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How Blockchain Works

blockchain.mit.edu

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Re: How Blockchain Works

#71

Post by prostoalex »

the_snooze wrote: post #23
Moodles wrote: post #20

Earlier quoted context omitted.

I have a PhD in cryptography. Please be precise. Exactly what problem will blockchain solve for vehicles? You can't just hand wave and say stuff like "decentralized trust management" and expect us to nod along.

Yeah, I'm quite skeptical of it as well. If I'm being really charitable to it, then it's a way to synchronize data between parties without relying on a trusted intermediary. That said, it's unclear what practical value that has outside of purely digital applications like cryptocurrency. When you roll it into things in the real world (e.g., supply chains, health records, etc.) then you necessarily have to trust the da…

> it's a way to synchronize data between parties without relying on a trusted intermediary

At the expense of time. So most real-world use cases (securities trading, vehicular networks, payments) fail when you introduce a 10-minute delay required for distributed confirmation.

For time-insensitive examples you've provided - supply chain and health records - the use cases work better, but who will dedicate the resources and mine the blocks to ensure that specific blockchain's survival?

Re: How Blockchain Works

#72

Post by passiveincomelg »

sparkzilla wrote: post #55
this_user wrote: post #26

Earlier quoted context omitted.

A blockchain is just a type of data structure. I have yet to see any use case, outside of building crypto currencies, that could not be realised without it. The problem is not that the technology did not exist before, the problem is that people and organisations were slow or unwilling to adopt it. But that is not the type of issue that will be solved by introducing new technology, and almost all blockchain advocates…

My company aims to convert all the world's news into data. Please tell me another technology that will allow us to build a decentralised, failure-tolerant, censorship- and tamper-resistant archive of that data, that allows anyone to add data, and have it verified without a central authority, and that anyone can use to create news applications.

verified how?

Re: How Blockchain Works

#73

Post by thedancollins »

prostoalex wrote: post #65
thedancollins wrote: post #33

Over the past year I have gone from Blockchain enthusiast to more blockchain gadfly. The concept is truly revolutionary but the use cases I typically see trotted out are not compelling in any significant sense and could be solved without blockchain. I believe the reason for this is due to the fact that the true value of a blockchain solution is not in the data aspect of it (which everyone gravitates to and can quickl…

> The concept is truly revolutionary In what way? Publishing a DB dump with a checksum has been around for decades, and doesn't require a new user to download an entire history of deltas from day 1.

Because it finally provides a mechanism by which bad actors on a network could face repercussions for their activity. Consider how different the internet would be if hyperlinks were two-way rather than one-way. Again, it is not only about data, it is about the speed of transactability that would result when value could be exchanged instantaneously with radical transparency behind the actors on the chain. Bankers go away, auditors go away, credit requirements for market participation go away. What could be do with the trillions of dollars tied up and sitting in credit collateral accounts? Liquidity is a good thing.

Re: How Blockchain Works

#74

Post by kybernetikos »

acjohnson55 wrote: post #68
thedancollins wrote: post #33

Over the past year I have gone from Blockchain enthusiast to more blockchain gadfly. The concept is truly revolutionary but the use cases I typically see trotted out are not compelling in any significant sense and could be solved without blockchain. I believe the reason for this is due to the fact that the true value of a blockchain solution is not in the data aspect of it (which everyone gravitates to and can quickl…

Maybe this is a different way of putting it, but my assumption is that if there are killer apps for blockchain tech, the value created will tend to be in the equity of companies rather than tokens. In most cases where those things are being conflated (e.g. ICOs), there's no obvious reason for it. Not everything needs a bespoke ledger and microeconomy. The complexity is completely unjustified.

> Not everything needs a bespoke ledger and microeconomy. The complexity is completely unjustified.

I also think that the mad gold rush has the potential to turn off those who would build the real ecosystem, small pieces of useful, reusable smart-contract code at a time.

Re: How Blockchain Works

#75

Post by the_snooze »

passiveincomelg wrote: post #72
sparkzilla wrote: post #55

Earlier quoted context omitted.

My company aims to convert all the world's news into data. Please tell me another technology that will allow us to build a decentralised, failure-tolerant, censorship- and tamper-resistant archive of that data, that allows anyone to add data, and have it verified without a central authority, and that anyone can use to create news applications.

verified how?

And what exactly are you verifying?

Re: How Blockchain Works

#76

Post by lawn »

prostoalex wrote: post #65
thedancollins wrote: post #33

Over the past year I have gone from Blockchain enthusiast to more blockchain gadfly. The concept is truly revolutionary but the use cases I typically see trotted out are not compelling in any significant sense and could be solved without blockchain. I believe the reason for this is due to the fact that the true value of a blockchain solution is not in the data aspect of it (which everyone gravitates to and can quickl…

> The concept is truly revolutionary In what way? Publishing a DB dump with a checksum has been around for decades, and doesn't require a new user to download an entire history of deltas from day 1.

The term blockchain should come with a way to decide consensus, like proof-of-work or possibly proof-of-stake. This is a solution to decentralized consensus which is a truly revolutionary concept.

