Blockchain: The Right Reaction to the Chain
British academic Michael Mainelli was already working on blockchains years before the term even existed. He explains why he finds the term “blockchain” inapt and describes what will remain of the actually not-so-new technology once the euphoria subsides.
Everybody is talking about “blockchain,” but is that the right term in the first place?
It, in fact, isn’t entirely logical that the industry and the media use the term so expansively. The term “blockchain” originated from the bitcoin context even though the word never appears in Satoshi Nakamoto’s 2008 bitcoin white paper. He did, however, speak of blocks that get chained together. I personally prefer the term “mutual distributed ledger” – MDL for short – because it encapsulates the essential features of the technology we’re talking about here. “Ledger” stands for a permanent record of entries. “Distributed” describes the architecture: The ledger is distributed across multiple computers. And “mutual” describes the ownership structure: The ledger is the property of the public domain. But I can understand that the term “blockchain” is a bit easier to market.
You mentioned bitcoin and the 2008 white paper that described it. Did that mark the birth of MDLs?
No. The technology isn’t new. More than 20 years ago our firm had already developed an MDL application for a company in the health care sector. We had a distributed architecture, a copy of everything resided on each computer, and everything was encrypted. Back then we still synchronized via cables or floppy disks, whenever two company staff members met. Like with bitcoin today, we used a mathematical formula to convert entries into a numerical code – a hash – and integrated it into the subsequent entry. We called that “sleeving” and spoke of “stacks” rather than “blocks.” But what we got was a chain – a blockchain, if you will.
Why didn’t this idea catch on back then?
First of all, we weren’t the only ones working on MDLs. But the world just wasn’t ready for them yet, as the saying goes. That’s a typical phenomenon. Internet protocols, for instance, already existed in the 1970s. And e-mail has been around for longer than just since the mid-1990s. But it took time for both to catch on. It’s the same with MDLs. Digitization is really just starting to boom. It’s only just recently that everything and everyone is online. Furthermore, in the 1990s, systems distributed across multiple computers were considered to be extremely unsecure.