Explore the Blockchain, Ignore the Bitcoin Maximalists
Byline: Tim Swanson
Over the past six months the fintech world and financial industry as a whole have gone agog with the term "blockchain." We can see that trend depicted via Google search results in the chart at right.
Why the sudden interest in "blockchains" and "distributed ledgers"? After all, much of the technology and ideas used by Bitcoin, Ethereum and even Git, the open-source system for managing software updates, have been around for more than a decade. Public-key cryptography has existed since the mid-70s. Consensus algorithms such as PBFT and DLS used in distributed computing and distributed databases have likewise been under development and in production environments for decades.
While all the individual elements that comprise the Bitcoin blockchain have been around since 2001, it took until Satoshi's 2008 white paper to demonstrate how these individual pieces could be cobbled together to work as one to fulfill certain tasks. Specifically, the paper described a new type of data structure that was tamper-evident and economically costly for any one entity to unilaterally revise.
Careful study of cryptocurrency systems such as Bitcoin showed that under certain security assumptions, it is possible to verify and authenticate when financial information has been transferred and updated. Due to how it was configured, the specific applications of Bitcoin's blockchain itself resulted in a niche set of use cases, namely pseudonymous interactions that needed censorship resistance on a public network.
What happens if you reconfigure those same elements or substitute those elements with other cogs and software libraries? Different types of utility and applications arise from this mix-and-match process, all of which have...