Can a blockchain find people offering rides, link them up with people who are trying to go somewhere, and give the two parties a transparent platform for payment? Can a blockchain act as a repository and a replay platform for TV shows, movies, and other digital media while keeping track of royalties and paying content creators? Can a blockchain check the status of airline flights and pay travelers a previously agreed upon amount if their planes don’t take off on time?
If so, then blockchain technology could get rid of Uber, Netflix, and every flight-insurance provider on the market.
Really? All these applications can also be built using 'normal' systems architectures. If you build them on a blockchain, then you also get:
- A very low rate of transactions
- A very high computational cost to mine new blocks
- A very high storage cost for each node
- No way to reverse transactions in the case of error or fraud
So somehow the benefit of putting these applications on the blockchain has to outweigh these costs. The only benefit I can see is transparency. When you have information that must be publicly available and immune to tampering, then a blockchain could be a nice way to achieve that.
But for these examples? I don't see any reason to use Ethereum or a blockchain at all to implement them. Can someone help me out here?
Looking at all these pessimistic comments I can't help but wonder if this is what the op eds in the newspaper looked like while the internet was being built. "its too slow, and even with our best compression transferring a movie would take a month. Not gonna happen. Computers are too expensive for most households." etc.
If you want to keep middle men in between most things that we could potentially do programmatically, thats cool. I'm on the hype train.
- low tx rate? not for long
- high computational cost? Security feature. Makes fraud/hacks very expensive. If you think energy conservation is more important, other chains don't have this cost (proof of stake).
- high node storage cost? mining fees & block reward more than outweigh this. not everyone needs to run a full node (but anyone can).
- no way to reverse transactions? feature. you can always add arbitration / escrow. openbazaar does this very nicely
If you go the traditional route, you will always have a company in the middle, taking their cut or selling you out behind the scenes.
That’s the intellectual blind spot which is making this so hard to understand: you’re invested in the technology and want to see it succeed, which means you’re inclined to minimize every downside and boost every possible use without asking whether something is better in addition to being possible.
Being old enough to remember when the internet was starting to go mainstream, there were op-eds like that but they got plenty of pushback because there were so many new things which you could do on the internet which were either impossible, unaffordable, or too cumbersome before. Yes, a modem connection was too slow to play a movie but you could read newspapers around the world, send email to anyone and have it arrive in seconds, download software or photos instead of having to drive to the store, research and trade stocks, chat, etc. and there was a clear path for technological improvements making that experience better over time. The average person could easily see things they’d like to do and the costs were getting more approachable every year.
In contrast, we have a ton of blockchain hype without a single legal use which solves a problem normal people care about better than existing, well-tested technology. There’s a lot of “that’ll change once these fundamental design flaws are solved in a way we don’t yet know how to do” hype being peddled by people who stand to profit if everyone buys in but, as during the dotcom bubble, that should inspire more rather than less skepticism.
I think the key thing is that even without understanding the technology most consumers could see "before I couldn't get access to this information/correspondence/map/ticket/catalogue/advice/news/opinion/porn and now I can" as an obvious life enhancement in a way which having anonymous miners as counterparties rather than the company providing the service and their bank isn't (not even if expressed in terms of a 3% fee reduction). Whereas with blockchain it seems like it's often the evangelists not understanding the consumers: to use examples from the article, I really care that flight delay information is easily available which is why the internet was much better than call centres but I really don't care whether it uses a distributed database or not and wouldn't fly with anyone I worried wouldn't honour the terms of my ticket. I care that ridesharing services have good availability, routing and safety, I really don't want them to be transparent about my location and payments to any interested party.
Now, there are many technologies which are very useful for certain use cases despite the consumer failing to grasp what's going on behind the scenes, from Java VMs to graph databases to torrents, but certain things tend to be true of them
(i) they weren't as exciting opportunities as the internet even if billion dollar businesses were built on them
(ii) the developers explaining why existing solutions were good enough if not more optimal in many respects were often right.
Exactly – during the 90s I heard from a ton of companies looking to get on the web. They needed help understanding the technology but in most cases there were clear benefits from making things easier to find, customize, etc.
I’ve seen the same trend for blockchain evangelists to have gone deep into that technology but have only a cursory understanding of the businesses they’re trying to enter. A great example is the retail purchase model which always comes up in Bitcoin discussions, which ignores the fact that most people think credit cards are just fine and like things such as fraud protection more than the hypothetical chance of a fractional overhead reduction. There might be room there but it’s an uphill fight and the value is capped at the lowest Visa, et al. are willing to drop their merchant fees to.
I think your comment about selling tech is also important because the model puts some unusual constraints on it: you can sell to developers by focusing on tech details but how many developers are paid to work on problems which require trustless distributed systems and low transaction volumes? Most big systems require the opposite.
>>In contrast, we have a ton of blockchain hype without a single legal use which solves a problem normal people care about better than existing, well-tested technology.
Maybe this is your blind spot? You assume it has to be legal to be useful.
But in any case, there are legal use cases that work today: sending money with very little friction, including no need to provide a trusted third party or the payee your personally identifiable information.
With Ethereum, we'll soon have social networks and markets that participants can trust will not have fees increased and terms changed once the platform has become dominant. So you can have monopolies without monopolists.
> Maybe this is your blind spot? You assume it has to be legal to be useful.
I'm looking at what it takes to go mainstream — if it's predominately used for illegal activity, that'll deter normal people and legitimate businesses from adopting it and increases the likelihood of government regulation. As a simple example, how many people would use a tumbler if that started being seen as probable cause for a money laundering investigation?
> But in any case, there are legal use cases that work today: sending money with very little friction and with no need to provide a trusted third party or the payee your personally identifiable information.
How many people care enough about removing the trusted third party that they will use this instead of Google Wallet, Square, Venmo, etc. (and, soon, Apple Pay)? Some people value that but it seems unlikely that it's enough to make up for the smaller network, processing delays, and exchange fees.
This is a common Bitcoin talking point, but it's not a good one.
There are over two billion people in the world who have no bank account or access to even basic financial services; “banking the unbanked” is much discussed in international development circles. Around 2013, Bitcoin advocates started claiming that Bitcoin could help with this problem.
Unfortunately:
* The actual problems that leave people unbanked are the bank being too far away, or bureaucratic barriers to setting up an account when you get there.
* Unless they use an exchange (which would functionally be a bank), they’d need an expensive computer and a reliable Internet connection to hold and update 120 gigabytes of blockchain.
* Bitcoin is way too volatile to be a reliable store of value.
* How do they convert it into local money they can spend?
* 7 transactions per second worldwide total means Bitcoin couldn’t cope with just the banked, let alone the unbanked as well.
* A centralised service similar to M-Pesa (a very popular Kenyan money transfer and finance service for mobile phones) might work, but M-Pesa exists, works and is trusted by its users – and goes a long way toward solving the problems with access to banking that Bitcoin claims to.
Advocates will nevertheless say “but what about the unbanked?” as if Bitcoin is an obvious slam-dunk answer to the problem and nothing else needs to be said. But no viable mechanism to achieve this has ever been put forward.
What subset of those people aren’t using a mobile-based banking system like Mpresa but do have the IT infrastructure to operate a cryptocurrency?
I’m all for helping spread modern infrastructure around but it seems like the current cryptocurrencies are taking on significant overhead to solve problems which aren’t pressing for very many people.
