UK government urged to use Bitcoin-style digital ledgers | Hacker News Reader

UK government urged to use Bitcoin-style digital ledgers

bbc.co.uk

55 pointsLedgiNe64 comments

Would someone be able to explain why these ledgers are of any use for the gvt? My understanding is that what they really achieve is to established trust in a decentralised (p2p) system where none of the parties can be trusted.

But how is that relevant to a gvt? The gvt controls all its servers so what do these ledgers add? I also see these ledger technologies being proposed for financial transactions clearing systems. Again, what problem are we trying to solve here?

The article says security if a central server is hacked. But if a client gets hacked you are not really better off.

Plus my understanding is that these ledgers do not scale. Each transaction takes a lot of computing power.

It's just the current "Blockchain" frenzy. It's now a bigger buzzword than Bitcoin and everyone wants to use it for everything despite not understanding the basic concepts.

Satoshi's paper never included the word.

He talked about it as a "chain of signatures" in the paper, and it is very much the groundbreaking part of bitcoin. It was the necessary component for the creation of a distributed timestamping server, which was the missing piece to make a system like bitcoin fully decentralised.

I agree though that there is a lot of hype for "blockchain technology" and this seems like a weird use of it, since you already have a central third party that everyone has to trust.

"chain of digital signatures" was referring to the method of assigning value between owners via transactions (s2). That's not the blockchain, nor was it a new concept -- see bmoney, Wei Dai, 1998.

They described the blockchain as an "ongoing chain of hash-based proof-of-work, forming a record that cannot be changed without redoing the proof-of-work"

Thanks for the correction re: terminology used, it's been years since I read the paper.

It's a Merkle tree [1]. I don't see governments urged to use more B-trees or inverted indexes.

1. https://en.wikipedia.org/wiki/Merkle_tree

In the UK specifically there is a strong push by the public to prevent the government from being a large holder of public data. That is the reason we don't have a public ID card scheme, instead we have a distributed ID system[1] which is used to identify you. I would assume that this portion would benefit from stronger guarantees as there isn't a single arbiter of truth there.

[1] https://www.gov.uk/government/publications/introducing-govuk...

I thought the reason we don't have an ID card system was that it was too bloody costly.

That aside, one of the identity partners is Verizon, which don't even do business in the UK. What's their incentive here? Why is giving my passport or driving license details to Verizon better than giving it to Government, a branch of which issued it in the first place? Frankly I think it's nuts and not a win for privacy.

They do a fair bit of enterprise business, but not much in the way to customer facing.

The emperor spent a billion dollars on his new clothes. A small child pointed out that he's naked. He's presently trying his hardest to make naked chic.

Have you heard of the health benefits of being naked? Naked is so easy to clean. You never need to mend naked. Naked never goes out of style. Naked is easy to color coordinate.

It isn't entirely relevant to the emperor whether he succeeds in getting naked accepted as the latest fashion or not, as long as he succeeds in not getting laughed at. Being naked is ultimately survivable, being tricked is not.

I always liked Terry Pratchetts take on this which was "The Story of the Whole Crowd Who Were Rounded Up by the Guards and Told 'This Didn't Happen, OK? Does Anyone Want to Argue?'"

I strongly suspect that you would enjoy the writings of Izabella Kaminska over at the FT:

  Techies look upon the financial world and find its messy structures
  hard to reconcile with the physical reality around them.

  Which is why we’re going to propose that the blockchain fad is mostly
  about putting finance in terms that are understandable to techies — i.e.
  as something absolute – and having them learn for themselves through
  trial and error why that’s actually a flawed assumption in finance.

http://ftalphaville.ft.com/2015/10/30/2143506/if-you-call-it...

It's like how bank accounts are always used as an example when describing transactional systems, despite not working that way in reality (two near-simultaneous transactions can result in you having a negative balance, and this is a feature not a bug). Naive assumptions about how the world works can certainly produce software that is clear, logical and wrong.

However, what I hear there is "oh sure, you might be able to write software for all of these other things, but not this thing that I'm an expert in, that's way too complicated". Many people have been wrong about this in other domains, and it seems to me that essential complexity can only delay the point at which software can usefully automate things, not prevent it entirely.

