by Lumai Mubanga
In the previous article entitled “Blockchain technology, a culmination of old technologies” we discussed two old technologies on which blockchain is built. These are cryptography and distributed systems. In this article, we move a step further to discuss additional features that have made blockchain what it is today.
To begin with, blockchain may not involve cryptocurrency but cryptocurrency will involve blockchain. There are many blockchain-based solutions and cryptocurrency is just one of them. Additionally, blockchain is not the solution to every problem or challenge but it has proved resilient and robust in tackling certain problems in a way we have never thought before.
With two types of blockchains available; permissioned and permissionless, all active users need to have a basic understanding of what these platforms can offer. Interestingly, blockchain as a technology is designed to provide or build systems which are highly secure, permanent and highly transparent. The question is, do all forms of blockchains provide these incentives? It will be safe to point out that not all blockchain systems are built the same and not every blockchain system will provide the security and perhaps the permanency to data that you require.
That said, we can safely state that there are big blockchain systems that have been around and have been tested to provide the basic incentives of permanency, security, traceability and other features. These blockchains such as Ethereum or Hyperledger, R3’s and bitcoins have proved, over a period of time that they are secure and reliable. But generally, what other features make these standout?
In addition to cryptographic and distributed ledger features, some blockchains like ethereum have additional features like smart contracts. Smart contracts are automated systems that on the occurrence of pre-determined actions something else happens. Take airline insurance as an example. If the algorithm allows for an automated refund to a client whose flight departure is delayed for more than 2 hours, the system will behave exactly as “agreed”. Thus, the customer will not be inconvenienced and the insurance company is obliged to meet its obligation there and then.
The permissionless feature in some blockchain design like bitcoin means that it is open. Anyone who downloads the software can participate and becomes part of the network. The entire distributed ledger thus becomes available to their node. This feature helps to distribute information beyond a central repository node so that anyone can access the information at any time and from anywhere.
Thus, with cryptographic elements, distributed system features, smart contracts and permissionless status, blockchain remain the most robust system ever invented by man.