The eponymous “blocks” — in the blockchain, a system of recording information, aren’t much to look at. To most of us, they appear as a jumble of code organized in a prescribed way. What might seem to be an indecipherable string of ones and zeros is actually a very special type of container, one that can record — for anyone to see — thousands of digital transactions.
Taken collectively (and linked together in a chain), they form a universally accessible, distributed, unforgeable database that’s continuously growing as anyone, anywhere adds their data and forms new blocks (a process that happens on average, every 10 minutes).
As practical as that might seem, it’s a technology that’s been riven by controversy. To supporters, it could transform almost every kind of business. “What the internet did to publishing, blockchain will do to about 160 different industries,” Overstock.com founder Patrick Byrne has declared. To detractors, it’s a broken concept that has done nothing but defraud rubes, launder ill-gotten wealth, and accelerate global warming. In the words of noted computer scientist and skeptic Nicholas Weaver, it should “die in a fire.”
The a-ha moment
Blockchain traces its origin to the financial meltdown of 2007, when the US stock market lost more than half its value and big banks were bailed out. What if, some wondered, a new form of currency could be created that could operate beyond bank and government oversight and interference? In 2008, an unknown person who called themselves Satoshi Nakamoto published a white paper explaining how a new digital currency called “bitcoin” could be created using the principles of cryptography.