Decentralized Blockchain Networks — The Next Big Thing or Another Gimmick?
September 13, 2021
You would probably look at me weirdly if I claim that Blockchain is a household buzzword. Well, it isn’t, and I’m not making any such claims. And the current honor of household buzzwords probably belongs to the cloud, the Internet of Things, and even Artificial Intelligence.
Coming back to the topic at hand, let’s answer the question that’s been on everyone’s minds since the dawn of the Internet. How can we trust what happens on the Internet, especially when anyone can edit Wikipedia entries? The answer to this age-old question is Blockchain. Blockchain is being viewed as a Swiss Army Knife that can solve various problems such as privacy, data ownership, digital identity, and decentralized decision-making.
As time passes by, most of us run our lives on the Internet. We shop online. We bank online. We log into multiple applications online that represent digital versions of ourselves. And now, we even work online!
To make it easier, assume Blockchain to be an airplane black box, which records everything that happens exactly as it occurs. For example, the exchange of data, goods or services, or even digital transactions. Now, assume an intangible chain that transfers the data into unmodifiable encrypted blocks and scatters them across nodes or a distributed computer network worldwide.
Next, I’d like you to humor me further and imagine Blockchain as a distributed catalog that keeps a shared list of transactions. These transactions are better known as blocks, and each of these blocks contains past records with a timestamp. Essentially, chaining these blocks together. Hence the name, Blockchain.
In an elevator pitch, Blockchain is defined as a digital ledger that records transactions and tracks assets across a network. An asset, in this case, can be intangible (copyrights, patents, IP, or branding) or tangible (car, cash, or property).
A Blockchain consists of several key elements, which include:
Distributed Ledger Technology (DTL): Only the Blockchain network participants have access to the shared digital ledger. Here, the transactions are recorded only once, thereby eliminating duplication.
Immutable Records: The transactions in a Blockchain cannot be altered or tampered after it's recorded to the shared ledger. In case a transaction contains an error, a new transaction must be entered to counteract it. Additionally, all records are individually encrypted and time-stamped.
Smart Contracts: This is essentially a set of self-executing rules that are stored on the Blockchain. These rules are used to determine the terms of a contract between different parties on a Blockchain.
When it comes to developing technology solutions such as Blockchain, distributed networks are involved. In a distributed network, parts of the system are located in different locations. Secondly, the processing is spread across various nodes. Blockchain, specifically, can employ two types of network architectures. These include:
Centralized Network: All aspects of the network are handled and controlled by a single authority on a solitary server.
Decentralized Network: There are numerous network owners, and the workload is spread across several servers.
As the possibilities of network contribution continue to expand, organizations are opting for a network architecture that best suits their requirements. Much of this innovation focuses on decentralized systems.
Decentralized Systems – The Way Forward?
As mentioned earlier, decentralized networks are supervised by individuals who set the rules and regulations for participation among themselves. Furthermore, since the networks are decentralized, a single person or entity cannot control the data.
Decentralized networks offer various advantages over legacy and centralized systems. Some of the benefits of decentralized networks include:
Reliability: Employing a decentralized network eliminates a single point of failure, thus improving reliability. This is because each node within the network operates as an independent system. If one node is compromised, it will not affect the rest of the network and continue to function as usual. All the nodes must be targeted at once to bring the network down, making it improbable.
Enhanced Privacy: Decentralized systems allow greater user privacy. This is because information on the network passes through multiple points. This makes it problematic to track data flow across a network, eliminating information leakage risk.
Presence of a Trustless System: Institutions like Facebook and Google have earned a bad reputation regarding privacy over the past few years. Hence, it should come as no surprise that people are hesitant to put sensitive data, personal property, and money under the control of a centralized authority.
Here is where decentralized systems are the game-changer since it allows multiple participants to manage a network. Each participant in the network has a copy of the same data in the form of a distributed ledger. As a result, leading to a network environment where trust is not necessary.
Existing social networks have centralized systems. The organizations behind these social networks have the ultimate authority to control the data of all users. The organizations can share and disseminate user information as they please, including the likes of targeted advertising.
Users worldwide are getting fed up with this. They want a shift to decentralized systems that would provide them control over their data.
Like social networks, people are also annoyed by the overreach displayed by governments. Here, decentralized systems act as a method to take back control from the government. Thus, contribute to greater democracy and fairness.
Fascinatingly, this motivation stems from the desire to ensure the community governs systems. Furthermore, governments are also attempting to censor information by blocking citizens’ access to social media. They can carry this out by blocking traffic to the central servers of the social media networks.
But, this would not be possible in a decentralized system with a peer-to-peer network. This is because the information would be shared with each node. Consequently, this would allow each node to forward any communication without the government's censorship.
Another factor, in this case, is the manipulation of voting systems. Voting manipulation is not a novel concept and has been around for eons. Rumors were floating about vote manipulation and vote hacking in the 2016 US Presidential Elections. Hence, voting systems should move to decentralized systems due to increased reliability. Thus, eliminating the possibility of manipulation.
Usher in the Next Era of the Internet With Mutual Mobile
Decentralized networks have diverse and far-reaching applications. However, you must understand that decentralized networks are not the silver bullet to fix all Internet privacy problems.
Although, they do offer a more comprehensive approach as compared to centralized networks. Centralized platforms have been around for ages. Hence, people forget there is a better, secure, and privacy-friendly way to build Internet services.
The importance of decentralized networks first came to the forefront in the first era of the Internet, i.e., the 1980s to the early 2000s. In this era, Internet platforms and services were built on open protocols and servers controlled by the Internet community as a whole. These factors were instrumental in establishing Internet services companies like Google, Yahoo, LinkedIn, Amazon, Facebook, and YouTube.
It comes as no surprise that big businesses are the drivers of innovation. And we see the same with Blockchain. Tech giants like IBM and Microsoft are leveraging their cloud computing infrastructure to build custom blockchains for customers and experimental purposes. It is also being utilized in research to develop applications for medical records, digital identity, and insurance records.
Similarly, Blockchain is now being used for music sharing, global payments, tracking diamond transactions, and even in the legal marijuana industry. Thus, blockchain has enormous potential, and the first-movers have an advantage on their hands.
Well, talking about first movers, Mutual Mobile has been spearheading the charge in everything tech-related since its establishment. Whether it's software and web development, Internet of Things, Artificial Intelligence, or app development; we are the X-factor that elevates your business. So, reach out to us and let us do the rest!
The value of decentralized networks was seen in the first era of the Internet. Now, we’ll get to see it all over again with Web 3.0.