A blockchain (chain of blocks) is a distributed database, transparent, secure and allows the transmission of information without a central control body.
A Distributed Database
A blockchain takes the form of a register of transactions or operations. All participants who are on the network can have a copy of this register: it is a publicly visible distributed database.
The blockchain shows real-time updates in the form of blocks containing all the transactions/operations, one after the other. Keeping the register up to date and verifying transactions requires computer computing power: operators who agree to operate the networkdonating their computing power are called “miners “.
Transparent
The blockchain can be consultedeveryone: you can for example consult the Bitcoin blockchain (register of all Bitcoin transactions) via an explorer. In practice, individuals are made anonymous behind the addresses appearing on the register (equivalent to account numbers).
The creation of semi-transparent or private blockchains remains possible through a system of access rights to the register.
Security
If you attempt to tamper with the registry, your attempt will be immediately spotted and invalidatedother “miners”. In addition, important cryptographic processes prevent the modification of old blocks: the further your transaction is, the more secure it will remain.
The security of the register relies on the plurality of the network of miners validating the blockchain. A malicious user must gather more than 50% of the computing power to be able to tamper with the registry.
Transmission Of Information Without A Control Body
Blockchains use the principle of electronic signature, based on cryptography, in order to authenticate the author of a transaction. You can therefore issue a transaction without an intermediary: it is not verifiedthe servers of a central bank, butthe miners of the network.
The system is thus based on a common protocol executedall miners. To determine the miner who is assigned write permission, and who therefore adds a new block, many blockchains use proof-of-work consensus.
Today, many players are working on creating services other than simple payment systems and taking advantage of the opportunities offeredBlockchain technology.
The Limits Of Blockchain Technology?
In summary: despite all its promises, Blockchain technology has its limits:
- A blockchain does not replace intermediaries
- Blockchain projects are not foolproof
- Some blockchains are power-hungry
- Theoretically vulnerable to attacks
A Blockchain Does Not Completely Replace Intermediaries
The smart contracts present on the blockchain are dependent on inputs entered manuallythe user. For example, the blockchain cannot itself certify the veracity of a diploma: it can ensure its permanent authentication if an institution registers it on the network. The promise of being able to do without any regulatory body is not desirable in all situations. On the other hand, the user remains dependent on the platform which offers a user interface for this blockchain.
Blockchain Projects Are Not Foolproof
The law of the code, of course, but at what cost in the event of a malfunction? The automation of operations recorded on a blockchain are guarantees security and transparency. However, exploiting a flawa hacker is a risk that should always be considered. The example of the hacking of TheDAO in 2016 ( crowdfunding platform based on the Ethereum blockchain ) highlights two possible paradigms: should the code of a smart contract remain inviolable? Or does a modification of itthe human hand prevail over the intangible guarantee of its execution?
In this case, the second solution was chosen.
Some Blockchains Are Power-Hungry
The Proof of Work validation system usedmany blockchains (including Bitcoin) ensures the security of the register consumes a lot of energy. Although it is difficult to estimate, the operation of Bitcoin and meme coins would have an electricity consumption equivalent to that of Ireland (according to this study ). It is nevertheless a “false problem” since solutions have been formulated and implemented for other crypto-currencies such as Proof of Capacity or Proof of Stake.
Theoretically Vulnerable To Attacks
Until proven otherwise, succeeding in bringing a blockchain into default remains extremely unlikely. Network architecture not only makes attacks costly and complicated but also limits the nature of possible hacks. However, the 51% attack is not statistically impossible; it has already been widely studied. Its action is limited to the non-validation of transactions or double-spending.
Gathering more than half of the computing power (or capacity, or currency units ) is a deterrent: if the miner were a farmer, it would be like burning down his own farm.