What Is Blockchain? Three Videos Explain the New Technology That Promises to Change Our World

You’ve heard the word “blockchain” many times now, but prob­a­bly not quite as many as you’ve heard the word “bit­coin.” Yet you sure­ly have a sense that the ref­er­ents of those two words have a con­nec­tion, and even if you haven’t yet been inter­est­ed in either, you may well know that blockchain, a tech­nol­o­gy, makes Bit­coin, a cur­ren­cy, pos­si­ble in the first place. Their sheer nov­el­ty has already giv­en rise to a mini-indus­try of explain­er videos, more of them deal­ing direct­ly with bit­coin than blockchain, but in time the lat­ter could poten­tial­ly over­take the for­mer in impor­tance, to the degree that it becomes as vital to soci­ety as the pro­to­cols that under­gird the inter­net itself.

Or at least you could come away con­vinced of that after watch­ing the blockchain explain­er videos fea­tured here. The short­est of the three, the one by the Insti­tute for the Future at the top of the post, attempts to break down, in just two min­utes, the prin­ci­ples behind this tech­nol­o­gy, still in its infan­cy, in which so many see such rev­o­lu­tion­ary poten­tial.

“Blockchains store infor­ma­tion across a net­work of per­son­al com­put­ers, mak­ing them not just decen­tral­ized but dis­trib­uted,” says the video’s nar­ra­tor. “This means no cen­tral com­pa­ny or per­son owns the sys­tem, yet every­one can use it and help run it.” And accord­ing to blockchain’s boost­ers, that very decen­tral­iza­tion and dis­tri­b­u­tion makes it that much more trustable and less hack­able.

In the Wired video just above, blockchain researcher Bet­ti­na War­burg explains her sub­ject in five dif­fer­ent ways to peo­ple at five dif­fer­ent stages of life, from a five-year-old girl to a ful­ly grown aca­d­e­m­ic. Actu­al­ly, that last inter­locu­tor, an NYU his­to­ri­an named Finn Brun­ton, does much of the explain­ing him­self, and right at the begin­ning of his seg­ment (at 9:48) rolls out one of the clear­er and more intrigu­ing run­down of the nature of blockchain cur­rent­ly float­ing around on the inter­net:

A tech­ni­cal def­i­n­i­tion of blockchain is that it is a per­sis­tent, trans­par­ent, pub­lic, append-only ledger. So it is a sys­tem that you can add data to, and not change pre­vi­ous data with­in. It does this through a mech­a­nism for cre­at­ing con­sen­sus between scat­tered, or dis­trib­uted, par­ties that do not need to trust each oth­er. They just need to trust the mech­a­nism by which their con­sen­sus is arrived at. In the case of blockchain, it relies on some form of chal­lenge such that no one actor on the net­work is able to solve this chal­lenge more con­sis­tent­ly than any­one else on the net­work. It ran­dom­izes the process, and in the­o­ry ensures that no one can force the blockchain to accept a par­tic­u­lar entry onto the ledger that oth­ers dis­agree with.

Brun­ton also empha­sizes that “almost every aspect of it that is con­nect­ed with the con­cept of mon­ey” — includ­ing but not lim­it­ed to Bit­coin — “is wild­ly over-hyped.” Those who can look past the Gold Rush-style bal­ly­hoo­ing of those ear­ly appli­ca­tions of blockchain can bet­ter grasp what role the tech­nol­o­gy, which essen­tial­ly enables the build­ing of sys­tems to secure­ly exchange infor­ma­tion over the inter­net that no one per­son or com­pa­ny owns, might one day play in many parts of our lives, from finance to ener­gy to health care. “Cred­it scores that aren’t con­trolled by a hand­ful of high-risk, data-breach-prone com­pa­nies,” promis­es Caris­sa Carter of Stan­ford’s d.school, “cred­i­ble news sys­tems that resist cen­sor­ship; effi­cient pow­er grids that could low­er your pow­er bills.”

Before it can bring those won­ders, Bit­coin must first over­come for­mi­da­ble tech­ni­cal lim­i­ta­tions: as Com­put­er­world’s Lucas Mear­i­an writes, for instance,” the Bit­coin blockchain har­ness­es any­where between 10 and 100 times as much com­put­ing pow­er com­pared to all of Google’s serv­ing farms put togeth­er.”  But then, few of the first devel­op­ers of the tech­nolo­gies that dri­ve the inter­net could have imag­ined all we do with them across the world today, and those who did must have had a sol­id under­stand­ing of its most basic ele­ments. How do you know when you’ve attained that under­stand­ing? “If you can’t explain it sim­ply, you don’t under­stand it well enough,” as Albert Ein­stein once said, and as Citi Inno­va­tion Lab CTO Shai Rubin quotes him as say­ing at the begin­ning of his own blockchain explain­er, per­formed in less than fif­teen min­utes using no pieces of tech­nol­o­gy more rev­o­lu­tion­ary than a white­board and mark­er.

Relat­ed Con­tent:

What Actu­al­ly Is Bit­coin? Princeton’s Free Course “Bit­coin and Cur­ren­cy Tech­nolo­gies” Pro­vides Much-Need­ed Answers

Bit­coin, the New Decen­tral­ized Dig­i­tal Cur­ren­cy, Demys­ti­fied in a Three Minute Video

Bit­coin and Cryp­tocur­ren­cy Tech­nolo­gies: A Free Course from Prince­ton

The Prince­ton Bit­coin Text­book Is Now Free Online

Based in Seoul, Col­in Mar­shall writes and broad­casts on cities and cul­ture. His projects include the book The State­less City: a Walk through 21st-Cen­tu­ry Los Ange­les and the video series The City in Cin­e­ma. Fol­low him on Twit­ter at @colinmarshall or on Face­book.


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