Thoughts on Digital Licensing and Beyond

The Blockchain is Just an Application

May 27, 2021 Mike-E-angelo 3 min read
Categories: business technology

The blockchain is just an application. Everyone is going nuts over blockchain now that they see it can be used for commerce, despite its awkwardness and efficiency concerns. In the hysteria, the whole premise of the blockchain has taken on a bigger concept than it actually is.

But let’s keep in mind that a blockchain is basically an application. It’s an application that runs on one or more computers (nodes) that comprise a network. Its authority only extends to the processes it executes in on those computers.

What’s novel about the blockchain is how it validates its transactions and stores state. It’s a decentralized database that is tamperproof. Although, I really hate saying it’s “tamperproof” because:

In any case, despite how its stored, or how its validated, its reach and authority only applies to its application processes. This is important for vendors who sell products on it.

If a vendor creates 10 products on blockchain X and then another 10 on blockchain Y of the same type, which set is the official 10 products?

Here is where a centralized resource (AKA “oracle” – so fancy!) has the advantage. The centralized source has the official record of product inventory, as well as the official record of which blockchain it is currently tracking ownership. Using this approach you can enable a scenario where a product exits the centralized boundary, makes its way through blockchain X, then after a resale or two back onto the centralized boundary, then exits again onto blockchain Y.

It’s funny that when I first started to explore NFTs and asset issuance with blockchains – most notably the Colored Coins with Bitcoin, no less – one of the selling points was that this could be done with existing assets already tracked using centralized sources.

It seems that no one really thought about doing this with the digital tokens that the blockchain themselves allowed (ala centralized version of “NFTs”) so that was one of the reasons why I set out to do this – to prove that it could be done.

Anyways, back to the point (there is a point here, right?): there isn’t anything special about a blockchain except perhaps with how it validates its transactions. Its authority only applies to the machines its on, and does not “reach” into anything else.

Of course, the same thing could be said about centralized applications, as well. Authority only reaches to the boundaries of that centralized application, too. An author could also choose to sell 10 of their products on centralized application X and centralized application Y. Which one is “official?” Same problem, different take.

Eventually we want to get to formats and standards, exclusivity deals and the like. That’s like v4 or v5 of this space. I am just trying to survive at the moment with v0. 😅

But, at the end of the day, my further take and question is: if this problem exists in two systems, and one (centralized) is more efficient than the other (decentralized), why are we gravitating to the more inefficient offering? ✌

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