Those millions also need to be well-versed with modern security protocols to keep their cryptosavings from being stolen, and accept the fact that not only the transactions are irreversible (which I guess is okay, considering that neither are Western Union's or Moneygram's), but sending to non-existing null addresses does not return an error, so any typo, a garbled message or a man-in-the-middle attack is also irreversible.
Those people often don't have access to reliable internet or electricity, bitcoin does not solve any of their problems. Further, bitcoin is not spendable money for 95% of human needs, especially in the aforementioned regions. Exchanging bitcoin for spendable money in person is risky, inconvenient and expensive. Bitcoin is a terrible option for this population.
>>As a simple example, how many people would use a tumbler if that started being seen as probable cause for a money laundering investigation?
Filesharing is arguably in this category and maybe shows that it's possible that something not generally used for legal purposes and not in the mainstream can nonetheless become widely used. But yes there is certainly a risk.
>Some people value that but it seems unlikely that it's enough to make up for the smaller network, processing delays, and exchange fees.
Right now cryptocurrency is in its infancy, so it has a lot of drawbacks, but it has obvious advantages that anyone can see, like being able to send money from your computer, without first registering with Google Wallet, Square, Venmo, etc, to anyone, anywhere in the world who also has the software installed on an internet connected device. This is a fundamental innovation in money transfer. You're right that it may not be enough to overcome the advantages that large trusted third parties can bring to make it go mainstream, but the advantages it has are obvious enough that people can see it potentially doing so.
These things are always hard to judge but there's certainly plenty of prior art: there's a ton of CS history for distributed consensus, distributed attestation, etc. prior to 2007 and the proof of work concept goes back to at least the 90s – see e.g. http://www.hashcash.org or http://www.hashcash.org/papers/bread-pudding.pdf.
Anyone who spent time on cypherpunks-l in the 90s would also be familiar with the discussions of e-currencies like David Chaum's 1989 digicash (https://en.wikipedia.org/wiki/DigiCash) which did not use proof-of-work but did cover a lot of the same ground for anonymity, etc.
Of course Bitcoin built on previous ideas, but the ideas were more theoretical, in the realm of academia and obscure cypherpunk mailing lists.
The components of an iPhone (e.g. the touchscreen, microprocessor, RAM, SSD drive) OTOH were already mass-produced and widely adopted in consumer electronic.
I don't want to understate the iPhone's impact. It spurred the development of better LCDs, touch interfaces and especially SSDs, but it was undoubtedly still working off a more established base than Bitcoin.
The consensus algorithms predating Bitcoin required some percentage of participants to be trusted identities, so were quite different than what Bitcoin pioneered.
Hashcash was a very limited experiment that had no consensus system. Utilizing the proof of work idea of Hashcash to create an identity-less consensus system was more conceptually groundbreaking than iPhone's marriage of touch screen mobility and personal computing.
While the iPhone added a personal computer to a mobile phone, in a user friendly touchscreen package, the blockchain created something that was totally new: distributed consensus without known and trusted parties.
> If you go the traditional route, you will always have a company in the middle, taking their cut or selling you out behind the scenes.
The free market sure seems to be okay with this. Those middle men provide valuable services like chargebacks, lines of credit, the ability to quickly provide large sums of money without using wheelbarrows to cart them around.
> I'm on the hype train.
You, and almost every other blockchain proponent are so blinded by hype and greed you can't see the very real, very fundamental flaws in bitcoin and "the blockchain". Bitcoin attracts the perfect intersection of people who don't understand economics, math, computer science, finance, business, sociology, or politics. Bitcoin is deeply flawed in all those areas.
> Bitcoin attracts the perfect intersection of people who don't understand economics, math, computer science, finance, business, or politics. Bitcoin is deeply flawed in all those areas.
i can somewhat +1 this just based on anecdotal evidence. a bunch of guys released an ICO and gathered about 15 mil in funding who ive met. i expected them to be extremely smart but i've found that they lucked out and simply wrote up some docs coding barely anything. the idea...seems cool? but i think they're in way over their heads based on what i've gathered from speaking with them. ICOs seem like a crazy scam
This one makes me a little sad. I was very into bitcoin and blockchain ideas early on and the ICO fever has poisoned the well a bit. The money is attracting the types you're describing but IMO the only people who knew anything about BTC in the early days were exactly the kinds of people who knew a lot about about economics, cryptography, finance, business, government, politics, and philosophy. It seems obvious to me that the intersection of these things informed bitcoin's core design concepts. Some people think the system we have now is deeply flawed and needs a redesign, others don't. Those who don't might find it hard to see the utility in bitcoin.
> IMO the only people who knew anything about BTC in the early days were exactly the kinds of people who knew a lot about about economics, cryptography, finance, business, government, politics, and philosophy.
No, it was founded by, and primarily attracted, weird conspiracy theory spouting goldbugs whose motivation was that (a) they thought a gold standard was still workable (b) they had a pathological aversion to the concept of credit in a banking system. Literally, conspiracy theory. https://davidgerard.co.uk/blockchain/the-conspiracist-gold-b...
The scammers didn't come along just this year with ICOs. Scammers have been endemic in Bitcoin as soon as they were tradeable for anything else at all. Bitcoin was founded by starry eyed naifs and this always attracts predators. Sometimes, e.g. pirateat40, the naifs are also the predators.
If you think the desire for sound money is weird you'll never understand why we need bitcoin. The hard core gold bugs in the Libertarian forums circa 2008 STILL don't trust bitcoin because they can't hold it in their hand. You think these are the folks that invented it? They're typically not computer savvy in the least and would rather invest in canned food with a 90 year shelf life. In that diverse group there were a small subset of cryptography nerds who had worked on several digital money theories and iterations before actually inventing bitcoin. Those people knew a lot about finance, economics, politics, etc. People like to flatten groups into one personality and call them weird or fringe to auto-win an argument when the reality is a bit more complicated than that. I'll remind you that the early days of the internet attracted some weird characters too. Doesn't mean they were wrong to be excited, and it doesn't mean the people who actually invented it wore spiked collars and combat boots either.
> If you think the desire for sound money is weird you'll never understand why we need bitcoin.
If you assume your conclusion, then your conclusion follows. I understand the desire, but a wider need doesn't follow, because a pure gold standard hasn't been adequate to the economy we actually have since the late 1600s. One of the big problems bitcoin has always had is that wishing doesn't make it so.
> I'll remind you that the early days of the internet attracted some weird characters too
Often literally the same characters, the cypherpunks.
I see Bitcoin an amazing store of value as it is. Of course I'm excited for the improvements that are coming to it (ring signatures being used to increase privacy of the system, Schorr signatures to make multiple signatures aggragatable).
Cryptography is going through a new booming period.
Just skip the hype part and look at the math part..if an improvement is not using cryptography (for example the elliptic curve group directly), it most likely is not critical for scalability of the system.
> If you think energy conservation is more important, other chains don't have this cost (proof of stake).
Those chains don't exist yet in any meaningful sense; at this point, AFAIK, it's not been proven that an energy-efficient PoS system even can be created theoretically. If it turned out it could be done and then if it was done, I'm sure lot of the negativity would disappear.
The underlying sentiment behind pessimism, at least for me, is that it seems that in the blockchain ecosystem, all the incentives are aligned in such a way to have the market push us into stupidly wasting huge amounts of electricity, storage and bandwidth for no tangible benefit. No need to wait for energy-efficient PoS or other things - you can earn your money right now.
