If you've been following the news a bit lately, you've certainly heard of something called "blockchain" or "chain of blocks" in our Gallic world. It's a storage concept that makes data ultra-secure for very specific uses. If you've heard of it, chances are it's in the context of Bitcoin, but this concept has uses far beyond the cryptocurrency that is more fashionable than ever at the moment.
Mathematician Jean-Paul Delahaye describes blockchain as “ a very large notebook, which everyone can read freely and for free, on which everyone can write, but which is impossible to erase and indestructible. »
So here is an attempt to explain how it works.
In the beginning was encryption…
To understand blockchains, you must first understand cryptography. The principle of cryptography (or encryption) is much older than that of computing: it simply consists of reorganizing information in such a way that you need a specific key to understand it. You may have already had fun coding messages at school to transmit sweet nothings using basic encryption keys (by shifting each letter by one letter of the alphabet or by assigning numbers to the letters)… This way, if someone comes across your message, they will not be able to decode it unless they have the encryption key to translate the code into a readable message. The military used very complex cryptography systems well before the first computers (we can cite for example the famous Enigma machine which encoded and decoded German messages during World War II and was cracked by Alan Turing).
Modern encryption is now entirely digital. Today's computers use encryption methods that are so complex and secure that it would be impossible to break them with simple mathematical calculations performed by humans. However, Computer encryption technology is not perfect. It can still be "cracked" by people skilled enough to find flaws in it... In addition, the data remains vulnerable if someone other than the owner comes into possession of the encryption key.
Overall, digital encryption remains very strong and even encryption technologies found at the consumer level, such as the AES 128 bits which are standard on iPhones and other Android devices, are secure enough to prevent government agencies like the FBI in the United States from accessing data on your devices.
Blockchain, a public, collaborative and secure database
Encryption is normally used to lock files so that they can only be accessed by specific people. But what if you have information that needs to be seen by everyone—like, say, accounting information from a government agency that must be made public by law—and still needs to be protected? Here you have a problem: the more people who can see and change information, the less secure it is.
Blockchains were developed to address the security needs of these specific situations. In a blockchain, every time information is accessed and updated, the change is recorded and verified, then sealed with encryption, making it impossible to edit a second time. The entire set of changes is then saved and added to the global record. When someone wants to make a new change, everything starts over again, the information is stored in a new “block” that is encrypted and attached to the previous block (hence “blockchain”). This iterative process connects the very first version of the set of information with the latest version, so that everyone can see all the changes made, but not everyone can contribute and edit than the latest version.
This concept is hard to illustrate with a metaphor, but imagine that you are part of a group of ten people building a Lego building. You can only add one piece at a time, and can never remove any. Each member of the group must agree on the precise placement of the next piece. This way, you can see all the pieces at any time—from the very first piece of the project—but you can only change the last piece.
Let’s take a slightly more relevant example. Imagine a collaborative document, like a spreadsheet on Google Docs or Office 365. Anyone with access to the document can edit it, and each time they do, the change is saved and recorded as a new spreadsheet and locked in the document history. So you can see the changes made step by step, but you can only add information to the latest version, not edit previous versions of the spreadsheet that have already been locked.
This idea of a secure and constantly updated “ledger” finds a natural application in the financial sector. Digital currencies in circulation like Bitcoin are the most widespread and well-known use of blockchains – and for good reason: the very first blockchain was created in 2008 for the needs of Bitcoin and the idea has since spread to other areas.
The technique: step by step, block by block
Having said that, let's now look at how it actually works from a computer science perspective: it's a combination of cryptography and peer-to-peer network.
A concept that emerged in the late 90s with Napster, peer-to-peer services allow users to download files from multiple locations at once, making the process more efficient than if you had to download the same files from a single connection. In terms of the topic at hand, the “files” would be the basic data of a blockchain, and the download process would be the equivalent of the encryption that keeps it up to date and secure.
