Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

How Blockchain Works

blockchain.mit.edu

Post reply on HN
Print view View original

121–130 of 176 posts

Re: How Blockchain Works

#121

Post by cromulent »

thedancollins wrote: post #114
prostoalex wrote: post #91

Earlier quoted context omitted.

> it is about the speed of transactability As somebody pointed out https://news.ycombinator.com/item?id=18076542 high transaction throughput is not exactly the killer feature of modern-day blockchains.

Well ok, buit I was talking about transactability - not throughput. I have stated numerous times that the tech struggles to be viable at scale. On Bitcoin's blockchain you can transact and settle in 10 minutes. That beats 2 to 3 days all day long in a fiat-based system.

I transacted and settled with a physical fiat currency today in 10 seconds.

Re: How Blockchain Works

#122

Post by 0xfeba »

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…

> they need to trust that the messages they are receiving are authentic using a decentralized consensus mechanism and some sort of Bayesian Inference Model.

Or, since manufacturing an automobile is already centralized just use existing PKI.

Re: How Blockchain Works

#123

Post by romaniv »

decentralised wrote: post #117
romaniv wrote: post #102

Earlier quoted context omitted.

I'm curious about this as well. No one seem to be talking about specific attacks mitigated by blockchains as opposed to authorities signing current state. The definition implies that if someone says "I'm on block 1000" they cannot create altered version of history without touching all the blocks after the change. But how is this useful? If there is a disagreement about the last block, majority wins, right? So couldn'…

The attacks that blockchain can protect against are: - Fraud - DDoS - Censorship The usefulness of a consensus protocol is that no one party can be trusted to have the most up-to-date AND valid blockchain. Every node has the incentive to cheat and the consensus rules define a method of evaluating the proposed chain of blocks and determine it's "trustworthiness". In PoW this is often an algorithm like Greedy Heaviest…

>The usefulness of a consensus protocol is that no one party can be trusted to have the most up-to-date AND valid blockchain.

Consensus protocols do not require mining. You can simply poll X random nodes and compare what they tell you. I don't understand what mining adds to the equation. Okay, instead of "I need to control 50% of all nodes" it becomes "I need to control 50% of all mining capacity". Is that the point of mining? To make inserting hordes of cheap lying nodes impossible?

Re: How Blockchain Works

#124

Post by vec »

thedancollins wrote: post #118
vec wrote: post #100

Earlier quoted context omitted.

> Bankers go away People will still need loans. People will still want low risk investment vehicles to "store" their wealth in. At least some sizable number of them will want an institutional actor to handle operational security and insure against key loss. > auditors go away The blockchain mostly guarantees that a ledger hasn't been tampered with, but it doesn't guarantee that the transactions were correct and compl…

You are not grasping the import of being able to exchange value WITHOUT a banking system in place. As for the credit requirements comment, yes - good point. But in the case of a micro-transaction, realtime agreement. I can consume 15 minutes of power and pay for it at 15:01. A credit requirement still exists -0 but it is one second as opposed to 60-90 days worth of power. This idea assumes many things into existence…

I can exchange value today without a banking system in place. I have some paper currency in my possession, and if that doesn't work there are plenty of commodity goods available to barter with. You'll notice that even in situations where cash or barter are feasible the vast majority of actors opt into the banking system anyway.

Cryptocurrencies are genuinely useful for parties who don't have access to the formal banking system for one reason or another, but I've got every reason to believe that crypto-backed banks will still be profitable and that people will flock to them as soon as they're available.

As for microtransactions, I can also consume 15 minutes of some service and not pay for it at 15:01, then automatically generate another burner account to consume another 15 minutes. This might not work for power, since there's physical infrastructure that would have to be cut over, but it would work just fine for a very large number of other services. The service provider is going to pretty quickly generate some fraud prevention strategy to prevent you from doing that, and now we've reinvented credit requirements for market participation.

Re: How Blockchain Works

#125

Post by dx87 »

thedancollins wrote: post #118
vec wrote: post #100

Earlier quoted context omitted.

> Bankers go away People will still need loans. People will still want low risk investment vehicles to "store" their wealth in. At least some sizable number of them will want an institutional actor to handle operational security and insure against key loss. > auditors go away The blockchain mostly guarantees that a ledger hasn't been tampered with, but it doesn't guarantee that the transactions were correct and compl…

You are not grasping the import of being able to exchange value WITHOUT a banking system in place. As for the credit requirements comment, yes - good point. But in the case of a micro-transaction, realtime agreement. I can consume 15 minutes of power and pay for it at 15:01. A credit requirement still exists -0 but it is one second as opposed to 60-90 days worth of power. This idea assumes many things into existence…

What benefit does transferring value with a blockchain have over any other method of transferring digital currency? People have been using chest keys and cosmetic items as currency on Steam for years, there are even sites where you can cash out and get money in exchange for digital currencies. Steam also has the benefit of being a point of authority that can handle fraud and theft.

