Earlier this month, Susan Breidenbach of Semiconductor Engineering wrote an article that explores the blockchain-cryptocurrency phenomenon. As Breidenbach observes, the blockchain buzz has reached “deafening levels” in recent months, although proponents of the technology say the best is yet to come.
“[However], critics argue that too many people drank the blockchain Kool-Aid,” Breidenbach states.
“Outside the cryptocurrency arena, they say that blockchain amounts to little more than some really slick slideware. The reality lies somewhere in between. [Nevertheless], some pilot implementations in a range of industries are starting to materialize from the clouds of hype.”
According to Steven Woo, vice president of systems and solutions and distinguished inventor in Rambus‘ Office of the CTO, the ability to achieve consensus with blockchain, especially in situations where participants have no history working together, opens up a range of potential markets and applications.
“Nascent markets and applications, which don’t have a lot of historical infrastructure to replace or be compatible with, are good candidates for the technology, as well as applications and markets that want to reduce management costs and improve the speed of commerce,” he tells Semiconductor Engineering.
“By eliminating the need for a third party to administer the ledger and clear transactions, participants using blockchain technology can reduce costs and potentially increase the speed at which they do business.”
As Woo emphasizes, blockchain technology is still in the early stages, with a lot of interesting work going on in evolving and enhancing Proof of Work to more closely match the needs of applications and users.
“Proof of Stake and Proof of Elapsed Time are two of several new ideas for improving on the concept of Proof of Work – and there are certain to be additional methods that arise to meet the needs of applications and markets that adopt blockchain,” he elaborates.
Moreover, says Woo, cross-border transactions and commerce can also be improved with blockchains, while the ability to support Smart Contracts, such as on the Ethereum platform, opens up additional possibilities for accelerating commerce and reducing costs.
As we’ve previously discussed on Rambus Press, blockchain is a shared digital ledger collectively updated and maintained by its enrolled users, which enables parties to transact with each other in a completely transparent manner. Each transaction is public and its details, together with the time and date, are unanimously verified by the other users on the network. Since there is no mediator between parties, completing a transaction becomes cheaper and simpler to achieve.
Security is ensured due to complex cryptographic rules that prevent any single participant from updating the system without seeking validation from the network. This makes the system immune to manipulation as inconsistencies are automatically identified and rejected. Since no single participant holds a master copy of the ledger (multiple copies are simultaneously updated by different participants), no single party can take full operating control. These factors ensure that the system maintains its integrity without the oversight of a centralized authority.
Interested in learning more about blockchain? The full text of “Blockchain: Hype, Reality, Opportunities” can be read on Semiconductor Engineering here, while our article archive on the subject is available here.