Don't get caught up in blockchain hype
blog.apnic.net
blog.apnic.net
In fact, on almost every dimension, decentralized services are worse than their centralized counterparts:
They are slower
They are more expensive
They are less scalable
They have worse user experiences
They have volatile and uncertain governance
And no, this isn’t just because they are new. This won’t fundamentally change with bigger blocks, lightning networks, sharding, forks, self-amending ledgers, or any other technical solutions.
That’s because there are structural trade-offs that result directly from the primary design goal of these services, beneath which all other goals must be subordinated in order for them to be relevant: decentralization.
[0]https://blog.chain.com/a-letter-to-jamie-dimon-de89d417cb80
> For all that she has learned, Radia is first to confess that she is by no means an expert in the technology — admitting that she cannot distinguish exactly what makes something blockchain technology
The article is right about one thing though - a lot of people are talking blockchains up without having any idea about what they are or how they work.
Conversely, a lot of people, like Radia in the article, are talking blockchains down, without understanding them.
Note that you said asymmetric cryptography and your parent said that asymmetric cryptography is not the basis of the block chain. And they would be right, at its core, the blockchain consists of blocks of transactions in a Merkle tree. The Merkle tree typically uses a cryptographically strong hash, otherwise it would be possible to modify the Merkle tree without anyone noticing. But a hash is not asymmetric cryptography.
In many applications of the blockchain, asymmetric cryptography is used to sign transactions. But that is largely orthogonal to the blockchain as a data structure. The blockchain as a data structure has useful applications without transaction signing, etc.
What makes the discussion clouded is that some people define 'block chain' as transaction blocks in a Merkle tree, while others also consider distributed consensus, etc. to be part of the block chain.
Blockchains as defined this way have existed long before there was a proof-of-work based consensus protocol to make Bitcoin a reality. In their more general form they are called "Merkel trees". Filesystems aren't generally structured this way but, for example, git repositories are Merkel trees.
http://c8.alamy.com/comp/D5AYH7/german-chancellor-angela-mer...
The only cryptography is the SHA1 hash that links commits together, otherwise all cryptography is optional.
And that's totally okay because such repositories are usually run by people who have the authority over it.
A blockchain is a special kind of linked graph that uses cryptography to link each node, otherwise, there are no additional requirements and there are plenty of reasons you might not want anything else.
Nowadays, it appears to be used to refer to a distributed database that use blockchains or merkle trees (binary trees with hash pointers) and has a consensus algorithm.
Does this assertion come from a person who understands, or doesn't understand blockchain? :)
Because if you don't understand it, I would take your assertion with a grain of salt. And if you think you understand it, but you make this assertion, it means you disagree with many people that understand it... which hints that maybe you don't understand it after all ;)
The subset who have CS degrees maybe
Many-to-most "blockchain experts" are hazy on where, exactly, the line between blockchain and not-blockchain falls (or, at least, there's enough ambiguity that drawing a sharp line is difficult to impossible).
To use that uncertainty to call out someone who professes skepticism about the general concept, while explicitly confessing that same uncertainty, as a means of disqualifying her perspective is therefore literally a fallacy of irrelevance.
* Not quite the middle of nowhere, but certainly not a tech hub
a lot of bitcoin followers seem to think that decentralization saves us from arbitrary value adjustments. decentralization completely exposes currency to volatility and does not self-stabilize nicely regardless how many people use it, because supply is broken. this false idea that decentralization is good for currency shows lack of understanding in how currency works. a central authority is required to protect the value of currency. that is why central bank prints money and does QE. it is not a conspiracy to enrich some cronies. without central authority, it cannot function as currency.
The only problem I see, if you could even call it that, is that bitcoin "banks" (exchanges?) are restricted to being 100% warehousing operations since there is nobody to bail them out if (when?) they decide they can make more profit earning interest by loaning out the funds they are contractually obligated to hold.
If you want to avoid a run on your bitcoin exchange then simply don't engage in fractional reserve banking...or, I suppose, don't lose all your holdings to hackers.
