I am not sure when was the last time I heard the world abuzz resonating with Blockchain technology spanning over several domains…fiscal, legal, logistics, aviation…Not only, people associated with the emerging technology are deliberating on it, but also, those from a wide spectrum of multinationals and transnationals are assessing and evaluating the technology disruptor! Where there is smoke, there is bound to be fire! Some are scared merely because they are resistant to change in their lives, others wish to maintain the status quo in the organizations they work in, still, others perceiving it as a school of thought, a figment of imagination…incomprehensible… and incompatible with the human psyche.
I am a technocrat completely immersed in and fascinated by the modus-operandi of the entire system. Undoubtedly, when I perceive and ponder over the technological advancements, I wonder why did we not bring it into effect earlier? In my entire 14 year career in Information Technology, this is the first time I have encountered such a super concept, a redefined thought process, that has vast social as well as economic ramifications for humanity.
From Tech professionals to seasoned leaders, to those arguing for and against Blockchain, the lurking fear that the new technology will ultimately sweep the businesses across the globe is, surely, unnerving and unsettling. Nevertheless, this is a question we will be confronting in the realm of Blockchain, outside Blockchain and those perched on the periphery just touching the surface.
Let’s dive deep.
Simple Question:
Banks and regulatory authorities have a central authority or a government body controlling the whole flow of money. Is there no centralization in Blockchain?
There is a lot of Technical Jargon involved in reply to the question. The Byzantine Fault Tolerance, Proof of Work, Proof of Stake, Consensus Algorithms etc. But I will explain this concept very simply to a layman audience. A plausible response that will benefit both the non-tech-savvy and the techie entering this field.
Simple answer: In the world of Blockchain there is very much a Central authority in place, similar to the functioning of the banks and financial institutions. In banks, when someone applies for a loan it passes through a series of steps, across different tiers. Similarly, when the Government of Australia initiates to change the 20 Dollar note, it is not one person who takes the decision to put it into effect. It is an idea floated, at first. Then, the idea is taken across multiple regulatory bodies.
The Australian government, fiscal analysts, taxation and regulatory mechanisms, banks, designing, printing and security institutions and much more. So, when we say centralized organization, it is not actually one individual/ organization doing the work. There are numerous other organizations that alter, change and improvise upon the idea of a change of tender. Can I even list all the organizations, or the levels and designations of the people involved, in changing a 20 AUD note? Can you?
Also, read –
Blockchain Technology: The Present, and The Future Ahead
Imagine the Government electoral process – Is the Election Commission solely responsible for electing the next Prime Minister of the country? Or, are there other government bodies that are monitoring, regulating and impacting the outcome before one individual is finally selected? Not to mention the decentralized voting process which has existed since ages, and will continue to do so, as far as I can see myself living on Mother Earth!
What is transpiring in the two paragraphs at ante? It is evident that not one central organization, but a number of organizations are playing their part, identifying, isolating, vetting, correcting, opposing and altering to reach an eventual goal. Once this consensus amongst all cogs of the lubricated machine is arrived at, a decision is taken. The same happens in Blockchain, albeit with greater transparency and visibility and better control. Each participant on the network has to validate the authenticity of a transaction taking place. If a certain fraction of participants on a Blockchain network questions the truthfulness of a transaction, that transaction simply does not happen.
What, then, is the hype about central control? It is the same thing. It is the same people. It is the same consensus of opinion. It is the same – the notion of the majority being right! The beauty of the Blockchain process is that this majority cannot even be influenced. Overruling majority decision making in Blockchain Technology is next to impossible, it is insurmountable! In human decision making, however, influence is not only a possibility but a stark reality to reckon with!!!
Blockchain is multidimensional!
It cannot be explained within the confines of a single article. To conclude, central control is still very much existent in Blockchain technology, in the same way, as in other human-controlled processes. When we say decision making is decentralized, it is also decentralized in all other systems, we trust today. No one person takes the decision. Decision making and the consensus is still broadly distributed across multiple hierarchies/levels…referred to in Blockchain Technology as consensus Nodes!