Am I the only one who doesn't really have a clue what blockchain is?
Something to do with bitcoin transactions, right?
As far as database giant Oracle is concerned, the October announcement of its Blockchain Cloud Service (BCS) was timed perfectly. After dabbling with blockchain internally for a year before joining the Hyperledger consortium in August, it had reached the point where its customers – and a market intrigued by what looks like …
blockchain is a distributed, decentralised database. Transactions are crytographically signed, and require a consenus of participating nodes to verify.
Beyond that, you either get it (like the people I am paid by) or you don't (like the guys still insisting after I gave them an R&D demo at my last job that they "couldn't see what blackchain bought to the party")
Bitcoin is a freak sideshow. If you are talking to someone who cannot distinguish between Bitcoin, and the underlying blockchain, then save your breath.
The real power of blockchain comes when you realise it's a state machine (like you learned about at University) and can actually act as a computer in it's own right. Which is how smart contracts work.
The uptake of blockchain is a paradigm of Arthur C. Clarkes pointed observation on how new ideas spread.
What's the most inefficient and slow database you can think of?
A blockchain is worse than that by several orders of magnitude. Currently, a single bitcoin transaction is estimated to consume as much energy as 15 average American households do in 24 hours.
Which is how smart contracts work.
Or don't, as it turns out, because it's impossible to write 100% flawless code.
I agree with this general comment. I don't see what business problem this technology will solve for me that isn't already solved by something simpler. Can anyone enlighten me from a business perspective?
Certainly. The "blockchain" concept was invented by a secret cabal of contract lawyers who were concerned that increasing amounts of authoritative case law was constraining future litigation growth potential (this is why the "inventor" of Bitcoin is so mysterious btw). By yanking the rug out from under the previous contract model and (crucially) distributing verification, the number of potential litigation targets increases exponentially.
To take a basic example: Dave and Crapillion Corp. have a "smart contract" that ensures he is paid for work done when his side of the deal is fulfilled. This is authorised by the distributed blockchain with different bits under the control of different entities in different jurisdictions.
But!! There is a dispute over whether Dave's work was up to standard ... and Crapillion have called in the receivers for unrelated reasons. Is the cash in Dave's account? Can the receiver get it back? Can Dave enforce payment? The potential litigation surface has expanded beyond all recognition and every case is a test case!! You've invented the legal equivalent of building Salisbury Cathedral - ongoing work you can pass on to your grandchildren ;)
@Sorry_that_handle_is_already_taken wrote (amongst their otherwise elegant post):
"Currently, a single bitcoin transaction is estimated to consume as much energy as 15 average American households do in 24 hours.
That's an awful lot of juice. Should that be suffixed with "Probably" ?
That's an awful lot of juice. Should that be suffixed with "Probably" ?
Possibly. It's a difficult estimate to make, but this is the source of that estimate: https://digiconomist.net/bitcoin-energy-consumption
Currently, a single bitcoin transaction is estimated to consume as much energy as 15 average American households do in 24 hours.
That's an awful lot of juice. Should that be suffixed with "Probably" ?
Looked at another way, it's as much energy as one American household consumes in 15 days.
I know that's probably going to be a lot more than my household consumption, but at the spot price I just looked up of $8,905.73 per Bitcoin, where do I start?
(I suspect that I'd have to lay out a fair old bit on hardware before I could even begin)
Yes, but most businesses don't want decisions to be made by a "consensus of participating nodes", they want them to be made according to a set of rules and procedures handed down by the CEO.
Can blockchains work in the sort of management structures found in the real world?
If the powers that be decide that the wrong decision was made, can it be changed to the management sanctioned correct decision? The answer to this by the way is no, and that is the whole point of blockchains.
With a private blockchain, how do you prevent a 51% attack from outside without a digital arms race that consumes the entire planet's resources of electricity and GPUs?
I would no more trust a private banks blockchain than I would their own internal ledgers - both could be doctored no end.
But it will be much more difficult to interfere with a blockchain. Which means it will be trusted far beyond the reasonable limits of technology. A bit like courts, who often seem to assume that DNA evidence is inviolable, or that coppers tell the truth.
By being wrong (or at least focusing on a specific use case built on top of blockchains rather than on blockchains themselves) I think you've absolutely perfectly summed up the situation. I *think* I know roughly what they are, but I'm still waiting for that Eureka moment where I understand what all the fuss is about. At the moment, to me it sounds like a different type of mousetrap, but I don't understand why some people think it's a better type of mousetrap.
