The article talks about a satellite system being developed to support blockchain based systems. These systems will require the sharing of large amounts of data. Many areas of the world do not have well developed land based internet systems, so companies are looking to leapfrog land based internet and go directly to wireless.
As for blockchains, a blockchain is an immutable shared data file which is managed by a decentralized network of computers. There is no central storage or authority to maintain the data file.
In the traditional banking systems, banks each hold their own ledger of accounts at each bank. They need to coordinate transfers of money between the banks via a clearing house and settle up periodically (daily?) via accounts at a central bank. All electronic money transfers are mediated by the banks in this way.
The first blockchain system, Bitcoin, manages a shared financial ledger. It allows peer to peer transfers of financial value without having to clear and settle through a central authority. While money transfers are the first blockchain system, there is no reason other things can’t be registered in a blockchain ledger.
Patrick Byrne, CEO of Overstock, is developing a blockchain system to manage stock ownership and transfer. As you might imagine, there are many other types of property that might be registered is this kind of system.
Ethereum is a blockchain based system for decentralized execution of more general programs. The idea is to be able to have a smart contract defined by an Ethereum program which is stored and executed by the Ethereum network.
The thought is that replacing the many centralized systems with these decentralized blockchains will result in more efficient and transparent systems.
Mr. Database,
I’m very grateful for that explanation. I think I finally get it: “blockchain” refers to a metaphor of blocks chained together, not an exotic sort of block and tackle contraption or a chain around a city block.
The names that characterize these sort of things always invoke some easy to remember conceptual image— if you don’t confuse it with some other definition.
I need to chew on this a spell. What I wonder now is: is this just hype for the simple fact that information—ie credits, debits and the like— take place almost instantaneously? The old model is of a bunch of separate branches tethered radially to a central parent bank or hub, and the new paradigm is of “nodes”, each connected directly to every other node. I can see the difference between these models, but wonder if we’re seeing the benefit of near simultaneous communication more than any actual structural change. Is this a fair assessment?
The advantage of the centralized model is that it is simpler;if one ‘solar system’ crashes, the galaxy remains at least partially intact. It seems there’s a possibility that a single local malfunction would be felt across the entire structure in this new model.
I don’t know if I’ve been very clear, but the analogy arises from my very general understanding of architectural structures, say comparing a post and beam structure with a latticework. When the traditional structure fails you usually call the carpenter; when the complex lattice fails you’re apt to call an ambulance.
Random musings here,from your generous and stimulating reply.
Again, thank you.