This article on Fortune.com, based on a book, isn’t up to date with the new ambiguity regarding the basic requirements to be called a “blockchain” which have been watered down considerably from when this was published:
“Today thoughtful people everywhere are trying to understand the implications of a protocol that enables mere mortals to manufacture trust through clever code. This has never happened before—trusted transactions directly between two or more parties, authenticated by mass collaboration and powered by collective self-interests, rather than by large corporations motivated by profit.
It may not be the Almighty, but a trustworthy global platform for our transactions is something very big. We’re calling it the Trust Protocol.
This protocol is the foundation of a growing number of global distributed ledgers called blockchains—of which the Bitcoin blockchain is the largest. While the technology is complicated, the main idea is simple. Blockchains enable us to send money directly and safely from me to you, without going through a bank, a credit card company, or PayPal.
Rather than the Internet of Information, it’s the Internet of Value or of Money. It’s also a platform for everyone to know what is true—at least with regard to structured recorded information. At its most basic, it is an open source code: anyone can download it for free, run it, and use it to develop new tools for managing transactions online. As such, it holds the potential for unleashing countless new applications and as yet unrealized capabilities that have the potential to transform many things.
Big banks and some governments are implementing blockchains as distributed ledgers to revolutionize the way information is stored and transactions occur. Their goals are laudable—speed, lower cost, security, fewer errors, and the elimination of central points of attack and failure. These models don’t necessarily involve a cryptocurrency for payments.”
It is now clear that operating a trust protocol is difficult and requires a not insignificant number of mining operations that fully expect to get paid for their work. To avoid this ramp up to riches some blockchain startups now eschew trust algorithms altogether; opting instead for solutions that claim trust is created because only trusted entities are given permission to mine. This is a far cry from the trust algorithm of Bitcoin identified in the Fortune.com article.
Overview by Tim Sloane, VP, Payments Innovation at Mercator Advisory Group
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