Microsoft and Bank of America collaborate with Azure Blockchain as a Service
news.microsoft.com
news.microsoft.com
I've heard buzz about "enterprise blockchains" several times, but I still don't understand what this brings that an authenticated REST service on top of an SQL database doesn't.
(More directly, it's not easy to sell nor charge a lot of money for just a database, so this is a genuine advance in sales technique.)
The cost of going from 99% to 99.999% can be a 100000x increase in the software space.
For reference Bitcoin has a 99.99% uptime per http://www.bitcoinuptime.com/
In the case of FIX, the reason it was widely adopted was that a buy-side client (Fidelity) demanded their brokers (developed with Goldman, then taken up by others) adopt the standard.
I understand why Microsoft would want to support this. I can understand why BoAML would want this. Where I'm failing to see how this initiative will succeed is there seem to be missing a buy side participant to demand implementation. Perhaps BoAML has some sort of leverage with other market participants to get them on board? Recording transactions from one arm of BoAML with another arm of BoAML doesn't make sense to me. There are already internal systems to handle transaction recording.
There's an interesting primer on the subject here: http://www.truthcoin.info/blog/pow-cheapest/
You can still get the benefits of verifiability, append-only, detect misbehavior etc without it. See for example Certificate Transparency (RFC6962) for a standard that implements those properties using similar Merkle Tree constructions.
Disclaimer, I have a startup that generalizes the same Verifiable Logs (and also allows for Verifiable Maps): https://www.continusec.com/
For example, in the case of certificate transparency, that the CAs aren't mis-issuing certificates, and further that the logs aren't conspiring to hide entries (such as via split views).
It sounds like a means of getting a distributed database that actually works, with no central admin. That's no small thing.
If you don't like the externality costs of mining - I'm with you. But that's the government's job to manage, and seemingly, they're ok with that. They even subsidize the network by requiring that some goods only be purchased via blockchain.
I'm curious how you're defining efficiency here. If it's "nearly 100% efficient", does that mean it's 99% efficient? 99.999% efficient?
If 100 people compete on a block and 1 person is awarded the block, then isn't it 1% efficient and 99% wasteful?
From the network's perspective, everyone collaborated to make that block more secure. The more hashing power you have, the harder it is to subvert the network.
"Wastefulness" in this case can only be expressed by comparing energy spent per hash to the most efficient extant computer which could hypothetically be used by an attacker. In this case, Bitcoin is already mined using specialized ultra-efficient ASICs, so by this standard it is not wasteful.
The rational actors aren't collaborating to make the network more secure, they're competing to get the reward.
In fact, the asics you mention is why the network isn't that secure. They create an economies of scale that allows the network to be controlled by a handful of Chinese miners, who in turn won't fork useful updates.
That means the redundant work being done by the miners is wasted.
That is not true. The proof of work is the mechanism required to prevent users from casting arbitrarily many (fraudulent) votes on blocks because Bitcoin is anonymous. If Bitcoin were not anonymous, you could just give one vote per block to every user and everything would be fine. But Bitcoin is anonymous and the proof of work essentially only replaces knowing all users by making it hard to cast a vote and in consequence even harder to cast many. So the proof of work is logically the component in Bitcoin establishing some kind of identity for users and has nothing to do with the creation of value.
If you need distributed state, use Paxos, raft or be OK with having a single point of failure.
Also, ponzi schemes require that money from users be stolen to pay off new users. Instead we pay miners to secure all the Bitcoins in the network by burning power (IE, just like a job, you use 8 hours of energy and you get a paycheck)
12.5 BTC every 10 mins => 12.5 / 600 per second => 0.02083.
0.02083. * $600 = $12.5 / sec
Assuming electricity cost of $0.10 per kWH...
%12.50 / 0.10 = 125 kWh / sec.
125kWH * 3.6e6 joules, per second => 450 MW
For comparison, the UK power grid runs at about 30-40GW.
[1] http://paymentsviews.com/2014/05/15/there-is-no-such-thing-a...
If blockchain technology is all about adding trust in a trustless environment, what are the trust implications of using Oracle JVM?
The problem have always been running others untrusted code in your own jvm.
