This is wrong: Blockchain is not a new way to store data. Data has been stored in a distributed manner before. (Napster was a successful distributed data application) Blockchain is a method of securing state. In the case of Bitcoin, this enables a ledger that anyone can use, but no one can corrupt. This creates digital scarcity (a completely new phenomenon), but bitcoin also comes with a protocol for transactions. This is exactly what you need to make a basic digital currency, and thus, bitcoin was created. Bitcoin has serious drawbacks regarding speed and energy consumption, but it succeeds as a digital store of value. I used bitcoin last week to pay developers in another country. Now, what Bitcoin does not do, but what Ethereum does, is use blockchain-secured state to create a global permissionless application. Computers are state machines. Ethereum is a turing-complete state machine that is accessible to anyone. Code runs on Ethereum much like transactions are made on Bitcoin. The result is that you can execute code that the entire world can interact with, and everyone shares the same results. You can create digital currencies using Ethereum, but because of its turing-complete nature, you can also do much more. For example, because of blockchain, a girl in Poland can now buy shares in a house in the US, earn a portion of the rent, and sell the shares at a later date: https://realt.co/ Digital trading card games can be created with limited numbers of cards, and people can trade, buy, and sell these cards directly, or on unaffiliated marketplaces: https://godsunchained.com/ https://opensea.io/ Derivatives can be created around any of these assets, and markets for these derivatives are global: https://synthetix.exchange As a result, there is an explosion of applications, and transactions are increasing https://etherscan.io/chart/tx This author does not understand the technology, and is attacking the hype and failed early use-cases. The early web had similar hype and use case failures. However, the technology was transformative.At its core, blockchain is a glorified spreadsheet (think: Excel with one table). In other words, a new way to store data. In traditional databases there’s usually one person who’s in charge, who decides who can access and input data, who can edit and remove it. That’s different in a blockchain. Nobody’s in charge, and you can’t change or delete anything, only view and input data.
That's not technically true. There are zero-knowledge proofs that can be used to deidentify assets and transactions. As an example, JPMorgan has developed one type: https://www.coindesk.com/jpmorgan-adds-new-privacy-features-to-its-ethereum-based-quorum-blockchain That's one of the wonders of Ethereum. Because it is turing-complete, it unleashes a huge amount of creativity. Bitcoin has transaction mixers, but they are far from optimal. I am not long-term bullish on bitcoin. BTW, these zero-knowledge proofs have now been leveraged for both privacy and increased bandwidth on the main chain: https://www.theblockcrypto.com/post/80495/aztec-ethereum-layer-2-unveil
Dude, I love this article. I’ve sent this to half a dozen people over the last few weeks. It does such a good job of explaining things that we computer geeks have been trying to explain for years. One of my colleagues has a saying that he thought of after talking about Bitcoin: “don’t fail at your job rule #837: if your solution requires Dyson spheres, it’s not a solution.”
man who doesn't understand blockchain asks other people who don't understand blockchain to explain blockchain; concludes blockchain can't be explained Here, say it with me: Blockchain is an indelible, public record of transactions. That's it. That's the whole enchilada. Here, let's miss the point: And anything that is unstolen stays unstolen. This is the "land registry" argument: the use case is land registries that are offices full of paper where corrupt people can be bribed. This is much of India, for example, and why Modi has done so well: you may own your house, but if your neighbor bribes the auditor you don't anymore unless you bribe him more. Now? Now every transactional record is public domain, just like it is in the developed world, only without having to stand up an unimpeachable bureaucracy. Authentication is the whole point. This is why the first and most prominent real-world applications of blockchain technologies have been in the luxury market: Luxury goods accounted for $1.2T in 2018. 60-80% of $1.2T is... worth paying attention to. There's a very real possibility that counterfeit goods are about to be impossible. That's worth talking about.The fact that no one is in charge and nothing can be modified also means that mistakes cannot be corrected. A bank can reverse a payment request. This is impossible for bitcoin and other cryptocurrencies. So anything that has been stolen will stay stolen.
There’s certainly a ton of money to be made in blockchain tech, and lots of industries that need better databases and records. It’s important though to remember that blockchain is just a database. It doesn’t do anything whatsoever to stop shitty people from doing shitty things. In an example like a corrupt government office keeping track of deeds, there’s literally no additional difficulty entering a false record that results from any aspect of blockchain. Similarly, there’s nothing that makes it publicly accessible that’s inherent to blockchain. You can swap blockchain in that example with a SQL server or MongoDB and have the exact same end result. Again, not saying there’s not dough to be made, there is. And yes, we need better record keeping in a lot of industries. But it’s important to not mistake blockchain for being a silver bullet that fixes humans. It is a silver platter that serves up investors to projects that need money, so that’s fantastic, but it’s just a database.
