Blockchains: Beyond Bitcoin
A modern data structure for distributed ledgers
One of the sessions from the Offline Camp iteration that I attended discussed the blockchain largely outside of the context of cryptocurrencies. What is it, and why does it matter? We put our heads together and tried to figure it out.
For starters, a blockchain is a data structure that facilitates a distributed ledger. A distributed ledger is a ledger, like the kind used by accountants, that works like a distributed database. Members of the network elect to work together to store and update the structure through strictly defined relationships which dictate who can update the structure. Many distributed data structures like Dat archives, IPFS blocks, and Secure Scuttlebutt feeds operate on similar principles for marshaling peers in a network to cooperatively manipulate a data structure, though they provide very different guarantees about that data than blockchains do.
To that effect, what does a blockchain give us? Openness and consistency. Anyone can update the blockchain as long as they’ve mined the correct block, and anyone can verify that it is the correct block (more on blocks and mining momentarily). As one update proliferates through the network before another, the chain develops a single communal history that peers distribute. This consistency is important for record-keeping, such as in financial systems.
Our group discussed how mining works on a blockchain. Francis Brunelle explained that there is a work function and a difficulty value that grows over time, where the work function involves combining a block with a random number and generating a hash from that combination, then comparing the hash to the current difficulty value. If the hash is less than the difficulty, the block used to generate the hash can be added to the blockchain. This update can then be broadcast and verified by other peers, with the miner that found the block collecting on certain incentives. In this way, anyone can update the blockchain so long as they have solved the work function. Once solved, the answer can be checked against the input with very little computation, allowing the valid update to proliferate while invalid updates are quickly identified.
Mining is only one type of work function, called proof of work. A few others exist, including proof of stake, proof of cooperation, and proof of space. A variety of different projects, including cryptocurrencies, use these approaches to address emergent problems in proof-of-work systems concerning energy consumption and network latency. The experimentation in this area reflects its growing importance, as corporations and communities alike find more need for independent financial infrastructure and robust peer-to-peer technologies.
Because of the broad utility of distributed ledgers, they have found uses in identity systems, domain name systems, and distributed computing. Far beyond Bitcoin, the blockchain is an important modern data structure.
Editor’s Note: This article recaps discussions we had at Offline Camp, a unique tech retreat that brings together the Offline First community. Join us at our next event or sign up for updates and cast your vote on where we should host future editions of Offline Camp.
