Henry: Hey everyone. It's Henry, Mike and Chris of Decentralization Education. Now Decentralization Education is our short 10-to-15-minute segment where we explain technology terms and topics that we often reference during our regular podcast; The Decentralized. This week, we're talking about Blockchain. Everyone's talking about blockchain, not everybody understands it completely, because it can be a little bit complicated. Mike, can you lead us off? What is Blockchain?
Mike: Well, Henry, you are right. It is often complicated, and I would say even convoluted topic; Blockchain, because I think it's to your point, it's not very well understood from a technical aspect, but it's also not really well understood. From what I want to say, just a general public point of view, people just don't know what it means. You ask people what is a blockchain and they all think trust, they all think security, they all think encryption and all of these other things like we talked about last time. But realistically, a Blockchain is in the simplest terms, is a chain of data blocks, seems kind of funny, but that is exactly what it is and the unique piece of what a blockchain really is in that chain structure of data. So, if you've looked at your standard Excel spreadsheet where you've got rows and columns that kind of artifact, that thing is basically what, back in the old days they used to call like a relational database. That's what Oracle is based on, it was like the first kind of relational database where you have all these different cells, and these columns all are different things. So, one column is your name, and the other column is your email address and all this. What a blockchain does is take that relational, that huge Excel spreadsheet and cut out all of the rows except for one. So, think of a spreadsheet that rather than basically being infinite in rows and columns, it's only one row, but it's infinite numbers of columns long.
Henry: Oh, you mean like the top row that goes on forever?
Mike: Exactly. Like A1, A2 to AA to AZ, all the way on, goes on forever. And there's a reason for that. If what you're doing is storing information and you wanted that information to be immutable.
Henry: Oh yeah, it can't be changed right?
Mike: That's the next piece. But the first piece is in the first step to something being immutable and you hear this word a lot, which means it can't be changed, it's got to be in the same location all the time. so, what you're doing is you store one piece of information in block one and it is always in block one, and then you store one piece of information in block two, and it is always in block two. And the idea is now you have this long chain of events, and you can bind the virtue of it being a straight, long chain. You can determine when something was written by who and where it's stored, and you can tell somebody it'll always be there. That's basically the idea of a Blockchain.
Henry: Okay, Mike. So, in your analogy in the very first cell, you've got some information that's written, what you are saying then is it's just incredibly linear so.
Mike: Yes.
Henry: Cell number thirty-thousand and three, you couldn't take that first cell copy it and put it there. So, you could save a whole bunch of time.
Mike: Well, no it's well, it's kind of Henry, it's kind of like that, but think of it more like what you have is basically one row of data that is constantly being written, like there's always January 1st, 2021, there's only one January 1st, then there's a January 2nd, then there's a January 3rd. Then there's a January.
Henry: They don't change.
Mike: And they don't change, and they don't change. And so, what it's all about with this blockchain is about, you want to be able to go back to the very beginning and see what happened in every single block, every single day.
Henry: And why would you want to do that?
Mike: Because that's what a blockchain is all about. We talk, let's go back to the relational database, which is the Excel spreadsheet. That causes problems that basically allows people to solve to sort things name related to like first name, last name, email, but what it does is it doesn't do anything to make that data quick and easily accessible and form more importantly, it doesn't do anything to preserve history. So, if you take a blockchain out there and you say, the very first block was written on January 1st, 2021, then you can always go back to that very first block check. Where it starts to get interesting is when you now take this block of information, so I've got this Excel spreadsheet, and I say, Henry, what I want to be able to do is guarantee that nobody can change the content of any of these cells. So, you mentioned going to the back end and putting it to the front end. No, this Excel spreadsheet is called a distributed ledger. If you add a mathematical equation on top, which is basically, it uses compute power to say, once I write January 1st, 2021, in block number one, then what happens is a bunch of people have to process a mathematical equation to guarantee the contents of block one. Whoever does it, the fastest and the first gets to write that block and they guarantee that block is written, everybody has this consensus, they all agree that the mathematics guarantee that that cell can't be changed, it's like encrypting it. And now this is what makes a distributed ledger into a blockchain, the mathematics and this idea of processing, of having external people who have no vested interest in what goes into those cells, do a mathematical equation to guarantee that the data in those cells can never be changed.
Henry: Okay. And the value of all of this is?
Mike: The value is in this idea that you and I can act some form of business. And it started, let's be honest with all this dark web type stuff, but you and I could transact some kind of business that says when I deliver A, you deliver B. I give you kidney, you give me a thousand dollars and basically you pledge it in this blockchain. Everybody knows it, everybody knows you get it, once the transaction is done, it gets recorded, I get my thousand dollars, you get your kidney.
Henry: So, it's irrefutable.
Mike: Irrefutable.
Henry: Proof!
Mike: Immutable, these are kind of the words, and that's what the mathematics is supposed to do.
Chris: What I like to tell friends who ask me about blockchain in the very simplest way. And I know it's skipping a lot of other info, but blockchain is a ledger that you cannot change.
Mike: Chris, it's very simple and that's exactly what it is, but it's the piece I like to add is the fact that it's not like an Excel spreadsheet. It's also got a timestamp, it's intended to be a time, not just information that can't be changed, but information that was recorded at a specific time and can't be changed. And where it gets really interesting is when people try to define the value of a blockchain, that's where it gets really interesting, because this is the thing that people are running around all over the place, trying to figure out right now is what is the value and that's where it gets really interesting. You start getting into things like cryptocurrencies and mining and all of these things, which I'm sure are topics on their own. This kind just started as a niche kind of technology, it was just a white paper, and somebody came up with this idea and said, hey, this would be a way that you could guarantee that data was basically immutable. So, anything that you wanted to make sure lasted forever from a data perspective would be there.
Henry: Well, thank you, gentlemen. Blockchain has always been a little bit nebulous to me anyway, but much clearer now, I think honestly, that this could very well lead to our next topic that we should consider doing and that is Bitcoin.
Mike: Absolutely.
Henry: Let's do it next time.
Mike: Okay. Thanks Henry.
Henry: Okay. Thanks guys.