The devil is in the implementation details, but a potentially significant difference is the reduced need for trust. When the records office maintains their own database, outsiders have to trust the office to maintain and report records accurately. Scenario 1: You buy a house from Alice. The records office inserts a record of the transaction in their SQL Server database. You and others can confirm the transaction using a public web API the office provides. Alice's ex-husband, Bob, has a friend in the records office. He makes a quiet payment and gets the friend to update the record, changing the seller's name from Alice to Bob. Bob then takes you to court, saying he was always the rightful owner and the sale by Alice was fraudulent. Your mortgage lender made you buy title insurance for scenarios like this, and you have a long legal battle involving paper records and hopefully reliable database backups. Scenario 2: The records office records the transaction in a contract on a public blockchain. Within a minute, the transaction is visible to anyone in the world, using the same tools that work for all other transactions on the blockchain. They can also review the code that makes the contract work. A bad actor could still enter a false record, but it can be immediately detected by outsiders, and valid records will be essentially immutable forever within an hour. Any hack that takes advantage of a defect in the contract logic will put all the records at risk, and the defect will be visible to outsiders. An exploit that can rewrite the blockchain history would destroy the multibillion dollar blockchain itself.blockchain is just a database
More on the implementation details: that pilot project relied on Propy to record the deed on the Ethereum blockchain. Propy makes a public blockchain record of the transaction and also keeps copies of the documentation in their "secure network," and they "are accessible only by parties involved in the transaction" so in this case there's still a trust bottleneck. Putting more of the information into the public blockchain might reduce the need for trust but also reduce privacy for the people in the transaction. Everything is a tradeoff.
Let's clear up a couple of assumptions before we continue: 1) I'm not talking about money. I'm talking about use cases. The principle use case is authentication. So let's set aside the whole "ton of money" argument because changing the subject does not increase your credibility. 2) I'm not a fucking idiot so stop treating me like one. You've used the word "database" like an incantation three times now which gives me the distinct impression it's a word that glazes over the eyes of someone in your life. I don't need to know who, I don't need to know why, but you need to know that we'll get along much better if you presume I understand the subject at hand well enough to not be patronized or else I wouldn't be engaging with it. Do you agree to these terms?
Okay. Indelibility is a feature, not a drawback. Here, watch: Arthur and Bob share a field. At some point in the distant past, Bob's grandpa said Arthur's grandpa could have the pond but never wrote it down. Bob reminded Arthur of this right about the time catfish got expensive and Arthur decided maybe catfish farming was a good idea. They go to Charlie, the local government clerk. Charlie will give the pond to whoever gives his son a better job. et voila it's Arthur's pond and Charlie's son David gets to sit on his ass drinking Red Bull for five catfish a day. Fast forward two years and the catfish market is bust. Arthur no longer wants to pay Daniel five catfish a day because they aren't worth the price of raising. Charlie goes to Bob and lets it be known that land records are variable and poof, Arthur is out of a pond. Let's put a blockchain on it Daniel is still getting his five catfish a day, but now GriftChain records that parcel 12345 went to Arthur as recorded by Charlie on 12/31/45. If Charlie wants to resell it to Bob, we need Arthur to be a party to the transaction. For that matter, Bob can bring up the transaction to Frank, the regional auditor, to point out that the initial transaction was corrupt, invalidating the whole thing. It's no longer Charlie's word against Bob, it's there in the GriftChain ledger. And Arthur can see this, Bob can see this, Charlie can see this, Daniel can see this, Frank can see this, and anything that gets recorded is recorded forever and is unfalsifiable. I've got like four SQL databases on my network. They all corrupt with appalling regularity. I can tweak the shit out of them whenever I want. Their principle utility is not their inviolability, it's their ability to reorganize and query a large dataset. If you want inviolable data, you pay more for that: I was messing with that shit back in 2000 for tracking photos and ownership and edit history and revision control is not the same thing as consensus. Yeah - you can falsify records. But the false records are forever. The fraud is there... forever. The fraud can be reversed with another transaction, blockchain isn't Vaal the god computer, but the address that falsified it is identified forever, too. If you have a credential that allows you access to the blockchain, and you use that credential to enter false data, every other transaction you made with that credential is now subject to audit. In order to get away with it, you have to get away with it forever. it doesn't make crime impossible, but it radically alters the economics of forgery to the point where for a broad sector of goods it will no longer be economically viable. I have never once called blockchain anything a silver bullet. Ask mk, it took him a good two years to get me to come around on the very idea of it. There are lots of technologies that are solutions in search of a problem. Blockchain is a solution in search of an implementation which is another matter entirely. No, there's absolutely no point in putting your deed on Bitcoin, it moves impossibly slowly and what the fuck is the point. Bitcoin is a black market instrument through and through. But it's not "just a database." And reducing it to such will never improve your grasp of it.In an example like a corrupt government office keeping track of deeds, there’s literally no additional difficulty entering a false record that results from any aspect of blockchain.
