Over the coming days and weeks leading up to the official launch of ICONSENSUS, I will be posting several articles providing an overview of the ICON project with two goals:
For those who have never heard of ICON, but have established initial interest in the project, it is my goal to provide enough information to ensure that — after reading the entire ICON 101 series — they are as well versed on ICON as anyone else, with the ability to explain it to others in an educated manner. It is difficult to educate others about a subject if you do not fully understand it yourself; accordingly, the goal of ICON 101 is to provide that understanding.
For those who have heard of ICON, and have been paying attention, the goal is to provide a bigger-picture view with a reminder of the long-term goals of the project. The most dedicated ICON contributors likely follow ICON on a weekly or even daily basis. With news emerging on a regular basis, it is often difficult to examine why a new partnership or news tidbit might be important without re-orienting your perspective to the “big picture.” Having fallen into this trap multiple times myself, it was my goal to re-establish a long-term, big picture thinking on ICON to better understand the micro-developments occurring.
Here is the “syllabus” for ICON 101:
- What is ICON?
- ICON’s Genesis
- The People & Teams of ICON
- The Technology of ICON
- ICON Tokenomics & Economy
- Public vs. Private Chains & the Network Effect
- The Growing ICON Republic
- ICON Governance
- Possible Points of Failure
- The Future & Closing Thoughts
It is my goal to release each of these every 3 or so business days, but please have patience if there are any delays.
First, to understand ICON, it’s critical to have a clear understanding of blockchain technology — what it is, how it works, and why it’s important. Here is a basic definition:
A blockchain is a growing list of records, called blocks, which are linked using cryptography. Each block contains a cryptographic hash of the previous block a timestamp, and transaction data (generally represented as a Merkle tree)….
…The blockchain is a simple yet ingenious way of passing information from A to B in a fully automated and safe manner. One party to a transaction initiates the process by creating a block. This block is verified by thousands, perhaps millions of computers distributed around the net. The verified block is added to a chain, which is stored across the net, creating not just a unique record, but a unique record with a unique history. Falsifying a single record would mean falsifying the entire chain in millions of instances. That is virtually impossible…
…The three main properties of Blockchain Technology which has helped it gain widespread acclaim are as follows:
Let’s break down those three concepts.
Decentralization: There is no central entity with control over the blockchain, with the ability to unilaterally make decisions regarding the direction of the network. A decentralized blockchain cannot be shut down, because there is no one person or entity that can shut it down.
Transparency: The entirety of the blockchain is visible for the entire world to see. Blocks and transactions can be viewed by anyone with a desire to examine them.
Immutability: In a sense, “tamper-proof.” Because blockchain records are spread across an entire network of individuals, it is effectively impossible to alter the historic records of a blockchain once the blocks have been written.
Blockchain was first truly (and famously) implemented through Bitcoin, which was essentially the implementation of blockchain technology in monetary form.
Simply put, Bitcoin was “Blockchain 1.0” — the initial and, arguably, simplest implementation of blockchain technology. It was, and likely still remains, the most important blockchain. Not only was it the first “proof of concept,” but it also established a blockchain on top of our financial system — an area of our lives with one of the greatest needs for reinvention. Bitcoin is the oldest established blockchain, and will almost certainly remain in our lives for a long time to come.
However, as you may know, Bitcoin hasn’t been the only successful implementation of blockchain. Ethereum was the next meaningful implementation of blockchain, not just in terms of total adoption, but also in terms of serving as the next step in development and complexity of blockchain.
If you’re unaware of what Ethereum is, here is a basic definition:
At its simplest, Ethereum is an open software platform based on blockchain technology that enables developers to build and deploy decentralized applications.
Additionally, Ethereum allows for the creation of smart contracts:
Smart contract is just a phrase used to describe a computer code that can facilitate the exchange of money, content, property, shares, or anything of value. When running on the blockchain a smart contract becomes like a self-operating computer program that automatically executes when specific conditions are met. Because smart contracts run on the blockchain, they run exactly as programmed without any possibility of censorship, downtime, fraud or third-party interference.
While all blockchains have the ability to process code, most are severely limited. Ethereum is different. Rather than giving a set of limited operations, Ethereum allows developers to create whatever operations they want. This means developers can build thousands of different applications that go way beyond anything we have seen before. ( Source)
To better understand how smart contracts work, take a moment to watch this brief video:
Simply put, you could label Ethereum as “Blockchain 2.0” — the next phase of complexity and utility.
