What are the practical uses of private blockchains anyway?
https://nvlpubs.nist.gov/nistpubs/ir/2018/NIST.IR.8202.pdf
Brief quote from the conclusions:
> The use of blockchain technology is still in its early stages, but it is built on widely understood and sound cryptographic principles. Currently, there is a lot of hype around the technology, and many proposed uses for it. Moving forward, it is likely that the hype will die down, and blockchain technology will become just another tool that can be used.
Then there is a fairly large paragraph about limitations and choosing the right tool for the job rather than just trying to shoehorn blockchain in for its own sake.
Public blockchains could be used for accounting transparency, for example, for tracking donations and spends of a non-profit. Decentralised blockchains are of course being continually redefined and reinvented, with an alternate financial complex at the forefront of it all.
There are likely many more usecases, but the ones most interesting to me are global payments infrastructure being built by stellar.org, celo.org, and diem.com.
See also: https://www.hyperledger.org/
If you just store the equivalent of a blockchain somewhere then I don't see what benefit it provides over a database controlled by a consortium.
It's all bullshit.
It's fair to ask why this public record needs to be in a blockchain though. You could store the record in plain HTML on a public website and have the Web Archive create periodic immutable snapshots of it.
(some cryptokiddies have tried to claim it as "the world's first blockchain" https://btcmanager.com/finding-the-oldest-blockchain-in-the-... apparently not understanding how much it undermines the case for wasteful proof-of-work blockchains if a classified ad does the same job)
It’s a cute gimmick, I’ll give them that.
When you publish your phony ad in the NYTimes, you also prove that this phony ad existed at the date the NYTimes was published.
This company probably buys one edition of the NYTimes with their add and check if the NYTimes published the correct hash, if it is wrong they will run an other add the next day with the correct hash the next day. Now they only prove that the hash existed the next day.
I'm open to hearing about any other non-blockchain solutions to this problem, though. One seems to be IOTA and their "Tangle" graph, but I don't fully understand how that could facilitate a historical record of each transaction, as (unlike a blockchain) it is not an append-only ledger.
If you are in a situation where you can't find any trustworthy authority (including yourself), you are probably part of a scam or a crime.
Byzantine fault tolerance is an interesting concept that solves a problem that almost never happens in modern software.
So, you don't understand how blockchains work, okay.
With a distributed BC you don't have to trust an authority. You trust that 51% of participating entities know what they are doing and that they checked the protocol implementation and agree on one.
Also you can say that everything in a blockchain is verifiable by third parties, but most people don't do that work (not unlike any open-source software).
Making past entries immutable is the purpose.
Proof of work and distributed mining don’t need a blockchain.
Have you heard of hashcash? It is proof-of-work concept to prevent email spam.
This is also an issue with a 51% attack.
A public blockchain with multiple agents that do not trust each other like in BitCoin make sense to me.
Okay, so use mercurial or fossil.
Or how does a private blockchain manage who has write access to it (since it's supposed to be private)?
GPG has been around since the 1990s with the web of trust being entirely decentralized and while I'd be the first to say there is room for improvement there's no way that's anything other than decentralized.
Which ignores and can even make worse the problem of bad data at the entry point. This is what effectively killed the entire set of use cases related to supply chain provenance.
So for some reason having a solution and look for the problem is suddenly acceptable. Few seem to find the problem though.
If you read through typical descriptions of how blockchains can be applied in industry, you’ll notice that they are extremely vague. That should tell you something.
>special emphasis has been placed on the protection of an individual's privacy. Secure technologies, like blockchain and encryption, are woven throughout Excelsior Pass to help protect the data, making it verifiable and trusted. No private health data is stored or tracked within the apps. Excelsior Pass can be used to voluntarily show a QR code as proof of COVID-19 vaccination or negative test result via a digital smartphone wallet or printed credential without sharing underlying personal health details.
https://www.governor.ny.gov/news/governor-cuomo-announces-la...
EDIT: I guess I could request the whitepaper from IBM and read it, I mean what's yet one more tech giant sending me spam and selling my info to advertisers going to hurt? But I don't see any way for the entire thing to work and avoid people making up fraudulent test results/vax records without trust. I mean even with trust a clinic could feasibly fake that stuff, but without trust pretty much anyone could do it.