Central banks have very little influence on the value of their currency once people lose faith in it, people will buy anything instead of holding on to their (usually rapidly devaluing) currency.
One thing every holder of bitcoin knows is it will never suffer through hyperinflation, ever.
... a central authority is required to protect the value of currency. ...
So you're saying there is no way to have a stable economy without control over your currency?
A central bank can ultimately control the value of a currency by either grabbing assets on the free market and emitting currency - or the inverse - grabbing currency and selling off the underlying asset.
This is a very powerful way to control volatility.
Gold has fairly strict supply and it moves around a lot.
If the US Fed really, really wanted to control the USD vis-a-vis some other currency, they could do that.
"I believe most currencies originated in a decentralised way"
Ah? No, definitely not. Except for gold ... currencies have issuers, rules, a central bank of sorts. Like the King. Or whatever.
Everyone keep saying that but these words are empty. What are consequences of regular stock market? And what difference does it make for someone who bought bitcoin for $15,000 and sold for $50,000 ?
I fail to understand how frightening people helps? Its been acknowledged so many times yes its a bubble. Yes, a major correction is in works, but shorting or selling now is "catching falling knives" (term I learnt trading stocks in 80s). But when the bubble burst EVENTUALLY, you won't be able to buy bitcoin for 1 cent, as it will never go back to basics again. We need deep correction so that we can test major mining holders how much they withstand so 80% correction would be healthy for Bitcoin, if we want to (should!) look at it at any other trading stock.
The truth is - unless something else comes along, there is almost infinite number of dollars waiting to be convert to bitcoins. these traders will be passing a baton to each other for a very long time to come.
So, what you're saying is they protect the value of a currency by devaluing it?
> it is not a conspiracy to enrich some cronies. without central authority, it cannot function as currency.
No, it's a conspiracy to tax the population without actually taxing them through devaluing the currency (aka inflation). Enriching some cronies is merely a side effect that keeps the bankers in line (and, more importantly, in the cartel) since they profit handsomely through fractional reserve banking and debt monetization -- neither of which is possible "without central authority".
A central banks job is to stabilize the currency and the relevant economy. Controlling liquidity and interest rates are two tools to affect this change. Side effects of which are controlling the rate of inflation.
Stability is the key for a currency at global level.
But don't take my word for it:
"The Board of Governors of the Federal Reserve System and the Federal Open Market Committee shall maintain long run growth of the monetary and credit aggregates commensurate with the economy's long run potential to increase production, so as to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates."
But, anyhoo, totally off topic.
Not even to mention the negative effects inflationary policies have on the factors of production but, as you're some kind of expert, I obviously don't have to.
I really should know better than to try to discuss economic issues with someone who can't even manage to use a shift key but, as the say, "someone is wrong on the internet."
It's an awesome technology for what it does, and it will probably be more _useful_ than most people realize right now (if we ignore other cryptocurrencies on the market). But that doesn't mean that bitcoins themselves are going to be worth more.
Proof? I use it as a currency all the time. I also use Monero (which btw is specifically designed to be a real currency) yet its price keeps rising. QED. And by the way, these are not dark web purchases. Not that it matters at all.
How do I use it as a currency? Easy. Actually use it. If you worry about price going down, just convert it to USD when you receive it. Think of it as a settlement layer. Because... it is. There. Now you get to try to tell me why what I said is false.
Surely you're not saying that Bitcoin cant be a currency because it hasnt taken over the world yet, therefore it still has relevant volatility.
By the way, exactly 0 of the 5 properties of a currency are "no volatility".
And this is part is funny. Would you care to quantify the bounds of volatility at which a security tranforms into a currency?
Does market manipulation NOT happen in foreign currency exchange?
Do you consider USD Tether a currency?
/me gets lawnchair out
Guess this means no one is able to refute my price vs value claim either.
