What Blockchain Is And What It Is Not

Blockchain, obviously, is a hot market trend. Every single person I’ve met over the last few months has had a business plan somewhere in the area of cryptocurrencies and, of course, Blockchain. Very few of them, when I’ve been asking “Why Blockchain?” were capable of giving any reasonable answer. The savviest ones have been saying that it’s a very reliable and immutable database. Others just claimed that “It’s the future!”

Wikipedia at the time of writing says that Blockchain is a “growing list of records” and a “public ledger”. I would actually say that it’s a data maintenance principle. It unites computers, which we don’t trust, into a group, which we can trust. Not entirely, but much more.

That’s exactly the purpose of Blockchain and similar decentralized data structures (like Tangle or Zold): to make a database trustworthy, while each individual element of it is anonymous and that’s why, by definition, can’t be trusted. Each server may corrupt the data and steal our money. We would never trust our transactions to it. But we trust them to a large group of such servers. Why?

Because all computers in the group vote for our transactions and the majority decides which data wins. Then, we hope that the majority of servers are legal and trustworthy, while the minority may be against us, trying to steal our money. Since the amount of servers is big, the group is trustworthy. We simply believe that the majority is always on our side.

Each server contains a full copy of the entire database, any time ready to get into a fight with other servers and vote for the data, to achieve so called consensus. This extreme redunancy of data is the price we pay for the trust in Blockchain. For example, at the time of writing, 9,000+ Bitcoin servers maintain 173Gb of data each!

Thus, Blockchain is a suitable data storage solution, when we don’t trust data maintainers. This is the only reasonable use case for it.

On the other hand, it absolutely makes no sense to use Blockchain when all group members trust each other. I can’t really understand what “private Blockchains” are for. If the network is private and owned by a single organization, the servers are trustworthy. What is the point of duplicating the data and paying for the data reduncancy. Why can’t we just use MySQL?