Unblocked: the Trust Machine, Part 2
Part 1 claimed that the Blockchain is a Trust Machine. But what is it?
The Blockchain Trust Machine components
The Blockchain has several essential elements that combine to make it a Trust Machine.
The Ledger is a critical part. It’s just a database; recording transactions, assets, locations and anything else.
The clever bit is that the Ledger sits on a Peer-to-Peer computer network. In P2P, thousands of computers are connected to every other without any central control point
Consequently, the network system holds an identical synchronised copy of the Ledger on every machine. The network does not allow change to existing records and must agree on any new additions. This agreement is known as consensus.
This construction gives the Blockchain some unique properties.
Blockchain’s unique properties
Firstly, no single entity controls the Ledger, so there is no single point of failure. Advanced cryptography protects the Ledger data. The encryption uses advanced maths in a technique called hashing. It’s fiendishly tricky, but in short, it prevents alteration. Therefore, the ledger is always an unchangeable, verifiable and visible record.
Any attempted change to the existing Ledger data on one copy immediately invalidates all the other copies. Consequently, everyone else on the network would see this and reject it. You would have to control the majority of the network computers to brute-force any change. And because there is no central control, this would take enormous computing power, time and expense. The bigger the network, the more unlikely this becomes.
Meanwhile, every new piece of data needs network verification by consensus. There are different ways of achieving this. However, once agreed, it’s then permanently linked to the previous information on all Ledger copies. Now, the Ledger contains a chain of individual data blocks. It’s unbreakable, transparent and traceable.
I like to think about a brick wall, where each brick is a transaction block. If you want to alter the wall, you must remove all the brickwork above it first. Alternatively, cutting out any stonework risks the entire wall falling. Either way, the change is readily visible, no matter how good at building walls you are.
So the Ledger shows the entire history of an item and all its transactions. It doesn’t matter how many hands it passes through. Because you can verify it is correct at any time, you can trust the machine.
How can we apply this Blockchain concept to the wine business?
From grape to glass, wine goes on a long, complicated journey involving many different players. Growers, producers, packagers, appellations, regions, countries, wholesalers, shippers, warehouses, auctioneers and retailers. Oh, and consumers in different markets too!
Millions of global wine consumers rely on the wine industry to safeguard their wine. Whether the issue is quality, safety or origins. It’s a question of trust.
Sometimes that trust is misplaced. Fraudsters have many opportunities to cheat. Fraud destroys consumer trust, and that risks everyone’s reputation. It costs the wine industry billions – in lost sales, deterrence and prevention. The consequences have even been deadly.
The quality, safety and origins of wine are always under threat. For the first time, Blockchain guarantees that the wine in your glass is genuine.
Think that wine scams don’t affect you? Part 3 looks at some past wine scandals and shows how prevalent and insidious they are. Chances are, many ordinary wine-drinkers like us have been cheated. Or will be.
Links to Unblocked Parts 1; 2; 3; 4; 5.