Blockchain Book Summary

Blockchain Book Summary Preview

Key Insights

As a digital ledger software platform that is both unhackable and unchangeable, blockchain is far ahead of its time. Allowing for an unprecedented level of transparency and accountability, this distributed technology can threaten banks, businesses, and even governments based on its high-level capabilities. In Blockchain, Stephen P. Williams provides a thorough overview of this radical concept while highlighting potential outcomes that may arise from its implementation, for better and for worse.

A Digital Ledger

It began as a platform for Bitcoin. Some philosophers refer to it as the next enlightenment.

But what, exactly, is blockchain?

Simply put: blockchain is a digital ledger--or a book where monetary transactions are recorded and tracked.

Sounds pretty dull, right?

However, without the existence of ledgers, civilizations would never have been able to build cities or effective markets.

While history has taught us that ledgers are important, they are not always reliable tools. Some corporations (such as Enron) have even been known to keep a second set of records which are aimed at hiding their true financial undertakings.

To avoid this type of illegal activity, brokers and bankers are often able to certify the legitimacy of a ledger for a fee, but again, this method is far from fail-proof.

Essentially, a blockchain fills in this validity gap by tracking every purchase or sale that a consumer or company makes. Blockchain has a system in place for verifying these transactions, eliminating the need for third-party involvement.

Unlike a paper ledger system of the past or many of the digital ledger formats that exist today, blockchain is not only publicly accessible, but it is not susceptible to hacking or corruption. Next, we will look at why this is the case.

Hack-proof

Each ‘block’ in the blockchain is essentially a set of data points.

Think of groups of stars where each constellation is a block in the galaxy’s chain. However, before these sets of stars are able to form constellations, each star is assessed and verified for accuracy and reliability through a set of highly-specified protocol.

One such verification protocol is referred to as proof of work. With this, every set of data points is subject to a complex math problem that needs to be solved before the block can be added to the chain. In order to solve this mathematical challenge, significant computational resources are required, which makes it very implausible that a hacker would be able to get through and manipulate the chain.

So, if hackers can’t solve the mathematical problems required to get their blocks added to the blockchain, who can?

This is where miners come in. Miners are people that are trained to compete to solve blockchains. From the problem-solving process, a cryptographic hash (a string of numbers and letters) is generated along with a timestamp. Both identifiers are used to connect the block with the remainder of the chain.

Now, let’s say that a hacker was able to circumvent the problem-solving process and infiltrate the chain. What would happen?

When the hacker tried to change the information in a single block, all of the hashes for the entire blockchain...

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