IT IS DIFFICULT these days to avoid hearing about
blockchain. Blockchain is going to be the foundation
of a new business world based on smart contracts.
It is going to allow everyone to trace the provenance of
their food, the parts in the items they buy, or the ideas
they hear. It will change the way we work, the way the
economy runs, and the way we live in general.
Despite the significant potential of blockchain, it is
also difficult to find a consistent description of what
it really is. A recent Google search for “blockchain
technical papers” returned nothing but white
papers for the first three screens; not a single paper
is peer-reviewed. One of the best discussions of the
technology itself is from the National Institute of
Standards and Technology, but at 50-plus pages, it is a
bit much for a quick read.
The purpose of this article is to look
at the basics of blockchain: the individual components, how those components fit together, and what changes
might be made to solve some of the
problems with blockchain technology.
This technology is far from monolithic;
some of the techniques can be used (at
surprising savings of resources and effort) if other parts are cut away.
Because there is no single set of
technical specifications, some systems
that claim to be blockchain instances
will differ from the system described
here. Much of this description is taken
from the original blockchain paper.
While details may differ, the main
ideas stay the same.
Goals of Blockchain
The original objective of the blockchain system was to support “an electronic payment system based on cryptographic proof instead of trust …”
While the scope of use has grown considerably, the basic goals and requirements have remained consistent.
The first of these goals is to ensure
the anonymity of blockchain’s users.
This is accomplished by use of a pub-lic/private key pair, in a fashion that is
reasonably well known and not reinvented by the blockchain technology.
Each participant is identified by the
public key, and authentication is accomplished through signing with the
private key. Since this is not specific
to blockchain, it is not considered
The second goal is to provide a public record or ledger of a set of transactions that cannot be altered once verified and agreed to. This was originally
designed to keep users of electronic
currency from double-spending and to
allow public audit of all transactions.
The ledger is a record of what transactions have taken place, and the order
of those transactions. The use of this
ledger for verification of transactions
other than the exchange of electronic
cash has been the main extension of
the blockchain technology.
The final core goal is for the system
Guide to the
Article development led by
Blockchain remains a mystery,
despite its growing acceptance.
BY JIM WALDO