Un­der­stand­ing blockchain tech­nol­ogy - Part I

Daily Trust - - IT WORLD -

Trans­act­ing money usu­ally re­lies heav­ily on in­ter­me­di­aries (“mid­dle­men”) like banks, ac­coun­tants, gov­ern­ments, etc., to en­sure trust and suc­cess­ful trans­ac­tional process like au­then­ti­ca­tion or record keep­ing. Trans­act­ing in crypto cur­ren­cies (In­ter­net money), such as bit­coin, has re­lied on the blockchain (BT) tech­nol­ogy, which is one of the hottest top­ics in tech­nol­ogy to­day.

This is what Don Tap­scott says about the blockchain tech­nol­ogy: “The tech­nol­ogy likely to have the great­est im­pact on the next few decades has ar­rived. And it’s not so­cial me­dia. It’s not big data. It’s not ro­bot­ics. It’s not even AI (Ar­ti­fi­cial In­tel­li­gence). You’ll be sur­prised to learn that it’s the un­der­ly­ing tech­nol­ogy of dig­i­tal cur­ren­cies like Bit­coin. It’s called the blockchain.”

Although the blockchain tech­nol­ogy, whose ba­sic idea is to get rid of the “mid­dle­man,” is com­monly as­so­ci­ated with bit­coin, it has many other ap­pli­ca­tions. In fact, it is be­lieved that the blockchain op­er­at­ing sys­tem will pro­foundly dis­rupt hun­dreds of in­dus­tries that rely on in­ter­me­di­aries, in­clud­ing bank­ing, fi­nance, academia, real es­tate, in­sur­ance, le­gal, health­care and the pub­lic sec­tor.

Collin Thomp­son says that “per­haps, most pro­foundly, blockchain prom­ises to de­moc­ra­tize and ex­pand the global fi­nan­cial sys­tem; giv­ing peo­ple who have lim­ited ex­po­sure to the global econ­omy bet­ter ac­cess to fi­nan­cial and pay­ment sys­tems and stronger pro­tec­tion against cor­rup­tion and ex­ploita­tion.”

Tech­ni­cally speak­ing, the BT tech­nol­ogy al­lows con­nected com­put­ers to reach an agree­ment over the data that they share. The com­put­ers in the block­train are con­nected in a peer-to-peer net­work, mean­ing that a par­tic­u­lar com­puter in the net­work can di­rectly talk to any of the other com­put­ers in the net­work. In this fash­ion, there is no cen­tral server owned by some en­tity that is con­trol­ling ac­cess. The agree­ment be­tween the com­put­ers in a BT net­work in­volves us­ing a con­sen­sus mech­a­nism wherein the rules are im­ple­mented in soft­ware that all the com­put­ers run.

The rules en­sure that all the com­put­ers in the net­work are syn­chro­nized. For the case of bit­coin, one of the rules re­quire that no­body can send bit­coins that they have not first re­ceived from some­one else or from min­ing (that is, from a coin­base trans­ac­tion). One im­pli­ca­tion of this rule is that the “lead­ing” com­puter (see be­low) can­not in­clude trans­ac­tions that ar­bi­trar­ily give it hun­dreds of fake bit­coins. Also, as part of the rules, ev­ery 10 min­utes, one of the con­nected com­put­ers is ran­domly se­lected to state the au­thor­i­ta­tive or­der of valid trans­ac­tions for that pe­riod of time. In com­puter sci­ence lingo, this ar­range­ment is some­times called a re­peated leader se­lec­tion. Note that the cho­sen “leader” is given the priv­i­lege to mine bit­coin - which is the only way that bit­coin is minted - pro­vided it (the leader) is able to solve a very com­pli­cated math prob­lem, as de­scribed in a pre­vi­ous ar­ti­cle in this col­umn in Daily Trust (1 May 2017). An­other way to say this is that the ran­domly-se­lected com­puter can write it­self a coin­base trans­ac­tion - pro­vided it can solve the math prob­lem.

The data that is shared in the BT tech­nol­ogy is what is ac­tu­ally called the block­train, which is ba­si­cally data in a spe­cific for­mat that fa­cil­i­tates the main­te­nance (by all com­put­ers) of the con­sis­tency of the data. The 1 May 2017 ar­ti­cle in this col­umn dis­cusses this as­pect to some de­tail for the case of bit­coin, and is in­cluded here for your con­ve­nience. Bit­coin deal­ers are send­ing bit­coins to each other over the bit­coin net­work all the time, but some­one needs to keep track of who had paid or sent what. The bit­coin net­work has the re­spon­si­bil­ity of col­lect­ing the trans­ac­tions made by all bit­coin deal­ers (dur­ing a given in­ter­val of time) into a list, called a block. Min­ers (lead­ers) com­pete to au­then­ti­cate the trans­ac­tion in the most re­cent block and write them into a gen­eral ledger, which is a long list of blocks (or in­di­vid­ual trans­ac­tions). The gen­eral ledger is also called the “blockchain,” or the chain of the blocks, if you may.

Of course, the gen­eral ledger has to have in­tegrity, which is where the min­ers come in. When a block of trans­ac­tions is cre­ated, min­ers au­then­ti­cate it. They do this by ap­ply­ing some math­e­mat­i­cal for­mula to the data and turn it into some­thing else - that is shorter; per­haps a ran­dom com­bi­na­tion of char­ac­ters (let­ters) and num­bers. This end re­sult, which is called a “hash,” is stored along with the block, which at the time is the most re­cent one (block) in the blockchain. The math­e­mat­i­cal ma­nip­u­la­tion re­quired to ob­tain a hash (for the cur­rent block) is con­cep­tu­ally sim­i­lar to en­crypt­ing the in­for­ma­tion in a block. With this anal­ogy, the miner takes the in­for­ma­tion in a block, as­sumed ar­ranged in a one-di­men­sional ar­ray, and pre-mul­ti­plies this ar­ray by a two-di­men­sional (2D) ar­ray. To make the math­e­mat­ics more dif­fi­cult, the pre-mul­ti­plier is made to de­pend re­cur­sively on the var­i­ous pre-mul­ti­pli­ers for all the pre­vi­ous blocks in the en­tire blockchain - that is, from the in­cep­tion of bit­coin in 2009. To be con­tin­ued next week.

Newspapers in English

Newspapers from Nigeria

© PressReader. All rights reserved.