"Build a better mousetrap, and the world will beat a path to your door"
A blockchain is a distributed database where the transactions are fully audited and guaranteed. The method of guarantee varies. It doesn't have to be the way Bitcoin does it (proof of work), which requires large amounts of power-consuming computation.
Since the idea was put together by some very techy-type people, there's tons of jargon that obfuscates meaning, and much of the documentation is incredibly badly written.
The Canton of Zug in Switzerland is using a blockchain application as a method of creating online identies for citizens.
What do you mean by "fully audited and guaranteed"? To give an example, the manager at my local shopping centre was jailed recently because he transferred money received from the local council for disabled toilets. The auditor picked it up when they checked all the expenditure and reported it to the police.
How would recording it on a blockchain change anything in this respect vs recording it on the bank's SQL database? Both give you an accurate list of transactions, but someone still needs to check that the money went where it was supposed to go, ie to a plumber to fit the new toilet, and someone still needs to visit the shopping centre to see that the toilet does in fact exist.
Truly people hear about blockchain term a lot recently, but very few really know what it is and why there is so much fuss about it. I think that first everyone should answer some basic questions by reading simple and easy-to-understand articles like this one - https://blog.s-pro.io/blockchain-technology-explained/ that is written in plain English and covers the main aspects of the blockchain technology. Hope it helps!
AIUI blockchain was supposed to be a distributed, organisation and infrastructure independent way of recording transactions. Designed so that you were free of big corporate organisations such as banks.
So why does a large organisation need such a technology? Apart from the kudos of using blockchain which seems to boost share price?
I am still at the stage of trying to visualise the solution which requires the technology. Which is generally the wrong way round.
Indeed. One such forgotten failure from circa 2002 was a blockchain system for guaranteeing that data had not been tampered with. As is was a private system they published a daily hash (in fact a hash of all their customers daily hashes) in a national newspaper to provide non repudiation.
Whilst I could see the value I didn't consider it needed enough to buy the product. Apparently neither did anyone else. Let's see if it fares better this time.
and that's your problem right there.
"Private" blockchains are the creation of traditional IT departments who can't grasp what a blockchain is and feel the need to own everything.
(Like a former employer whose IT department is still firmly rooted in the 1990s. They were insisting on supplying Windows Phones (because only Microsoft was "approved") up until 18 months ago.)
Remember, information on the blockchain is secured crytographically, so there's no downside in making it public. However the upside is the resources needed to tamper with it are practically infinitesimal. Not only would you have to crack the encryption. You then have to recalculated all the hashes and find a way to replace every single copy in existence. Even if you wanted to throw a "fake" blockchain into the mix (to discredit the real one) you'd still have to burn more CPU than exists today.
Never say never, but at the moment, a properly instantiated blockchain is as close as you are going to get to a tamper proof system.
@AC. "and that's your problem right there"
You are utterly wrong. A private blockchain works rather well. You only need to commit a final hash occasionally to a public chain to get independent non repudiation of whatever you have hashed to that point. Remember just because bitcoin transactions are in the blockchain this isn't necessary. They could be stored separately and just use the blockchain for verification.
The big problem with a public shared blockchain is who is paying for it. Bitcoin currently costs $17M a day just to support 200,000 transactions per day.
is its distributed and peers get to vote on the 'correctness' of a blockchain. In a commercial context, if anyone disagrees, then you've got problems. The approach to determining correctness (to me at the moment) seems ad-hoc with potential for poisoning if anyone really wanted to do this.
Its a technology and an interesting one in passing, but I'm yet to see the killer app that says this is a good idea that really adds value. There are advocates for every new bit of technology, which is nice, but not always a good idea. My default position is always to ask how this adds value - I havent seen the answer wrt blockchain yet.
Lots of questions about what blockchain is good for in a business context...
Blockchain gives you an immutable (write-once) database which is sharable and permissioned. The use case is for transactions amongst business partners who today must each record every transaction in their own private databases. The basic benefit for blockchain in a business context is that participants can all share one copy of the transaction log, so everyone sees the same consistent data.
The features that blockchain adds, beyond what you'd get by sharing a traditional database, are these: You have cryptographic proof that the database isn't tampered with. The permission system means that participants can see only those transactions that they themselves are involved with. Smart contracts allow transactions to be proposed automatically, subject to confirmation by the parties involved in the transaction. And contrary to the way cryptocurrencies like Bitcoin work, the confirmation process does not have to be resource-intensive. (That resource-intensive confirmation process is central to how Bitcoin works, but it's not a fundamental requirement for blockchain in general.)
