The Business Blockchain: Promise, Practice, and Application of the Next Internet Technology by William Mougayar

1
WHAT IS THE BLOCKCHAIN?
“If you cannot understand it without an explanation, you cannot understand
it with an explanation.”
–HARUKI MURAKAMI
PAY CLOSE ATTENTION. This chapter is probably the most important in the
book, because it attempts to offer a foundational explanation of the blockchain.
It is the first stage of this book’s promise to give you a holistic view of the
blockchain’s potential.
Understanding blockchains is tricky. You need to understand their message
before you can appreciate their potential. In addition to their technological
capabilities, blockchains carry with them philosophical, cultural, and ideological
underpinnings that must also be understood.
Unless you’re a software developer, blockchains are not a product that you just
turn on, and use. Blockchains will enable other products that you will use, while
you may not know there is a blockchain behind them, just as you do not know
the complexities behind what you are currently accessing on the Web.
Once you start to imagine the blockchains’ possibilities on your own, without
continuously thinking about trying to understand them at the same time, you will
be in a different stage of your maturity for exploiting them.
It is my belief that the knowledge transfer behind understanding the blockchain
is easier than the knowledge about knowing where they will fit. It’s like learning
how to drive a car. I could teach you how to drive one, but cannot predict where
you will take it. Only you know your particular business or situation, and only
you will be able to figure out where blockchains fit, after you have learned what
they can do. Of course, we will first go together on road tests and racing tracks
to give you some ideas.
VISITING SATOSHI’S PAPER
When Tim Berners-Lee created the first World Wide Web page in 1990, he
wrote: “When we link information in the Web, we enable ourselves to discover
facts, create ideas, buy and sell things, and forge new relationships at a speed
and scale that was unimaginable in the analogue era.”
and scale that was unimaginable in the analogue era.”
In that short statement, Berners-Lee predicted search, publishing, e-commerce,
e-mail, and social media, all at once, by a single stroke. The Bitcoin equivalent
to that type of prescience by someone who just created something spectacular
can be found in Satoshi Nakamato’s 2008 paper, “Bitcoin: A Peer-to-Peer
Electronic Cash System,”
1 arguably the root of modern blockchain-based
cryptocurrency innovation.
The paper’s abstract depicts Bitcoin’s foundation, and it explains its first
principles:
A purely peer-to-peer version of electronic cash would allow online
payments to be sent directly from one party to another without going through
a financial institution.
A trusted third party is not required to prevent double-spending.
We propose a solution to the double-spending problem using a peer-to-peer
network.
The network timestamps transactions by hashing them into an ongoing chain
of hash-based proof-of-work, forming a record that cannot be changed
without redoing the proof-of-work.
The longest chain not only serves as proof of the sequence of events
witnessed, but proof that it came from the largest pool of CPU power. As
long as a majority of CPU power is controlled by nodes that are not
cooperating to attack the network, they’ll generate the longest chain and
outpace attackers.
The network itself requires minimal structure. Messages are broadcast on a
best-effort basis, and nodes can leave and rejoin the network at will,
accepting the longest proof-of-work chain as proof of what happened while
they were gone.
If you are a non-technical reader, and you focus on the italicized parts, you will
start to get the gist of it. Please re-read the above points, until you have
internalized Nakamoto’s sequential logic! Seriously. You will need to believe
and accept that validating peer-to-peer transactions is entirely possible by just
letting the network perform a trust duty, without central interference or handholding.
Paraphrasing Nakamoto’s paper, we should be left with these points:

The Business Blockchain: Promise, Practice, and Application of the Next Internet Technology by William Mougayar