Blockchain glossary: Lesson No.3 – Building a blockchain doesn’t have to be complicated
Can blockchain transform the world? Before we can answer this question, we need to understand what this technology can and can’t do, what it is and what it isn’t. Therefore, we have to go back to basics and explore the fundamentals in order to eliminate all misconceptions about blockchain. This series is meant to clear the air by answering the most fundamental questions.
We’ve been talking about blockchain for quite some time; we discussed its facets, uses, future, shortcomings, and growth, to name a few. We got down to the heart of the matter and answered questions such as: Is the blockchain over-hyped? Can it transform the world? How can we measure its performance? Should we list it as a skill? What’s in it for us?
What we haven’t done so far is focus on what this technology can and can’t do, what it is and what it isn’t. Therefore, we have to go back to basics and explore the fundamentals in order to eliminate all misconceptions about blockchain. This series is meant to clear the air by answering the most fundamental questions.
In the first part of this interview series, we invited seven blockchain experts and Blockchain Technology Conference speakers to weigh in on the difference between blockchain and distributed ledger technology.
In the second part, we allowed the experts to ask the right questions and also provide the answers. Just to give you an idea of what was included in the second part of this interview series, here are some of the questions you need to ask yourself before using blockchain:
- Does my use case support or require decentralization between peers?
- Once you have a database, does the blockchain add anything technically?
- Who are the participants in my network?
- Why is the blockchain technology valuable for a certain project?
In the last part of the interview series, we invited our seven blockchain experts to answer the following question: Can anyone create their own blockchain? Let’s find out.
Before we start, have a look at last year’s interview series with 8 blockchain influencers:
- Can blockchain transform the world? 8 influencers weigh in on its value
- Is blockchain the land of milk and honey? 9 experts share their concerns
- Setting the course for a world without middlemen? 9 Blockchain influencers weigh in on this possibility
- Disruption may be an unavoidable reality: Is blockchain the new status quo?
Meet the experts
Can anyone create their own blockchain?
Ingo Rammer: If we’re looking at private blockchains (as they are mainly used in business-to-business scenarios), then, yes. Absolutely. The complexity is also not necessarily in the technology. Open source platforms like Hyperledger Fabric provide relatively easy ways to implement private and permissioned blockchain networks between multiple participants. (You can think of it similar to installing a database product on top of which you run stored procedures – but this time it’s a blockchain network which runs smart contracts.)
The complexity is not necessarily in the technology.
The hard part is convincing other independent organizations to join your network, as this requires a clear set of benefits and a solid organizational and technical governance process. I believe that in the long run, the networks which will succeed are the ones which have a truly decentralized governance and revenue model which is understood by all participants. Or to formulate it differently: for me, the litmus test of a blockchain is whether or not it would survive when its initiators eventually decide to abandon it. I think today, the jury is still out whether or not blockchains which don’t fulfill this requirement will provide enough value in the long run.
Peter Lawrey: To create a blockchain, you need to record transactions in a block and have each block include the hash of the previous block creating chain, thus a blockchain or chain of blocks.
This is pretty easy, the hard part is making this decentralised with a reliable, trustworthy consensus strategy that is more useful than a database alone.
The approach we take with Chronicle Decentred is to have four stages:
- replication of blocks
- gossiping of which blocks every node now has
- vote on which blocks should be included in the next round.
- when a majority vote is detected, announce what the blocks have been added in what order so they can be processed.
NOTE: This makes a number of basic assumptions in our design
- we want to have nodes adding blocks concurrently to increase throughput.
- we know which nodes are running the service so we can determine when we have a majority.
- a majority of our nodes are running in sync.
Arnaud Le Hors: Yes, anyone can create their own blockchain although as pointed out earlier, this technology only makes sense when more than one participant is at play. There are many technologies now available for people to develop their own blockchain network.
Several of them are open source, such as the ones produced by Hyperledger, and Hyperledger Fabric is now supported by many vendors and cloud providers, including IBM.
Vinita Rathi: The short answer is yes; anyone can create their very own Blockchain. As daunting as it may sound, building a very own private blockchain is no longer as tedious or challenging as it was a couple of years back. The easiest and most common way of setting up a private blockchain is by using the existing Ethereum Network.
Ethereum Blockchain is simply lots of EVMs or nodes connected to one another to create a mesh. Each node runs a copy of the entire blockchain and competes to validate a transaction (mining). Whenever a new node is added, the entire network is updated and is propagated in order to ensure that each node is in sync.
Building a very own private blockchain is no longer as tedious or challenging as it was a couple of years back.
Ethereum provides tools like Geth, Eth, and Pyethapp that would you to become a node in the Ethereum Network and download’/update a copy of the entire Ethereum blockchain. These tools allow to set up a private blockchain.
The blockchain is nothing but a Distributed Ledger in which transactions are recorded chronologically and publicly. These transactions are recorded in blocks, and all the nodes in the network compete to find the next valid block.
The very first block in the chain is what is referred to as GENESIS Block. To create a private blockchain, one needs to create a genesis block. Above-listed tools like Geth can be used to create genesis block, which in turn will be the start of a custom private blockchain.
Svetlin Nakov: An experienced developer can create their own blockchain network, of course. This can be done by forking an open-source blockchain system that already exists (e.g. Bitcoin or Ethereum) or writing their own solution from scratch. Usually, people don’t write a blockchain system from scratch, because this is too complicated. Instead, they start from an existing project, clone it and modify its code to add new features, change the consensus rules or other logic.
I am part of a blockchain network development project (protocol development), which started from forking the QTUM blockchain and later took its own path of development. This is a good example of how such protocol development project can work.
Jana Petkanic: Yes, they can, anyone can – but why? A sufficient technology is already out there but it’s crucial to have the incentive to bring stakeholders outside organization on-board and reach consensus first with them. Do we need blockchain? Yes/no. What blockchain? Perhaps we try to pilot on a public chain (almost zero costs) and we will evaluate? Do not invent the wheel when it’s already there. Think of end-users and benefits first. Tech will follow your drive and needs.
Christian Junger: Yes. There are two methods. You either fork an existing one or you create your own blockchain. Both of them will require extensive technical knowledge.