Following this pattern, it is not unreasonable to label ICON as a certain type of “Blockchain 3.0.”
To understand this, let’s begin with a quote from the ICON whitepaper:
“The ICON Project aims to build a decentralized network that allows independent blockchains with different governances to transact with one another without intermediaries. Anyone can create a new blockchain project and join the network. A new blockchain project is free to connect with existing projects and create new unique worlds, or blockchain multiverse.”
What does that mean?
ICON envisions a world where significant mass of our existing systems, technologies, databases, transactions, etc. are all run on blockchain technology. The insurance industry. Cities. Hospitals. Banks. Universities. The list goes on. Again from the whitepaper:
“A wide variety of communities tailored to each business are formed around the world in various fields such as finance, public service, logistics, healthcare, IoT, energy, manufacture (sic), and E-Commerce. With the development and spread of blockchain technology, these communities are expected to accelerate both in quantity and quality. In such an environment, most tasks will be handled through Smart Contracts within the community, and the role of many centralized agencies and intermediaries in each field will gradually shrink or disappear, accelerating the paradigm shift of business processing.
It is expected that changes to the community-centered work environment will not only affect the way the community works internally, but also fundamentally change the way works are handled between communities. In general, most communities initially begin with the goal of improving the work efficiency among the internal members of the community, but in many cases they evolve naturally in the direction of increasing transactions with the outside world.In this case, rather than handling external affairs through a separate centralized institution, the Smart Contract of each community will become the subject of the transaction and the works will be handled through the connection between the Smart Contracts.
In the megatrends that will result from the spread of blockchain technology, ICON aims to be in the lead by connecting communities to create an environment where all communities in ICON Republic can work in real time based on Smart Contracts.”
It’s one thing for various industries to create their own blockchains for managing their own affairs. It’s a whole different beast for these blockchains to interact with each other. This is because there will not be a “universal” blockchain standard when it comes to implementation. Hospitals may choose a different governance model than insurance companies. The economics of the bank’s blockchain economy will differ from that of a municipal government. Indeed, there are already hundreds of young blockchain projects in existence, each with their own unique features, structure, and operability. While many will not succeed for various reasons, it’s still important to note just how many different directions the technology can go in.
That’s where ICON comes in. ICON seeks to hyperconnect the disparate blockchains that dozens of industries will establish in order to create a globalized network of blockchains that can communicate, operate, and execute among one another in an efficient, decentralized, permissionless manner.
Here is an example of how that might play out in practical terms:
(Note: The concept behind the example I describe below was initially put forward by Markus Jun, formerly of DeBlock, in this Medium article, which is recommended reading.)
Imagine a student at a university requires surgery. On the day of her operation, she checks into the hospital. In doing so, she presents her digital identity — recorded on blockchain via ICON — and provides permission to the hospital to share her medical records, stored on the hospital’s blockchain, with her insurance company. Now, the insurance company can immediately — and automatically — process the claim, since the records are tamper-proof on the blockchain and do not require an additional party to verify them. Just through this process alone, we’ve reduced time (the process is virtually instant), resources (no paperwork to fax or mail), and labor cost (by eliminating the need for a 3rd party).
But it doesn’t have to end there. Let’s say that, following the surgery, the student must remain in the hospital for a few days to recover. She can then give permission to the hospital to share her records with the university to provide a formal excuse from attending class. Again, there is no paperwork, time, or labor costs in doing so.
Today, it is possible for the blockchains described above to exist internally utilizing a series of smart contracts: within the hospital (to maintain medical records), the insurance company (to track claims), and the school (to track attendance and curriculum records). However, there is no mechanism that exists that allows each blockchain to interact with one another as the example above described.
Throughout this series, we will be referencing the above example multiple times to help explain the ICON ecosystem, so please make sure to understand and remember it.
It is difficult to imagine blockchain adoption becoming truly widespread without the ability of companies, institutions, organizations, and individuals to interact with one another. ICON wants to be a part of that process, and they’ve already made considerable momentum in that regard (with the evidence for that assertion to be laid out in this series).
In the next part of ICON 101, I will dig into the institutional backing and genesis of ICON and why it’s poised to accomplish its lofty goals.