Decentralised Apps and The Blockchain
@TheCollogue — 30/04/2014
The Bitcoin blockchain, as designed by Satoshi Nakamoto, is positioned to make an architectural change to the internet as we know it. The blockchain is the framework of the Bitcoin protocol allowing it to be a Peer-to-Peer Electronic Cash System.
The protocol, coupled with the use of cryptography, ensures trusted third parties are not required to complete a transaction electronically between two users. Transactions are processed anonymously by Bitcoin Miners and added to the shared general ledger, which is then distributed to the peers of the Bitcoin network. This protocol, as defined here briefly, creates a decentralised monetary system gaining the user’s trust through the protocol and cryptography of transactions/wallets only. This is a very brief description of the blockchain in order for us to look at decentralized applications. For a full description check out this video.
Decentralised applications are those designed utilising the blockchain technology. These applications can either use the Bitcoin blockchain protocol to operate or have their own customised version. Examples of the two would be Mastercoin, which leverages Bitcoin blockchain and Ethereum, which has its own open source blockchain.
Mastercoin and Ethereum are both decentralised application(DApp) platforms, which raise developers up a layer and allow for a more simplified method of creating DApps. Although these DApps are similar in function they are different in topology. Mastercoin utilises the existing Bitcoin blockchain protocol while Ethereum is developing its own open source blockchain protocol.
As we are at an early stage of DApp adoption, there are many arguments over how these extraordinary apps should evolve. I’ll touch on two such arguments here.
The first point of contention on DApp evolution, regards the use of the Bitcoin blockchain. Some suggest the Bitcoin blockchain should not be used by other applications as it may unnecessarily bloat the blockchain and risk bringing down the Bitcoin network. Others suggest the Bitcoin blockchain should be used in a defined method which protects the Bitcoin Network from downtime.
Bloating is a concern as it can impact the decentralisation of the Bitcoin blockchain, which is achieved through peer to peer networking. This means each peer in the network has a copy of the blockchain stored locally. Any new peers joining the network will be required to download the blockchain. If the blockchain becomes too large to be downloaded and difficult to manipulate by peers, then it becomes unmanageable. This may result in a set of peers/miners running the blockchain, or a centralised topology.
The second point of contention regards the creation of additional blockchain protocols for use in DApps or other cryptocurrencies in development. Ethereum is an example of one of these. In this case the argument is Ethereum and other DApps should be using blockchain in a method referred to as sidechaining. Recent talks of Bitcoin 2.0 suggest these applications should be developed using a sidechain of the Bitcoin blockchain instead of their own blockchain protocol. This would also enable an easier method for these decentralised apps to be integrated with other DApps and Bitcoin technologies. Kyle Torpey outlines this in a recent article on Bitcoin 2.0.
Mastercoin mention, in their wiki, that they are designed to run on any blockchain protocol. This suggests, should there be a push for apps such as Mastercoin and Ethereum to be running within a sidechain of the Bitcoin network, that their current design would not require adverse change in architecture. In other words Mastercoin is Blockchain agnostic.
Personally I see the concept of DApps using a sidechain of the Bitcoin protocol dominating over those with customised blockchains. In keeping within the context of “Mastercoin is to Bitcoin what HTTP is to TCP/IP”, I’d suggest that Altcoins and customised blockchains are to Bitcoin as Gopher is to HTTP. Gopher exists but has been dominated by HTTP.
This just scratches the surface of the path decentralised applications are leading and there will be plenty of future posts in relation to DApps on this blog. There is a long way to go, but the first steps have well and truly been taken to ensure the technology Bitcoin brings to today’s Internet is not going to fall by the way side.
Decentralised applications like Mastercoin and Ethereum are two amazing technologies setting the precedents in terms of achievement in working with the blockchain. At the time of writing Ethereum is still in development so we are yet to see it’s full functionality.
Eoin Mullins
@TheCollogue
