The blockchain paradox: Why DLTs may do little to transform the economy • Hacker News Board

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

#241

Post by Frogolocalypse » Wed, Jun 14, 2017, 9:19 PM UTC

joosters wrote: post #55

Frogolocalypse wrote: post #47

Earlier quoted context omitted.

> the miners control bitcoin. Incorrect. Nodes enforce consensus in bitcoin, not miners. It is thus. It has always been thus.

Plain 'nodes' weren't even a thing back in the early days of bitcoin. The original design envisaged all participants to be miners. It was only when mining became out of reach of ordinary computers that people started running nodes. They do very little, just sending and receiving bitcoin transactions, a task which the miners could do just as well by themselves. Nodes have no say in consensus, the miners can ignore the…

> Satoshi from the Bitcoin white-paper chapter 12 'Conclusion' : The network is robust in its unstructured simplicity. Nodes work all at once with little coordination. They do not need to be identified, since messages are not routed to any particular place and only need to be delivered on a best effort basis. Nodes can leave and rejoin the network at will, accepting the proof-of-work chain as proof of what happened while they were gone. They vote with their CPU power, expressing their acceptance of valid blocks by working on extending them and rejecting invalid blocks by refusing to work on them. Any needed rules and incentives can be enforced with this consensus mechanism.

First, you have to understand what 'consensus' actually means :

> https://en.wikipedia.org/wiki/Consensus_%28computer_science%...

> A fundamental problem in distributed computing and multi-agent systems is to achieve overall system reliability in the presence of a number of faulty processes. This often requires processes to agree on some data value that is needed during computation. Examples of applications of consensus include whether to commit a transaction to a database (or, for example, committing blocks to a blockchain), agreeing on the identity of a leader, state machine replication, and atomic broadcasts. The real world applications include clock synchronization, PageRank, opinion formation, smart power grids, state estimation, control of UAVs, load balancing and others.

Nodes are the agents in a multi-agent system enforcing consensus.

Nodes accept incoming transactions and validate them. Miners don't. Nodes replicate transactions to other nodes. Miners don't. Miners take transactions from nodes, and order them in a block, and perform a hashing function on them (the only thing they do). Miners pass the new block to the node. The node validates the transactions in the block. Miners don't. The node validates the block. Miners don't. The node replicates the block to other nodes. Miners don't.

There is only one function that miners do. They take transactions, put them in a block, and hash them. As soon as a miner produces a block that any node determines does not obey consensus rules, it is rejected. It doesn't even matter if another node has already accepted, because consensus is aligned with all nodes. Any node that replicates non-consensus blocks or transactions is itself rejected.

So nodes accept the transactions, validate the transactions, replicate the transactions, maintain the mempools, validate the blocks, replicate the blocks, serve the blockchain, and store the blockchain. Nodes even define the PoW algorithm that miners have to employ.

Nodes maintain the protocol, not miners. It is thus. It has always been thus.

See for yourself. Download it.

https://bitcoin.org/en/download

It's currently at 0.14.2

https://bitcoin.org/en/full-node

> A full node is a program that fully validates transactions and blocks. Almost all full nodes also help the network by accepting transactions and blocks from other full nodes, validating those transactions and blocks, and then relaying them to further full nodes.

You should probably question how such a fundamental misunderstanding of how bitcoin works comes about. Is there a source for your opinion?

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

#242

Post by seagreen » Wed, Jun 14, 2017, 9:25 PM UTC

jerguismi wrote: post #200

seagreen wrote: post #154

Earlier quoted context omitted.

> I feel like Silicon Valley hegemony has a grudge against crypto currencies I have a grudge against crypt-currencies because their proponents think: + Implementations don't need specs + PL theory is below them (static typing? referential transparency?) + Repeated million dollar hacks aren't a problem + There's no shame in lying about the core purpose of your product (Etherium: The implementation is the LAW. Except w…

> because their proponents think: Come on, you can't generalize things like that on a group such as cryptocurrency users. I think this generalization tells more about you than cryptocurrency proponents.

I can, because I'm trying to explain a mindset, not make an argument. Maybe cryptocurrencies are the future, but there are reasons people are suspicious of them besides being silicon valley hegemons afraid of being disrupted.

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

#243

Post by SkyMarshal » Wed, Jun 14, 2017, 9:27 PM UTC

anothercomment wrote: post #239

You can begin to see the beauty of Bitcoin when you want to accept payments. All you need to do is download a wallet, generate an address and put it online. You don't need anybody's permission, as would be the case with PayPal or the likes. The risk of somebody deciding on a whim to freeze your funds is also greatly diminished (again, very different from PayPal and the likes). "Governance" and "Accountability" seem t…

>But it is also not true that it would be a huge problem if there were forks. Why would it be? People will simply use what works best for them, controlled by market forces (they need other people to use the same fork).

It's a problem for any tech that aspires to go mainstream and thus must contend with the already high cognitive loads on the majority of people who don't follow the tech in detail, don't know what a hard fork/chain split entails, what it means for their money, or the economy. Most mainstream users, when confronted with having to understand something like that to safeguard their money, will conclude, rightfully, it's best left in a traditional bank or under the mattress.

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

#244

Post by MarkPNeyer » Wed, Jun 14, 2017, 9:29 PM UTC

lawrenceyan wrote: post #165

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…

They all say that they'll never roll back or retroactively make any changes. But inevitably, they always do. I thought Ethereum might have been different, but of course I had to be disappointed. The problem with blockchains is that they still fundamentally fail to solve the problem of mob rule, though, I suppose you could argue that's one thing you'll never fully get rid while the human element is still involved. Rob…

Here is a proposed solution to mob rule:

https://github.com/neyer/dewdrop

With a much simpler version of the same concept here

https://github.com/neyer/respect

I think it's doable.

