Initial version: 2024-02-10
Last update: 2024-03-05

In this chapter you will see why and when you may need a blockchain. This will give you a general understanding of the application areas for this tool as well as some main concept around which it is build.

• The name
• Necessity is the mother of invention
• Searching for the perfect register
  • The matter of ownership
  • Wisdom of the crowd
  • Properties of the perfect register
  • Dual nature of the perfect register
• Summary

The term blockchain, depending on the context, may be used as:

• a name for a data structure;
• a name for an algorithm or protocol;
• a name for a suite of technologies.

When used as a name for a data structure, blockchain refers to data put together into units called blocks. These blocks are connected to one another like a chain, hence the name blockchain (chain of blocks). What is important, unlike real physical chain where you can replace one chain link with another (for example fixing it), you cannot do similar operation in this chain of blocks – if you add a block to the chain, it will stay there forever and there is no way to move, remove o replace it. That is why blockchain is strongly time-dependant data structure preserving the sequence of operations.

When used as a name for an algorithm or protocol, blockchain refers to a sequence of operations that cause the flow of many blockchain data structures according to protocol's rules.

When used to refer to a suite of technologies, blockchain refers to a combination of the data structure and algorithm that all together can be used to achieve consistency, trust and integrity of your data in purely distributed peer-to-peer systems, regardless of the application goal.

I favour the term blockchain (with smal letter b) than Blockchain (with capital letter B) to emphasize general nature of presented material.



I always say to my students that in computer science every technology has some reasons to appear and exist. Otherwise it becomes a useless curiosity. To understand technology you must understand reasons behind the birth of it. Without this background you will never know why things are as they are.

The situation is no different with blockchain. There must be something justifying its existence.

Today blockchain is not as popular as it was so few years ago. Probably because people finally understand for what they can use it and they stopped repeating meaningless empty slogans just to attract clients or just to follow the mainstream on the principle: others have it, I must have it too.

Today nobody wants to make calculations, process text document or learn AI in blockchain. And very well. This cannot be done, this is not what blockchain is for. So why do you may need blockchain? Answer for this question is difficult because there were too many slogans around and to less implemented appropriate and sensible real case applications. Basically, blockchain is only suitable for one purpose: to reliably and irrefutably demonstrate that an action has been performed. Blockchain is simply a register of such activities.



Wait a minute and ask yourself how you could define a perfect register? Register of what? – you may ask. Of anything. Just a register you can put some information in and be sure that it will stay there forever and nobody, even you, could change or fraud it by removing, adding or replacing even a small part of it. Register you can easily use to prove that you put some information and nobody could deny it, because you are the creator or owner of this information.



Before you go further, to be sure that you will not waste your precious time, you may ask: Do I really need such a register? Is'n it just an academic question with no use value for the average person? My personal answer is: Yes, I do. Probably your is the same or will be the same in the near future. You, I and all other people need such a register to prove many different things. Among many other you prove that:

• you pay your taxes;
• you spend your money;
• you are allowed to drive the car you are sitting behind the steering wheel of;
• house you are living belongs to you;
• your name is really your name;
• you really are who you say you are;
• your kids are your kids;
• you are actually as old as you say you are;
• you are no longer entitled to discounts on cheaper rail journeys because you are over a certain age;
• you caused a car accident;
• you have received two of free doses of the vaccine;
• you have rights to buy medicines prescribed to you by a doctor.

Aggregating all above you may say that you prove your "ownership" of some "objects" like: money, car, house, kids, age, personal data etc.

What is more, this ownership is rarely established by you. In most cases there is other person or institution which officially makes you an owner. Without this official "acceptance", in accordance with applicable law, you are not an owner. What should be important for you is the eternal nature of ownership as long as you do not waive them or they are not withdrawn under applicable law (which should also be visibly recorded somewhere).

Assigning things to their owners is usually done with a register or more common a kind of ledger. One problem is that you have many such ledgers dedicated to different purposes: land and mortgage registers, bank accounts, registry office. All of them are still changing reflecting every transfer of ownership. This is important, because an outdated register or ledger cannot be a trustworthy witness for testifying ownership. This natural need of having an up-to-date and unfrauded, always correct register has led to the development of special institutions to take care about them. The more valuable certain kinds of objects are, the higher the chance for the existence of a government-regulated ledger that documents the ownership of those objects. Government, because we believe that government can guarantee certainty, impartiality and honesty of entries in the register. Other words, your right to some objects are guaranteed by centralized institutions. The power of these guarantees stems from the fact that they are provided by institutions that bestow public trust.



On the other hand, this trust is very naive. In digital age it's much easier than ever before to hack or simply change some data and make that your house is not any more yours, you lost your rights to drive a car and even that you were ever born, because there are no any data about you in registry office. Such a story was told in "The Net" film starring Sandra Bullock, Jeremy Northam, and Dennis Miller (1995). By pressing a single button you and everything which belongs to you ceases to exist.

What is really surprising for me is that we, as a society, believe in the power of handwritten signatures. However it my sound, in today's digital word, we trust in very primitive and easily counterfeitable handwritten signatures more than digital ones. Why? Probably because we don't understand technology and in consequence we don't trust it.

Imagine such a situation, and maybe you don't even have to imagine, because you've dealt with it. You are buying an apartment. You go to the notary. You sign in his presence the documents that he has previously read to you. You leave happy, thinking everything is fine. Why do you think so. I bet you didn't check his ID, so you don't really know if the person you saw was actually who said he was. You have signed a document, but you do not know whether this data has actually been entered into generally available registers. You don't know if the notary public's signature (even if he is who he claims to be) is true and in accordance to his design – after all, he could have scribbled on anything, thereby rendering the document invalid.

