🇺🇸 English version
Hearing its praises sung daily, it's easy to eventually lose sight of what blockchain technology actually involves, what it enables, and its limitations. Understanding how it works allows for the conception of ever more creative uses, but also an appreciation for the complexity involved in implementing some of these solutions.
Blockchain was created to solve a simple problem: traditional payment systems are based on the knowledge of the identity of the parties to the exchange. The validity of these identities is guaranteed by a centralized authority (the state, website administrators, a notary, etc.). But if one wishes to establish a decentralized payment system, that is, without a central regulatory authority, then the validation of the participants' identities cannot be ensured. This is the price to pay for an open, unregistered, and fast system. But how can one ensure at the same time that anonymous participants actually fulfill their contractual obligations, and that they cannot lie about the real state of their finances, nor retrieve the sum paid after the transaction? In the physical world, it is impossible to create trust among anonymous people because the ease of taking advantage of information asymmetry between participants preferentially selects scams over honest transactions.
The solution proposed by blockchain is to introduce a single element of indisputable and unfalsifiable centralization within a totally decentralized system: the ledger that serves as an indelible history of all transactions made. Therefore, to ensure the system's integrity, it suffices for all the validators ("miners") of the system to download the exact copy of the unique register of all transactions. They can thus verify at any time the accounts of each of the anonymous participants, and know if they have the necessary funds for the transaction. Once the transaction is validated, "mined", it is added to the register and thus becomes visible to everyone. Thus, anonymity and transparency work hand in hand to eliminate any possibility of malicious conduct. The term blockchain refers to the chain of blocks of transactions. To validate transactions, miners must solve a difficult mathematical problem. The first to solve it validates the transactions of their block, which renders all other ongoing validations by other miners null and void, thus preserving the uniqueness of the transaction history. Without this mechanism, called "proof of work," all miners could propose mutually contradictory transactions at the same time, and the principle of a unique ledger would cease to operate.
Launched in 2008, Bitcoin was the first practical incarnation of blockchain, and as such, cryptocurrencies have come to represent blockchain in the public imagination. In essence, blockchain can be seen as a way to monetize computations, since miners offer their computing power to validate Bitcoin transactions and are rewarded in the same currency. In 2014, Ethereum opened new perspectives by exploiting the full potential of distributed ledger technology: if cryptocurrencies are created by computations, that is, computer programs, why not generalize the concept and consider that blockchain will be a system for processing monetary transactions through automatically executed computer programs? By reversing the question in this way, Ethereum paves the way for the use of smart contracts, managing monetary transactions based on certain conditions freely defined by users.
All these ideas, imagined well before their implementation by Bitcoin and Ethereum, have for the first time demonstrated their practical validity and efficiency. Following them, many other blockchains have emerged: Polkadot, Cardano, Tezos, Binance Smart Chain, Solana, to name the most well-known. They differ in transaction processing times, validation fees, and thus their degree of centralization.
There is indeed a trade-off between security, network openness, and speed. The more open the network to the public, the more validators are needed to ensure the honesty of transactions, the slower and more expensive it is to use. Some blockchains have therefore opted for increased centralization, with few miners, to gain speed. Others have sacrificed openness, and are reserved only for identified members: these are the "permissioned" chains, like Hedera and Hyperledger, which are preferred by business consortia for networks connecting targeted partners.
Like any computer system, blockchains are not without flaws. Transaction security on the Bitcoin network was ensured by the implementation of a "proof of work," which is today criticized for the high energy consumption it entails. Ethereum initially based itself on the same mechanism but is increasingly suffering from it, as its complexity congests the network and leads to operating costs that have become absurd.
The second generation of blockchains uses "proof of stake," which no longer requires solving a problem and allows all those who own a sufficient amount of the chain's cryptocurrency to act as validators. Other proof modes include "proof of hold," reflecting the duration of cryptocurrency possession used on the network (token), "proof of importance," based on the validator's reputation, "proof of use," corresponding to the volume of transactions made by the user, or finally "proof of burn," whereby a validator destroys a portion of their holdings to prove their commitment to the protocol.
More complex techniques, such as sharding (segmentation of operations) and rollups (off-chain computations, less costly but based
on advanced mathematical concepts), are the current solutions presented to reduce the energy consumption of blockchain, which remains, however, in the same order of proportions as the activities of web 2.0 data centers.
As a technical solution, blockchain is a type of protocol in constant evolution. It mobilizes the best skills in network engineering, cryptography, economics, and electronics. The solutions it outlines have already given birth to a new way of thinking about entrepreneurship, commercial exchanges, and the valuation of digital assets. Beyond crises and bubbles, blockchain and web 3.0 will have a lasting impact on all sectors of the economy.