Experts in the technology and financial sectors consider blockchain technology to be revolutionary. Your role, as a solutions engineer, presales engineer, or customer-facing sales professional, may require knowledge now or later in your career to sell blockchain technology solutions. It is important to appreciate how the blockchain is changing the world and how you as a value-added reseller (VAR)/vendor/integrator or even a professional services organization can participate in the blockchain revolution.
Blockchains are not a product to sell, such as a server, a data storage array, or a network router. Blockchains are an “exercise in development” to essentially sell, service, and develop a blockchain-focused solution. Blockchains can certainly “enable” products and, as a result it can be complex to design, implement, and develop applications around. Sometimes legacy applications can be extended, which is a common design and integration approach that enterprises should consider. Essentially, the technology behind blockchains is simple, but the implementation of the technology is where it gets more complex. The goal of this chapter is to break down blockchain technology for a sales-driven and technically focused audience.
This chapter discusses the technical merits of blockchain technology in a simple manner with direct correlations to how it applies to business.
IN THIS CHAPTER, YOU WILL LEARN THE FOLLOWING ABOUT BLOCKCHAINS:
- What a blockchain is and how to define a blockchain
- The history of the blockchain and why the history is important to appreciate
- How blockchains compare to other enterprise technology platforms
- What blockchain transactions are and how they provide value to the enterprise
- What a trustless model is compared to a trust model
- Why the blockchain is considered revolutionary
- Types of blockchain platforms
What Is a Blockchain?
Blockchains have been considered a disruptive technology and the start of what has been coined the Web 3.0 generation. Web 3.0 is the next technology front on the Web where many devices are interconnected (called the Internet of Things) and used with technologies such as automated intelligence. Blockchain technology has significant ramifications for specific industries that perform fiduciary or intermediary duties, as you will see in this chapter and throughout the book.
To be clear, there is a significant amount of confusion about what a blockchain really is, how it creates value, and whether it's a cryptocurrency. Another issue is that blockchains have very different use cases; some blockchains are only for cryptocurrencies, while others do not support cryptocurrencies.
To gather an understanding of where blockchains and cryptocurrencies came from, it is important to appreciate Bitcoin. Bitcoin was the real start of blockchain technology because it provided a use case to society. Satoshi Nakamoto, in his 2008 paper “Bitcoin: A Peer-to-Peer Electronic Cash System,” created the concept of the blockchain.
Nakamoto's paper had some detailed approaches to how a blockchain should be purposed for the benefit of the masses.
- A blockchain should be a trustless online payment network that is based on peer-to-peer (P2P) versions of electronic cash. The network is a robust node structure that works together with little coordination.
- A blockchain should alleviate the challenge of double spending, where funds can be over drafted and therefore lost to the wallet holder.
- A blockchain should implement the proof-of-work consensus method that rewards nodes that participate in the creation blocks (miners). The miners are rewarded for participation through an incentive approach, and this encourages miners to be honest.
- A blockchain should simplify privacy through a trustless system that removes intermediaries and introduces the use of anonymous public keys.
If you read Nakamoto's paper, you will likely conclude that enterprise permissioned blockchains were not in Nakamoto's vision at the time. The realization of this requirement for enterprises was not introduced for years after Bitcoin became mainstream.
One of the main challenges in the blockchain arena is how to answer the question, “What is a blockchain?” If you ask 10 different blockchain experts, you will get 10 different answers. The following are just some of the definitions of what a blockchain is:
- A blockchain is a shared distributed ledger or data structure.
- A blockchain is a distributed root of trust on a distributed ledger.
- A blockchain is a digital ledger in which transactions made in Bitcoin or another cryptocurrency are recorded chronologically and publicly.
- A blockchain is a type of distributed ledger for maintaining a permanent and tamper-proof record of transactional data.
- Blockchain technology is a distributed ledger technology that uses a distributed, decentralized, shared, and reciprocal ledger, and it may be public or private, permissioned or permissionless, and driven by tokenized crypto economics or token-less.
These definitions all focus on a ledger—specifically, a distributed ledger. A ledger is essentially a written or computerized record of all the transactions a business has completed. A distributed ledger is a database that is consensually shared and synchronized across networks that are spread across multiple sites, institutions, or geographies.
My Approach to the Definition
My approach to defining blockchains is somewhat varied from what other blockchain evangelists will provide. I believe that there is no one correct definition that will provide a realistic understanding of the blockchain technology to everyone. This book presents several blockchain definitions that will vary depending on the audience.
My experience as a presales engineer has taught me that different types of audiences have different levels of interest in how technology works. For example, one would not expect an attorney to understand information technology the same way a SQL developer would. Both a developer and an attorney have different training and for that matter think differently.
My definitions of a blockchain focus on the following audiences:
- Technical, which includes IT staff, developers, and other technical stakeholders.
- Business, which are generally IT directors, C-level suite members, and stakeholders of financial organizations.
- Legal, which is generally any compliance-related auditors, corporate counsel, or other types of attorneys. Legal would entail government regulators, as well, depending on your use case.
Technical Audience
Figure 1....
