Blockchain – A Technical Perspective

Abstract – It is no doubt that #Blockchain is the most talked about technology in 2017, if not in recent years (How does it compare to #Cloud and #Social_Media?!). Everyone and his neighbor is trying to get into this technology. While it is a healthy competition (if you can say that!), it should be obvious that not everyone should rush into claiming expertise. I believe in 2018, things will settle a bit for Blockchain, new models will emerge, and enhancements will result in newer and enhanced implementations. Every company is getting into this technology, building support teams and units while trying to catch up with the fast moving technology. #IBM will continue to be a leader in this area (may be I’m biased!!), others will follow and will disrupt.

Introduction

In this quick post, I will try to share my understanding of the technology building blocks and structure, away from the marketing and commercial terms and terminologies. In college, we all learned about data structures, distributed systems, and transactions processing (true if you are a Comp Sci major or related IT field!). In the “Data Structures” class, we learned about #Linked_Lists (LLs), their implementation and their benefits (beyond the scope of this post). With that in mind, I’m claiming that Blockchain is another implementation of the popular LLs. Some implementations may vary, but overall, the LLs is the origin and the foundation of Blockchain.

The Blockchain Details

So to make the Blockchain easy to understand and prove how it is linked to LLs, let us see what is Blockchain and how it is implemented. In its simplest form, Blockchain is blocks of data chained together, simple! (hence, linked list). Each block contains data, hash, block id, and a “Nonce”. A nonce is usually a 4-byte field, whose value is used to enforce the hash to have a certain signature (e.g. starting with 4 zeros). The nonce plays a key role in the verification of the data in the block. The hash is a digital fingerprint of the data and the nonce, so if they change, hash changes. Also, the data is where the transactions are stored.

Now, with a block containing id, data, hash, and nonce, how do we build a chain?! The answer is simple and easy, especially when you look at how the LLs are implemented. We use the hash of the block as a pointer to this block. Blocks point to their previous ones using their respective hash values. When block’s data in the chain changes, the hash value changes, hence invalidating the whole chain. In the implementation, the blockchain is looked at as a distributed ledger where copies of the chained blocks are shared among all entities in the network. Mutation of data not only invalidates the block, but also causes the whole chain of the ledger to be invalid. Other copies of the ledger will reject the mutated one and enforces the correct copy of the data that are shared among other network entities, hence blockchain resists manipulation of data.

Conclusion

Blockchain is a simple, emerging but disruptive technology. It is easy to implement and has potential to serve multiple industries and markets. The excellent capabilities provided and their ability to resist changes proved essential for many industries. The financial services, the banking, and the supply chain industries have seen the most benefit of this technology. The healthcare industry will get its fair share and will for sure benefit as well. Being a disrupting technology, Blockchain will have positive impact in the development of a larger ecosystem. New versions and new implementations will evolve resulting in greater benefits for all.