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The blockchain paradox: Why DLTs may do little to transform the economy

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Re: The blockchain paradox: Why DLTs may do little to transform the economy

#221

Post by TheSpiceIsLife »

cercatrova wrote: post #181
root_axis wrote: post #146

Earlier quoted context omitted.

> make an agreement that is enforced by a smart contract Please give me an example of how an agreement can be enforced by a smart contract. > When an actor fails to live up their obligation they are refused payment It works the same way with colored pebbles. > There is no way to take off with something that is not yours Why not? I know this is an abstract question in this context which is why I asked for a practical…

Okay, I'll give you a practical example. Here is an excerpt from the book Blockchain Revolution. "bAIRBNB VERSUS AIRBNB bAirbnb is a distributed application (DApp), a set of smart contracts that stores data on a home-listings blockchain. The bAirbnb app has an elegant interface: owners can upload information and pictures of their property. The platform maintains reputation scores of both providers and renters to impr…

> Risk Reduction: Home owners currently store customer identities and financial data on their own servers

I wasn't aware this was how Airbnb operated. I was under the impression whoever made the listing on Airbnb never saw details of the renters payment details.

> In disputes involving smart contracts, parties can call for arbitration.

Call who? A lawyer? Their heavies? Who's paying to operate all this infrastructure?

> Local governments in oppressive regimes cannot subpoena bAirbnb for all its rental history data.

So governments will outlaw it and prosecute anyone caught operating a bAirbnb, which should be simple to do because all this listings are publicly visibly. Which should also be true of real Airbnb now, but charging people who renting their houses / units / whatever illegally seems to be fairly low on the police's list of priorities. Oppressive regimes, however, tend to go after people for what should be trivial matters, which is what makes them oppressive.

Governments can also order ISPs to block certain types of network traffic, thereby denying access to these services.

Re: The blockchain paradox: Why DLTs may do little to transform the economy

#222

Post by scient »

russdpale wrote: post #217
rockmeamedee wrote: post #85

I agree with this article. Proponents of blockchain tech argue its revolutionary quality is its ability to act as a decentralized and trustless database. But I don't ever hear them sort through the issue of how to agree on the schema for this trustless database. For a group of people to use a decentralized DB, they have to agree as to what to store in it, and how to store it. They need to form consensus about how the…

With bitcoin, it is agreed upon using byzantine consensus. The only way a bad actor can manipulate the ledger is if they own enough nodes to gain a majority, which is virtually impossible. After just a handful of bit times is economically and mathematically impossible to reverse the contract. I suggest listening to this Tim Ferris podcast with Nick Szabo: http://tim.blog/2017/06/04/nick-szabo/ The entire idea is that…

> The only way a bad actor can manipulate the ledger is if they own enough nodes to gain a majority, which is virtually impossible.

Im not buying that. If there is a way, someone will do it. This actually seems like a huge vulnerability to me. Especially when we are talking about specialized blockchains where the participation isnt every internet connected person in the world. How do you prevent that from happening?

Re: The blockchain paradox: Why DLTs may do little to transform the economy

#223

Post by scient »

subway wrote: post #209
jerguismi wrote: post #195

Earlier quoted context omitted.

Why would you want to do that with a blockchain? Is it necessary to store this logging data to thousands of nodes? What about 5 servers, geographically distributed?

Why do you assume a blockchain has to consist of thousands of nodes? A private blockchain works equally well across those 5 geographically distributed nodes.

So why use blockchain? Whats the benefit? The only thing I can think of is proof of authentication attempts, a kind of a irrefutable log of some sort. But whats the benefit its providing, that we are lacking today?

