Blockchain is the new Google

This article is excerpted from William Mougayar’s article Blockchain for Trade: The Promise, Practice, and Applications of the Next Generation of Internet Technology. In the article, Mougayar is extremely excited about the future of distributed databases.

At its core, blockchain is a technology that permanently records transactions, which cannot be erased later and can only be updated in sequence, essentially maintaining a never-ending historical track. This seemingly small feature has huge implications. It makes us rethink the way we create transactions, store data, and move assets before, and this is just the beginning.

Blockchain cannot be described as just a revolution. It is a tsunami-like phenomenon, slowly advancing and gradually covering everything in its path with its force. In fact, it is the second significant layer on the Internet, just as the web was the first layer in 1990. This new layer is all about trust, so we can call it the trust layer.

Blockchain is a huge catalyst for change, affecting management, lifestyle, traditional cooperation models, society and global institutions. The penetration of blockchain may encounter resistance because it brings about an extreme change.

Blockchain is rebelling against the old ideas that have been in our minds for decades or even centuries. Blockchain will challenge the way that transactions are managed and centrally controlled. For example, why should we pay a third party to store a deed to clarify property rights if blockchain can automatically verify it in an irrefutable way?

Blockchains relax the trust that has traditionally been held by centralized institutions (e.g., banks, policymakers, clearinghouses, governments, large corporations) and allow it to circumvent some of the older control points. For example, what if verification of counterparties could be done on the blockchain instead of in a clearinghouse?

An analogy could be that in the 1500s, medieval guilds helped maintain a monopoly on certain crafts against outsiders, controlling the printing of knowledge that explained how to reproduce their works. They conspired with the Catholic Church and governments in most European countries to establish this type of censorship by authorizing and controlling printing. But this type of central control and monopoly did not last long, and soon, after the printing surge, this knowledge was freely disseminated. It would be unthinkable today to make printing this knowledge an illegal activity. We can think of these traditional central trust holders as today's guilds, and we would question why they continued to hold such trust if technology (blockchain) can already perform this function or even do it better.

Blockchain has the potential to release this trust from beyond existing boundaries, just as medieval institutions were forced to relinquish control of printing.

It is deceptive to think of blockchain primarily as a distributed ledger, as this represents only one of its many aspects. It is like describing the Internet as just a network, or just a publishing platform. These are necessary but not sufficient conditions or properties; blockchain is also more powerful than the sum of its parts.

Blockchain proponents believe that this trust should be free, rather than in the hands of a central authority that taxes it or controls it from one form to another (e.g., fees, access rights, or permissions). They believe that this trust can and should be part of a peer-to-peer relationship, enforceable with the help of technology. Trust can be encoded, calculated to be true or false on a mathematical basis, and it can be enforced and reinforced through strong cryptography. In essence, trust is replaced by cryptographic proofs, and trust is maintained and secured by a network of trusted computers (trusted nodes), as opposed to a single entity creating a high-level or unnecessary bureaucracy around it.

If blockchain is a new way to complete trusted transactions without trusted intermediaries, we will soon have a trust that does not require intermediaries. Policymakers who manage "trusted" institutions like banks will face a dilemma. How do you manage something that is evaporating? They will need to update their old ways of managing.

Trust in intermediary control always came with some friction, but now, with blockchain, we have frictionless trust. So, when trust is "free" (even if it still needs to be earned), what happens next? Naturally, trust will follow the path of least resistance, becoming increasingly decentralized and moving toward the edge of the network.

Blockchain also enables the exchange of assets and value, providing a new, high-speed rail for the movement of value without unnecessary intermediaries.

As backend infrastructure, blockchains have been likened to fundamental, never-stopping computers. Because of the incredible amount of resilience they offer, once launched, they never come down.

There is no single point of failure, and unlike banking systems that may fail to operate, cloud-based services may fail to operate, but the real blockchain will continue to operate.

The Internet replaced some intermediaries, and now blockchain is replacing others. But it is also creating new ones. So, as others enter the race to “decentralize everything,” the current web middlemen need to think about how their roles will be impacted.

The world is engrossed in dissecting, analyzing and predicting the future of blockchain; technologists, entrepreneurs and businesses are wondering whether it should be considered a vitamin or a poison.

Currently, we talk about blockchain doing this or that, but in the future, blockchain will become more invisible; we will talk about what it can do. Just like the Internet or the network, or like a database, blockchain will bring us a new language.

Since the mid-1950s, when IT was gradually formed, we began to get used to a new language: mainframes, databases, networks, servers, software, operating systems, and programming languages. Since the early 1990s, the Internet has created another dictionary: browsers, websites, Java, blogs, TCP/IP, SMTP, HTTP, URLs, and HTML. Today, blockchain brings another new set of instructions: consensus algorithms, smart contracts, distributed sub-accounts, teletext transmission (transmission) systems, digital wallets, and transaction blocks.

By superimposing blocks, we will accumulate our own knowledge chain, and we will learn and understand blockchain, what has changed, and what such changes imply.

Nowadays, we can Google everything, most any information or product.

In the future, we will be able to do the equivalent of "Google" to verify records, identities, authenticity, rights, work, titles, deeds and other valuable and asset-related processes. There will be a digital certificate of ownership for everything. Just like we can no longer question the spending of digital coins (thanks to Satoshi Nakamoto's invention), we will no longer be able to copy or forge official certificates once they are authenticated on the blockchain. This is the missing piece of the information revolution, and the blockchain is fixing it.

I still remember the initial excitement of being able to track a package on the web, a feature first introduced by FedEx in 1994. We don’t talk about this type of service very much now, but this particular feature was a watershed use case that showed us what we could do on the early web. The underlying message was that early closed, personal services could become publicly accessible with just an internet connection. A host of services followed: online banking, tax filing, purchasing products, stock trading, bill verification, and many others. Just as we can access these services by searching in public databases, we can search a new type of service that can be verified in the blockchain to confirm the authenticity of the information. Access to the information is not enough, we also want to find access to its authenticity, and we can find out if the terms can be modified to record it specifically, hoping that the holder can get the maximum transparency. The blockchain promises to provide and make this transparent in its original form.

The old question “Is it in the database?” will be replaced by “Is it on the blockchain?”

Is the blockchain more complex than the internet? Mostly yes.

Blockchain is part of the history of the Internet. It is on the same level as the world-wide network in terms of importance, and after the debate we return to the Internet in a way that we hope is: more decentralized, more open, more secure, more personal, more fair and more accessible. Ironically, many blockchain applications have the opportunity to replace traditional network applications, and will also replace traditional transactions, which still cannot relax their strict centralized control in performing trust functions.

However it unfolds, the history of blockchain will continue to be written for a long time, just as the history of the web will continue to be written after its first invention. But there is one thing that will make the future of blockchain even more interesting: your participation.