Note from the Editor: This is the first of a three-part series where I’ve invited Guest Blogger Kurt Grela to provide a rebuttal to my claims that blockchain is a fad technology. This series will culminate in a live debate which can be found, along with my counter-points, on our page The Great Blockchain Debate of 2018.
There are public blockchains and private blockchains. Most often, you hear about public blockchains, such as the bitcoin blockchain or the ethereum blockchain. These blockchains have a ledger of transactions that are available for all to see. There’s the wallet from and to addresses. How much Bitcoin or Ethereum was sent. What time and what block number the transaction is locked in. Once the block closes, it’s hashed (i.e., locked) into the next block. This happens every 2 to 10 minutes. Changing a previous block requires all the validators to change the block. It’s simply too much coordinated effort, especially where there are new blocks to create and several blocks have already been closed. There’s no central authority to reverse the transaction without the entire network accepting the change, but time has already moved forward. That’s the immutable characteristic that separate blockchains from a regular SQL database where a central authority, such as an administrator, can make the correction.
Private blockchains are where the parties tend to trust one other more. In many cases, an existing business relationship or ecosystem already exists. The reason they opt for a private blockchain is to keep transactions private and reserving the possibility to reverse a previous transaction recorded in a block with a future transaction in a new block.
For example, let’s say someone sends money to an incorrect wallet address. In a private blockchain, the recipient is probably known. Contacting that recipient about the mistake rectifies the problem and the transaction is processed in a future block. In a public one, the person might not be known, and the likelihood the money returning is near zero.
The Blockchain Title Wave, Coming to a Supply Chain Near You
As for whether the consumer should know the difference between a public or private blockchain, it’s probably not that important. The internet, email, computers, tablets, and mobile phones all work just fine, and many consumers do not need to know how they work. The protocols and devices just work.
Why are 270 global supply chain companies building on HyperLedger, a private blockchain.
“We believe that blockchain has big implications in supply chain, transportation and logistics,” said Kevin Humphries, Senior Vice President, IT, FedEx Services. “We are excited for the opportunity to collaborate with the Hyperledger community as we continue to explore the applications and help set the standards for wide-scale blockchain adoption in our industry and others.”
FedEx
Why are these companies giving away their business client lists and contacts to participate in a private public chain? It’s less about giving away data and more about industry collaboration and improved efficiencies where a ledger can be referenced.
Let’s say you are shipping a container of goods around the world. Only in recent years has the paper documents been digitalized. Previously, it was paperwork. Lose the paperwork describing what’s in the container and the process gets delayed. By using the HyperLedger blockchain, the records are embedded into the blockchain. The sender can allow certain data to show within the ledger, and restrict other data. This way one only the parties that need the information to proceed have the info.
“Honeywell Aerospace, whose solutions are found on virtually every commercial, defense and space aircraft in service today, is pleased to join Hyperledger,” said Sathish Muthukrishnan, Chief Digital and Information Officer for Honeywell Aerospace, “We look forward to leveraging the blockchain technology to solve critical customer needs and enable our position as a leading Software-Industrial Company through the Power of Connected.”
Honeywell International Inc.
Similarly, for consumers, not everyone wants to share their data with Facebook and Google, which are mostly free. As you may have heard, if you don’t know what the product is, and you are not paying customer, you are the product! In the last year, many consumers were surprised at how much data Facebook and Google have on the average person.
Now, imagine the possibility of allowing certain data to be shared while restricting other data elements. Previously on Facebook, people gladly shared their friend list with advertisers without their friends opting in for their info to be shared. Now, there is ability to restrict your data. What if you could earn money from your data instead of others earning money from your data.
A company focused on our decentalized future is Blockstack. “Decentralizing the World Tour” powered by Blockstack is happening over the next year. First stop was in NYC a few weeks ago. Restricting your data via a blockchain and browser is near and a welcome change for many.
Follow the World Tour: https://community.blockstack.org/dwt-tour-ny
Stay tuned. Part II to be released next week!