There are actually lots functional proof of stake coins like byteball and NEM for example (but I share your skepticism about long term viability of proof of stake BECAUSE it doesn't cost anything). I think the energy "waste" isn't waste because it serves a purpose. For someone to forge a transaction they would need to control a huge amount of hash power which would cost a fortune. On the other hand, there's always ideas like gridcoin that use that hash power to do scientific computations at the same time (best of both worlds?).
Thank you for your comment. Looking at all the doubt and hate about blockchain & cryptocurrencies on HN lately, I personally can't help but wonder where have all innovators gone.
Confirmation Bias at work. You're invested, so you want it to take off.
Yet none of those blockchain enthusiasts could tell me a
single USP that blockchains had over storage in a normal database on any concrete use case, with the sole exception of cryptocurrencies.
And the reason is simple: all those applications have none of the properties and problems the blockchain solves - which is an elegant niche solution tailor made for mutually mistrusting entities working together on a distributed ledger. That barely exists in real life.
Centralized systems are what you want in 99% of cases. They're more reliable, better controlled, have infinitely more throughput and usually, you want to be able to roll back transactions under certain conditions (fraud, mistakes, etc.)
Sure, you could store anything in a blockchain. Sure, something yada yada blockchain could "replace Netflix". It's just that apparently nobody can tell me _why_.
My only concern right now is that I can't short Blockchain technology because the relation of hype to actual usefulness and potential is so incredibly large that it will drag a big chunk of the tech sector down the drain.
In stark contrast to AI which is just as hyped, but isn't just supposed to "change everything" since years - it's actually starting to do so on a spectacular timeline.
> Yet none of those blockchain enthusiasts could tell me a single USP that blockchains had over storage in a normal database on any concrete use case, with the sole exception of cryptocurrencies.
> And the reason is simple: all those applications have none of the properties and problems the blockchain solves - which is an elegant niche solution tailor made for mutually mistrusting entities working together on a distributed ledger. That barely exists in real life.
> Centralized systems are what you want in 99% of cases. They're more reliable, better controlled, have infinitely more throughput and usually, you want to be able to roll back transactions under certain conditions (fraud, mistakes, etc.)
While we're high on the hype cycle for blockchains and crypto currencies, it's easy to find actors that do not understand the limitations of the technology. It has heavy drawbacks when compared to centralized systems. That is true, I agree with that part of your comment.
What your position misses, are the huge unrealized upsides of blockchain tech. It's natural, because they are potential, unrealized and, as such, difficult to defend. Let me try my hand at it anyway, as high level as possible so we don't get lost in use case minutiae.
Blockchain allows you to eschew the need for a single central trusted party. This allows for fluid ecosystems, removing the need for a monopoly/oligopoly in scenarios that today require one. This removal of a market deficiency is known to increase innovation, through competition.
If you find it difficult to imagine use scenarios for blockchain, look for deficient markets caused by the need for centralized trust: monopolies and oligopolies. In each, you'll find an opportunity to create a more competitive market through blockchain.
> If you find it difficult to imagine use scenarios for blockchain, look for deficient markets caused by the need for centralized trust: monopolies and oligopolies. In each, you'll find an opportunity to create a more competitive market through blockchain.
How? This is just vague handwaving that doesn't actually explain how the blockchain can solve real problems. As of now, bitcoin is the only demonstrable use case for a blockchain, and while I don't think anyone could convincingly argue that bitcoin is useless, it's not going to cause an economic revolution like the advent of the internet.
> How?
By simply eliminating intermediaries. A middle man always takes a cut somehow. If you can eliminate him, both parties can enjoy better rates. Here are some non vague ways blockchains can help real problems:
- What if a kind of youtube existed where advertisers paid content creators directly instead of youtube taking a large percentage? And it was censorship resistant.
- What if we could build app stores that don't take a 30-50% cut.
- How about an entire p2p marketplace without fees like ebay? openbazaar.org
- What about getting paid for things that are impossible right now because of CC tx fees? This unlocks microtransactions & an entire attention economy (see yours.org, steemit.com, more incoming)
- How about p2p digital rights management to allow artists to keep more of their income? Several in the works.
- How about any service that exists to keep records? I would love to see the day Pacer was replaced by a blockchain.
- What if a kind of reddit could exist without centrally moderated channels and armies of fake users?
- What if p2p rented data storage could be a fraction of the price of dropbox without selling your data?
- What if you could rent computing power in a p2p fashion?
- What if network/VPN rules could be tokenized in the hardware and network access could be metered and charged per minute in crypto?
- What if you could receive payroll as a minute by minute stream?
- What if the lottery was provably fair and 1000 times less of a ripoff?
- What if we could replace obviously flawed political polling with prediction markets?
I could write this list all day. Not vague handwaving, all of these things are being worked on or already exist.
> What if a kind of youtube existed where advertisers paid content creators directly instead of youtube taking a large percentage? And it was censorship resistant.
Youtube taking a large percentage has nothing to do with the nature of the technology and everything to do with the fact that they have no competition due to insane network effects and highly optimized research driven UX. Also hosting, indexing, and reliably streaming hundreds of TB of high quality video is not a trivial problem. Further, you cannot escape censorship when your concern is advertising revenue.
> What if we could build app stores that don't take a 30-50% cut.
Once again, this is not a technology problem: Google and Apple will never allow app store competitors on their platform, otherwise someone would have already done this (and it was done during the early iPhone days with the Cydia store available only by breaking Apple's security - no blockchain required)
> What about getting paid for things that are impossible right now because of CC tx fees?
The same problem exists with bitcoin tx fees such that all the proposed solutions to this problem involve finding a way to avoid the blockchain at all costs.
> This unlocks microtransactions & an entire attention economy (see yours.org, steemit.com, more incoming)
Microtransactions are not practical on the blockchain and most microtransaction concepts are DOA because nobody except crypto-enthusiast wants to pay 10 cents to upvote memes and cat pictures when they can do that for free, with a better selection, on sites like reddit. There is probably some limited potential for microtransactions when it comes to gaming or maybe publishing content, but once again, the real problem has very little to do with technology and much more to do with the fact that most content is crap and people don't want to pay for it.
> How about p2p digital rights management to allow artists to keep more of their income
Once again, not a tech problem. People would happily pay the artist if the artist self-published, but most don't do that because publishing through a platform or another distributor is the only practical option for discoverability. Once you're discovered, the payment aspect is a non-issue, e.g. famous artists who already deploy "pay what you want" style stores (Radiohead, Louis CK, Humble Bundle etc).
> How about any service that exists to keep records? I would love to see the day Pacer was replaced by a blockchain
Why? What problem does this solve? Storing records is already a solved problem. There are plenty of non-blockchain techniques for storing, auditing, and cryptographically verifying and securing records without any of the PoW drawbacks. Please offer even one practical example.
> What if a kind of reddit could exist without centrally moderated channels and armies of fake users
First of all, the blockchain does not solve the "fake user" problem, so I'm not sure what that means, but centralized moderation is not a problem for most people who just want to browse content and don't really care if someone gets banned for spamming "nigger" in comments. For those that really care about totally unbridled free-speech there are already non-blockchain alternatives like voat.co... what does a blockchain bring to the table?