>The study of money, above all other fields in economics, is the one in which complexity is used to disguise truth or to evade truth, not to reveal it.

-John Kenneth Galbraith, Money: Whence it Came, Where it Went

Maybe it's my problem, but that essay just sounds confused to me. Can you summarize what she's saying there?

Basic idea of double entry bookkeeping is that if you borrow money, it represents both an asset to you which you can spend, but also a liability (for the lender the reverse is true) because you have an obligation to repay it later, and that any accounting system should reflect all this lending that goes on. Knowing what they owe and are owed in future is as important to banks as knowing what payments they've just received and just made.

She's contrasting that with a "techie" view where all that matters is securely and immutably recording the fact that a borrower has received the "coin" (which represents mainstream blockchain implementations, though I'm sure blockchains could be designed to reflect debt relationships and even enforce debt repayment), and suggesting that what the distributed consensus actually records is only a subset of the relationships a centralised accounting/clearing system deals with.

She also pointed out that our financial system being built around debt relationships actually guarantees there will be some non-zero level of demand for dollars/Euros/Yen etc in future, whereas building the Bitcoin ecosystem around who holds the Bitcoin at a given point in time doesn't actually guarantee people will still want them tomorrow (especially if they owe repayments on dollar-denominated debt to buy BTC or mining equipment)

OK, that's essentially what I got, but that seems to refute the idea that blockchain should be used to replace all accounting(!), which is something that I never saw anyone advocate for. Bitcoin is just electronic cash, and that's how it was presented. And which can be, or not, tracked by accounting systems.

It just reads like a poorly structured argument against a huge strawman.

It's not particularly well structured and veers in the direction of straw man.

But most arguments in favour of blockchains as a superior way of doing things are centred around the idea that replicating cash is the most important thing about building a monetary system, when cash is actually the least important (and most likely to be deprecated!) part of the monetary system the world today is built on. If you still need a separate authority or method of reaching consensus to reconcile debts, then making the record of who controls the assets independent and immutable is a bug of the monetary system rather than a feature.

It would be good if there was a way to bet against Blockchain technology in general. Prediction markets seem like the only option currently available...

Some amount of decentralization is still nice for them I guess. The big problem they don't have to solve is an anonymous defense against a Sybil attack.

They would probably be better handpicking a group of institutions / people / orgs and have them regularly sign statements of what's been going on since last time.

I have never heard the term Sybil attack. I presume in the case of bitcoin a Sybil attack would be having your private key stolen?

The term refers to subverting a reputation system by creating loads of spurious participants. See https://en.wikipedia.org/wiki/Sybil_attack for details.

With regards to Bitcoin: The value in a distributed block chain is to ensure participants don't double-spend their coins. An attacker in a Sybil attack would spend their coins, broadcast the transaction and (after the recipient believes he's received the transfer) use fake identities to "vote against" including said transaction in the public ledger. That way, he could then go on to spend the coins again. To prevent this, Bitcoin uses a proof of work function: each participant in the network gets a share of the voting power corresponding to the effort he or she spends on calculating sha256 hashes, not to the number of identities one represents.

> To prevent this, Bitcoin uses a proof of work function: each participant in the network gets a share of the voting power corresponding to the effort he or she spends on calculating sha256 hashes, not to the number of identities one represents.

Which leads to the problem that whoever can spend the most money on computing power gets the most votes.

I never understand why some people can't use Google and choose to publicly announce their ignorance.

I never understand why some people always insist on writing the pointless why did you not just Google it response. I am also not convinced that he did not Google it and was asking about clarification about the parents intent. Furthermore not everyone thinks publicly admitting you don't know everything is shameful.

The one possible benefit would be immutable databases.

But can't this be achieved with a simple cryptographic signature?

No, because you need a chain to know if things haven't been removed or added.

It could lower fees for them, increase security, and they could do away with SWIFT, making transfers last minutes rather than days. It won't be public and won't have much to do with consensus or "P2P".

Don't have time for an explanation right now, but saying "why do they need a blockchain if they could just use a replicated database with cryptographic signatures?" is like saying "why do they need a database if they could use a flat file with a query engine?"

