The most frequently used imagery to talk about blockchain, in the case of Bitcoin for example, is that of a gigantic account book that traces the history of all the transactions that took place between two parties.
Each transaction is informed, with a date, details, and a special identifier that allows it to be found and traced. Everything is made public on this great book.
It’s not the names of the people who participate who are informed, but other identifiers that characterize them.
A little more technically, it is a blockchain (the literal translation speaks for itself) which takes root on a public peer-to-peer network, where each transaction is publicly announced on the chain, with the details above.
For the system to work, someone needs to validate the transactions and thus avoid fraudulent manipulation, such as a user who spends twice the same amount of cryptocurrency.
But if we aggregate a third party or a specific organization for this validation, we return to a centralized system all that is most classic and the interest of the system falls into the water.
In the case of blockchain, it is a number of members of the peer-to-peer network who compete to validate transactions and thus be able to generate a new block in the blockchain, using appropriate open-source software (Bitcoin Core in the case of Bitcoin).
These are the so-called miners. By validating a transaction and adding a block to the chain, they are rewarded with transaction fees, in addition to creating a little extra money.
Mining actually represents a cost: that of energy and time (it seems that it is money) spent to solve the mathematical problem posed by the system to generate a block.
Digital era and bitcoin
The digital era certainly risks overturning all the concepts that revolve around money.
This would mean the disappearance of money as manufactured, disseminated and managed by the organs and institutions which had accompanied the birth of modern currencies: essentially the banks.
The compensation of debts and receivables would be done independently of currencies, monetary zones, and sovereignties. The monetary issue would pass from the responsibility of a central body to that of the mass of economic agents individually.
In reality, the entire banking and financial economy would be shaken. In fact, most of the banks’ income comes from their control over the circulation of money, that is to say, the compensation of debts and claims.
The more complete and complete this control, the more the banks draw from it the capacity to lend, without constraint and without brake.
The digital age would greatly increase what is known as leaks in the banking system and would pose a barrier to their freedom of monetary creation.
This thereby calls into question the existence of banks which would not manage to adapt to this gigantic shock, much heavier than the measures taken to force them to strengthen their equity or the development of their profession (dematerialization of agencies, digitalization of practices, etc.).
To this digital vision we could object that it is illusory to think that the diversity of monetary systems and currencies can be abolished with a stroke of the digital wand. Thanks to bitcoin storm which make it easy to use the bitcoin.
This objection is well founded if we follow the problems faced by cryptocurrencies (security breach, high volatility, volume of transactions, money supply, etc.).
Moreover, the intrinsic conception of cryptocurrencies leads to thinking that the inventors of digital currencies are trying to reinvent gold.
On the other hand, the Block Chain is a very powerful concept that can be applied to many other areas. Its use can also be transposed into voting systems or the functioning of Crow funding platforms.
Wood said Ethereum is ideal in situations where central control is a weakness, for example, when users don’t trust each other.
Finally, some believe that Bitcoin will not be sustainable as a decentralized entity.
In the same way that the world of streaming music has evolved from Napster through peer-to-peer protocols to services like Spotify and Apple Music.
Cryptocurrencies could well follow the same trajectory if banks embark on the adventure thinking of finding their account