> What if p2p rented data storage could be a fraction of the price of dropbox without selling your data
Economics of scale guarantees you'll never be able to beat a centralized solution like AWS when it comes to this type of thing. You might see some cheaper options for a time, but once the market catches up to the fact that AWS is achieving orders of magnitude cheaper storage than a faux meshnet of consumer harddrives, you'll find that this idea is totally impractical.
> What if network/VPN rules could be tokenized in the hardware and network access could be metered and charged per minute in crypto
Interesting idea, but nobody wants this.
> What if you could receive payroll as a minute by minute stream
Interesting idea, but there's no reason that employers would adopt this.
> What if the lottery was provably fair and 1000 times less of a ripoff
Not really a concern for those that operate the lottery.
> What if we could replace obviously flawed political polling with prediction markets
Vague, impractical and fraught with its own flaws.
> I could write this list all day.
Yes, but like 99% of blockchain related ideas, the problems that are actually solved are already solved without the insane drawbacks of PoW.
We also miss the upside of emailing everybody a huge Excel file, which would also accomplish distributed replication. It doesn't necessarily mean that most people fail to grasp the concept and enormous potential for sending a large Excel file, it's just that for their use case they have access to more performant tools.
> Blockchain allows you to eschew the need for a single central trusted party. This allows for fluid ecosystems, removing the need for a monopoly/oligopoly in scenarios that today require one.
Except that the system is designed for centralization towards the entity that has access to the cheapest and most subsidized electricity. While most popular cryptocurrencies have escaped that route, you can look into the variety of lower-league shitcoins, that are generally limited to a handful of miners - the rewards are just not there to compete with a giant centralized GPU farm.
What on earth tells you I'm "invested" ;) ? I'm just curious. I still don't know why you're so vindicative, I don't like either when companies use the buzzword "blockchain" in a wrong way.
Ok look, I have a stake here because I run a crypto fund but let's just be clear: in the beginning of money, refunds involved going to the person you wanted a refund from and demanding the return of your currency. It's not that different from how crypto works right now except that the transaction is much more provable. Over time, institutions that look a lot like banks will provide the refund abstraction on top of crypto, BUT that doesn't change the value of an immutable changelog for money.
Think of it this way, if you were building money for computers, it would have atomic transfers and a changelog. Those properties, it turns out, are very useful, mostly because people dramatically underestimate how many transactions are between semi-untrusted parties (I would argue it is the majority of transactions). Yes, right now, crypto is a step backwards for many transactions, but that's because institutions that would traditionally support currency can't properly model the risk so only the brave entrepreneurs who accept unbounded risk participate. Over time, like any technology, traditional institutions will accept it as the regulatory regime becomes more clear.
The analogy to the beginning of the internet is obvious (the only real question is whether governments decide to ban it).
Refunds not a big deal and no different than paying cash. Online stores have a reputation and reviews so if there's retailers out there scamming people the internet will find out quickly.
To be fair -- and I'm no blockchain booster -- transactional rollbacks should be modeled as separate operations and replacement transactions on an immutable log (or loggish thing, anyway). You can use bitemporal tracking to model invalid belief states, but your system should never be allowed to drop transactions.
Most of the practical use cases are illegal developed nations (because fundraising should be guarded for the elite). But there will be a developing nation that adopts the token economy, allowing for global crypto liquidity to flood in and be put to productive use. Stocks, bonds, notes, everything will be tradable on the global marketplace without KYC AML garbage. Just the free flow of capital to where it's needed most.
Blockchain is only innovative if you ignore the decades of DBMS development. There are very few cases where distributed consensus is needed (versus master/slave relationship), and even those cases can be served by a variety of consensus protocols with better throughput and performance characteristics.
I don't think the parent is a luddite for questioning very emphatic and rather baseless claims. The strawman you build is unwarranted IMO.
Household computers were a thing in science fiction long before they were possible and I don't recall anybody doubting you could eventually transmit movies over the internet in a reasonable amount of time.
Then you continue with the usual hand waving when people point out weaknesses in the bitcoin architecture. Because the last thing we want is for the hype to die and the speculation to crash, am I right?
>If you want to keep middle men in between most things that we could potentially do programmatically, thats cool. I'm on the hype train.
You can do things programmatically without using the blockchain. Actually nowadays I'm pretty sure that for the vast majority of transactions online no human is the loop.
>- low tx rate? not for long
What makes you say that? If you think about segwit/lightning and friends I'll wait until I see them working in practice. I'm still skeptical that these solutions will manage to reach high amounts of transaction without losing the decentralized nature of bitcoin.
>- high computational cost? Security feature. Makes fraud/hacks very expensive. If you think energy conservation is more important, other chains don't have this cost (proof of stake)
You make it sound as if proof of stake was actually a thing. Has any serious blockchain successfully implemented PoS at this point? I know many people are talking about it but it's still very much theoretical as far as I know.
>- high node storage cost? mining fees & block reward more than outweigh this.
I don't understand this argument. Nodes and miners are two different things. If you do serious transactions on the network you should run a full node. Are you saying that people who run full nodes should invest in a mining rig to offset the cost? What if they live somewhere electricity is not cheap enough to turn a profit?
>- no way to reverse transactions? feature. you can always add arbitration / escrow
Yeah by using a... trusted third party. How would you scale this? Well, I can think of a way, you could set up organization who would take a small fee to act as trusted third parties. With a high enough volume of transactions these organizations would have a low incentive of cheating for any given arbitration since loss of trust would mean the end of their business and they could be sued. They could also offer loans and other things the blockchain can't provide on its own. You know, like a bank.
>If you go the traditional route, you will always have a company in the middle, taking their cut or selling you out behind the scenes.
The bitcoin network takes its cut as well and these days it's not exactly cheap. And what do you mean by "selling you out behind the scenes"? Privacy issues?
It's not really clear to me how PoS is providing any security in Decred above that provided by the PoW.
If a single entity is able to get 51% of the hashrate why can't they effectively control which PoS tickets are selected?
Since the overall reward & transaction fees are distributed between both PoS & PoW, it seems to follow that at there will be fewer PoW miners resulting in less overall security vs. a pure PoW protocol.
Regarding third parties, on a blockchain you don't have to trust them to hold your money. You can set up a 2-of-3 scheme where if the two primaries agree then the third party never gets involved, and if they disagree then the third party decides where the money goes, and only then gets a cut. Advantage: in the absence of a dispute, this system is free.
Since when is the blockchain free? You still have to pay a transaction fee.
And with your scheme there's still the problem of how do you scale it? Even if you hope that you'll be able to settle the transaction without disagreement you still have to select a third party "just in case". I can't see working at scale unless you have "professional" third parties with good reputation who will be able to oversee a big number of transactions without being tempted to cheat the system. Why would these third party accept to work for free?
Maybe those parties would accept to be paid only in case of dispute but in this case (if the number of disputes is a very small proportion of all transactions) they'll probably ask for a significant amount of money to break even. You want this third party to be very reputable and hard to corrupt after all, that means that they must have a significant amount of money at stake. You don't want some dude doing it as his weekend project in his basement.
Furthermore the one contesting the transaction will have to be the one who pays the company because how could they force the other one to give money? In turns that means that this neutral third-party becomes biased, it has an incentive to side with whoever paid them to weigh in on the transaction since they've effectively become their customer.
That's kind of my problem with this entire blockchain thing, people are reinventing the wheel, telling everybody they're going to "kill the banks!" but they never stop to wonder why our current system works the way it does. I'm not saying that things are perfect as they are but if you don't learn from past mistakes you're doomed to reproduce them.