In your example, yes, that plays out exactly the way you described. But why would Arthur and Bob be involved in the transaction at all? The government office responsible for recording deeds would be the ones with a copy of the blockchain. Nothing says they need to make it public, and only other offices from that agency need to be involved in the consensus process. The same scenario you described works just as well if there’s a central SQL db. Either way, the source of authenticity isn’t inherent to the blockchain itself, but to the security of the implementation and the agencies that are providing consensus. It’s not as though the agency in Portland and the agency in Omaha are going to call Arthur and Bob’s local agency to verify the transaction—they’re going to consent to the data so long as the data is valid and shows that the property only belongs to one person at a time. Yes, blockchain does prevent whatever piece of information is being recorded from belonging to two people at the same time, whether that’s money, land, expensive watches, whatever. But it doesn’t add anything to proving whether the owner of record is valid that you don’t get from a well-designed db running on some other platform. Like any platform, it just has certain elements of its implementation that are easier, and certain elements that are harder. All tech is like that.
It doesn't though. Records can be altered. Names can be changed. Bob owns the fish pond until someone with access to the database erases his name. With a database, the ownership depends on who has access to the database, and how much that organization is trusted. If Frank's party gets swept out in a coup, Charlie can make himself the owner of half the town - after all, he was loyal to the winning side and who's gonna say shit? If Bob wants a loan for fish food, Gary's Happy Imports has only Charlie's word that Bob owns the land he's staking which means Gary's business choices depend on their read of the stability of the Charlie administration. Let's put a blockchain on it Frank may be out, but Bob's ownership of his pond is indelible. Charlie can try and say he owns half the town, but Gary can audit the blockchain. So can everyone else. It's no longer worth Charlie's time to shake everyone down because anyone can see he doesn't own shit. Better yet, whatever database Frank used to hold property records dirtnapped the minute the tanks rolled but the blockchain is on 8,000 computers from Arizona to Zanzibar. Yes. It is. And if 4,001 of them say Bob doesn't own a fish pond, Bob doesn't own a fish pond. But if 3,999 of them say "Bob doesn't own a fish pond" then 3,999 of them get kicked off the blockchain, eat shit, pay their penalties and download the copy of the blockchain that says "Bob owns a fish pond" if they want to continue. Distributed ledgers are not "tech." They are a novel approach to verification that negates falsification. not inhibits, not minimizes, negates.The same scenario you described works just as well if there’s a central SQL db.
Either way, the source of authenticity isn’t inherent to the blockchain itself
but to the security of the implementation and the agencies that are providing consensus.
All tech is like that.
You make an interesting point, but I’ll try a different tack. In all of your examples, you’re using the example of someone trying to falsify who is doing the selling of something, or alter the existence of a record of ownership. But, what about a way simpler example: you have a blockchain record showing you own a bottle of Pepsi. I add an entry showing that you sold me the bottle of Pepsi. In this case, it’s not the blockchain that prevents the fraud, it’s whatever verification process is built into the app we’re using. Yes, the blockchain prevents us from both owning the Pepsi, and that’s good and built into the tech, but it’s the external sources of truth that the app reaches out to that prevent me from fraudulently taking ownership of your soda. That’s all I’m saying—that blockchain is cool, but it’s not a fraud-proof system. And in the worst-case scenario of total systemic collapse, the new government just makes a new blockchain, and goes “maybe you should have had a hard copy, now go farm beets.”
Sure. I had a buddy who wanted a source of microQRs. "Because they looked cool." I pointed out that QR codes are data signifiers that link to something and that buying a stack of random QR codes to slap on his gear "because they look cool" isn't exactly the point. He gave no fucks. He was all about it. To the best of my knowledge there's six dozen things in his apartment that, from a digital standpoint, are PL mount Zeiss macro lenses owned by Burns & Sawyer. Let's put a blockchain on it If any of these non-lenses ever get scanned by a blockchain connected device, they show up as a Zeiss PL mount macro purchased by Burns & Sawyer in 2018 and currently on a job in West Covina. As they are not in West Covina, the connected device throws a flag on the play. Burns & Sawyer monitors its assets on the blockchain and pop one of them just came up. The lens that it thinks should be in West Covina is actually in Long Beach. They call the guy who rented the lens - "are you in Long Beach?" He says "nope, here's a picture of your lens along with the serial number" "kk thanx" and with that, Burns & Sawyer strikes out their entry for that PL mount lens, issues a new one and goes about their day. Meanwhile my buddy, who is an idiot, scans another thing in his house which is now no longer a Burns & Sawyer PL mount Zeiss but a KNOWN COUNTERFEIT ITEM. Burns & Sawyer no longer cares but Long Beach PD gets an alert that a lens reported as counterfeit has suddenly popped up. Where? At the geolocation of the scanner. No, this isn't a part of the blockchain but if it's my ERC-721 compliant blockchain, it sure as shit will be attached to it. We agree - blockchain is fraud proof. This does not make stuff that attaches to the blockchain fraud proof. But it makes fraud hella harder and it does so at effectively zero cost. The layers of verification on a scarf are going to be fewer than the layers of verification on a Birkin, which is fine and good and to be expected. But there's never been a way to verify a Birkin before. Ever. In the history of mankind. We've gone from a world where the Salvador Mundi is a Da Vinci because the Saudis really really really want it to be to one in which every time a rolex changes hands, the world has a record.
