A blockchain is distributed digital ledger technology (DLT) with transactions (or blocks thereof) linked by timestamped, cryptographic hashes. A blockchain that may be private (permissioned) or public (permissionless), with a mechanism, typically “proof of work,” for coming to a consensus about the valid state of the chain determined by a majority of the participants all of whom have equal access to all of the chain.
A permissioned blockchain has preapproved members who can contribute to it and have the rights to validate the block transactions. A permissioned blockchain may also restrict access to approved actors who can create smart contracts.
A permissionless blockchain is public. Anyone can join and participate in the process of block verification to create consensus and also create smart contracts.
A blockchain is made possible by the dual application of cryptography and some kind of a consensus mechanism. Anyone participating in the blockchain network can create a transaction, but to insert that transaction into the chain of blocks, one requires to show some evidence of deserving to do so. This is usually done by solving some complex problem, typically involving cryptography, and getting a majority of the network members (at least 51%) to approve of it. This kind of a consensus mechanism is called Proof of Work (PoW). There are many other consensus mechanisms, but PoW is the most widely implemented on.
Bitcoin: a consensus network that enables a new payment system and a completely digital money. It is the first decentralized peer-to-peer payment network that is powered by its users with no central authority or middlemen.
Ethereum: a decentralized platform that runs smart contracts: applications that run exactly as programmed without any possibility of downtime, censorship, fraud or third-party interference.
Hyperledger: an open source collaborative effort created to advance cross-industry blockchain technologies. It is a global collaboration, hosted by The Linux Foundation, including leaders in finance, banking, Internet of Things, supply chains, manufacturing and Technology.
Smart Contracts: A smart contract is a software-based agreement between two parties that runs on a blockchain network, and triggers an outcome based on a previously agreed upon event. For example, when a certain condition is met, the smart contract can be validated and it can discharge a sum of money from one of the contracting parties to another. Imagine a factory that automatically orders supplies when it is about to run out of them.
The most obvious and well-known disruption attributed to blockchain is, of course, the financial system, so much so that blockchain is almost synonymous with Bitcoin, the cryptocurrency that utilizes blockchain for recording its transactions. But blockchain can be used in any system that requires keeping a ledger of transactions of any kind – interaction with health providers, service delivery of benefits, and civic services. Having an open but tamperproof ledge of activities can be useful for ensuring transparency in government and social services.
Blockchain can be used in any system that requires keeping a ledger of transactions of any kind – interaction with health providers, service delivery of benefits, and civic services. Having an open but tamperproof ledge of activities can be useful for ensuring transparency in government and social services. As such, blockchain can be quite disruptive to established services that are generally opaque to common citizens and, in places, rife with corruption.
Like any new technology, or perhaps even more so, blockchain is hyped beyond its potential. Its use in cryptocurrency has potential for massive financial frauds, and many countries around the world are still figuring out how to allow, if at all, such currencies to coexist with the established financial system. Also, since the transparency of the blockchain is important in that it allows everyone to look at it, it may not be the desired platform where privacy is important. It’s impossible to correct errors without reversing a transaction, and it is the irreversibility that makes a blockchain special in the first place. Finally, whether or not smart contracts are legally enforceable remains to be seen.
The bulk of the discourse around blockchain technology states simply that “immutability is a characteristic of blockchain technology.” While it is possible that any variety of the technology could yield the emergent property of immutability, this seems highly unlikely, and is definitely not yet firmly established. For example, legislation is being proposed based on definitions, but stating that “the data on the ledger is . . . immutable” in a statute does not mean that the data is immutable (i.e., unchangeable) in reality.
How do we implement the right to be forgotten in a technology that is designed to not forget?
How does a blockchain work - Simply Explained. https://www.youtube.com/watch?v=SSo_EIwHSd4
Demystifying Blockchains. https://punkish.org/Demystifying-Blockchains
How Blockchain can transform India. https://www.youtube.com/watch?v=8fbhI1qVj0c
How to timestamp a digital document https://www.anf.es/pdf/Haber_Stornetta.pdf
Bitcoin https://bitcoin.org/en/faq#general
Redactable Blockchain - or - Rewriting History in Bitcoin and Friends. Eprints
The Path of the Blockchain Lexicon (and the Law). 36 Review of Banking & Financial Law 713. SSRN
Wise Contracts: Smart Contracts that Work for People and Machines Proceedings of the 20th International Legal Informatics Symposium IRIS 2017.
Smart contract. In Wikipedia, The Free Encyclopedia. Retrieved 11:18, November 21, 2018
Legal Framework For Crypto-Ledger Transactions by Primavera de Filippi. https://wiki.p2pfoundation.net/Legal_Framework_For_Crypto-Ledger_Transactions