Yes, there's the standard transaction fee, but on Ethereum that would be about a penny. My point is there'd be no fee to the third party, in the absence of a dispute. In that case the third party would do no work. They don't even have to know about the transactions where they're designated "just in case."
The fee when there is a dispute would have to be higher; I'd argue that this isn't terrible, since it gives the primaries a stronger incentive to work things out on their own.
Obviously it would help to have some kind of reputation system for arbitrators. That doesn't necessarily have to be on chain; anything that lets both primaries agree on an arbitrator is fine.
The contract is what forces the payment; the money in question is held by the contract, and if the arbitrator makes the decision, the contract automatically deducts the fee from the held funds and pays it.
You're right that sometimes people ignore why the current system works, but the flip side is dismissing blockchain solutions without first understanding how they work.
Free? Who pays for the blockchain? Last I looked into it, each transaction requires about enough electricity to power a house for an entire day. That isn't very free.
That's an average including all the mining rewards, it's not actually paid by people issuing transactions. A simple transaction on Ethereum costs about a penny.
I agree the energy consumption of present-day blockchains is a problem; hopefully proof of stake will fix it.
I feel the same. I can't fathom the lack of imagination, and IMHO that's what it is. I've loaded Lemonade Stand on an audio cassette, and with the same fingers, I now type this on a black wafer on a plane.
There is no reason to use blockchain to implement every single piece of software. Blockchain's primary utility is as a cryptocurrency. There's a lot of profit being made off people's ignorance and everyone I see pushing this agenda are people who have no idea how software works and are not qualified to speak on the matter.
People have a problem: the software they have is not solving their problems very well. Before it was Oracle, then SAP then more recently IBM Watson and now it's blockchain.
A lot of business people don't realize they need to work closely with programmers to achieve their goals. The companies who know this are operating at global scale have nothing to do with blockchain in their architecture.
I know very massive entities with huge budgets in my region that are suffering intensely from their lack of a proper software engineering team. They don't even realize it so instead they just hire more manpower to deal with their bad backend systems. Oracle, SAP, and IBM just sell them garbage that solves 30% of their problem while introducing more problems and now they're eyeing blockchain cause they don't know better.
Even as a customer I recently had to convert my SIM card from post paid to prepaid with a telecom provider having revenue measuring in the billions. I go there and their system is down. Twice. They tell me this happens several times a week and have no idea when it will come back up. Ten employees that cannot do their job. I managed to catch them when their system was up and it took about an hour convert my SIM, and I had to wait there the entire time.
I feel that it's a failure for the people in charge to discern something that is going to solve their issues something that isn't. Most people just either accept the lowest bid RFP from a Banglore team or pay millions just because of the name behind the company.
This is a bit of a rant but I'm sick of how crappy everything is and a lot of this is very easy to fix. My credit union's website back in 2007 for a city in California was more useful and easier to use than what I have to deal with now from a bank with a yearly revenue in the hundreds of billions.
> and now they're eyeing blockchain cause they don't know better.
Or because they can't be seen ignoring a hype that too many others believe in. When decisionmaking for a publicly traded company you have to at least pretend to participate in the hype even if the only reason is a sufficiently large fraction of investors thinking that a sufficiently large fraction of their peers are believing in the hype. It's almost like magic.
This is the whole misguided overenthusiasm we have seen with BTC as well. Blockchains do change something fundamental: the ability to provide for the aforementioned services in case:
- You want to stay anonymous
- You can't trust a third party
I would argue that a functional society would not need any blockchain services as it would provide the necessary privacy defenses to do anonymous transactions and the means to enforce trust.
In the same fashion, it was argued that BTC would be useless in a correctly functioning banking ecosystem.
What these systems offer is not something impossible to do otherwise, it is a lower bound on the services a society can provide (assuming internet and computers).
If tomorrow a country has a Zimbabwe moment, people will switch to BTC. If taxis end up being to corrupt, an etherum service can take the relay.
A lot of the blockchain enthusiasts are anarchists or libertarians. They assume society is already failing or on the verge of collapse. They often fail to see that not everyone is in that mindset.
Even in a world in which taxis and other institutions are corrupt, it stretches credulity that my real concern when getting a late night taxi is that the merchant service might run away with my $25 and my credit card company might not refund me.
I've been in countries where there are major trust issues with taxis, and the very worst case I could imagine would be a service which signals to anyone watching that I'm on the street in the middle of the night, holding a smartphone which also has the ability to make irreversible transactions of a large portion of my cash holdings to an anonymous endpoint, and I'll probably get into the next vehicle to stop for me.
For a significant proportion of mooted cases where trustlessness is mooted as an advantage of blockchain technology, trustlessness doesn't actually exist and/or centralisation actually reduces problems with trust
Trustless doesn't mean reputationless. A blockchain based Uber-like service would function similarly with reviews by former passengers for individual drivers.
Sure, but my point is that the disadvantage of broadcasting to the entire world that I'm on a street corner in Quito in the early hours of a Sunday morning with a smartphone full of cryptocurrency (and for other reasons, having a public record of the details of every ride I've ever taken) is likely more of a concern than reducing the cost/trust of the dispatch/vetting service.
Reputation requirements result in higher prices for buyers, as it's hard for new entrants to come along and gain meaningful business, while the older entities suddenly have the incentive to "milk" the reputation they earned.
Meanwhile, with a credit card I can buy a product from Amazon or some joe-schmoe site nobody ever heard of, and have a guarantee that Visa will back me up if the latter is a scam.
You're paying those prices for Visa's reputation. Visa takes what, 2-3% of every transaction? Also, Visa has a record of every transaction you've ever spent. And as the Equifax case has shown, even big players aren't immune to hacking. You know what's pretty resilient to hacking? The blockchain itself.
At any rate, the advantage of Bitcoin/Ether is that sending Joe Schmoe your money doesn't mean you've exposed your credit card number and billing address (likely also your physical address) to Joe Schmoe. So there's pros and cons to either system. Refunds have existed since well before credit cards were a thing. Does it require a bit more of "buyer beware" ideology? Sure, but I don't think that's any different than a cash-based society.
I'm paying roughly 3% out of which I get back 2% through cashback on my credit card. For a net fee of 1% I get buyer protection and dispute resolution in case I and seller disagree. The higher the sum, the more likely I am to be interested in such protection.
The move to chipped credit cards (or Apple/Android Pay) also shields my real card number and makes information unusable in case of hacking. I already hide my address by having the card statements go to a PO Box and using that as my billing address, but I know that's not a widespread practice and some institutions forbid that.
We in Zimbabwe do not fully understand what you mean by "Zimbabwe moment"... please do explain. And also explain how this blockchain would change anything here.
Sorry, I mean a runaway inflation that led to trillion dollars bills to buy bread, as well as the impossibility to anticipate costs of look g projects without resorting to foreign currency.
what would a blockchain solve that any foreign currency would not do in that case? whats the benefit of a blockchain based system compared to dollar or euro cash in such a situation?
A blockchain is run algorithmically and you can't change the rules as you will. There's no way to create a lot of bitcoin out of nothing (except a hard fork, which mean creating a new blockchain), that prevent inflation.
I don't think blockchains provide any anonymity. You can try to provide as little information as possible about yourself, but there is nothing in the blockchain that facilitates anonymity.