If this were true you would have a point, but what about this from the article: I'm sure this is in large part due to Bitcoin's popularity and high number of users, but on a smaller scale this will be true for any blockchain application, and the power consumption will just keep increasing over time. This is not a trivial point.it does so at effectively zero cost
Carrying out a payment with Visa requires about 0.002 kilowatt-hours; the same payment with bitcoin uses up 906 kilowatt-hours
You're talking Bitcoin, not blockchain. Bitcoin largely exists so that Chinese tongs can hide assets from Xi. It was invented by a South African embezzler and popularized by libertarians. Ethereum uses staggering amounts of energy, too. This is why everyone who does anything with ETH is deploying test-cases while the eggheads figure out how to make proof-of-stake work. The change means instead of solving puzzles to prove you have the authentic blockchain, you basically pay an insurance policy. The chance for a spectacular implosion is high, which is why they're like two and a half years overdue. Screw this up and you won't get a do-over for a decade. But we're talking about blockchain. The authentication protocol I've been talking about this entire time runs on a private network built on the Ethereum protocol. I doubt it has more than a hundred nodes. Rather than "everyone who wants to run anything on Ethereum" using up its transactions, it's "everyone who wants to verify ownership on Arianee" which is a much smaller subset. Is Arianee big enough to not run afoul of the 51% problems being discussed? Sure - since it's a private network they get to set whatever rules they want. So is it a true public blockchain? You bet your sweet bippy it isn't. But it's a blockchain. Providing a solution.
First of all, I'm not trying to say that there isn't a single use case for blockchains out there. I'm also not going to pretend to understand blockchains beyond a hand wavy high level understanding, so before we go on, I'd like to outline how I understand blockchains work, so we can at least agree that my understanding isn't fundamentally flawed: 1. Blockchains are kept "authentic" by calculating a set of hashes which are updated each time a transaction occurs. 2. All past transactions have an effect on the current hash, therefore you cannot modify any prior transactions without also affecting the hash, making it obvious if someone has tampered with it. 3. This is only valid if there is more than one copy of the blockchain (or parts of the chain, I'm sure nobody is sitting there with the entire Bitcoin chain, it's probably huge), because otherwise the hash changing is meaningless, nobody would be able to tell if it was tampered with or not as you could just recalculate the whole thing. 4. A higher number of users (and part holders) of the chain increases the security of the chain, because if there were, for example, only three users, two of them could agree to both make the same false transaction, and validate each other. The consensus then goes in their favour. 5. Because the entire chain is in a way involved in calculating the hash for the latest transaction, the cost of calculating it increases over time. I'm not trying to write a scientific paper here, so I'm sure there are incorrect details, but are we broadly in agreement?
I'm no expert, but I think your description is fairly accurate. Yes, the chain of hashes is the core principle guaranteeing the integrity of the blockchain. As you are probably aware, a hash function takes data as input and produces a string. The SHA-256 function used by bitcoin produces a 64-character hex string that might look like this: Every unique input value is expected to produce a unique hash, and a key principle is that it is easy to generate the hash from the input, but almost impossible to figure out what the input was if you are given the hash, you might as well just guess the input, hash it and see if it matches. Exactly. A set of transactions are gathered into a set called a block. Some summary information and a random number called the nonce is added in. This whole package is the input data, and the resulting hash is an identifying fingerprint for the whole block. The next block includes the previous hash, a new set of transactions and summary information and another random nonce, forming the input for the next hash. Because the hash function is easy to calculate in one direction, anyone can check the chain of hashes. If a single bit of data at any point in the chain is altered, the next hash and all the following hashes will be different. The bitcoin blockchain is over 100 gigabytes, not small but it would fit on a $30 USB drive. Someone could use the client software to confirm that their copy of the blockchain is valid, meaning that the chain of hashes checks out mathematically. But this would not prove that the blockchain matches any other blockchain in use by others. Anyone can create a blockchain, and there are many blockchains that are not widely used and not valuable. Security is provided by the mathematics of the hash, and the algorithms in the software which have proven fairly robust over time. Bitcoin blocks are added about six per hour, and consensus is based on a simple rule: whichever blockchain is longest at the moment is the official blockchain. Therefore the most recent transactions, packaged in the most recent block, are considered tentative, since there could be an alternate valid block that contains the same transactions. Only after a second and third block appear are the earlier transactions considered more or less final. You refer to the 51% attack, a known vulnerability. If a majority of the users creating new blocks (the miners) conspire, they can secretly create valid new blocks without sharing them to the network. After several blocks are published on the public blockchain, the cabal publishes their evil twin blockchain. Since