So the benefit in a business context is improved efficiency. A group of business partners who regularly interact with each other can share a single, permissioned, tamper-proof ledger, and routine transactions can be automated but are still subject to approval by the participants in the transaction.
How many companies actually need blockchain is another matter, but that's basically what it gives you.
This is why the Bank of England are looking at it. There's a relatively small number of banks in London who borrow off each other on the repo market for short periods. They do so using collaterol (usually things like government/corporate bonds they own as part of their capital reserves). But there's a worry that one bank might use the same bond as collaterol more than once, should they ever get into trouble, and nobody could easily know.
So there could be a system that would make this trading easier, more transparent, and if run/supervised by the BofE would also mean they could have a good old nose at what assets the banks are holding and how much they're borrowing.
Whether they can make that actually work in practise is another matter entirely. But it's a plausible use of some kind of blockchain technology.
In general I'm sceptical of how useful it'll turn out to be. But I can imagine there being a few uses.
>But there's a worry that one bank might use the same bond as collaterol more than once, should they ever get into trouble, and nobody could easily know.
I'm sorry but this is factually incorrect. In general in the European Repo market cash and collateral are exchanged as part of Delivery versus Payment process. In other words the same bond cannot be used twice because it has already beend delivered.
In the US (and to a lesser extent Europe) most repo is Tri-party, which means a trusted third party holds securities for both parties and reallocates them in it's ledger to the lender of cash.
You are right to be skeptical. It is very hard to find a genuine double spend problem in conventional fianncial systems. Plenty of other problems but not double spend
>> And contrary to the way cryptocurrencies like Bitcoin work, the confirmation process does not have to be resource-intensive. (That resource-intensive confirmation process is central to how Bitcoin works, but it's not a fundamental requirement for blockchain in general.)
OK, got it. So the 'mining', (competitive, rewarded verification) is not central to the blockchain. That's the bit that was missing for me! Thanks.
But then blockchain becomes simply a distributed, crypto-verifiable database, right? And that already exists, right? Classical distributed database theory has long solved the inherent 'race condition' problem, a problem which Bitcoin descriptions always dramatically claim Bitcoin has 'at last' solved.
So, can someone fill in the bits I'm missing...? Unless...............
> But then blockchain becomes simply a distributed, crypto-verifiable database, right? And that already exists, right?
Mostly right. It's a tamper-proof, permissioned, append-only distributed database. (Tamper-proof by virtue of the crypto.) If you've already got one of those then you probably don't need blockchain.
Decent article I read just this morning on practical uses for Blockchain technology:
The examples are towards the end.
Other points I found interesting were the restrictions on the data access (as covered above) and how many of the big financial institutions have a foot in multiple consortia, I don't think this technology will lead to the redundancy of the banks anytime soon.
I read last week that it's now possible to paste anyone's face onto video of anyone else's body, a technique that is (unsurprisingly) being exploited for porn.
This will soon create the problem of nobody believing the verisimilitude of any clip of video, unless the provenance of said piece of video can be traced back to its creation through something like a blockchain.
I recently visited my folks who are over 70 years old, both them and their friends were asking about Bitcoin and blockchain. It was very much like the comments section here, a bunch of elderly farts saying how it doesn't make sense to them and in my day we just used a Windows database.
As one of those bright young things who works in modern computing, rather than a left over role administering 1990s apps and hardware with a side order of cynicism, I totally get blockchain tech as it's been around for years.
The biggest problem with it, is people trying to fix everything with it.
I had a client who suggested making some kind of secure messaging with it, there are already simpler encrypted messaging solutions and blockchain is not a bolt on to make everything suddenly secure "cos it's encrypted"
Anon because I am again insulting the pensioners who regularly post here about their lack of Facebook and now lack of blockchain ... Like those users who are proud of their lack of knowledge and interest in IT.
"As one of those bright young things who works in modern computing, rather than a left over role administering 1990s apps and hardware with a side order of cynicism, I totally get blockchain tech as it's been around for...... "
You, young man, are under some illusions if you think we oldies have all been chucked on the scrapheap - if you've seen some people in the course of your work administering 90s hardware and "apps" then I can assure you you are not working in "modern computing". On the other hand, if you've just made that up, you are a cheeky young whippersnapper, and whilst i admire your enthusiasm as a bright young thing, may I caution you that the road to experience can only be completed by donning the cloak of cynicism. Otherwise young one, your enthusiasm will lead you astray into the gulf of gullibility, where lie the skeletons of many a misguided traveller......
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