In addition to providing the cryptographic mechanism which the current speculative cryptocurrency maelstrom is built upon, Blockchain technology is all set to break through into technological ecosystems and make some serious waves.
The new paradigm offered by Blockchain technology is based on decentralisation: in order to use the technology, process execution and management both need to be decentralised. To build a reliable and robust system that any system user may access and analyse, system coordination and control mechanisms must be distributed throughout all Blockchain network nodes.
This approach means that once a system is “released”, its creators no longer have control of its maintenance and development. Once it is formed, it goes on to function on a fully decentralised basis, following criteria defined in partnership with stakeholders – who may or may not wish to be involved. A good example of this decentralisation is the development of cryptocurrencies, such as Bitcoin. Established financial regulatory authorities are finding that they are unable to have any more of a say in its development than establishing entry barriers from traditional markets, which is where they can actually function as controlling forces.
However, there is no need for us to regard this decentralisation as a lack of control or governance; rather, it creates the transparency required to establish set operating rules. All agents in a decentralised system, especially where there is a certain level of mutual distrust, must openly adopt certain operating rules. When it comes to using distributed systems involving Blockchain technology, the act of using the system implies that these rules have been accepted. With clear rules the system will operate independently, and on no account will it be possible to modify those rules.
These contracts are coded and clearly specify how the system is to operate, as well as the roles, responsibilities, and remuneration of the various agents involved.
In a way, we could look at Blockchain technology as a platform for app development, where features of decentralisation are inherent to the platform itself and code encryption is based around the implementation of contracts, which precisely specify the system’s features and limitations.
If we take our tendency to expect too much when it comes to new technology as a starting point, although the new paradigm offered by Blockchain cannot solve everything, what it does currently do is provide an ingenious solution to cases which require complete decentralisation and shared, instant access to information, as well as those in which there is a significant degree of mistrust between actors.