the cabal has more computing power than the rest of the network (more than half), the evil blockchain will be longer, and therefore accepted as official by the network. The cabal benefits because they used transactions in the doomed blocks of the public blockchain to buy stuff (cash or other digital assets, something that can't be easily reversed). But they don't put these transactions in the evil blockchain, so their balances are not debited in the evil blocks, and they can spend those funds again. There are some game theory reasons that reduce the risk of a 51% attack, one being that it would wreck confidence in the network and reduce demand and value for the entire blockchain (which, if it is worth attacking, is a big asset for the cabal), but the algorithm itself can't prevent such an attack and it has happened on some blockchains. The difficulty, and therefore cost, of mining a new block, is entirely determined by the algorithm. Creating a valid block is easy, you just take the previous hash, add some recent transactions and summary data, and a random nonce number, and calculate a new hash. A typical desktop computer can calculate millions of hashes in a second. But the algorithm is picky, and rejects most hashes. The goal is to accept one new block every ten minutes, no matter how many people are on the network making hashes, so the algorithm makes the arbitrary requirement that an acceptable hash, which is basically a bunch of random digits, must start with a series of zeroes. The miner changes the value of the nonce each time they make a new hash, hoping to get lucky with a hash that starts with enough zeroes. You can check the most recent bitcoin blocks and see the accepted hashes. Right now the latest winner is If, for whatever reason, more people start generating hashes, the next block will probably appear before ten minutes. That's fine, but if it goes on for too long the blockchain will grow faster than intended, sending more mining rewards out so the amount of bitcoin in circulation grows faster than planned. In that case, the algorithm will increase the difficulty, demanding MOAR ZEROES, to slow down the rate of blocks. These tune-ups happen every two weeks or so. It's also possible that fewer people will mine bitcoin, perhaps turning to other cryptocurrencies when the price drops. If that happens the difficulty will be reduced, to keep the production rate steady. I made a toy mining simulator, to get a feel for how hard it is to come up with a winning hash. For popular cryptocurrencies, it's not cost-effective to use a desktop computer, when a rig capable of generating trillions of hashes per second won't find enough lucky hashes to pay for the electricity it uses. So that's the way you could tell that a given blockchain is a big deal. With one simple computation, you can verify that the output hash satisfies an entirely arbitrary but inconceivably restrictive standard of being so very close to zero. Discovering the input value that produces such a low hash required computations consuming as much energy as Switzerland uses, year after year. (I would like to perform that hash myself, generating a recent accepted block hash, but I haven't been able to piece together the input values that work in a SHA-256 tool to get a bitcoin output hash.)1. Blockchains are kept "authentic" by calculating a set of hashes which are updated each time a transaction occurs.
be9056c3804a0d6797c7e28b9408ed9a80dac5a36cfdf47de13d2c2d18c122fb2. All past transactions have an effect on the current hash, therefore you cannot modify any prior transactions without also affecting the hash, making it obvious if someone has tampered with it.
3. This is only valid if there is more than one copy of the blockchain (or parts of the chain, I'm sure nobody is sitting there with the entire Bitcoin chain, it's probably huge), because otherwise the hash changing is meaningless, nobody would be able to tell if it was tampered with or not as you could just recalculate the whole thing.
4. A higher number of users (and part holders) of the chain increases the security of the chain, because if there were, for example, only three users, two of them could agree to both make the same false transaction, and validate each other. The consensus then goes in their favour.
5. Because the entire chain is in a way involved in calculating the hash for the latest transaction, the cost of calculating it increases over time.
0000000000000000000bff61e1ae588ae7c575b28736bddbee09a89218eb3404
Thanks, that clarifies it quite a bit. If I understand correctly; apart from my guess that the blockchain might be kept in parts by different users (turns out the whole block chain must be stored by each user), the only thing I had fundamentally misunderstood is that the calculation cost goes up for every transaction. It does not, since you only use the latest hash to calculate the next one (plus all the new data, obviously). Pretty funny, since that was pretty much the only one that mattered for the point I wanted to make (blockchains being power inefficient).
In practice, most users don't run bitcoin software at all, but interact with service providers like Coinbase. You can also run client software that only downloads part of the blockchain and allows you to generate new wallet addresses, monitor the network, and initiate transactions. Many clients are suitable for portable devices. You can even run client software on a computer that never connects to the internet, using it to create new addresses with minimal risk that the private keys will be stolen. Bitcoins don't really change hands, they are always in the blockchain, assigned to addresses. Individuals control private keys, which give them the ability to initiate transfers from an address. The power consumption is considerable and a fair source of criticism, as the low hashes produced by all that effort have no use beyond proving that you did a lot of work.
