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How Does The Nature Of Blockchain? – Finextra

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In every 30, 40 or 50 years, the status quo must be challenged, modified, transformed, in order to avoid the accumulation of power, centralization, totalitarianism, and corruption. Corruption is inherent in power systems, and there is no more tyrannical
power than power over money.

Only one billion people worldwide have access to banking services, 4 billion have eventual access, and 2 billion have no access for various reasons such as economic constraints, legal problems, or geographic isolation. However, children born today may no longer
have a bank account when they are adults.

They will have an application on their mobile devices that will function as their own bank and will be transported in autonomous vehicles. When cryptocurrencies are used massively, 4 billion people isolated from banking and international trade will have access
to these services. They will also have the opportunity to protect their money from governments and banks. They will acquire the power to control their future.

The disruptive architecture of blockchain technology, in general, and bitcoin, in particular, provides us with a new way of organizing the world, in exactly the same way that the Internet radically transformed communications. Bitcoin will do the same with money
and finance. While the Internet has democratized information, blockchain will democratize assets, money. Let us take into account that, for centuries, the States has had a monopoly on the issuance of money.

Now, you can’t talk about bitcoin and altcoins, if you don’t know what blockchain is in advance. This technology is one of the four underlying cryptocurrency technologies. It has countless applications, all of them related to the paradigm shift that has
governed societies for millennia.

That is, blockchain proposes replacing hierarchical, authoritarian, and centralized institutions with horizontal, consensual, and decentralized institutions or protocols. In this article, we will talk about the characteristics, nature, and essence of blockchain.

Blockchain, a trusted network

It is the concept of decentralization applied to value exchange. Its first application is money, and it is basically a language of exchange. Blockchain generates a dimension of trust implicit in the data it contains, completely eliminating the participation
of intermediaries in good faith in a system, whatever it may be. The role of these intermediaries – states, banks, notaries, arbitrators, judges, lawyers, etc. – is to give confidence to the parties that wish to make a transaction or enter into an agreement
of any kind, but do not trust each other because they do not know each other.

For a blockchain to be considered as such, it must be:

1. Open

The software that gives life to the blockchain is open-source; therefore, no one should pay licenses or royalties or ask permission to use it and improve it. In the same way, anyone can participate in the network by downloading a partial or total copy of the
blockchain and use it according to the previously established consensus rules.

2. Without borders

It is no longer about nation-states as trusted intermediaries. It is about a “redcentric” trust – according to the term coined by Andreas Antonopoulos, author, and guru of bitcoin and blockchain. That is, it must be based on computing, on software code, on
the accuracy of mathematics.

The network must not have intermediaries. The network is trust per se, taking into account that all information that travels through it is publicly verifiable through a block explorer, such as blockchain.info.

3. Transnational

The network operates distributed in different geographical locations around the world in nodes that run an exact replica of the blockchain, thus preserving, the same unanimous state, the same truth that cannot be arbitrarily modified by any of the nodes without
there being a general consensus.

4. Neutral

It does not serve the purposes of any State, organization, or institution. Each member of the network – called a node – follows the consensus rules neutrally and, if not followed, is simply expelled.

There is no such thing as a good transaction or a bad transaction, an authorized or unauthorized transaction, a legal transaction, or an illegal transaction. In these systems, a transaction can only have two states, valid or invalid, based on the consensus
rules. It does not matter who is the sender or the recipient of the transaction, nor is the value of data being transmitted. In other words, it is a non-discriminatory network.

For a system to be open, borderless, transnational, and neutral, it must defend these characteristics of any actor that intends to censor, freeze, modify, revoke and restrict transactions, or prevent the participation of users or countries.

Blockchain or no blockchain?

How can you distinguish between a real blockchain or anything that has taken its name?

• If in any context you can replace the word “blockchain” with the term “database,” then it is surely not a blockchain.
• If it is not decentralized, borderless, neutral, resistant to censorship, or open, it is not an innovative technology. It is more of the same disguised as something new.
• If it restores trust in intermediaries, that is, if it is centrally managed, it is just a common and current database that has appropriated the term “blockchain” as a marketing strategy.

Under these conditions, the alleged private blockchains such as Ripple, Hyperledger, Chain, R3, Monax cannot be considered as true blockchains. A true blockchain must meet the following attributes: open, borderless, transnational, neutral, and censorship-resistant.
None of those mentioned in this paragraph comply with them.

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