Why blockchain? — Because duh!
That’s of course not true: here is our why… (and blockchain basics explained)
Nowadays it’s becoming a bit of a ‘hype’ to mention blockchain to your handshake pitch. And yes, we admit, we also happily make use of the perks of mentioning this hyped technology. We include blockchain, for instance, in our company’s tagline on our website; ‘applying smart contract blockchain technology to the publishing industry’. Adding blockchain to our company’s tagline however, isn’t just a claim to fame.
Over the course of our company’s existence, Katalysis, we’ve spoken with many other initiatives, not limited to the publishing industry. Most of them are convinced this technology might be the holy grail to their businesses. In many cases, however, one should carefully think why to choose such a technology. Because after all, it isn’t the easiest route to follow given that the technology is still in its infancy. In many cases, current well established technologies, work perfectly fine.
Choosing to work with an underlying cutting-edge technology, was a conscious decision. To understand this, I will go a bit more in-depth about the technology itself for the readers who don’t yet have a good grasp of blockchain technology. If you are familiar with this, you can skip below part and continue to the heading ‘why blockchain’.
Although the internet enables peer-to-peer networks for sharing information, when it comes down to sharing value, peer-to-peer transactions are not possible without the involvement of a middleman. Digital assets, that is, anything that exists in a binary format, like digital cash and intellectual property are essentially files, and they are easily copied. A third party, acting as a middleman, is required to prevent double-spending of digital cash — spending a digital token twice.
Blockchain technology combines various IT components like cryptography and decentralized architectures, for time stamping documents, for authenticating users and for protecting data state on untrusted machines. This combination is what makes the technology so interesting, not just from a technical angle, but also from a social economic angle: it enables a peer-to-peer trustless value sharing network amongst participants.
The blockchain ledger prevents double-spending and keeps track of transactions between users. The distributed database maintains a continuously growing list of ordered records called blocks. Each block contains a timestamp and a link to a previous block. The transactions (also referred to as data records) are combined in these blocks. To verify these transactions, they need to be accepted and validated by the network. This validation is done via cryptographic algorithms. Each computer in the network solves the same mathematical equation using the transactions as input, and checks that they all agree on the result. This is sometimes referred to as “mining” a block. Once “mined” the block is time-stamped and sealed with a hash value. Hashing is a fixed length value or key representing a string of characters. Hashing is used to index and retrieve items in a database. Each hash is the starting point of the next block in the chain. The hash value represents the content in the block, so if even the smallest thing in the block changes, the hash will completely change.
Enter Smart Contracts
A more recent development in blockchain technology are Smart Contracts. Smart Contracts are effectively small programs stored on a blockchain. Because of the characteristics of the blockchain like transparency and immutability, their code is available for others to inspect, and any changes to them are fully recorded. Smart Contracts can act as a user in a blockchain (that is by receiving a transaction and accumulating some “tokens”), and they can store data and execute some functions that have been programmed into them. These functions can change the data stored within them, or perform some logic such as transacting with other contracts or calling functions of other contracts. This is particularly interesting for more complex use cases around blockchains which require more than storing a single quantity (a number of cryptocurrency tokens). At Katalysis we have written these smart contracts to store who the owner of the article is, and thus should get remunerated, and who the holder is, and thus can read it.
It is the right time to think about how we access, spread and compensate news. In the same spirit, which lead to the printing press, we believe quality content should be spread out over as many platforms as possible and should be read by as many people as possible, both online and offline. Our micropayment and Digital Rights Management implementation helps readers and writers connect in a fair, transparent and decentralised manner.
The architecture of the blockchain technology is key; there is no single owner of the network and the network is transparent for every participant. Due to these characteristics, it is possible for the writer (1) to get fast (nearly real-time) transfer of value and fair remuneration for their content, (2) to spread the content anywhere online, and remain owner of the content (or decide who the rightful owner should be), and (3) cost efficient ways to monetize the content. A blockchain also keeps track of connections between content creators and their consumers, which will enable very interesting propositions in terms of discovery of content and offering it to consumers.
We strongly believe in a fundamental and transformational change of the way distribution of quality content over the internet should be designed. In our vision this future online will be decentralized and distributed.
So, there you have it: blockchain — duh!
Do feel free to reach out to us if you have questions or suggestions!