Blockchains waste a substantial amount of computing resources. All that heat is wasted energy if the technology is used where the unique featureset of a blockchain are not important. And in the enterprise, that unique featureset is typically not really that important. B2B is a much better enterprise space for blockchains since the name of the blockchain game is 'distributed computing at the edge'.
The first point is that it's a shared database that allows organizations to co-operate, with a common view of the world meaning fewer integration points which are exponential as the number of participants grows.
The second point is that none of the individual parties has monopoly control of the "central" database meaning they can't extract excessive rent from the participants and exert political/corrupt influence on the network.
This is my favorite video explaining this and blockchains in general, and this aspect specifically which begins at 23:45 in. The sound is terrible, but definitely worth listening to. https://vimeo.com/153600491
There is simply no need for a private consortium to waste energy on proof-of-work. The features you mention can be implemented without any need for proof-of-work. The purpose of the organized waste that is proof-of-work is to achieve trustlessness, simply by requiring a huge expansion of energy if you wish to rewrite history.
In Bitcoin, the maintainers of the database (the miners) are separate from the users, and proof-of-work prevents the Blockchain/database maintainers (miners) from rewriting history. But if the owners and users of the database exist within the same organization, it would be trivial to verify that nothing has been rewritten simply by every party keeping a copy.
So, what does it give you? An immutable, distributed, public database that can be trusted despite not having trust in any particular participant.
Now, if you're a bank, why have you got offices with marble floors in the nicest neighborhoods? Why do your employees wear suits and ties? Why do you get a credit rating?
If you want security, that already exists. You can use encryption to identify people, and you can use it to hide sensitive information. You can use it over public channels, no problem. For instance this forum is on an encrypted https connection, and people can't sit on the route between me and YC to find out what I'm up to.
If you want a ledger, that's also been done. In fact you can use encryption to make sure there's never an unauthorized change to the ledger. And there's a whole load of ways that ledger can be scaled so that many people can use it at once.
Someone mentioned settlement of trades as a potential use case. But what is really to be gained against the way it is currently done? At the moment, you have a bunch of ops guys settling trades in the way it's been done for many years. If there's an error, you can call someone one the other side and fix it. Mostly, it's automatic, done by various cron jobs. What do we get from putting that in something similar to bitcoin?
Blockchain, in essence, is just a voter protocol that can deliver trusted consensus in adversarial (Byzantine) environment. This is its main value proposal for international finance.
I'd also like to see a blockchain-based public voting and election protocol. But there seems to be not enough governmental interest in that ;)
$850 million was blocked before they went through, and about $40 million of the remaining has since been recovered.
How would a blockchain have helped in preventing or recovering from this attack? If the hackers got access to their blockchain credentials, they would have been able to issue similar transactions. It would just have been much harder to block the transactions or reverse and recover them after the fact. It seems to me that running this on a blockchain would have made things worse, not better.
Also, consider rouleth.com, which is a provably "fair" online casino. (The odds are still against you, but you can verify that the bank did not cheat when you lose ten times in a row.)
Or imagine companies with shares on the blockchain, combined with smart contracts. That would allow you to automatically enforce all kinds of shareholder agreements (for example vesting or a tag-along right).
Maybe that's not revolutionary, but it could be quite useful and save a lot in legal anf auditing fees.
But I still fail to understand the attraction to corporates. By putting your blockchain in the Azure cloud, then you have a central point of failure? I agree it's an immutable record of everything that has happened (provided there's not a "hard fork" or over 50% of the resources owned by one participant, which is hugely possible with a small network) but immutable records are possible even today.
brb, murder spree
Bitcoin delivers value in that its blockchain is secured by mutual participation among miners, exchanges, buyers and sellers, etc. All of these new commercial, independent "blockchain technology" buzzword press releases can only succeed if they can attract and sustain a critical mass of participants who have mutual interest in its success. It's not for me to say that they can't do that, I'm sure they can. But there will be many offerings over the next few years before a VHS/Beta or HD-DVD/BluRay battle of titans can emerge.
EDIT: disregard most of this, according to comments elsewhere they're using Ethereum. shrug
EDIT: re-regard most of this, apparently it's a private instance of Ethereum (IMO this is similar to Bitcoin's same-PoW altcoins).
There's a use for a blockchain where the voting members are, say, the top 20 banks worldwide. It would be tough to get more than half of them to agree to change something. If half of them agree to change something, it probably really needed to be changed.