If it is not radically neutral and decentralized, it is not a blockchain
The word “blockchain” was long ago adopted commercially by large international conglomerates and used interchangeably with “distributed ledger.” In corporate offices, the notion of a “private blockchain” dominates the conversation.
But is a private blockchain really a blockchain, in the sense of Bitcoin? No, not really. It is instead a distributed ledger. Anyone can join the Bitcoin blockchain. On a private blockchain, you have to be invited, and a few key stakeholders control the network.
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A marketing tool
The term blockchain has served as a marketing tool for CMOs: they adopt “blockchain” to appear disruptive, cutting-edge and innovative. They are not. When corporate America discusses “blockchain”, they are only discussing a database of signatures.
Bitcoin is decentralized. There is no reason to trust anyone. Bitcoin allows anyone to use software without authority – a world where you can verify the truth for yourself. You don’t trust the nodes, the miners, the people making transactions, etc. You only trust the result of your own verification and validation of the blockchain, and ultimately the network effect.
Bitcoin is the first technology to have decentralized security managed by calculations. While previous security models have been based on concentric circles of access and control, in the form of an institution, Bitcoin’s security model is open and accessible to all, based on market forces and game theory.
In this first market-based security model, a series of incentives and penalties ensure that the platform remains a neutral arbiter without the need for intermediaries.
The open blockchain
Bitcoin revolutionized trust. It introduced the “open blockchain”, as opposed to the private blockchains presented by corporate America. In the bitcoin version of blockchain, you are able to run a decentralized trustless system without relying on anyone as a trusted intermediary, which is the main disruption and essence of blockchain.
Smart contracts are an attempt to implement trustless technology like Bitcoin, but achieve this only if you don’t have to trust anyone to execute the smart contracts correctly, which can only happen if everyone participates in an open way and verifies each other with access to the underlying consensus algorithm and mining is open to all.
Bitcoin, and by extension the underlying blockchain technology, is about network-centric trust without third parties. The network is a trusted party and only if you confirm everything neutrally, because it does not serve the goal of an organization or institution. It follows the consensus rules neutrally.
There is no such thing as a good transaction or a bad transaction, a valuable transaction or a spam transaction, an authorized transaction or an unauthorized transaction, a legal transaction or an illegal transaction. True blockchains do not care about the sender, receiver, value, asset or smart contract being executed.
The technology is radically neutral, and resistant to censorship. The system must be and remain open, borderless, neutral and defend its properties by making it impossible for any actor or cooperating actor to censor, disrupt, blacklist, restrict or otherwise inhibit the network. Most importantly, these new, open, decentralized trust systems are not dependent on institutions.