(1) is incorrect which renders (2) through (5) incorrect. 1. Blockchains are kept "authentic" by having identical copies distributed everywhere. Obviously a static, unexpanding copy is less useful than a dynamic one that records new transactions, so the copy holders have to be incentivized in order to keep their copies online and updated. 2. IN BITCOIN There is a reward for the first correct guess to a cryptographic puzzle. Essentially an army of computers are brute-forcing a solution. In order to have a hope in hell of coming in first, you need the clue of the last block. more here. Obviously the odds of guessing correctly are really shitty if you're all alone, which is why people talk about mining "pools." Pool the effort, distribute the wins. 3. The "correct" version of the blockchain is the one with the most agreement. If 30% of bitcoin miners decide they don't like the solution to any given block, there is now a fork with 30% of the miners on it, a fork with 70% of the miners on it, and "bitcoin" is whoever has the majority. Every miner needs the blockchain, the whole blockchain and nothing but the blockchain. 4) The more miners on the chain, the more miners need to vote against something in order to change it. If 30 miners in an 8,000 node network decide 7970 miners have the wrong copy, they are on their own pathetic little chain. If 30 miners in a 45-node network decide 15 miners have the wrong copy, they are still on their own pathetic little chain but they have the mother fork, for whatever it's worth. This formed the basis of the last season of Silicon Valley, incidentally. 5. The cost of calculating the next block increases over time so that early adopters are given an advantage. It's monetary policy at the code level. The difficulty of the hash is a choice, not an effect. Are those differences adequately explained?
Your clarifications are fine, but I do find it to be a bit of an uncharitable reading of what I wrote, because it seems to be far less wrong than you make it out to be, if we're to believe wasoxygen. However, the point that mattered most to what I was trying to say (point 5) turns out to be completely wrong, so it sounds like the power consumption point made in the article only applies to Bitcoin (or other similar blockchain use cases), and not blockchains in general. I still think a lot of the other points made in the article are valid. Mainly the idea that a blockchain can't replace external human validation, since a blockchain can only verify that records have not been tampered with after the fact, but can't verify that the input records are correct in the first place. For example in the case of land changing hands, the blockchain can't verify whether it really did or not, it has to be told. Instead of saying a blockchain is a glorified database, maybe it's more accurate to say it's a database with an elaborate checksum? A checksum can only check that data hasn't changed since the checksum was calculated, not whether or not the input information is correct. There are also further trade-offs which do come at a cost (of course that applies to any technology); - The security increases with the number of copies of the block chain out there, but since you need the entire chain to be copied it can be extremely storage intensive. Imagine if you wanted to use a block chain for a stock exchange; the number of transactions per day is enormous. - Keeping all of these copies in sync costs a lot in terms of data traffic, which also creates latency. In fact, all the hashing, even if it's not quite as bad as I thought, will create latency as well. In a time where some companies move physically close to stock exchanges in order to have shorter latency over their (already speed of light) fibre, this is not a minor concern. I think it's safe to say it's not "effectively zero cost", but it could be an acceptable cost for some applications. I also think it's safe to say there are many applications it would not be a good fit for.
You're effectively saying that since someone partially disagrees with me I'm rude. This is how we got into trouble last time - I can't stop you from being personally upset by the things I say but I can remind you that the excessive length and care you get in my responses are a sign I'm trying not to piss you off. wasoxygen is wrong. Blockchains are distributed ledgers. The distribution is the point. BitCOIN was derived from BitTORRENT where the entire point is the distribution and decentralization. The difference between bitcoin and bittorrent is there need be no central server to point new users to the blocks because there are no blocks. Everyone has the whole thing or they aren't a part of the equation. If you aren't 100% identical to everyone else on the network you aren't on the network. It's not a database. It's unwieldy and impossible to manipulate. A blockchain is an indelible, unfalsifiable, permanent record of transactions. You're absolutely right: if you write "2 plus 2 equals 5" in the blockchain, it will say that two plus two equals five. however, that block will have a unique identifier and the user that wrote that on the blockchain is also indelibly marked. And you're absolutely right that the blockchain is only as good as the information on it. But again, if you write something wrong or dishonest, you have written it forever, out where it can never be edited. Mistakes will be made because we're people but a pattern of "mistakes" is either incompetence or malfeasance and now that it's there forever, anyone can investigate. More importantly, there is no horizon beyond which mistakes cannot be found. No. With a public blockchain the durability increases with the number of copies. A 51% attack on an authentication blockchain would create two blockchains. Any transaction that happened before the 51% attack would be on both blockchains while any transaction that happened after the 51% attack would only be on one. if KBChain made the mistake of letting anybody on board, and got 51%attacked, KBChain Classic would release a memo saying "well that was dumb, we've still got your original verification and we're making our admissions standards more stringent." The data itself remains inviolate. Yes. But latency doesn't matter in the slightest when we're talking about authentication. If I'm buying and you're selling the money is going into an escrow account that you won't see for a month anyway so who cares. Thus once again we move from "I don't understand it and you're wrong" to "I understand it a little better but you're still wrong." A blockchain need not have 8,000 members. You don't get to play with Hyperledger unless you have a board of directors. Authentication on Bitcoin is dumb and authentication on the Ethereum mainnet is tortuous but authentication on an Ethereum-compliant private net could be fast as networking. Arianee, for example, accomplishes its mission perfectly if they just assign a node to every vendor that wants their products verified. If you've got 100 brands you've got 100 nodes and the network is secure because the only people who can write to the network are the brands that depend on it. That's 100 Raspberry Pis or the equivalent. Give each of 'em a 1TB hard drive. You're talking about a $500 cost for companies that don't sell watches for less than $5k ea. Breitling did 530m CHF in sales last year. I would say "effectively zero" is an accurate description.Your clarifications are fine, but I do find it to be a bit of an uncharitable reading of what I wrote, because it seems to be far less wrong than you make it out to be, if we're to believe wasoxygen.