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

#245

Post by rjeli » Wed, Jun 14, 2017, 9:35 PM UTC

nemo44x wrote: post #215

narrator wrote: post #192

Earlier quoted context omitted.

Does this scale though? It all sounds nice, but with the massive blockchain overhead is this system going to be able to serve the community at all? I heard that each node has to execute the block chain in Ethereum. Sounds like a lot of duplicated computing just to do something that would be much more efficient if centralized.

Right now probably not. However, Etherum has sharding, as well as other features to help scale, as a feature for the future. It isn't like we are stuck with the current implementations.

Is sharding a realistic goal for Ethereum? How would it be implemented?

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

#246

Post by thisjepisje » Wed, Jun 14, 2017, 9:39 PM UTC

Animats wrote: post #179

coldtea wrote: post #122

Earlier quoted context omitted.

> The real revolution is in smart contracts and virtual machines that run on a blockchain and the ability to define ownership of a distributed organization to distribute profits accordingly. Blockchains on blockchains that having turing complete contracts that can guarantee there isn't even the ability to cheat the distributed, mainly anonymous organization participants. Sounds like something utterly complex even to…

"Turing complete contracts" were a terrible idea, as the DAO debacle and subsequent fork demonstrated. If the people behind the DAO hadn't been the same people as the people behind Etherium, they would have been screwed. Machine-readable contracts need to be much simpler and much clearer to work. I've suggested decision tables as a format; those are declarative, guaranteed to terminate, and have a simple chart form t…

You can implement decision tables on top of a turing-complete language.

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

#247

Post by princeb » Wed, Jun 14, 2017, 9:44 PM UTC

erikpukinskis wrote: post #235

nradov wrote: post #106

Earlier quoted context omitted.

Bitcoin is mostly popular in Eastern Europe and Asia for transfer payments, fiat currency conversion, money laundering, and evading capital controls (getting money out of China). In the US if you're doing legitimate business with other US entities then there's really no need for such a thing. I can write a check or send a credit card payment or wire transfer to another US bank with a reasonably high level of trust th…

Americans won't realize the benefits of cryptocurrencies until they start to be able to do capital-B Banking with it. Not deposits, withdrawals, and transfers, but the creation of new financial instruments. Cryptocurrency wants to move people up the banking hierarchy. So it tries to lift Eastern Europeans to the level of New Yorkers, in terms of access to stable currencies and transfers. But it also tries to lift the…

> creation of new financial instruments

creation of old financial instruments is also fine by me: working capital loans, bridging loans, factoring, repos, commercial paper, bills of lading, letters of credit, etc.... you know, the stuff that businesses will typically need.

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

#248

Post by zilchers » Wed, Jun 14, 2017, 9:47 PM UTC

anothercomment wrote: post #239

You can begin to see the beauty of Bitcoin when you want to accept payments. All you need to do is download a wallet, generate an address and put it online. You don't need anybody's permission, as would be the case with PayPal or the likes. The risk of somebody deciding on a whim to freeze your funds is also greatly diminished (again, very different from PayPal and the likes). "Governance" and "Accountability" seem t…

I think this is the point though - for something like bitcoin, this tension is ok. It's when you start getting into things like blockchains for real estate in developing countries (I think there are a few startups working on this) when it becomes an issue. Someone still fundamentally needs to issue the blockchain deeds, or ok that you, in fact, own the property you are claiming to own. At that point, you have a central authority, and a normal database with some sort of public backup or checkpointing would be as good as a blockchain solution.

So, I'd agree bitcoin doesn't want central governance, and that's a feature not a bug, but for other block chain solutions this article makes a very good point.

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

#249

Post by anothercomment » Wed, Jun 14, 2017, 9:53 PM UTC

zilchers wrote: post #248

anothercomment wrote: post #239

You can begin to see the beauty of Bitcoin when you want to accept payments. All you need to do is download a wallet, generate an address and put it online. You don't need anybody's permission, as would be the case with PayPal or the likes. The risk of somebody deciding on a whim to freeze your funds is also greatly diminished (again, very different from PayPal and the likes). "Governance" and "Accountability" seem t…

I think this is the point though - for something like bitcoin, this tension is ok. It's when you start getting into things like blockchains for real estate in developing countries (I think there are a few startups working on this) when it becomes an issue. Someone still fundamentally needs to issue the blockchain deeds, or ok that you, in fact, own the property you are claiming to own. At that point, you have a centr…

Agreed, and it is a reason why I am holding back on Etherium so far. I don't know if they have a proposed solution to that, tbh, but it seems pretty impossible to solve.

Although, to be fair, "classic" contracts also need that someone to enforce them. Maybe Etherium & the likes only replace one aspect of it, not the whole process. If company X publicly announces that they'll adhere to a certain contract in the blockchain, they can be held accountable for it and transactions can be completely transparent.

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

#250

Post by anothercomment » Wed, Jun 14, 2017, 9:55 PM UTC

SkyMarshal wrote: post #243

anothercomment wrote: post #239

You can begin to see the beauty of Bitcoin when you want to accept payments. All you need to do is download a wallet, generate an address and put it online. You don't need anybody's permission, as would be the case with PayPal or the likes. The risk of somebody deciding on a whim to freeze your funds is also greatly diminished (again, very different from PayPal and the likes). "Governance" and "Accountability" seem t…

>But it is also not true that it would be a huge problem if there were forks. Why would it be? People will simply use what works best for them, controlled by market forces (they need other people to use the same fork). It's a problem for any tech that aspires to go mainstream and thus must contend with the already high cognitive loads on the majority of people who don't follow the tech in detail, don't know what a ha…

Maybe true, but in a way, classical investments are even more complicated. Some of them are even deliberately complicated to obfuscate their risky nature to naive investors.