Nicolas. So blockchain is the latest buzz word?
Nicolas : There has certainly been a lot of talk about blockchains in recent months. And I find this quite surprising, because this technology still demands a few years of fundamental research in order to realise its full potential. It is more an undercurrent, or a change of paradigm, than an innovation that can be used straight away.
OK, so it’s important. But what is it exactly?
Nicolas : Yes, it is very important. Blockchains call on highly advanced mathematical and cryptographic concepts. To remain simple, a blockchain is a distributed database, which means that there is no central management of the data and, therefore, no trusted third party that guarantees security. Even if it sounds disappointing, it is important to understand that, with the exception of a few points, everything that is possible with blockchains is also possible with conventional databases.
Is the bitcoin already based on these same principles? And does this mean that the system is infallible and impregnable?
Nicolas : Without a central point, the system becomes highly available. In theory, these systems cannot collapse and, thanks to the distribution of the data, their transaction speeds exceed anything that already exists today.
But the blockchains that are used today, for example for bitcoin transactions, have two major limitations. First, the entire database (the history of transactions using crypto-currencies) can be seen by all the nodes in the system.
And second, the database is replicated identically on all the nodes. These two limitations – the encryption of the data in the blockchain and the scalability of the blockchain, by distributing its content (sharding) – will certainly be overcome in the next few years, so we will be able to imagine numerous applications, including a distributed internet without web servers!
When I listen to you, it seems that blockchains could reconcile people with information technology, individuals with their personal data, and, in the future, restore trust between customers and the ways brands use their data. I would love to believe that…
Nicolas : Yes, identities, reputations and secure transactions could one day be contained in a blockchain. A range of services that we have to pay for today, and are based on this triptych (eBay, Uber, Airbnb, etc.), will one day be replaced by a secure and standardised OTC protocol. We will own our pseudonyms and the associated data in a shared network that does not belong to anyone.
I’m sure that you have already thought of the blockchain killer application.
Nicolas : Yes I have, but it’s a secret! But seriously, numerous solutions are already emerging for micro-payments. Using traditional methods, payments on the internet can take quite some time, due to the interactions between centralised servers. In Germany, blockchains are already used to recharge electric vehicles by induction, during the few seconds when they stop at traffic lights. Thanks to blockchains, this application allows the vehicle and the terminal to interact directly and complete a transaction very quickly, with low infrastructure costs.