Blockchain, the distributed ledger system run by cryptocurrencies, is increasingly inching into the mainstream according to technology news. It is becoming rather interesting How Blockchain Technology is Impacting Financial Services, and as blockchain creeps further and further into the mainstream, we will only learn more about how it works and the impact it is having on the financial world.
Currently, according to TechCrunch, many companies and other organizations that are building and using blockchains are doing so privately. This means that multiple blockchains do exist, and will likely continue to in the future.
Blockchains Can’t Currently Communicate With Each Other…
But how will blockchains communicate with each other if each one has been developed differently?
It’s a very good question. Right now, existing blockchains can’t talk to each other. That means that a bank using Blockchain won’t be able to communicate with another bank using blockchain, a hospital using blockchain won’t be able to communicate with another hospital, a bank won’t be able to communicate with a hospital, and so on.
Many blockchain observers believe that eventually, a protocol will need to be developed that allows blockchains to talk to each other.
Many who work in the space, including a recent MIT Technology Review, use the internet as a rough template for the projected growth of blockchain.
Before the development of what we know as the internet, there was no uniform approach to computer networking. Theoretically, the personal computer networks could have been individual and managed by network management software, or could have expanded without a central way of communicating together, just as blockchain is doing now.
The impetus to a common computer network was in part research and in part the Cold War. Both universities and the U.S. military wanted a unified infrastructure that allowed communication, both to facilitate research among institutions and for protection against an attack that might disable any one computer system. The internet protocol suite, with its individual elements of transmission control protocol (TCP) and the internet protocol (IP), were the result.
Security is of vital importance in blockchain as well. One of the chief early uses, for example, is likely to be financial services and the movement of money. If some nations develop their own cryptocurrencies, their financial system might become very vulnerable to attack.
But if blockchains could communicate, they could transfer assets and other vulnerable elements to a different blockchain once a threat occurred.
Blockchain communication could facilitate security by allowing movement of data from one distributed ledger to another.
Will Blockchains Communicate in the Future?
As a result, the move toward blockchain intracommunication is going on in several different fronts.
Computer scientists at MIT, for example, believe that the concept of the datagram, which is used in the internet as a “common unit of information” is able to be mobile across networks and should be used to develop an analogous concept in blockchain.
One company, Aion, is working on a process that would move information in a uniform way between blockchains. Its head, however, points out that development is only one part of the puzzle. The other is convincing developers of private blockchains that they need a public blockchain system.
Aion spokespeople, however, believe that one public blockchain system is not guaranteed. A large amount of organizational investment is being put toward blockchain development, and those organizations and investors will likely have a vested interest in their blockchain.
Still, if competing blockchains remain intraorganizational systems only, they are likely to encounter difficulty getting mainstream acceptance. That’s a problem for any business strategy that wants growth. So at some point, whether the system is analogous to the internet’s datagram or some other method, a public and interoperable system will likely be developed.