Re: The blockchain paradox: Why DLTs may do little to transform the economy

#224

Post by linkregister »

russdpale wrote: post #217
rockmeamedee wrote: post #85

I agree with this article. Proponents of blockchain tech argue its revolutionary quality is its ability to act as a decentralized and trustless database. But I don't ever hear them sort through the issue of how to agree on the schema for this trustless database. For a group of people to use a decentralized DB, they have to agree as to what to store in it, and how to store it. They need to form consensus about how the…

With bitcoin, it is agreed upon using byzantine consensus. The only way a bad actor can manipulate the ledger is if they own enough nodes to gain a majority, which is virtually impossible. After just a handful of bit times is economically and mathematically impossible to reverse the contract. I suggest listening to this Tim Ferris podcast with Nick Szabo: http://tim.blog/2017/06/04/nick-szabo/ The entire idea is that…

> The only way a bad actor can manipulate the ledger is if they own enough nodes to gain a majority, which is virtually impossible.

At times the leading BTC mining pool has controlled greater than 50% of the nodes. Would this not be enough to alter the ledger?

Re: The blockchain paradox: Why DLTs may do little to transform the economy

#225

Post by jakewins »

russdpale wrote: post #217
rockmeamedee wrote: post #85

I agree with this article. Proponents of blockchain tech argue its revolutionary quality is its ability to act as a decentralized and trustless database. But I don't ever hear them sort through the issue of how to agree on the schema for this trustless database. For a group of people to use a decentralized DB, they have to agree as to what to store in it, and how to store it. They need to form consensus about how the…

With bitcoin, it is agreed upon using byzantine consensus. The only way a bad actor can manipulate the ledger is if they own enough nodes to gain a majority, which is virtually impossible. After just a handful of bit times is economically and mathematically impossible to reverse the contract. I suggest listening to this Tim Ferris podcast with Nick Szabo: http://tim.blog/2017/06/04/nick-szabo/ The entire idea is that…

> If the poor of the world can understand the social mobility that crypto currency affords them

Can you expand on how crypto currencies relate to positive social mobility?

Off-handedly it seems to me it would be the opposite, although I'm admittedly fuzzy on this..

In theory crypto currencies reduce rent-seeking from intermediaries; since much financial rent seeking is established as percentages of an exchange (like a credit card transfer), removing those rents will give bigger net advantages to those transferring large amounts than those transferring small ones.

Not saying removing rent seeking is bad (it's awesome!), but I don't see how that does anything but increase the difficulty for someone with low capital to catch up; rather it should be doing the opposite.

Re: The blockchain paradox: Why DLTs may do little to transform the economy

#226

Post by sciyoshi »

russdpale wrote: post #217
rockmeamedee wrote: post #85

I agree with this article. Proponents of blockchain tech argue its revolutionary quality is its ability to act as a decentralized and trustless database. But I don't ever hear them sort through the issue of how to agree on the schema for this trustless database. For a group of people to use a decentralized DB, they have to agree as to what to store in it, and how to store it. They need to form consensus about how the…

With bitcoin, it is agreed upon using byzantine consensus. The only way a bad actor can manipulate the ledger is if they own enough nodes to gain a majority, which is virtually impossible. After just a handful of bit times is economically and mathematically impossible to reverse the contract. I suggest listening to this Tim Ferris podcast with Nick Szabo: http://tim.blog/2017/06/04/nick-szabo/ The entire idea is that…

OP's argument is that this distributed consensus algorithm works only if there is already consensus about which algorithm to use in the first place! If you and I disagree about which block history is valid (for example, because my history includes blocks with a lower difficulty), then the assumptions are no longer valid and there's a hard fork. Also, note that a 51% attack can only exclude transactions or allow double spending - the ledger still can't be arbitrarily manipulated since transactions are signed by private keys.