EDIT2: Requested the whitepaper from IBM and it's literally just an 11 page marketing PowerPoint. Mentions blockchain a few times but doesn't explain how it solves anything that a normal RDBMS (or even some fancy distributed one with immutable records etc. where all parties are trusted) couldn't do.
So in this use-case there is no distributed network in the first place. And never will be.
I'm very skeptical of these use cases.
For example, suppose US and Iran agreed to pay each other some amount as proof of their sactions deal...
US doesn't trust Iran or its central bank. Iran doesn't trust SWIFT, since it can be easily manipulated by its enemies (as it has been, before). US doesn't trust the alternative to SWIFT, since it is run by Russia and China.
EDIT: common people, that was just an example, it doesn't mean future transactions between US and Iran would be done that way. It was just an easy to understand example.
So what's the purpose of _private_ blockchains then? Grandparent comment was about "Permissioned blockchains can be useful..." not blockchain in general.
How does it remain private in a trustless case?
Alternatively, who keeps the blockchain private? Who manages access? If there is an impartial 3rd party, an "authority" or a "broker", a "governor" that all other parties can trust to do that, even if they don't trust each other ... can't that authority just use a database, with some checksums and signed rows if need be? What can't you get from a private github repo?
Is the "private blockchain" centralised or decentralised?
I feel that every time I see this discussion, the argument is shifted to a straw man whenever the wrong question is asked.
The intersection of the set of "private" and "mutually distrustful parties" is essentially 0.
https://apnews.com/article/fd4113419276444eba1d2a46d5c29752
In 2016, the US paid Iran $1.7B in pallets of EUR and CHF. The article's not explicit, but the settlement network probably uses a C-130.
Or is the set of blockchain payments an guarantee of adherence to the deal? How would that help? Are the coins supposed to be returned in case of lack of adherence? If that is the case, how would I trust the other party to return the bitcoin?
A NFT could also be minted, where people and institutions stake money on the deal and if either party breaks the agreement, the NFT is burned. So stakers are incentivized to do whatever is within their reach to make governments stick to the deal - otherwise they would lose their investments.
The way to bootstrap participatory democracy in a world that only cares about the money is to bake it into the money.
You can do this with paper. Signed paper documents. You have invented the "treaty". It has been a thing for centuries.
The whole "blockchain-backed international treaty" example is admittedly a bit contrived though. It's kind of a "horseless carriage" thing - trying to explain to @markwkw that no "blockchain payments" would be necessary, by expanding on their mental model. (Maybe that's an unwise strategy, and I need to start just rudely dismissing people instead, but I'm not sure how that would help with comprehension)
Engineering solutions based on binary ideas of true and false just don't apply to diplomacy or politics
EDIT: I define "reneging on the deal" as "acting as if the deal never happened".
The more governance decisions are recorded on the public record, the less opportunities there would be for parties to say "the other guy started it".
Also the deal could be set up to hurt both parties if they violate a predetermined condition. Maybe burn 5% of each party's GDP. Then they would be actually incentivized to collaborate.
Normally the courts solve this problem, so this is only an issue if one or both parties are operating outside of the law.
Which, for normal financial enterprises trying to do business, creates regulatory problems: Chase can't exactly transact with the PLA without getting bulldozed by regulators, and you can't exactly hide the transaction on blockchain (since its immutable).
In the scenario you describe, there are ways of cheating even in blockchain (51% attack), and there are ways of solving the issue outside of blockchain (military force, embargos).
This would generally be responsible for paying parties that actually trust you, using Treasury checks and possibly small amounts of cash, but there is an equivalent position within the uniformed Finance Corps where you pay untrusted parties who also don't trust you. For that purpose, you deliver extremely large briefcases full of cash. Basically, the same idea as a drug deal where the buyer and seller don't trust each other. Everything is transacted in cash, and both parties are carrying a lot of guns. This is generally how we make payments to local warlords in theaters of combat where they are not by any means an internationally recognized legitimate authority you can make any kind of a treaty with, but you need to buy their cooperation anyway.
