We increasingly hear about blockchains and the attention that the most diverse institutions, public and private, turn to this technology testifying its importance as a tool for telematics traceability of transactions; but what is and how does the most popular “distributed” protocol of the moment work?
The term “blockchain” (literally “chain of blocks”) indicates a shared public log, which is replicated on multiple servers, which automatically updates on each of the nodes that chose to participate in the “chain”.
It is a data repository, consisting of a continuously increasing list of records, of which a full or partial copy is stored on all nodes in the network.
The records contained in a blockchain are of two types:
- Transactions, which are simple data
- The blocks, which are the record of how and in which order the transactions were inserted in the database.
Transactions are created by network users in their operations (for example, currency transfer to another user), while blocks are generated by an apsecial category of participants, the so-called “miners”, who use software and sometimes hardware specialized in creating blocks.
Blockchain technology has the advantage of creating block recordings (i.e., in predefined logical drives) whose fundamental feature is that the new block contains inside the hash of the previous block. This creates an indissoluble link between the blocks (the chain) which makes the blockchain itself unchangeable (if an intermediate block is modified, the system realizes it because the hash changes, which at this point no longer coincides with the one already recorded in the next block). This feature ensures traceability of the data or information that has been inserted in the blockchain.
The further feature of the blockchain (which can be used as no) is its ability to be a computer log, so a log that can be read “automatically” and always interpreted automatically by a computer. For example, the Bitcoin system, the first and most popular application of blockchain technology, has added to the blockchain an additional “condition” that defines its operation, which sounds like this: “I authorize X bitcoins transaction only if … After interrogating the blockchain … it emerges that the disputing man has X, or more, bitcoins “; This feature belongs (at present) to cryptocurrencies and not to blockchains.
The latter – as technology itself – could be confined to a secure and unmistakable registry in which data can be interconnected to each other for the sole purpose of being kept without any time limit in a place accessible to everyone.
In fact, there are initiatives in this regard that limit the use of the blockchain to attribute a “certain date” and, if necessary, free consultation to whatever one wants to enter.
For example, there are experiments regarding the use of the blockchain to give copyright protection in the “software code” field: in practice a programmer entering the code he created in a blockchain can demonstrate in the future his paternity and the anteriority .
In this case, the data contained in the blockchain does not depend on a given date and the blockchain becomes only a secure container, but only a container.
Bitcoin’s optics adds to the blockchain a use that – if developed – leads to smart contracts: in practice, it does not merely enter a data blockchain, but that data contains further instructions that the blockchain itself will perform in a way completely independent of the (subsequent) activities of the parties
If these are the main technical features of the protocol, it should be noted that its nature of “distributed register” or better replicated over multiple nodes presupposes some operating conditions:
Since it is a register based on the mutual recognition of multiple distributed entities, all of which have equal dignity and rights, the first condition is precisely the existence of a trust (non-technological) relationship between at least two nodes
Chain nodes must always be active, available and distributed, meaning that they must be managed with reliability and continuity.
Currently, the technologies and software available to create blockchains are many and predominantly open source, but this does not mean that node management activities do not cost and run it free of charge.
The computing power required for cryptovalue mining has increased exponentially in recent months, Digiconomist has published an interesting estimation of consumption, reaching unexpected conclusions: Bitcoin and Ethereum Mind consume more than one state as Syria, specifically the “system” Bitcoin consumes, estimated to be around 14.5 TWh, while Ethereum stops at “just” 4.7 TWh. Miners’ activity, in turn, is rewarded with the assignment of “something” in the case of a Bitcoin network of a number of currency units, so the system must find its mode of remuneration both in terms of coverage of the costs and of profit opportunities for who is allowed to use this system. Up untill here are the technical features, in the next deepening some legal reflection on the applications and the operation of the distributed registers.