Public transaction records in the Bitcoin blockchain
The past year has seen an explosion of interest around “blockchain” technology, described on Wikipedia as a “distributed database that maintains a continuously-growing list of records called blocks secured from tampering and revision” (Wikipedia, original article). Success of the technology is demonstrated by the Bitcoin network, which employs such a data structure to record Bitcoin transactions publicly. The idea is simple. If one party wants to send money to another party, they create a transaction “block” which is sent out to all members of the network, approved by the greater network constituents, and added to the public blockchain, a sort of public record. Only after public approval is any transaction considered valid.
The blockchain model has been proven successful in that any attacks are usually evident immediately. This is due to the public nature of the record; because every party possesses a record of transactions, any falsification would have to simultaneously affect each and every record. And because the blockchain is public, no information can be “stolen”.
It is easy to justify why then financial institutions have begun to develop their own blockchains for their own transactions. But this is not without issues. The increased stake in blockchains has prompted several technological consortia to work towards a blockchain standard. However the core of blockchains involves decentralization. The Bitcoin network has, by its very nature, a low degree of centrality, because of the sheer volume of constituent nodes, and similar importance to each one.
Some of those involved in standardization of blockchains have commented that the regulations imposed by any external consortia merely reflects on the consortia itself and less on the importance or relevance of blockchains themselves. The decentralization of blockchains means that no single node has any substantial power over the network, despite its vastness, which is reflected by its resilience to hacking and fraud. But this also means that such a network is completely truthful – the blockchain cannot lie. So consortia trying to impose regulations on the operations of blockchains reflects a power grab, which despite good intentions, might not take a hold.
As the article points out, the newest and best work is often done outside of committees by the individuals using the network the most. At the end of the day, someone has to write the code to maintain the Bitcoin mining network, and standardization more often follows from what people actually do than from what makes the most sense.
(Source: http://www.coindesk.com/double-standards-the-push-for-blockchain-interoperability-could-get-messy/)