> Plus my understanding is that these ledgers do not scale. Each transaction takes a lot of computing power.

This is a particularly gross distortion of reality by people who for whatever reason want people to believe cryptographic currencies won't scale.

In the infancy of a currency, when there aren't many transactions, the mining power amortized over each transaction will be much more than when many transactions are happening. Each transaction doesn't take mining power, the number of transactions and mining are completely decoupled.

Well, the above poster is half right. Blockchains don't scale as well as, say, a distributed database. It's not due to computational constraints, it's the amount of data handled by every node.

Bitcoin can currently handle about 2 transactions per second.

> Bitcoin can currently handle about 2 transactions per second.

First, this isn't the real number and second 'handle' doesn't describe the situation, which is an artificial limitation built in as an artifact. Whether you are in the camp that believes this will be worked around in bitcoin or not is irrelevant, on a technical level any cryptocurrency can be created that can handle MANY more transactions.

Right now you could sync to the blockchain on the bandwidth T-Mobile gives for free while on international roam in 100 countries.

So the amount of data handled by every node is not even close to any sort of practical limit. Anyone with Netflix could sync to 50x the number of transactions.

I agree with the above and you make a fair point, mine still stands though: a decent distributed db could still do substantially better.

Do better at what? Handle more data? Of course, but computers aren't exactly struggling with handling enough integer math to move a balance from one place to another.

That isn't the problem with things like this. The problem is trust, transparency and accountability. The old "A rasberry PI could handle the same amount of transactions" misses the point completely.

We’re already doing this in UK Government (well, minus some of the bits of blockchain that we don’t want). GDS blogs about our Registers platform regularly. More info:

https://gds.blog.gov.uk/2015/09/01/registers-authoritative-l...

https://gds.blog.gov.uk/2015/10/13/the-characteristics-of-a-...

The specification of our Registers is on the OpenRegister project: https://openregister.github.io/specification/

Would you care to comment on why gov.uk is using 3rd party analytics scripts run by a company based in a foreign country on the online tax assessment form for UK citizens?

Getting rid of that massive privacy and security hole would be a much better use of your time and resources than farting around with the blockchain.

Ouch. That is a pretty serious security hole on a tax website, they're using Google Analytics - google or someone who breached their security could entirely take over the tax website and record all the data.

Wouldn't it be a lot safer to handle their own analytics with a self-hosted solution rather than paying google for it? At the very least they could self-host the js so that they control what is being run on their own domain.

I don’t know about HMRC’s solutions and I haven’t looked at the tax self assessment form so I wouldn’t like to comment on that.

On the main GOV.UK we use Google Analytics Premium; Google certify that information in a premium account will not be inspected by themselves. They also self-certify as a Safe Harbour supplier[1], although obviously with the framework having been dissolved late last year that’s up in the air. I’m also informed that we truncate the IP before sending it to try and mitigate potential geolocation.

Obviously I’m just an employee of GDS: none of this is an official statement.

[1] https://www.google.com/policies/privacy/frameworks/

Looks like interesting work.

But is this actually a blockchain at all? Isn't it a signed database which could be central or distributed (with distributed not giving you any significant advantages but lots of downsides)?

I realise the word blockchain is trendy (which is probably why this 'chief scientist' has latched on to it), but it doesn't seem applicable to me to most of the problems faced in government, which are better solved by cryptography and a certain degree of centralisation of data. Why would we want a distributed NHS register of patients for example?

The security issues and complications with untrusted nodes and distributed consensus are legion, and the blockchain as used in bitcoin is a particularly inefficient way to address them (proof of work etc).

It’s not a blockchain, it’s a Merkle tree (at least as far as I understand it, I’m only involved with Registers at the presentation layer).

The goals here seem to be data immutability and protection against tampering data. (like in spy movies, when someone hacks a government server to add fake passport data, this should be impossible)

Also as elmar pointed out, they can have a robust network with no single point of failure.

But in a crypto-ledger system, if a computer in the UK embassy in Kenya is infected, you will still be issuing fake passports. This is effectively moving the problem away from a central server to all of the clients, and I am not sure this improves security.