Wait a minute and ask yourself how carefully you sign documents. Imagine that delivery man brings you a parcel you are waiting for. You confirm receipt by signing a document or, more often, on a tablet or any other electronic device. Is your signature really in accordance with its perfect pattern? Probably no. Probably it looks rather as a daub of a signature, not exactly your signature. Next time delivery man may make similarly crooked signature and take over your parcel. I expect that you will have many problems to prove that you will not received what you were waiting for.



Any centralized control over any resources carries the temptation and cause the danger of taking complete control over them and using them for a completely different (opposite) purpose. On the other hand it seems impossible to have trusty register if it is totally uncontrolled. Checkmate? No move, no choice? Not necessarily.

As you can conclude reading [sur2004], decisions taken by a large group, even if the individuals within the group aren't smart, are always better than decisions made by small numbers of "experts".



Surprising? Impossible? This may be counter-intuitive idea for you, but it's quite common in the world.

• Something you've probably encounter in your life: footpath and sidewalks in newly build estate. My dad always said, that if you want to design a comfortable passageways you should spread fresh soil, rake it nicely and wait. Within a few days, people tread the paths they would most like to follow.
• In countries whose legal systems were derived from the British Empire: the United Kingdom, the United States, Canada, Ireland, Australia decision about whether you are innocent or guilty rests with the jury – the group of people who have been chosen from the general public to listen to the facts about a case and to decide whether the person accused is guilty or not. So, very important aspect of our life is "controlled" not by expert (lawyers or judges) but by a group of common people who based on common sense, general understanding of the world and set of evidences render an impartial verdict.
• Swarm intelligence (the expression introduced by Gerardo Beni and Jing Wang in 1989) is the collective behavior of decentralized, self-organized systems:
  • boids (Reynolds, 1987),
  • ant colony optimization (Dorgio, 1992).
• Justice. Being wrongly accused is not pleasant, but it can happen. In such a situation, it is good to have a witness confirming your version of events. Moreover, the more such witnesses you have, the more credible your story becomes. The more independent witnesses confirm a particular fact, the more likely it is that this fact is indeed true. In this case (as long as all parties to the proceedings act honestly) the social status of the witness is less important than their number.
• The Space Shuttle. The space shuttle on-board flight control system (called the DPS, for Data Processing System) utilizes five computers, which are known as GPCs (General-Purpose Computers). The PASS (Primary Avionics Software System) resides in a maximum of four of these at any one time. Four computers simultaneously execute identical code and synchronize their I/O activities. At each critical step, the computers "vote" to determine the appropriate step, for instance, firing the control thrusters to roll the shuttle to the left. The fifth computer is reserved for the backup flight system, or BFS. The BFS can perform critical flight functions if a catastrophic failure disables the PASS. The BFS can only be engaged by crew action. The Shuttle cannot operate without the DPS. Most of the subsystems do not have manual backups. This is why NASA has tried to achieve fail-operational/fail-safe reliability: After a single failure, the Shuttle remains fully operational, and the mission continues; after a second similar failure, it can still return safely. [spegif1984, han1989, rye1978, wwwibm001]

Personally, as the most important properties of the perfect register I may list:

• Openness Everyone has an access to it, anyone can check it at any time.
• Irrevocableness If you actually signed something you can't deny it.
• Nonforgeabilness If you actually did't sign something no one can claim and "prove" that you did it.
• Veracitiness You always know who signed each information (this is a consequence of the two previous features).
• Independentness It is controlled by all people together but by no one exclusively.
• Watchfulness Anyone who tries to change your data without your consent cannot do so by hiding it from you.
• Operationness No politics, governments, institutions or dictators are required to "guarantee" that you can safely operate on it.
• Persistenceness If you decide to put some data in register it should stay there forever without the possibility of correction, change or deletion.
• Timeliness It strictly preserves sequence of events. There is no option to add data with backward timestamp. Even if you do this it will be placed in a chain afterwards and everyone can easily detect that some event was placed later than it should be.

This is not a closed list. Feel free to add more (and let me know) if you think I missed something or you need something more.





Probably you have heard about yin and yang. The duality of balance represented by the theory of yin and yang assumes the co-creation of the universe by two opposing but complementary forces.

In a more general meaning, duality is understood as the presence of two separate parts or aspects or the co-occurrence/co-existence of two independent or even opposing elements, phenomena or concepts within a whole. If you focus for a while on what you have just learned you will discover such a dual nature in perfect register.

Proof of ownership requires transparency. The register should be open to anyone. You, me and all other people without any restrictions should be able to read the historic (existing) data it preserves keeping everything previously written in it unchanged.

At the same time ownership manipulation requires privacy. Probably, unless you are not a celebrity or influencer, you don't want other people to know how many cars, houses, planes, etc. belongs to you. You want to keep it hidden from other people's eyes. Acquiring some good must be somehow denoted in a register so the ledger you use must be writable. Writable nature means rather appending a new data than alter existing – otherwise you will destroy history which may be necessary to proof ownership as it was stated above. Any writing access should be limited and given only to very trustful entities.

If you put now all above characteristic side by side the dual nature would be obvious:



The need to meet these conflicting requirements significantly complicates the design of such a system, forcing you to look for appropriate tools that could be useful if you were trying to implement it.



In this chapter I have tried to show you that blockchain is not a funny tool but it is rather an answer for actual need. We possess many different things. And even if we are a temporary or transient user because we lease some of them in some certain time period we are the owner of them. We need a method or tool to prove it. Government or institution controlled ledgers are fine as long as you can trust governments or institutions. We need a tool that independently on intentions always returns true and unfrauded data. We don't need blockchain in itself but we need a perfect register. Blockchain is just one of methods it can be brought into existence in software.