A blockchain is like a big spreadsheet. It's not going to be anonymous if you start typing identifying information into it, but it certainly gives you the option of being anonymous if you care to do so.
In contrast, you cant make a bank transaction without linking your identity. This is what people are talking about when they say blockchains give anonymity.
It’s dangerously irresponsible to mislead people with statements which imply that blockchains provide anonymity because when someone’s identity is linked there’s a full, incontrovertible record of every transaction they’ve ever made which can never be removed from the public record.
If someone cares about anonymity, that’s a huge gamble to make that the system will never have a design or implementation flaw (in the case of things like zcash which are, unlike bitcoin, attempting to provide anonymity at all), and that everyone they ever do business with is trustworthy.
While this is correct, for that to be true a person would need to be using the same wallet address for every transaction which is contrary to default wallet behavior / best practices. I think people conflate the side effect of KYC regulation (mass identity linking) with an inherent weakness of blockchains when it's not. I can buy BTC directly from a person to a new wallet address and it is pseudonymous at that moment. My point is the blockchain doesn't provide or remove anonymity, its just a medium that does not require identity. Meanwhile, every bank transaction you make is recorded with your ID and its all sitting in a handfull of databases waiting to be hacked like equifax was. If used the way they were intended the anonymity could be miles ahead of where we are now (just ask the ransomware bitcoin hackers).
That’s only true if you posit that people actually follow those best practices at scale (is there any reason to believe that’s not false?) and that an attacker doesn’t know how to use a database. Otherwise you’re just betting that they’ll NEVER link your wallet IDs.
That last part is guaranteed to be false. Beyond the obvious capabilities of a state-level attacker, think about why Equifax has that data in the first place. People will buy things on credit and that depends on not being anonymous – churning IDs would be like only paying cash for everything, which is known not to be viable for anyone who isn’t rich. Secondly, think about how many businesses want this data for marketing purposes: you can churn wallets all you want and it won’t help when the vendors are passing that information to companies like Acxiom, Equifax, or Google.
The best practices I'm talking about are built into the client software and a user doesn't need to know about them (new address per transaction already happens in most wallets). Again, totally not claiming linking ids isn't a problem, its just being touted as an impassable blockchain problem which is the basis of this discussion. The problem exists because governments are forcing all onramps to link IDS, not because of an inherent flaw of the system. Even with that 'flaw' other proposals/experiments already exist and work really well, and will probably be integrated directly into bitcoin in the future. An equifax-like service could exist that establishes credibility based on holdings or the public history of an address you control, not necessarily an identified individual. There are some clear benefits to that, one being your identifying information is not put at risk.
Indeed - there’s no anonymity in BitCoin itself as all transactions are trackable. What anonymity there is exist because of external services like mixers/tumblers and the difficulty level of directly tying a given wallet to an individual.
Monero goes further and anonymises transactions between wallets.
> A lot of the blockchain enthusiasts are anarchists or libertarians. They assume society is already failing or on the verge of collapse.
You don't need to assume that to see obvious benefits of a blockchain. As long as there're stupid or evil people in society central authority systems like banks can fail, rob you or be hacked. Blockchain on the other hand is more reliable.
> central authority systems like banks can fail, rob you or be hacked. Blockchain on the other hand is more reliable.
The body of evidence to date suggests that you're much more likely to be robbed of your cryptocurrency through fraud or incompetence than you are to lose your traditional currency from a bank.
Furthermore, we've already seen examples of the "authorities" behind cryptocurrency executing a rollback to modify transactions they didn't like: https://www.coindesk.com/hard-fork-ethereum-dao/
I strongly dispute the notion that blockchain is more reliable. Maybe in some ideal universe where blockchain technology is not implemented and maintained by humans.
> The body of evidence to date suggests that you're much more likely to be robbed of your cryptocurrency through fraud or incompetence
Because the technology (right now? maybe we'll see cryptocurrencies built in hardware/os eventually) is for competent geeks, not that greedy people that store their bitcoins on exchange wallets (or use any central server). One has to ask oneself if the blockchain is more reliable for him, just as he does with other things like choosing doctors etc.
But there is no need for the whole mining thing if the only transparency is needed.
- publish all "transactions" (of any nature)
- hash (transaction | hash of previous transaction) and sign the hash
- publish signed hashes along the transactions
- give customers back signed hashes of their transactions
This way you have a system with proovable immutability and guaranteed inclusion into the transaction log. If anyone can come up with a signed hash of a transaction not in the log, it means the system isn't trustworthy and should be punished, through legal or market means.
By the way, we already have a system like this in place: Certificate Transparency. There is no way one can buy "tokens" in such model though, so there is no incentive to hype it ¯\_(ツ)_/¯
> If so, then blockchain technology could get rid of Uber, Netflix, and every flight-insurance provider on the market.
No, it can't. The hard part of Uber isn't the app and the architecture that gets cars to meet together, it's pulling all the shady under-belly moves to avoid taxi regulation or lobby it in your favor, all while being profitable. I've seen quite a few "how I made an Uber clone in a day" posts on here. The tech is boring and simple, the business model and empire is what's important.
Similarly, there were dozens of streaming sites before Netflix and Spotify, but they never took off. Talking with media companies, getting licenses, negotiating royalties, hell, even funding your own productions to attract talent, that's the hard part. Blockchain tech doesn't solve this, it just replaces the MySQL in their complex tech stack.
Sure, these companies can replace their database with blockchain, but that won't stop "middle men" like Netflix from existing, it just... changes their tech stack.
>No, it can't. The hard part of Uber isn't the app and the architecture that gets cars to meet together, it's pulling all the shady under-belly moves to avoid taxi regulation or lobby it in your favor, all while being profitable.
This is where the blockchain shines. You're not going to be able to sue a Dapp, or order it to be taken down. The only enforcement mechanism becomes going after end-users, which is much more difficult than going after the trusted third party running the service.
I think increasing the cost of enforcing restrictions on trade is great from a societal perspective, given using the political system to restrict trade is highly profitable and thus overly done, but whether it's good or bad is beside the point that this is something that the blockchain architecture can do that the centralized server architecture can't.
> This is where the blockchain shines. You're not going to be able to sue a Dapp, or order it to be taken down
Why not? If someone makes an app, which has to happen for a service to get users, that’s an endpoint which can be sued. The point where actual money is converted is similarly exposed, and attempts at obfuscation run into existing money laundering laws. Finally, a blockchain protocol which cannot comply with legal requirements can be banned entirely — and since they require public access, non-trivial data volumes, and regular updates blockchains are less resistant to filtering attempts.
You're right that the city can sue the coder, though the odds of success are greatly reduced relative to suing a company that runs a ridesharing service on its own servers, given the coder is not running a server, but they can't sue to have the Dapp taken down. And if the municipalities get too aggressive, the coders can go anonymous.
>>The point where actual money is converted is similarly exposed, and attempts at obfuscation run into existing money laundering laws.
This is vastly more difficult than a court order to freeze a bank account. Maybe in the future it will get easier, but maybe not. As it is, a Dapp has far betters odds of both surviving censorship and profiting its maker in the face of municipal opposition than a centrally managed server.
>>Finally, a blockchain protocol which cannot comply with legal requirements can be banned entirely
Censoring a blockchain is much harder to do than sue a company in Silicon Valley to stop operating their service in a city.
It's something not even within the legal powers of municipalities, so right there the blockchain is far harder to stop than a traditional company.
