Although this statement is somewhat dated, it is not uncommon to hear Bitcoin detractors talking about a certain “Blockchain” technology behind it. Some even claim that this invention would be more interesting than the work of Satoshi Nakamoto itself.
However, Blockchain is neither an innovation, nor the unique technology behind Bitcoin. This is what we are going to study in this article. What is Blockchain?
What are the origins of the term “Blockchain”?
It is important to note that the inventor of Bitcoin himself does not use this word “Blockchain” in his White Paper. Instead, it simply refers to a “chain” or a “proof of work chain.”
The Bitcoin White Paper is a scientific document published under the pseudonym Satoshi Nakamoto on October 31, 2008. It depicts the technical outlines of Bitcoin and the reasons for its creation. You can download the latest version by clicking here.
Rather, the origin of this term seems to date back to the end of the 20th century. Indeed, it is found in certain cryptographic methods described as early as the 1970s. Most of the time, it's spelled “Block Chain” in two words. For example, this term could be inspired by CBC (Cipher Block Chaining). A mode of operation within a symmetric encryption system that describes how a block of data is processed in order to encrypt it. Although some principles are common to these two terms, the current description of a Blockchain is quite far from the initial principle of CBCs.
Beyond semantics, if we trace the origin of the concept itself, we can discover that this timestamp server method was first described in the early 1990s by the cryptographers Haber and Stornetta. Their paper is also cited in the references of the Bitcoin White Paper.
In any case, whether from a semantic point of view or at the concept level, Blockchain is far from being an innovation of the 2010s. It existed long before the invention of Bitcoin.
What is the real use of Blockchain?
Today, when we talk about Blockchain, we want to talk about the distributed account register of the Bitcoin payment network. That is, the list of transactions executed.
This term thus simply describes a database, in this case, a transaction register, organized into blocks in chronological order. Each block of information includes the digital fingerprint of the block preceding it, so that the smallest modification in a past block mechanically changes all the blocks following it.
This blockchain structure only allows you to create a timestamp server. On Bitcoin, it is associated with proof of work (Proof-of-Work). Thanks to the joint use of these two mechanisms, it becomes impossible to modify the transaction register without deploying phenomenal computing power. Blockchain alone is therefore not very useful. It needs to be used with other technologies. Thus, on Bitcoin, it is only a cog in the protocol. It is certainly essential, but it absolutely does not represent Bitcoin globally.
On the latter, the Blockchain simply allows all users, represented by the nodes, to ensure the absence of a transaction in the system. Among other things, it is this mechanism that makes it possible to avoid double spending.
” For our purposes, the sooner the transaction is the one that counts, so we don't pay attention to subsequent double-spending attempts. The only way to confirm the absence of a transaction is to be aware of all transactions. In the central money issuer model, the central money issuer was aware of all transactions and decided who came first. To accomplish this task without a trusted third party, transactions need to be announced publicly, and we need a system for participants to agree on a unique story in the order in which they were received. The beneficiary needs proof that at the time of each transaction, the majority of nodes agreed that it was the first one received.”
Satoshi Nakamoto, about the timestamp server, now called “Blockchain”, in the Bitcoin White Paper, 2008.
Some clumsily attribute characteristics of decentralization or immutability to everything called “Blockchain”. This is obviously nonsense. What is called “Blockchain” can only represent a register, that is to say a database. The immutability of it depends only on the goodwill of the entity that manages it.
In the case of Bitcoin, this ledger is distributed. The right to write, in other words the right to enter a Bitcoin transaction within it, does not rely on a central authority. Instead, it is the Nakamoto consensus by proof of work that allows the right to add a block to the chain, and which also ensures the immutability of past blocks.
Of course, the Bitcoin block chain is unchangeable and distributed, but not every blockchain is. It is very important to understand that. The innovation brought by Satoshi Nakamoto is therefore the peer-to-peer electronic money system, i.e. Bitcoin in its entirety, but not only the Blockchain.
Why did the term Blockchain emerge?
We were able to understand in the previous part that the timestamp server alone, colloquially called “Blockchain”, is neither an innovation nor a technology in itself. However, even today, this term is used by many people to describe anything else. This myth is surely explained by two distinct phenomena: the vital need for marketing actions for altcoins, and the search for shortcuts for Bitcoin detractors.
First of all, there is obviously a marketing benefit to the use of this word. Explaining that innovation comes from the Blockchain, and not from Bitcoin, opened up a royal road for Altcoins. The various cryptocurrencies that are proliferating on marketplaces have been able to use this marketing ruse to deceive many new entrants. This word sounds English and it seems complex to understand: here we have the winning combination for having a trendy technological word (Buzzword). However, as you may have discovered in the previous part, the real Blockchain is nothing more than a way of keeping track of past transactions, within a timestamp server. There is nothing innovative or complicated about it.
Then, the various detractors of Bitcoin saw this term as a perfect angle of attack. With this simple word, it is now possible to criticize Bitcoin without appearing old-fashioned. All you have to do is explain that Bitcoin is useless, but that Blockchain technology is great. Unfortunately, as you may have learned in this article, this is not the case.
These two strategies, applied to individuals who have not sought to understand how Bitcoin really works, perhaps explain to us why so many people still believe in this fiction today.
Conclusion
Blockchain absolutely did not appear with Bitcoin. There are numerous scientific writings evoking both the term and the concept between the years 1970 and 2000.
Blockchain is not a global technology, but simply a way of recording information and organizing it chronologically. It is well used within the Bitcoin protocol, however, it is only a small piece of complex watchmaking that this electronic cash system represents.
The emergence of this word and the confusion around it are surely explained by a marketing need for some actors, and a need to have a way out for others.
Blockchain alone is not an innovation. The real innovation is the Bitcoin system as a whole.