Re: The blockchain paradox: Why DLTs may do little to transform the economy

#227

Post by danblick »

russdpale wrote: post #217
rockmeamedee wrote: post #85

I agree with this article. Proponents of blockchain tech argue its revolutionary quality is its ability to act as a decentralized and trustless database. But I don't ever hear them sort through the issue of how to agree on the schema for this trustless database. For a group of people to use a decentralized DB, they have to agree as to what to store in it, and how to store it. They need to form consensus about how the…

With bitcoin, it is agreed upon using byzantine consensus. The only way a bad actor can manipulate the ledger is if they own enough nodes to gain a majority, which is virtually impossible. After just a handful of bit times is economically and mathematically impossible to reverse the contract. I suggest listening to this Tim Ferris podcast with Nick Szabo: http://tim.blog/2017/06/04/nick-szabo/ The entire idea is that…

Is "byzantine consensus" an appropriate term?

I think it's typically used when there's agreement on the list of nodes participating in the network. (The nodes can agree to change the list of participants, Lamport wrote about it in "Reconfiguring a State Machine".)*

With "blockchain" / proof of work, computing power substitutes for voting power: you pass state transitions by controlling a majority of the compute power rather than a majority of the voting power.

Have you seen "byzantine consensus" used in the second context (with proof of work) also?

(*) When I think of the Byzantine consensus problem, it's when:

- not every node has to vote in each round (so that the system can make progress even if some nodes fail);

- you can authenticate (e.g. with cryptography) that messages come from the appropriate sender (but not whether that sender is acting "honestly");

- the goal is to reach consensus, i.e., if any node concludes that some proposition (i.e. state transition) has passed, no nodes will ever agree on contradictory proposition.

Re: The blockchain paradox: Why DLTs may do little to transform the economy

#228

Post by scient »

ckastner wrote: post #144
root_axis wrote: post #112

Earlier quoted context omitted.

The source of the distaste is obvious: breathless hyperbole without much substance to show for it. Posts like yours are a great example of it. In this very comment you write: > leading the charge on what could be the next major technical revolution Unsubstantiated hype. Where is the revolution? A common thread among cryptocurrency enthusiasts is that the revolution is coming... except it never does. When you talk abo…

> bitcoin remains difficult and relatively unsafe to use (for the non-technical masses) Even assuming it were trivially easy and perfectly safe to use, there are numerous other risks currently associated with it. Just look at its recent volatility, for example.

People who claim BTC is the next mainstream currency are delusional. Its an investment commodity right now, and its way too volatile, way too little regulated and capped too low to be a serious currency contender. Seriously, the real world does not work that way, and thats not necessarily a bad thing. This goes especially for the whole decentralized and uncontrolled/unregulated part - I see it as bad thing, a lot of the regulations are in place to avoid anarchy and protect the consumers (admittedly there are also regulations that totally screw the consumer in some cases).

Re: The blockchain paradox: Why DLTs may do little to transform the economy

#229

Post by UncleMeat »

runeks wrote: post #158
hdhzy wrote: post #86

Earlier quoted context omitted.

I wonder what's the energy consumption of an average credit card transaction (including keeping the infrastructure, charge backs etc.)...

The more important point is that VISA is broken by design. Every day hackers steal credit card info and leech millions from the system, which is included in the fee you pay. The only reason it keeps working is because hackers aren't sufficiently sophisticated yet. The solution, of course, is to store a private key on a hardware device, not have the private key be 16+3 decimal digits and an expiration date.

That is entirely unrelated to a decentralized or centralized design. One could build a centralized CC network where we don't need to transmit credentials to third parties in order to make purchases.

Re: The blockchain paradox: Why DLTs may do little to transform the economy

#230

Post by nullstyle »

rockmeamedee wrote: post #85

I agree with this article. Proponents of blockchain tech argue its revolutionary quality is its ability to act as a decentralized and trustless database. But I don't ever hear them sort through the issue of how to agree on the schema for this trustless database. For a group of people to use a decentralized DB, they have to agree as to what to store in it, and how to store it. They need to form consensus about how the…

Trustless isn't the only option. https://www.stellar.org/papers/stellar-consensus-protocol.pd...

The reason I believe in our model for consensus is that it more closely resembles trust in the real world. We're more explicit than meatspace, which could be a drawback, but I think it's a better model than trustless.

Disclosure: I work for stellar.org

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