Instead of saying a blockchain is a glorified database, maybe it's more accurate to say it's a database with an elaborate checksum?
- The security increases with the number of copies of the block chain out there, but since you need the entire chain to be copied it can be extremely storage intensive.
- Keeping all of these copies in sync costs a lot in terms of data traffic, which also creates latency. In fact, all the hashing, even if it's not quite as bad as I thought, will create latency as well.
I think it's safe to say it's not "effectively zero cost", but it could be an acceptable cost for some applications. I also think it's safe to say there are many applications it would not be a good fit for.
Fine, let's say it it's a ledger, good enough for me. Agreed, but with a lot of these things the paper trail isn't necessarily even the problem. Let's take Trump's taxes, for example. There is documentation out there that shows he's probably done illegal things, he just hasn't been prosecuted either due to the IRS being under-resourced, or political considerations. The documentation itself does not seem to be the issue. I think you definitely have a point about dodgy dealings by state officials in places like India, but again I don't think this is a technical problem as much as it is a political problem. They could have good records without blockchains if their politicians really wanted it, but clearly they don't. I don't disagree with the technical case, but the point I was making is that you can completely recalculate the entire block chain to your liking if you have access to enough copies of the chain, or have enough friends who do. And in your example, it still very much depends on people trusting you (or some group) to be the arbiter of KBChain. Blockchain creates a robust ledger, one where no single actor can simply cross out a name in a document, which is good, but you could also achieve that by having a database that tracks changes over time. I guess your point is not that it's impermeable, but rather that it makes it harder to mess around with it. I don't disagree with this, but other secure systems are probably just as good? Absolutely, but I did say it can be good for some applications. I have the feeling that we basically agree, maybe I just think that the things blockchains do aren't quite as revolutionary as you do.But again, if you write something wrong or dishonest, you have written it forever, out where it can never be edited. Mistakes will be made because we're people but a pattern of "mistakes" is either incompetence or malfeasance and now that it's there forever, anyone can investigate
No. With a public blockchain the durability increases with the number of copies. A 51% attack on an authentication blockchain would create two blockchains. Any transaction that happened before the 51% attack would be on both blockchains while any transaction that happened after the 51% attack would only be on one. if KBChain made the mistake of letting anybody on board, and got 51%attacked, KBChain Classic would release a memo saying "well that was dumb, we've still got your original verification and we're making our admissions standards more stringent." The data itself remains inviolate.
That's 100 Raspberry Pis or the equivalent. Give each of 'em a 1TB hard drive. You're talking about a $500 cost for companies that don't sell watches for less than $5k ea. Breitling did 530m CHF in sales last year. I would say "effectively zero" is an accurate description.
The difference between "harder" and "impossible" is non-negligible.
It's late so I'll have to get back to you tomorrow on this.
Sure, but what's the motivation for anyone to use the blockchain? It effectively becomes just a new-fangled version of sending in your warranty card to Sears. Why would every owner of every widget-you-want-to-track in the world register their widget with the central blockchain managed by that company? why would everybody who owns a particular brand of a particular item agree to start using a particular app to register their purchases, sales, trades, and loans? Why would every retailer agree to report their sales to the same central registrar? And if you're talking about wildly expensive items, why would every rich person in the world want to make their assets publicly searchable and indexable? What you're talking about isn't impossible, it just doesn't make any sense for people to take part in. If me and a buddy want to trade watches, or I want to give something expensive to a relative, you're telling me that I'm expected to report that home to the manufacturer? Fuck no. Hell no. Not on your goddamn life. If anything, the scenario you're describing is simply an incentive to not use blockchain at all because as soon as you start using blockchain-connected services, there's a possibility that you will, through no fault of your own, be accused of counterfeiting, theft, or forgery. You could be going about your business and suddenly something you own and love loses all value and becomes a crime.