Data on blockchains is by default, unencrypted, especially data that needs to be validated by the nodes. Blockchains do not have inherent security against read access. You can control read access to some degree by encrypting certain elements on your blockchain but this can be compromised. Not all information on the blockchain is true; data still needs to be checked and uploaded correctly and as such is open to human error. No amount of time guarantees something will stay in the ledger. It is also difficult to remove data if required by law. It’s not secure because it depends on the assumption that the blockchain community has more compute than the rest of the world. It’s absurdly expensive to mine blocks to store data indefinitely. Lack of government regulations for blockchain could impede growth.
Is this true of all block chains or specific to bitcoin?
That's not a blockchain and that idea has existed for decades already.
I think that idea is now being called a "blockchain" since in reality the trustless/proof-of-work nature of a true blockchain is largely wasted for specific companies.
That's definitely the definition some companies are operating under.. but really?
WALs and journals have existed for ages and both fit the definition of a directed list of blocks.
Hell, ext2 and FAT fit that definition (inodes forming a directed list of block-references).
I guess we all store our data on something that's technically a blockchain by your definition.
Bitcoin is merely the first application to use Blockchain in a decentralized proof-of-work manner.
http://en.wikipedia.org/wiki/Merkle_tree
A bitcoin blockchain is also a Merlke tree.
But a git repository is not a blockchain.
The commit log of a repo is almost certainly a blockchain, which is why I mentioned "to some extend"
Think of a blockchain as only one strand (say, the leftmost strand, from a leaf all the way to the root) of a Merkle tree. Think of a git repository as the whole tree. So no, they are not equivalent.
If they were there would never be a way to have more than one branch depend on a previous one.
The commit log is a strict DAG, if you don't have any merges, it is a strict blockchain, otherwise it gets fuzzy but is close enough.
I never said it's equivalent but that is what a blockchain is; "A blockchain [...] is a continuously growing list of records [...] which are linked and secured using cryptography."[0]
This doesn't mention "Can't be a merkle tree" for one, but also doesn't mention "can't consist of branches which merge again" or "requires proof of work" or "must use signatures" (cryptography refers to the hashes normally but can refer to anything else too)
Git also acts like a blockchain, if you change the past (edit a past commit) you need to update all following commits for the new hash and their children hashes and anyone who has the repository must do a force pull, similarly to how Bitcoin rejects fork chains with less proof-of-work.
It might be worth mentioning that Bitcoin also uses MerkleTrees for storage as they are very good for quickly comparing sets.
A blockchain does not necessarily process financial transactions at all and I don't see why it must be a requirement.
What you are saying is that you can use git in such a way that you get something resembling a blockchain but - again, and it is getting tiresome - that does no imply equivalence between git and the blockchain.
I really don't understand why you keep arguing.
You still have blocks (commits) pointing to other blocks (commits). Some blocks just points to multiple other blocks (think the uncle system in ethereum, which is just exactly that; temporary forks that are still included into the chain)
In the version you mean, how does the blockchain (git, or any other blockchain by your definition) respond when two valid blocks are canidates to be added to the end of the chain?
Is only one block the winner? How is this property maintained as the blockchain grows?
These are the questions and issues the blockchain others in this thread mean can deal with, while, for example, these questions don't exactly make sense for, for example, git.
Seriously though, it just seems like a question of semantics. Is a blockchain just a specific sort of Merkle tree -- thus making Bitcoin a blockchain plus a distributed consensus protocol? Or does calling something a blockchain necessarily imply some consensus protocol already.
It doesn't. But for all practical purposes at this point in time it might as well.
You can search right now and find programming 'blockchain tutorials', targeting the cryptocurrency community, that go on to describe only linked blocks chained together via some embedded hash of a subset of the previous blocks (meta)data. This is what others in various comments are calling a cryptograpically secured blockchain.
Other tutorials will set up a mempool (pending transactions) or get peers communicating. I've never seen peer discovery or any discussion on chain value (ie height vs accumulated difficulty) for chain selection.
We've always been able to decide how to add an element to the end of a (possibly cryptographically secure) chain of blocks.
