader, then this is a great read.

Blockchain definition(s) as it is found on wikipedia

Wikipedia is the perfect source for definitions and clear explanations. The following two quotes are from the Wikipedia page on the Blockchain. The length and complexity of the sentences are an indication for me that there is not a real clear perception of what the Blockchain is, and will be.

“A blockchain is a decentralized and distributed digital ledger that is used to record transactions across many computers so that the record cannot be altered retroactively without the alteration of all subsequent blocks and the collusion of the network” —

also on the same page:

“Functionally, a blockchain can serve as “an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way. The ledger itself can also be programmed to trigger transactions automatically” —

Blockchain Summarized

In various videos and articles the Blockchain is summarized with the use of one of the following three set of characteristics (at least.

No consensus on key characteristics

I find this very interesting. Just a few years ago in 2009 the Blockchain was implemented for the first time. This technology is so new that even on the key characteristics there is no consensus . The big question that pops up is: is this a big hype or just something that is so complex that not everybody understands it? And if this is only a big hype why are venture capitalists investing millions in it? And why are the united nations betting the live of refugees on it?

My personal opinion after reading many introductory papers and watching many lectures on this. Everybody seems to dream about a more peer-to-peer network for registration of valuables. It doesn’t really matter to people what the valuables are, it can be money, houses, documents, or identities.People dream about what would happen when they are not dependent on a governmental or financial organisation. Removing the red tape to increase the speed and reduce the cost of transactions and creating an opening for machine to machine transactions is the main ingredient in many Science fiction stories.

And these dreamers ignore the complex center of the Blockchain technology. They ignore or do not know that it works only given specific rules or balance of rules. This is where I have my worries. For example: A consensus model on what transactions are valid only works when the network is relative big, otherwise someone with a big bot farm can takeover the network.

Also what does a blockchain add when there is no great incentive to create a big network of computers that want to build the blockchain?

As Nikolai Hampton has written:

“ The Bitcoin blockchain is protected by the massive group mining effort. It’s unlikely that any private blockchain will try to protect records using gigawatts of computing power — it’s time consuming and expensive. Within a private blockchain there is also no ‘race’; there’s no incentive to use more power or discover blocks faster than competitors. This means that many in-house blockchain solutions will be nothing more than cumbersome databases.” —

to be continued…

One clap, two clap, three clap, forty?

By clapping more or less, you can signal to us which stories really stand out.