Authentication. As I've been saying for like eight posts now. It does not. You buy electronics? B&H is one of the biggest vendors in the United States. For years they've sold gray market stuff openly - they even have a FAQ about it. What that means is they go to Thailand or Nigeria or Cyprus, buy Canon & Nikon & Sony & Whatever at 60% what it costs them in the US, haul it back to the US, and sell it for 10% off the US prices. They pocket the difference. This doesn't work out well for Canon & Nikon & Sony & Whoever because they had to pay duties to sell in Cyprus. Cyprus duties are often hella higher than American duties, which means to compete Canon has to sell their products for much lower than they do in the US. If you're a foreigner buying abroad, though, it's duty-free. You'll probably save 40,50% on that Canon lens. And if you're B&H you smurf ten thousand lenses out of assorted world markets a year. What's Canon gonna do, not honor the warranty? They can't prove that you didn't go to Cyprus and buy it yourself! Thus the spread on an international item can be up to 80%. If I can make a watch for $400 and pay $200 in duties to sell it for $1000, my profit is $400. If I have to pay $500 in duties my profit is $100... but any tourist in that country just bought my $1000 watch for $500, free and clear, totally legal. The gray market arbitrages the difference between "taxes individuals pay" and "taxes corporations pay" by looping the sale through an extra individual. Let's put a blockchain on it All of a sudden I know that watch was bought in Cyprus. And I know it wasn't bought by an authorized dealer. And I know who I sold it to, and I know who is attempting to resell it, and blam just like that they're no longer dealers. The individual consumer? I don't wanna punish him, he's just looking for a deal. But the guys punishing me for being international? Fuck to the yes they're going down. Again. $1.2T a year. To procure warranty service. More importantly though I just need to track when they cross international borders so I don't really give a fuck what the consumer does. If I ship a bunch of watches to Cyprus and one of them shows up in NY I get curious. If two dozen show up in NY I unleash holy hellfire on my Mediterranean dealer network. Because an authentic Rolex has the value of a Rolex and a fake rolex has the value of whatever you can get for it. If you wish to protect the resale value of your goods, you'd best participate. And I mean, look - Cabbage Patch Kids came with birth certificates. Nobody with an authentic spendybit wants to be accused of having a fake spendybit while everyone with a fake spendybit either doesn't want to be caught or wants to be ironic. You're legitimately arguing that provenance doesn't matter which is a fallacious position to take. Because I won't sell to them otherwise. If you're a vendor you already have to do this since I'm not actually selling to you, I'm selling through you and generally fronting you the product. They aren't. There's a unique identifier and there's a time and place it changed hands. This is already done with anything valuable enough to be insured. It's the title on your car. What I'm talking about isn't impossible. What I'm talking about isn't even exotic. It's mundane AF within the marketplace of high value product. What blockchain does is it (A) decentralizes it (B) anonymizes it (C) democratizes it such that verification is now trustless and frictionless. A haaaa. Now we get to the crux of the issue. If you give one of your friends an Audemars, he's received a gift of between $15 and $500k. IRS is gonna wanna know about that. It's the law NOW that it has to be reported, it's just that you can get away with it because nobody is watching. Only now if he wants to insure that audemars, get service on that audemars or resell that audemars, he'd best report it. The resale? Again, he's already required to report it BY LAW it's just easy to get around. Piketty estimated that the black market is roughly 40% of the white market because of stuff like this. And look at that - a concept popularized by the tongs and Silk Road is suddenly rendering a large chunk of the black market obsolete. Want service on your Audemars? Gotta report the sale. BAM. Taxes. Not up to you, pardner. Buy a Breitling and you're in the system. Buy a Vacheron and you're in the system. Buy a bunch of watches and you're in the system. Make no mistake: this is a vendor-friendly development. This is a government-friendly development. But we're talking about the stuff that tends to get used to sneak wealth across the border so let's not pretend you wouldn't be just as outraged if you heard about the guys who actually have a dozen black market watches in the forward cabin of their Donzi. Let's stand back and look at the hill we've climbed: yesterday blockchain was this useless thing you made fun of because only nerds care about it. This morning it's a concept that makes you outraged because of its flagrant anti-privacy overreach. Say what you will - you can't really argue it's a "solution for almost nothing."Sure, but what's the motivation for anyone to use the blockchain?
It effectively becomes just a new-fangled version of sending in your warranty card to Sears.
Why would every owner of every widget-you-want-to-track in the world register their widget with the central blockchain managed by that company?
why would everybody who owns a particular brand of a particular item agree to start using a particular app to register their purchases, sales, trades, and loans?
Why would every retailer agree to report their sales to the same central registrar?
And if you're talking about wildly expensive items, why would every rich person in the world want to make their assets publicly searchable and indexable?
What you're talking about isn't impossible, it just doesn't make any sense for people to take part in.
If me and a buddy want to trade watches, or I want to give something expensive to a relative, you're telling me that I'm expected to report that home to the manufacturer? Fuck no. Hell no.
If anything, the scenario you're describing is simply an incentive to not use blockchain at all because as soon as you start using blockchain-connected services, there's a possibility that you will, through no fault of your own, be accused of counterfeiting, theft, or forgery.
My position on blockchain hasn't changed, but I'm willing to put this thread to sleep. I still have yet to hear any argument in this discussion that makes the compelling argument that blockchain is the only, or in many cases best, solution to the problem. You've described a ton of problems that can be solved with better record-keeping or by enforcing existing laws, but nothing that doesn't already have answers, and in many of your examples, implementing a blockchain-based solution would introduce new issues that would then require new solutions. Nobody is saying that blockchain doesn't work for the purpose of storing data, only that in most cases, it's neither the only nor best answer.