What separates the two definitions of blockchain in this thread is exactly the distributed and decentralized choosing of the top block.
That's not a thing that has existed since the 90s nor is it a thing with so few requirements.
>The term "blockchain", as used these days, refers to the distributed system underlying cryptocurrencies.
That's how you prefer to use it but it doesn'T change how it's defined [1]
"At its most basic, blockchain is a vast, global distributed ledger or database running on millions of devices and open to anyone" [1]
That incorporates at least two concepts that are typically associated with the term "blockchain" that go beyond the basic cryptographic data structure: they are distributed, and they are open. Lots of technologies use a similar data structure; git uses a similar data structure. But when a silicon valley startup comes to you and pitches you on their "hot new blockchain tech" they probably don't mean git.
[1]: https://hbr.org/2016/05/the-impact-of-the-blockchain-goes-be...
>but on Bitcoin's use of similar technology to make a distributed ledger.
That doesn't really change a thing. Bitcoin merely uses a blockchain to ensure consensus, if all nodes are trusted then you don't need proof of work and you can switch to simply linking the list (see Git or Ethereum Testnets), and the contents of the blockchain are mostly irrelevant too (you can put anything on there, transactions are merely one type of thing you put in there)
At it's most basic, a blockchain is just a directed graph of nodes where a cryptographic method links two nodes together in a child-parent relationship. Everything else is just added fluff for the specific usecase.
Under your definition, every CBC mode stream cipher could be called a blockchain, which just makes the term meaningless. It was coined for a specific purpose: to describe how Bitcoin and related cryptocurrencies operate at a technical level, especially how they guarantee integrity and prevent double-spending.
How difficult is it to introduce illegal data into, say, Bitcoin's blockchain?
> Lack of government regulations for blockchain could impede growth.
i.e. "We're from the government, and we're here to help make your blockchain more efficient and grow faster!"
Databases are unsecured by default -> databases are overhyped!
Only MongoDB and yes, it is all hype
Government regulation exists precisly for the purpose of making inter-personal relations more efficient.
https://news.ycombinator.com/item?id=15915520
There is a huge difference between the cryptocurrency blockchain and the enterprise-y blockchain. They are not the same thing which kinda confuses the whole message.
Genuine question: What applications/problems it is useful for? Have you seen a good application yet (other than currencies)?
Would love to learn about the positives, from this community.
A “smart contract” is basically an ordinary payment contract where execution steps are gated by separate semaphore controlled by sunsets of the participant set.
What can you do with that? It’s hard to answer without being so general as to be useless, or without getting too specific such that we lose the big picture.
“Block chain” is about replacing courts and arbitration with a computer network, and replacing contract lawyers with programmers. What makes this possible is the fair, untrusted, equal access semaphore a bitcoin spend provides.
seriously, please: tell me one genuine use case for block chains that conventional database stack can't do?
There's literally nothing a blockchain can do that a trusted central database couldn't do. So you only need a blockchain if you can't trust a central database. As a result, the answer to the question you've posed is always going to be a political one, not a technical one. ("It lets banks that don't trust each other keep a shared database of transactions." "It lets citizens who don't trust their various governments exchange currency." "It lets shipping companies that don't trust each other digitize their manifests." "It lets scientists prove their papers were published on a certain date.")
Re your shipping manifest example - can you expand on this - how does this work?
The main point is that, unlike a situation where you would be using a centralized database, there is no need to have a central trusted party to operate the database - the source of trust is distributed among the mining power of all nodes in the network.
If this document is digital, then I might get screwed if you lose stuff or stuff gets damaged and you remove it from the Bill of Lading and say you never saw the goods. Or you might get screwed if I add new stuff to the Bill of Lading after you load the goods and claim you didn't deliver it. So one way to solve this is to put the document and both of our signatures in a blockchain, and now we all agree that this is what we saw on that date.
- Buying contraband
- Ransom payments
- Pump and dump schemes
- Money laundering
Remains to be seen how it will impact the everyday lives of regular people.
