We had an informative and eye-opening discussion with Artur Olechowski, Managing Director of Codete, about what people need to know about blockchain and whether it is still a trend and how it is shaping the tech industry in 2020.
Blockchain. Who hasn’t heard of it? The technology has been progressively shaping the tech discussion worldwide since the launch of the Bitcoin in 2009, when it appeared as an answer to the financial crash of the previous year, 2008. The main idea was to take power from the big institutions — banks, hedge funds — and give it back to people, making them independent from the powerful ones responsible for the crash in the first place. In other words, the insurgence of blockchain and the Bitcoin represented a revolution.
Tech-savvy people quickly understood that the underlying system behind the Bitcoin could be broadened and used to solve other trust issues outside the financial market. Now, it has been eleven years after Bitcoin and blockchain first came out. But the technology is still not as popularized as expected, and the gap of knowledge pertains even among the experts today.
The ongoing growth in technology has left tech enthusiasts with many unanswered questions. Therefore, in this article, we try to simplify the concept of blockchain, discuss its meaning and applications, and predict what future it holds for the industry.
For expert knowledge, we interviewed Artur Olechowski, Managing Director of our partner firm — Codete, an IT consulting and software development company specialized in digital businesses. RYDE has teamed up with Codete for support in product development, which will be entirely managed by the Codete team in terms of technology, such as updates and new applications, including our blockchain-based ones.
Can you summarize the concept of blockchain for us? What analogy could you make?
Blockchain is a database with a couple of specific properties and characteristics. Most importantly, it is decentralized and distributed, which means we don’t have only one server, but a network of machines which are communicating using peer-to-peer architecture.
The analogy we can make is a torrent protocol, where we have many devices sharing one file, meaning you don’t have to download it from only one server. Instead, we have many pieces in many machines around the world. You can think about the blockchain as a growing list of records or blocks, connected using cryptography. Each block contains information about the previous one.
Now, can you do it for a non-tech person? From everything that you told me, what is the essential aspect that you think that every netizen should keep in mind?
It is a way to store the data in a secure and very transparent way. You don’t have to rely on a single server, which can be owned exclusively by an organization — a company or an individual. With blockchain, we have a network of computers, so it’s much more spread, transparent, and immune to the attack. We are not putting all the eggs in one basket, let’s say.
So, what you are saying is that the security of blockchain relies on all the computers in the network?
Yes, exactly.
Is it true that blockchain is unhackable?
That’s a good question. First of all, there is no database or system out there, which is entirely secure — the same with blockchain. Anyhow, hacking the architecture of the blockchain itself is an arduous task. But you can use these unique characteristics I mentioned before to modify and influence the network. There are ways. In the history of the blockchain, there were some successful attacks, but it’s much more challenging to hack this type of database. But yes, especially smaller networks, with a small number of nodes, are possible to hack. For example, hackers can gather the majority of nodes, computing power, and then influence the records in their favor.
Then, the other computers in the network could find out about it eventually, or could it be done entirely silently?
There are a couple of techniques to acquire those nodes. You would either have to pretend that you are a unique user or gain the majority of computing power. You can also slow down the blockchain using DDOS attack. There are a couple of ways to do it, actually, not just one. It depends on the kind of results you want to achieve.
Blockchain entered the market with great hype. Then there was a downfall, and comparing to now, the storm is silent. As someone working with it since the early days, what is your analysis of the trend?
First of all, this technology started without hype in 2009. It was invented for only one reason — to support the cryptocurrency concept. In the past, there were plenty of cryptocurrency projects, but only one was globally successful. Bitcoin did it in a way that was unique — independent and secure. Satoshi Nakamoto, whoever he or they is (the person or persons who developed Bitcoin are hiding under this pseudonym), didn’t need banks anymore. They used a blockchain database to secure financial transactions without the involvement of any financial institution or country. Blockchain was the most significant source of Bitcoin’s success. The success of this cryptocurrency, and all the other ones based on the blockchain, initiated the popularity of the database itself. People began to see massive potential in this technology. At the peak of its hype, an enormous number of startups and well-established companies wanted to use it. There were plenty of lousy case studies, and blockchain became a buzzword. Right now, we are in a more quiet but also much more productive phase.
Does this mean that you believe it is still a strong trend?
It’s quite natural to have this kind of hype cycle with the peak of expectations and the troughs of disillusionment. We passed both of those stages, and soon we should see more interesting use cases. Right now, we are in an excellent place because we are trying to use it effectively and not only as a buzzword.
Right now, we are covering the post-licensing part — we can detect infringement and inform the author about it. We also help to collect remuneration for the author’s work. In the future, we want to go further and cover the pre-licensing part. We want to secure the rights of the author and make it possible to inscribe them in the blockchain. On the other hand, we also want to make it easier for the potential infringer to find verified information about the picture and make it easier to pursue the license. We believe most of our users want to be fair, but right now, it’s not easy — we want to change that.
So smart contracts could be implemented in this case?
It is all in progress. There are many technical challenges ahead, but we are quite far along the way with the PoC development, and we already have promising results. Hopefully, in the nearest future, we will be able to present it to the public with detailed technical specification
What other use cases you think blockchain is suitable for?
Blockchain is a ‘tool’, and I don’t think it has to repeat the success of Bitcoin in terms of its popularity. It should be used as it was designed — as a database solution, not as a marketing slogan. There are plenty of possible usages that allow us to create products with blockchain. Not only in the finance world, but also in other fields. As I said, blockchain is not a product — it is a database, and it can be used in many areas like healthcare or legal. Right now, it is becoming much easier to use, thanks to broader knowledge and new solutions that you can use to make implementing it easier than before. So yes, I believe there will be more and more ready-to-use products with blockchain technology.
Do you see it becoming common?
I imagine it will be used more as a background technology, not as an advertisement — as it is today. But, for sure, creating a sense of security is probably the biggest power of blockchain. Having the advantage of a distributed and decentralized database could be something relevant for many projects.
Just as Artur, we believe that now is finally the moment that we will see blockchain moving from being a buzzword to an effective solution for fields that require transparency and security. Especially for copyright-related issues, we hope to see it becoming one of the essential tools supporting its protection.