Exclusive: How blockchain solves a seemingly unsolvable problem
Recently IT Brief had the opportunity to discuss the hype around blockchain with Global Blockchain Technologies CEO Shidan Gouran.
Why are people/companies making such a big fuss about blockchain?
People and companies are making a big fuss about blockchain because it solves a seemingly unsolvable problem. Once upon a time, you would need a central entity to perform "trust functions" of sorts. Banks to maintain account balances. Clearinghouses to facilitate money transfers. Government agencies to transfer property titles.
Aside from being costly, it's inefficient. If Bob is sending Mary $100, that's just Bob and Mary. Why does there need to be a bank in the middle? Since the blockchain natively facilitates these transactions from one peer to another, it cuts out the middlemen that create friction, expense, and difficulty for transactions that, in concept, should be very straightforward.
What can you tell me about the technical side of blockchain?
There's a whole lot to know about blockchain from a technical perspective. It's basically a network of computers that maintain a ledger, in which every computer on the network must have the same version of the ledger in order to operate. This creates a consensus across hundreds or thousands of parties, preventing any one single entity from being able to affect the truth on the blockchain network - which prevents vulnerability and corruption, providing an unforeseen level of integrity. The day-to-day operation of a blockchain is actually relatively simple.
It's basically a bunch of computers agreeing with each other about a file. Which serves the same purpose as a single figurative computer not needing agreement from anybody by virtue of an implied trust in the entity that operates that computer (such as a government or a bank). If this sounds complicated, that's okay. The truth is, the inner workings of blockchain will ultimately not be visible to the average person. Through easy-to-use interfaces, its functionality will be simplified for layperson users to use without having to understand anything especially technical.
Global Blockchain Technologies is creating Laser, can you tell me a bit more about this?
Absolutely. To understand what Laser is, you must first understand the current landscape of cryptocurrencies. While Bitcoin and Ethereum make the most headlines, did you know that there are more than 1,800 cryptocurrencies on the market? Inevitably, this will raise questions about how these currencies can be transacted for each other.
Fiat currencies have a similar problem, in that there are 180 currencies recognized by the United Nations, all existing in different banking systems across the world. Since it simply isn't practical for these currencies and banking systems to exist in isolation from one another, the SWIFT protocol was created to form a borderless global banking system.
Laser will have the exact same function for cryptocurrencies, as a blockchain network that can operate in parallel to any blockchain with multi-signature capability (which is most blockchains), connecting one blockchain to another by enabling them to "speak the same language". If you can imagine how limited a banking world without SWIFT would be compared to what we have today, that is how limited cryptocurrencies are compared to what it could be with Laser's functionality. Laser will unlock all of that potential, thus enabling "blockchain without borders", as we phrase it.
What are interchain transactions and how do they work?
So, look at it this way... Bitcoin has its own blockchain network. Likewise, Ethereum has its own blockchain network. Think of it like Bank A and Bank B. They both do basically the same thing. But sending funds from one to the other will require the use of an intermediary of some kind. For banks, that's SWIFT, for an inter-bank transfer. For cryptocurrencies, that will be Laser, for an inter-chain transfer.
What are some of the major benefits of interchain transactions?
Interchain transactions will broaden the uses of virtually every cryptocurrency out there, enabling the ecosystem to grow considerably. Aside from enriching the world of cryptocurrencies, it will also impart its positive effects onto more people in a stronger and more meaningful way.
For instance, unbanked or underbanked populations in third-world countries who can already use cryptocurrencies will then be able to use them for more things - which creates more opportunities. Interchain transactions will ultimately make cryptocurrencies more usable, taking this asset class from a niche form of technology to a mainstream form of value.