At it's core, a blockchain is just a really efficient way of guaranteeing the integrity of any given ledger.
I am working on a giftcard purchasing and issuing system at the moment, for example.
I could use a chain of SHA256 hashes of each row hashed upon each previous row of data's SHA256 hash in our MySQL db to make sure that none of my employees were giving themselves an early Christmas bonus if you know what I mean.
Nobody could change any of the giftcard values without being noticed.
Blockchain technology is not only useful for cryptocurrencies.
Proof of Work is ultimately a set of well-balanced design decisions employing well-known technology. Maybe that's why people have a hard time seeing the novelty in it: they just see a bag of individual technologies and miss the delicacy of the design.
As an aside, I think it is somewhat likely that Satoshi was a state-sponsored actor or organization.
To what end?
States have a habit of going after anything that threatens their monopoly on the issuance of currency.
http://www.newsweek.com/clifford-stoll-why-web-wont-be-nirva...
It's hard to take comparisons of an internet-based technology to the internet itself seriously. Blockchain more comparable to something like Push [1]. Mostly overhyped, some good ideas that will survive and re-emerge years later, and massive amounts of malinvestment in technologies that didn't ultimately pan out. [2]
Sound advice for all problem solving.
While most articles infer they are building these things on top of the public Ethereum blockchain it is more likely they are basing it on top of R3CEV[0].
Either sloppy reporting or part of a grander pump-and-dump scheme, you decide...
Back when they were still planning things out I dropped some economic theory on them (over gas pricing IIRC) and they were basically like "nah, that would hurt our cabal". I wish I had a link because I'm not even exaggerating. Totally left a bad taste in my mouth.
Then I hear about hard forks and proof of stake and "welcome, my son, welcome to the machine..."
[0] https://www.google.com/search?client=opera&q=mother+of+the+i...
There is a clear distinction between public/permissionless blockchains (e.g. Bitcoin) and distributed ledgers (misnamed as private blockchains). The article is referring mainly to the later.
Bitcoin is a theoretical and practical computer science innovation even if the Bitcoin price goes down to $ 0. The innovation covers a search for decades for a secure P2P and [central] bankless protocol solving the multiple spending problem. This innovation uses game theory and security, and we expect that there will be new innovations around this concept. Check “Blockchain Research Resources” [1]
Regarding distributed ledgers the signal to noise ratio is very low (lot of hype). To clarify this we must understand that distributed ledgers existed long before the blockchain and are not really connected to Bitcoin and other public blockchains beyond reusing some part of those implementations but without the core innovation. These are examples of previous initiatives:
The Bitcoin paper is from 2008 while Nick Szabo’s smart contracts concept is from 1994 [2]
if we go back in time we can find the AMIX project in 1988 [3]
Another concept used in a distributed ledger is the idea of immutability of data recorded there. Ideas of log immutability can be traced back to a 1995 Spanish article titled “VCR y PEO, dos protocolos criptográficos simples” [4] and then reviewed in 1998 in English as “VCR and PEO revised” [5]. Bruce Schneier also published similar works in 1997 with Automatic Event-Stream Notorization Using Digital Signatures and in 1998 as “Cryptographic Support for Secure Logs on Untrusted Machines” [6]. Also look at "Logcrypt: Forward Security and Public Verification for Secure Audit Logs" [7].
[1] https://docs.google.com/document/d/1J8hehbnZWzcIUMQcxMiGbjz8...
[2] https://en.wikipedia.org/wiki/Smart_contract#History
[3] http://erights.org/smart-contracts/index.html and http://erights.org/smart-contracts/history/index.html
[4] https://www.coresecurity.com/system/files/publications/2016/...
[5] https://www.coresecurity.com/system/files/publications/2016/...
[6] https://www.schneier.com/academic/paperfiles/paper-secure-lo...
[7] https://pdfs.semanticscholar.org/441c/447bf74b1b9e403d043fbd...
Don't get caught up in hype hype