I would assume that cryptographic signatures are a better protection against tempering.

It doesn't move the problem, it prevents it in certain scenarios or makes it more difficult. The scenario you describe is already a valid method of attack.

Decentralized consensus does not solve data immutability. The append-only feature in Blockchain does that. So, you only need an append-only DB, without any form of decentralization, to do the same job.

The article is about blockchain technology (the title is misleading). So the append-only feature is implied, at least I hope so.

Guess the question is why you want a network of nodes, all of which may append a fake record, if you only want no one to change the data.

No can append a fake record without the matching private key needed to sign it.

Yes, the point is that decentralization consensus doesn't help.

Now you're moving the goal posts. It does help because it adding or removing from the chain will be noticed.

A simple git repository with signed tags (assuming the key is well protected) would provide those features.

There are use cases where a distributed database is a better tool, the big advantages you can scale multiple nodes and have a very robust network with no single point of failure and you no longer have to worry about the individual security of each node.

The downside you have to replicate all the database in each node or at least in several nodes of the network, you can have a sub-node structure.

If you depend on computation power algo for synchronization you can have very expensive hardware and electrical bill.

If you use others alternatives like prove of stake you can do it with very modest hardware.

Having read the intro the report, I don't think there's anything they're suggesting that can't simply be implemented with a spreadsheet in git repo. But that isn't as sexy.

Government has already shown reluctant to share data, c.f. the Open Data movement. National and local government still use Excel spreadsheets, and you still come across the occasional scanned-in PDF. Why do people think they're suddenly going to adopt some flashy distributed ledger tech? Why do people think that's the important problem to solve?

It's a solution in search of a problem. It doesn't even solve the actual problems of trust and getting good quality data released. Blockchains often seem to be an expression of technologists' distrust of government, as though it'd all be better if other people could be replaced with code, when in fact it would undermine democracy [1].

The idea of GDS being mandated to explore the use of a specific technology is ridiculous. They should be using the technology that they choose to solve problems that people actually have.

Ultimately, this sort of hyperbolic all-in report does serve to pull the conversation in a particular direction (openness, machine-readable data), which is good, but it simultaneously undermines it by being likely to fail.

[1] http://tom.loosemore.com/2015/11/01/blockchain-vs-democracy-...

Can this blockchain technology really leverage the big data prospects of the cloud?

^ Not sure if serious or just creating a sentence out of buzz words.

Why use blockchains? Blockchains for government make excellent sense for distributed data entry, such as processing that can happen in many locations.

Imagine many administrative offices that can create many drivers' licenses, or many city inspectors on many sites, or many doctors in many hospitals -- all with distributed capabilities to create data that is securely signed, tamper-resistant, immutable, transparent, accountable, and fault-tolerant.

Kudos to Sir Mark Walport and the UK.

We already have a much simpler model for an immutable database with distributed data entry: it's a DVCS. With GPG signatures (like git tag -s), it's also signed, tamper-resistant and accountable.

Blockchains are a solution to a much harder problem, where consensual order is crucial and nodes are not fully trusted.

The BBC article doesn't say much, and probably raises more questions than it answers. However, it is worth reading the government publication it links to, which was published today. Link is https://www.gov.uk/government/publications/distributed-ledge... , or more directly https://www.gov.uk/government/uploads/system/uploads/attachm... . This publication does answer some of the questions in these comments.

If you replaced "blockchain" with "encryption" this article would make sense. Ironically, the UK government is very disinterested -- antagonistic, really -- to using encryption to protect private data.

I'm surprised there's been no mention yet of government transparency and accountability. This is one of the widely touted advantages of using a blockchain.

Another good example is George Galloway, who is running for mayor of London. He has committed to running the city's budget on a blockchain if he gets elected (he wont get elected but it's a nice idea) - https://www.startjoin.com/blockchain

The basic advantage of the blockchain is to replace government not to upgrade it.

Looks like people don't like the concept of a society without government :)

How do you plan on preventing the existence of governments? Do you intend to restrict the freedom of me and my friends and business partners to form a government for our mutual aid? And if you do, with arms, aren't you a government?

"The government is always the most successful group of gangsters"

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