I doubt the US wants to become a country that prosecutes people for running software, or imposes a national internet firewall. Countries will have to choose between having an open internet and having the power to restrict commerce. Hopefully most will choose the former.
>>since they require public access, non-trivial data volumes, and regular updates blockchains are less resistant to filtering attempts.
No, it requires much more than what you imply to ban a blockchain. Users can use lightweight verification, which needs very little data, and rely on full nodes outside of the country. A government would have to ban TOR and VPS, and really any encrypted communication into/out-of the country to have any hope of stopping the blockchain.
Hi. I'm the author of the article. Thanks for your interest. I'm glad the piece is sparking a deeper discussion of the technical trade offs of the technology.
I just want to clarify that this article is one of many included in a full Spectrum issue dedicated to blockchain technology, which I had a hand in organizing. From the outset I was adamant that we acknowledge the costs and limitations of blockchains. Part of that treatment can be found in the last half of the overview.
But we also try to hit those notes in a separate piece, which you can find here.
- There are newer blockchain dApp platforms that are WAY faster than Ethereum (i.e. EOS, Quantum...)
- Proof of Work isn't the only consensus algorithm, there are ones with lower computational costs, such as Proof of Stake
- See IPFS, and there are other distributed storage solutions
- One can add new ledger entries that refer to previous ones, to correct them
Aside from transparency (and note that privacy is also an option on some blockchains), the main benefit is that smart contracts can eliminate the need for 3rd parties, but still provide trustworthy transaction settlements. Third parties such as the Uber organization, or a bank. The tasks they perform can be provided automatically via programmable transaction handling on the blockchain (smart contracts). Another benefit of distributed software is that it is more resilient (in theory - the global architectures are still being developed), no central point of failure or high-value target for attack.
> Proof of Work isn't the only consensus algorithm, there are ones with lower computational costs, such as Proof of Stake
PoS still doesn't exist in the real world, as far as I know.
> See IPFS, and there are other distributed storage solutions
IPFS has nothing to do with blockchains per se, though for better or worse (IMO for worse), the team working on it is also heavily involved with the cryptocurrency world. You might be thinking of Filecoin, which looks reasonable and had probably the only ICO so far that isn't total bullshit, but while I'm hopeful, we still need to see if and when it actually gets deployed.
> the main benefit is that smart contracts can eliminate the need for 3rd parties, but still provide trustworthy transaction settlements
Let's not forget about the most important drawback of "trustless" systems - machines know no mercy. You'd better be sure you've covered all potential problems in the present and the future, because if you make a single mistake in the code and lose all your money, there will be - by design - literally no one to help you.
(There's this idea of replacing laws with smart contracts that occasionally pops up on the Internet; it's a stupid and dangerous idea precisely because of that.)
* PoS was just an example - there are a range of consensus algorithms that are not proof of work, which was the very first one. Ripple is a "real world" blockchain that does not use proof of work: https://ripple.com/build/xrp-ledger-consensus-process/
> because if you make a single mistake in the code and lose all your money, there will be - by design - literally no one to help you.
Actually there are, by design, roll-back mechanisms that can be deployed if the majority of the network agrees to carry it out. I believe the current controversy in the Bitcoin network is partially over the removal of such a mechanism. Various other blockchains and blockchain-like networks have correction mechanisms. Also note, its not always about storing money - thats just one use.
With blockchains or distributed ledger technology in general you can replace an organization of people with code and logic. You need not dependent on people/organizations doing the right thing anymore. If you look at equifax or uber (e.g., god mode stalking) that can be a huge plus.
The biggest problem I see is that developers might want to seek rents from their contracts as organizations do from their activities. That would perpetuate the problems of inequity and simply update the technology underlying our society. If contracts were all free public goods on the other hand, things could change dramatically. There would be other problems to be solved (e.g., distribution of crypto currencies, move away from centralized mining to better alternatives, etc.) but there would be hope!
> With blockchains or distributed ledger technology in general you can replace an organization of people with code and logic.
I call BS on this. What application can replace people with logic attached to blockchain that also can't do the same with a simple database and code? (And I mean people doing useful work, not bureaucracy which hasn't been automated with macros yet) Blockchain is just a very slow database with distributed consensus. Apart from pure value transfer, what's the use case here where it's actually necessary?
Of course you can always use traditional databases and code to implement the functionality but then you need someone who runs the code! Even if all code is open source you need a way to verify that the code is actually running, which generally translates into trusting a third party – the company in question (e.g., uber). The third party can be completely removed with DLT — that‘s the unique feature. You don’t need companies anymore but can have direct interactions between users facilitated by a smart contract.
- A very high computational cost to mine new blocks
- A very high storage cost for each node
Those complains are most of the time coming from free lunch seekers.
The network have a value BECAUSE we inject value into it, and that's either direct investment or some energy spent during the mining.
It's an easy pitch. Not for all industries or markets, but broadly speaking, removing the need for trusted third-parties is a major leap forward.
And that's how those (trustless) decentralized ledgers should market themselves. It only needs to come down to that one simple thing: they increase the surface on which supply and demand can interact. The resulting friction generates wealth.
Lots of markets remained untapped because of that third-party need. Forgive the punctual essentialism, but increasing "capitalism"'s reach to those uncharted territories is good. In fact, it is precisely why I think it will take-off: the derived utility from an economic point of view is too high to be ignored.
Sometimes you don't need it to be trust-less or permission-less because some industries only have a handful players who already trust each other. That's not the full picture.
Obviously, there's an efficiency trade-off. But, don't make the mistake to throw the baby with the bath water. No system is perfect. No complex system behaves like it should. Bitcoin is imperfect. There are lots of bullshit and koolaid. Nonetheless, I believe the trend since Satoshi, with the long historical line of research he has built upon, published the Bitcoin paper is clearly upward. It should continue. Satoshi was the spark. Now (r)evolution will be incremental.
This is the point so many here are missing... blockchain allows free markets to exist where they didn't before. Look at Sia, there's so many people trying to make money hosting files that you can get 5 Tb of storage on the network for $10 a month right now, less than 10% the cost of Azure or S3. Sure that discount will shrink as more people start using the service, but this is allowing everyone to participate in the storage economy instead of the oligopoly of a few key players that we had before. When everyone can participate in the market the competition will lower costs and raise efficiency, improving the system for everyone.
This is an excellent articulation of the business case of blockchain. Too many people are getting on the hype train without being able to clearly define concrete and robust usecases.
All the good bits of blockchain, we already had in git: a transaction ledger with hashes for tamper-proofing. Git came out in 2005, based on work going back a few decades.
What we're seeing in practice is a lot of "Blockchain(tm)" products that are just this, and not actually a blockchain. Remember how Estonia has blockchains in everything and talks them up at every opportunity? Their local "KSI Blockchain" is just a ledger with hashes. https://davidgerard.co.uk/blockchain/2017/09/06/estonias-sma...
The Bitcoin-style decentralisation etc is not in practice useful for real things that aren't cryptocurrencies.
Transaction ledgers with hashes are great stuff! So if they get used more, that'll be the good outcome of "Blockchain(tm)" hype. But this article is just full of what are literally Bitcoin hyperbolic claims, with the buzzword changed.
This IEEE Spectrum "blockchain" issue has been consistently glib and lacking in detail. I'm very disappointed. This is supposed to be a magazine from an institute for engineers.