As for trusting they'll actually deliver what you're buying, again, that's what the guns are for.
Heck, as it stands right now just for normal consumers, buyers and sellers don't need to trust each other. They just need a legal authority who can prosecute each side and they need to trust that legal authority. Barring that, they need an extra legal authority they trust with guns.
As it stands, the obvious limitation of a blockchain is it only helps if your transaction is solely the exchange of data stored on the blockchain itself. Otherwise, you're back to the same issue. The fact that a transaction is recorded on a ledger doesn't mean either party actually received the goods they expected, and it doesn't mean they have any means of remediation, legal or otherwise, if they don't. The fact that a ledger says you own something doesn't mean you're in possession of it, and it doesn't mean the party that is in possession of it has to give it to you.
Would you say that blockchains make this faster, cheaper and less prone to fraud?
[1] https://www.reuters.com/article/us-banks-barclays-blockchain...
Ultimately the hash comes from Docusign, so I'm not sure I can think of the problem case where someone doesn't trust Docusign to self publish that hash but does trust a hash that Docusign publishes to the blockchain.
For example, a Bitcoin one: https://www.proofofexistence.com/
If they published the hashes on, say, their webpage or some third party's webpage, nothing would prevent them (or the third party) from redacting or removing the hash after the fact, given sufficient motivation.
You can put information on the blockchain and others can be sure it can’t be removed.
There are use cases.
Which is to say, just barely well enough to keep going.
And then there's the whole thing with how its scaling issues are mitigated via the platform dependency on the state's monopoly on violent enforcement. Emphasis on monopoly.
All right.
By the way, I don't think blockchains allow you to beat up people, either.
And it is already legal to beat up and kill each other over a property dispute. It just has to be a large enough dispute for the parties involved to be able to afford rebranding it as a "war".
Also "war" is the thing that happens between parties above which no legal frame or enforcement institution exists. Countries. There's no actual "international court" (there's the UN one, but it has no powers). This is why wars happen. So in fact, mentioning wars defeats your own point - yes, people will literally kill each other like savages when no legal repercussions exist. Wars show that.
Because we have no world government, we can only apply mitigation strategies like sanctions, diplomacy, economic interdependence. These work, but only until a true scarcity occurs, where taking someone else's stuff is a solution. Then it's back to wars.
Unlike the existing system of governance, a blockchain doesn't have the mandate to beat up people.
Yes, but the only things you can prove without trust are events that happen 100% inside the blockchain. Which, AFAICT the only use for a system that works that way that I've seen is cryptocurrency. The other one people were really hot on was supply chain, but, from what I understand, when you have supply chain trust issues, they don't look like "oh gee someone edited a database record", they look more like https://www.bloomberg.com/news/articles/2021-03-09/trader-bu...
Which, ironically, that's not a great use case for cryptocurrency either. Traditional escrow services are a better fit. If the trader had bought that tanker full of rocks with BTC, there would have been no way to reverse the transaction after it had been determined to be fraudulent.
So, yeah, blockchain is mathematically provable to have certain properties. But, like with any proof, those properties only hold for as long as the proof's assumptions hold. And it's really, really difficult for us laypeople to recognize when the assumptions do or do not hold when they're defined in terms of technical jargon that uses a familiar term like "trust" but assigns it a subtly but critically different definition from the everyday meaning.
>Normally, in such cases of non-delivery a trading house could make a claim against a cargo’s insurance policy. But Mercuria found that just one out of seven contracts used by the Turkish company to insure the cargo was real. The rest had been forged.
Can't forge a smart contract.
I'm curious, for example, how you'd get an errors and omissions clause working in Etherium. Like, how would Ether arbitrate a claim against that policy? Assume, for the sake of argument, that hard AI has not been invented yet.
In practice, this is solved by giving the contract the capability to query an external system (referred to as an oracle), which provides the results of the independent arbitration as an input to the contract.
I don’t think blockchain is worth the hype it got a few years ago, but still, with these limitations, there are use cases. That doesn’t change because you say ‘this use case doesn’t work’.