Going back to our Google Docs spreadsheet example, imagine that the collaborative document you’re working on isn’t stored on a server. Instead, it’s on each person’s computer. These computers are constantly checking in with each other and updating each other to make sure no one has changed previous records of the file. This is a “decentralized” process.
This is the central idea of blockchain: encrypted data that is constantly accessed and at the same time secure, without a centralized server or storage, with a change log that is integrated with each new version of the data.
So we have three elements to consider in this system. First, the peer-to-peer user network which stores all copies of the blockchain record. Second, the data that these users add to the last “block” of information, which allows them to be updated and added to the public database. Third, encryption sequences that users generate to agree on the last block, thus locking it into the sequence of data that forms the ledger.
The last bit is where the magic of the process lies. Using digital encryption, each user brings the power of their computer to help solve some of the super-complex mathematical problems that secure the document. These highly sophisticated solutions—known as checksums (or “hash” in English) – allow to reveal the essential elements of the data contained in the document, such as the account that credited or debited money in an accounting ledger or the origin of this money. The denser the data, the more complex the encryption and the more processing power is required to decode it. This is also why we talk about “mining” Bitcoin.
So, to summarize, we can represent a blockchain as a set of data that is:
- Continuously updated.
Blockchain users can access the data at any time and add information to the most recent block. - Sharing
Copies of blockchain data are stored and secured by each user, and all must agree on new additions. - Checked
Changes to new blocks and copies of old blocks must be accepted by all users through cryptographic verification. - Secure.
Alteration of old data and changing the method of securing new data are prevented by the encryption method and decentralization of the storage of the data itself.
Believe it or not, if you dig deeper, it gets even more complicated than that… but that's the basic idea.
Blockchain in practice: the example of bitcoin
Let's take a concrete example by looking at how this system applies to a cryptocurrency like Bitcoin. Let's say you have a Bitcoin and you want to use it to buy a new bike (or a car, a house, a castle... depending on its current value ;)).
Everyone on the system can see your Bitcoin, but your identity and that of the seller are only temporary pieces of information, tiny fragments of the enormous mathematical problems that form the heart of digital encryption. These values are integrated into the blockchain equation, and the problem itself is “solved” by generating the hashes by members of the peer-to-peer network.
Once the transaction is verified, one Bitcoin is transferred from you to the seller and recorded on the last block of the chain. The block is completed, sealed, and encrypted to never be changed again. The next series of transactions begins, and the blockchain grows longer, containing a complete record of all past transactions each time it is updated.
Now, when you think of blockchain as a “secure” system, it’s important to understand the context. Individual transactions are secure, and the overall ledger is secure, as long as the methods used to secure the encryption haven’t been hacked (but hacking this security is getting to really complex levels). Ultimately, as always in computer security, the weak link in blockchain is you, the user!
If you allow someone else to use your personal key to access the chain, or if someone finds it by hacking your computer, they can add information to the blockchain. There’s no way to stop them. This is how Bitcoin gets stolen in high-profile attacks on major cryptocurrency exchanges. It’s the companies that own those exchanges, not the Bitcoin blockchain itself, that have been compromised. And because the stolen bitcoins are transferred to anonymous users, in a process that’s verified by the blockchain and recorded forever, there’s no way to find the thief or get the bitcoins back. Tough!
What other uses for blockchain?
Blockchain technology originated with Bitcoin, but it is such a revolutionary concept that it quickly spread to other areas. A system that is constantly updated, accessible to everyone, validated by a non-centralized network and, above all, incredibly secure can be used in a large number of contexts. Financial institutions such as JP Morgan or the Australian Stock Exchange are developing systems using blockchain to secure and exchange financial data. Bill & Melinda Gates Foundation hopes to use blockchains to provide free banking services to billions of people in need.
Open-source tools like Hyperledger are trying to democratize blockchain techniques so that as many people as possible can use them while trying to reduce the astronomical amount of processing power required for security.
In short, blockchain is a tidal wave that will gradually make its way into our daily lives. If Bitcoin has one merit, it is that of having allowed the emergence of this phenomenon!