> All the good bits of blockchain, we already had in git
This is not true at all and shows a common misunderstanding of why the blockchain is useful.
The big breakthrough with blockchains and crypto currencies has very little to do with it it being a ledger with signed hashes. There are two main "good bits" of the blockchain:
- it provides a consensus algorithm to agree on a set of updates to the ledger. Not in git.
- it provides a mechanism for anyone to take part in this consensus algorithm while preventing sybil attacks. Also not in git.
And, as I said, this consistently turns out not to be the useful bit for applications other than cryptocurrencies. And the stuff that is actually used - and marketed as "Blockchain" - is pretty much git.
It's been eight years, "where's the beef" is a reasonable question by now.
A complex system that works is invariably found to have evolved from a simple system that worked. A complex system designed from scratch never works and cannot be patched up to make it work. You have to start over with a working simple system
People like analogizing blockchain development to the development of the world wide web.
Tim Berners-Lee launched the first website in Dec 1990, Google launched in Sept 1998. And in between there were many companies founded that did things that lots of people liked. These companies found widespread use and patronage.
Satoshi Nakamoto launched bitcoin/and the blockchain idea in Jan 2009, it's currently Oct 2017.
What besides trading cryptocurrencies, and endless(half-bakedly) pontificating on, are people doing with blockchains?
What simple, functional, useful blockchain systems are people actually using today that have potential to grow into more useful and complex systems later?
Multisignature funds are used by almost all blockchain project organizations and companies. That's a simple system that's extremely useful.
So blockchains give you the ability to open a secure account of valuable digital assets and authorize spending via cryptographic signatures and business logic.
You couldn't do that before blockchains, and it's not hard to imagine interesting variations on the theme: for example the Colony project that's on the top of HN right now.
It's a checkings account for cryptocurrency with spending conditions of the type "4 out of 6 members agree and the weekly spending limit is not exceeded."
Since blockchains are open source and programmable, that also means it's a checkings account that you can script in any way you want.
It's superior in that it doesn't require a bank. It's also an extremely transparent system, since blockchain transactions are visible to and auditable by everyone, and it has some strong security properties because of decentralization.
My understanding is that a blockchain is a distributed, immutable database. There must be some serious dollaroos floating around in consultancy fees for such a simple idea to be cropping up constantly and as a solution to almost every problem.
I could say: "My understanding is that software is just the code you put on the Neumann architecture. There must be some serious dollaroos floating around in consultancy fees for such a simple idea to be cropping up constantly and as a solution to almost every problem."
The thing is: not every problem is completely trivial to solve even if the basic idea of the blockchain is well known for some years now. I see progress, there are innovative ideas and implementation in the industry every year. It is not about the initial idea, the cryptoindustry is evolving just like the sowtware industry evolved. There may be more hype than necessary, but this stuff and its potential impact is real.
Trust-less veracity is extremely horizontal. This "simple idea" did not have a working proof-of-concept until 8 years ago, so it has not had much time to be realized as a broad solution yet.
Technically, I believe that has always been the definition of a hacker, even back in the 80’s. Since then it’s been movies and popular culture that have got it wrong. I believe that what most people think of a hacker, i.e someone who digitally breaks into a system, is actually a ‘cracker’.
I think it's time to stop fighting this fight--nobody I know, even among the security/tech literate, uses the word cracker. We may just have to live with the fact that "hacker" means two easily conflatable things, at least until another term actually catches on for one or the other.
I think hacker is the right term to use for someone who can pick up existing systems and modify their behaviour to suit other purposes, be it for fun or profit. Think back to ESR and RMS type of hacker.
FYI: I've put together a collection of blockchains (in JavaScript, Python, Ruby) and articles at Awesome Blockchains - https://github.com/openblockchains/awesome-blockchains . The idea is that to learn about blockchains build one (or two) from scratch. Not a crypto god? Or a JavaScript ninja/rockstar. No worries. Yes, you can. Happy blockchaining.
This is great, however the real strength of blockchain lies in it being a distributed database. These are all single node examples. Would love to see some examples of a simple network based blockchain
Add your single node example onto git than it's distributed :-). For rolling your own peer-to-peer network and nodes see the starter articles linked in the Awesome Blockchains page that include examples in JavaScript, Go, etc. Happy blockchaining.
It is spiritually based on your single node examples which I encountered earlier last week, so big thanks for that (was just enough to get me started).
Most of the logic resides in models/blockchain.js. You can interact with the node using the HTTP endpoints in routes.js.
Disclaimer: I have no idea what I'm doing, but it seems to work. Would love some feedback.
This is an open question, if you were to use blockchain to prove how much energy someone produced with their solar panel, doesn't this depend on a trusted configuration? Can't they feed in false data before the block chain part?
Yes and yes. This is the big pitfall i see so many ignoring - the real challenge if you're trying to interface with the outside world is establishing what the internal token means in the outside world without depending so heavily on a centralized weak link that the decentralization of the blockchain's maintenance is pointless. If the actors in a system don't trust each other enough to make changes to the database unilaterally, why would they trust that the other actors aren't lying about their on-chain/off-chain holdings?
My understanding is that blockchain truth is determined via a majority vote. What I'm really not clear on is how someone with a botnet can't simply take over a blockchain. With such large sums of cash at stake, it seems like a serious hacker would be much more interested in controlling a blockchain than doing silly DDOS attacks on some corporate website that slighted them.
Many of these systems are designed such that if you do have the computational power to attack the integrity of the chain, it is actually more profitable to put that power to use for legitimate mining.
Having 51% of the computational power does not let you just make up transactions on your own or transfer funds to your own wallet. What it does allow you to do is pay a counter-party, receive some product from them, and then go back and create a new chain where you paid yourself, instead of the counter-party.
In normal PoW, if you own a botnet, unless your botnet has a significant % (something like 25-51% depend9ng on details) of global hash power you're economically incentiviced to work on the main chain rather than try to "take over" the network
“Prisoners of War”; in Aztec cryptocurrency mining, blocks are allocated based on captives taken in ritual combat, who are then sacrificed to prevent double counting.
Alternatively, “proof of work”, as used in Bitcoin.
For that you need to have more than half of the hash power of the blockchain, which means, for bitcoin at least, billions of hardware investment. A hacker can't have such power.
On the other hand someone with significant influence over a small group of Chinese people still can, and not every blockchain is going to be anywhere near as distributed as BTC
What's wrong with writing in plain english? Reading that link, I can't help but get the feeling that either a lot of copy-paste from marketing pages has happened, or the author thinks marketing-speak is an acceptable way to explain things.
Can a blockchain find people offering rides, link them up with people who are trying to go somewhere, and give the two parties a transparent platform for payment? Can a blockchain act as a repository and a replay platform for TV shows, movies, and other digital media while keeping track of royalties and paying content creators? Can a blockchain check the status of airline flights and pay travelers a previously agreed upon amount if their planes don’t take off on time?
If so, then blockchain technology could get rid of Uber, Netflix, and every flight-insurance provider on the market.
Really? All these applications can also be built using 'normal' systems architectures. If you build them on a blockchain, then you also get:
So somehow the benefit of putting these applications on the blockchain has to outweigh these costs. The only benefit I can see is transparency. When you have information that must be publicly available and immune to tampering, then a blockchain could be a nice way to achieve that.But for these examples? I don't see any reason to use Ethereum or a blockchain at all to implement them. Can someone help me out here?