Blockchain Permanence: The Significance of Non-Reversibility in Blockchain Transactions

jenkinrocket (64)in #blockchain • 7 years ago

When the internet began to enact transactions across the web, there were some pretty serious problems with any exchange of money.

In real life when I hand you a dollar that dollar is yours. I can say all I want that I want the dollar(s) back because I didn't like the product or service, but there is no way for me to spend that dollar with you then go elsewhere and spend the same dollar with someone else. The spender also incurred certain risks, trusting their precious personal information with a merchant that might or might not take advantage. This trust needed always to be mediated by a mutually trusted third party that would ensure that transactions happened properly and resolve any disputes.

The internet allowed this sort of abuse to happen. Now, when a merchant received some form of fiat currency in electronic form, there was no guarantee that that currency hadn't already been spent elsewhere. The possibility of some error, or else of intentional abuse, was (still is) pretty enormous and banks and merchants take this into account when they laboriously profile individuals and write off a certain amount of fraud as inevitable and unavoidable.

Enter the Blockchain

The genius of the blockchain is that it allows, for the first time in the history of the internet, two parties to interact and make transactions directly. They can do this because each transaction is mathematically built into all previous transactions in a sort of math-ledger-chain that can't really be tampered with without doing the work to re-compute all of the chains from the point that any abuser is attempting to tamper on.

This robustness is supported by the fact that this ledger is widely distributed, making it ridiculous to attempt to alter the chain because, even if you could, it would require an amount of resources that cancel out any monetary incentive or benefit. Blockchains are considered trustless, or with trust built in, because it really does behoove everyone to play fair (and it's really hard not to play fair).

The Only Way is Forward

The implications of this for transactions are staggering. When you give someone a unit (or part of a unit) of cryptocurrency, that transaction is built into the system (and doesn't take place until it's built in), so that there's no way to take it back, or lie. If you try to spend the coin again it'll be compared against the transactions (blockchain) and rejected as illegal.

Every transaction is built into the distributed ledger, and all transactions are viewable by all parties. That's as permanent as you can get, even in person with the dollar example.

The great thing about the blockchain is that it has added a layer of permanence and stability to the internet and all sorts of transactions that happen on it, making the net a much closer analogy to the 'real' world in that any action you do can't be done twice and can't be undone (again, as in the example of the dollar).

This permanence is so significant that, essentially, it is ushering in a new age, one I can't wait to see. So keep those eyes forward, Steemians. The dawn of the blockchain future is upon us, and much like the blockchain itself, there's no going back.