Re: How Blockchain Works

#77

Post by thedancollins »

acjohnson55 wrote: post #68
thedancollins wrote: post #33

Over the past year I have gone from Blockchain enthusiast to more blockchain gadfly. The concept is truly revolutionary but the use cases I typically see trotted out are not compelling in any significant sense and could be solved without blockchain. I believe the reason for this is due to the fact that the true value of a blockchain solution is not in the data aspect of it (which everyone gravitates to and can quickl…

Maybe this is a different way of putting it, but my assumption is that if there are killer apps for blockchain tech, the value created will tend to be in the equity of companies rather than tokens. In most cases where those things are being conflated (e.g. ICOs), there's no obvious reason for it. Not everything needs a bespoke ledger and microeconomy. The complexity is completely unjustified.

That is a good point and it is why I am slowly moving towards gadfly - the use cases typically do not NEED blockchain. The thing that is compelling about blockchain is not the tech, which is not ready for prime time - but in the idea of pseudonymous transparency, faster transactability, fewer middlemen in any given transaction, decentralized control ...

Re: How Blockchain Works

#78

Post by hef19898 »

the_snooze wrote: post #23
Moodles wrote: post #20

Earlier quoted context omitted.

I have a PhD in cryptography. Please be precise. Exactly what problem will blockchain solve for vehicles? You can't just hand wave and say stuff like "decentralized trust management" and expect us to nod along.

Yeah, I'm quite skeptical of it as well. If I'm being really charitable to it, then it's a way to synchronize data between parties without relying on a trusted intermediary. That said, it's unclear what practical value that has outside of purely digital applications like cryptocurrency. When you roll it into things in the real world (e.g., supply chains, health records, etc.) then you necessarily have to trust the da…

Which is exactly the point I still try to get my head around when it comes to supply chains.

First, for blockchain to work you need trustable sources. Problem is, when the aource is trustworthy, what added benefit comes from a blockchain?

Second, having a, theoretically uninterrupted blockchain from the first raw material to, say, a car would provide way to much insight into supply chains. I pretty sure companies do not want that.

Finally, and that is IMHO the haedest point to practically solve, you need to make 100 percent sure that the physical and information flow in your supply chain are never ever seperated. One single separation and your whole blockchain is worthless. And that risk is so incredibly high in the real world it's almost laughable. So, to make sure a given blockchain matches the physical product you need a trustworthy party to assure that. And then, what value does blockchain add?

Someday someone a lot smarter than me will find a use case. At which I will say how damn obvious it is.

Re: How Blockchain Works

#79

Post by vec »

gibsons77 wrote: post #17
Moodles wrote: post #6

Now explain to a technical audience why some people say nonsense like how it’s the next internet or how it’ll change the world please.

Well.. It will change some aspects of our world. Particularly financial assets at first, but increasingly it will play a role in any peer to peer exchange requiring trust. Simple past examples are systems like OpenPGP that bind public keys to owners. Programmable blockchains allow generalized applications requiring decentralized trust. A good example of a use of blockchain outside of financial assets is in trust mana…

> Programmable blockchains allow generalized applications requiring decentralized trust.

Yeah, they don't really though. They allow a few extremely specific applications requiring decentralized trust. The trust guarantees only hold if no single party can, even momentarily, control more hashing power than was collectively used to generate the last X blocks, where X is number of updates made since the data you want to tamper with was inserted.

To put it in concrete terms, pretend we have a blockchain for publishing PGP keys, and that your public key is 10 blocks down in the chain. If I want to maliciously replace your key with one of my own then all I need to do is rent a few dozen servers off of AWS for a day or two and use them to generate a modified chain that has my key instead of yours in the 11th block down and then rehash all ten blocks spending slightly more compute power each time than the original committers did. The network will recognize my fork as the authoritative one because it's got more proof of work. That's expensive, but it's certainly not infeasible.

This trust mechanism works out for cryptocurrencies because their only value is monetary. That means that people are incentivized to set up mining rigs to spend a lot of real resources on mining because they automatically get compensated. It also means that there's a bounded maximum amount of effort that a rational actor will spend to tamper with the chain, because there's a finite limit on the available profit to be gained.

Neither of these are true for PGP keys. Publishing a secure update to a PGP key database is not, in and of itself, a profit generating enterprise, meaning fewer miners and far less resources spent per mining rig. And the potential upside of successfully tampering with the right key is enormous.

The actual mechanism which produces the security guarantees in blockchains isn't cryptographic, it's economic. Tampering with a cryptocurrency's blockchain isn't actually impossible, or even difficult, it's just by definition more expensive than it's worth. When you try and move to an application other than financial assets the economics break down, the security guarantees go out the window, and all you're left with is an extremely inefficient git clone.

Re: How Blockchain Works

#80

Post by lawn »

Moodles wrote: post #6

Now explain to a technical audience why some people say nonsense like how it’s the next internet or how it’ll change the world please.

> how it’ll change the world please.

Permissionless and trustless digital payments truly has the power to change the world.

It arguably already has with the rise of darknet markets and cryptojacking. Think of all the movies where a suitcase of cash must be delivered to a drop off spot, this now all goes away.

But the bigger picture includes making it much easier and safer for business which cannot take credit cards to accept payments. Think donations to wikileaks, porn and marijuana businesses.

Think about what it means for people to control their own money in case of a crisis. In places like Venezuela people are already using cryptocurrencies to avoid inflation, a corrupt government and to cross the border with their wealth intact. Charities like eatBCH uses cryptocurrency to send people money into the country in order to buy food.

Yet another step back, if cryptocurrencies would truly catch on and replace government backed fiat for general use, then it's not as easy to simply "print more money" to get away from financial troubles. Banks might then have to take responsibility for their actions instead of getting bailout after bailout.

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