Yesterday still unknown, but already carried by the bitcoin phenomenon (you know… this famous virtual currency written by Satoshi Nakamoto), the blockchain is now in the spotlight.
Some see it as the innovation that will disrupt most economic sectors. Others herald an era of efficiency and shared trust.
The fact remains that blockchain is being talked about and is gaining momentum, so much so that the French government has established a legislative framework so that France can become the European leader in blockchain.
Block ? Chain ? But what does that really mean?
Blockchain technology allows information to be transmitted, grouped into “blockchains,” with a high level of security, using «encryption methods and transmission protocols.»
In itself it is validating transactions without resorting to the authority of a third party. The blockchain is “trustless” because it does not require any trust in an institution to guarantee the validity of the transaction.
To put it more simply, it is the quantity of confirmations that takes the place of the quality of a central authority.
Why such a popularity?
One central factor: the freedom of secure information management, with no central authority to control.
«The shipment of a product from a producer to the end customer may involve up to 30 participants from one end of the chain to the other, especially if we are talking on a global scale. »
Thierry Grumiaux, delegate to the international transport commission at the FNTR.
So what does blockchain allow in this case? Quite simply, it facilitates and secures exchanges with a cryptographic process that allows the validation of transaction blocks .
But how is this possible? The registry/network of these transactions is decentralized and stored on different servers. Each server has its own user. Therefore, without intermediaries and without any infrastructure costs, security is guaranteed to the maximum. The registry becomes a very secure exchange history, updated in real time and independently by all users.
In fact, transferring value over the Internet between two entities without intermediaries is possible thanks to bitcoin.
As for the blockchain, and to make it short, allows to exchange this type of security, without intermediary and without control of any authority. The network or register records all transactions and is tamper-proof. Finally, the blockchain, by its simplicity of use, is accessible to all.
Decentralization is therefore within reach!
“What is blockchain?”, BlockchainFrance, 2016
Many challenges for this innovative technology
Indeed, if the operation of the blockchain makes it possible to make traceability more reliable or to improve operational performance by shortening, for example, invoicing and payment times, this technology can also answer a major question, securingand guaranteeing the integrity of data from one end to the other.But like any technology using data, it raises many questions:
- Scalability: Will the Blockchain, which manages restricted data, support the massive diffusion of these data?
- Anonymity and traceability: Reconciling privacy protection and traceability objectives to fight fraud is not an easy task. Will it be possible to meet this challenge?
- Power consumption: Verification, validation and cryptography operations consume a lot of electricity. Can the environmental challenge be met?