Re: How Blockchain Works

#126

Post by scottmsul »

mathnmusic wrote: post #2

I used this blockchain demo to teach a class this weekend. Many thanks to Anders Brownworth for creating this: https://anders.com/blockchain/blockchain.html

A cool idea would be to split the class into groups where they pass around a piece of paper and can add their group's block and pass to the next group.

Re: How Blockchain Works

#127

Post by decentralised »

romaniv wrote: post #123
decentralised wrote: post #117

Earlier quoted context omitted.

The attacks that blockchain can protect against are: - Fraud - DDoS - Censorship The usefulness of a consensus protocol is that no one party can be trusted to have the most up-to-date AND valid blockchain. Every node has the incentive to cheat and the consensus rules define a method of evaluating the proposed chain of blocks and determine it's "trustworthiness". In PoW this is often an algorithm like Greedy Heaviest…

>The usefulness of a consensus protocol is that no one party can be trusted to have the most up-to-date AND valid blockchain. Consensus protocols do not require mining. You can simply poll X random nodes and compare what they tell you. I don't understand what mining adds to the equation. Okay, instead of "I need to control 50% of all nodes" it becomes "I need to control 50% of all mining capacity". Is that the point…

I didn't say that consensus protocols needed mining, only PoW which is a consensus protocol uses it.

You can poll multiple nodes and each one will give you a different answer because of message propagation times.

Mining fulfils two roles:

- identity management: To identify who is a trustworthy block producer in an anonymous and trustless network, mining introduces a cost to the block generation process and we use a game theory assumption that it serves as a barrier for attackers. This doesn't mean there aren't validation checks performed by other nodes in the network and the consensus forming rules themselves of course.

- consensus formation: In a distributed network, nodes are bound to disagree on which is the canonical chain out of two or more competing forks. The most common algorithm calculates the accumulated computational effort of each chain of blocks and picks the "heaviest" one, ie the one with the most work done on it. This has the nice side effect of ensuring economic finality for the transactions in those blocks.

Re: How Blockchain Works

#128

Post by jcranmer »

thedancollins wrote: post #114
prostoalex wrote: post #91

Earlier quoted context omitted.

> it is about the speed of transactability As somebody pointed out https://news.ycombinator.com/item?id=18076542 high transaction throughput is not exactly the killer feature of modern-day blockchains.

Well ok, buit I was talking about transactability - not throughput. I have stated numerous times that the tech struggles to be viable at scale. On Bitcoin's blockchain you can transact and settle in 10 minutes. That beats 2 to 3 days all day long in a fiat-based system.

This is somewhat disingenuous. Transaction times can be as low as 10 minutes on Bitcoin, but this has high volatility. If I look in the past few months, average transaction times spike to a few hours quite frequently. Of course, if you look at the graph for January, the average transaction time jumped to days.

In standard interbank settling times, the transaction time takes days. But that's because transactions will automatically abort if they don't clear fast enough, and banks will take as much time as they can to actually close the transaction so as to avoid having to reverse it after the fact. In practice, many banks are happy to credit your balance with the deposit immediately (if the deposit is small enough, about $5k with my bank) without waiting for confirmation.

Of course, the time it takes to settle the transaction actually doesn't matter that much for the most part. In many cases, the transaction clearing time is going to be an insignificant portion of the time between invoicing the transaction and actually sending the goods.

Re: How Blockchain Works

#129

Post by TheDong »

yarrel wrote: post #88
Moodles wrote: post #45

Earlier quoted context omitted.

I actually conjecture that blockchains are only useful for cryptocurrencies like bitcoin. It's when you see companies using them for tracking their supply chain, their music, their photos, their porn, their bananas in Laos, their weed, that I roll my eyes into the back of my skull. There's no way it has any potential to simplify any beaurcracy, unless you think introducing multiple nodes on a network and constantly m…

Trust. If you are a small producer and you send a shipment of your widgets to Wal Mart, and Wal Mart then say "what widgets?", the efficiency of their SQL Server installation isn't a benefit that will bring you much comfort. If you are a small producer and you send a shipment of your widgets to Wal Mart with little rfid stickers on tracked by a blockchain system that you, the shipping company, border security, Wal Ma…

We have a shipment tracking system now without blockchain.

> little rfid stickers on them ...

If the problem you're trying to solve is the one you say, you might as well just run a few servers across different organizations / companies which replicate between themselves, like certificate transparency does, or like the gpg web of trust does... which isn't a blockchain because it's vastly more efficient.

Re: How Blockchain Works

#130

Post by dlubarov »

thedancollins wrote: post #107
poulsbohemian wrote: post #83

Earlier quoted context omitted.

Can you give an example of this transactability, especially in an example where it would be superior to existing solutions? Also, are you the Dan Collins in Phoenix? I think we did a project together about 4 years ago...

I am not that Dan Collins. And as for an example - credit card transactions. I am sure somebody else can provide more color but it is my understanding that there are 6 or 7 intermediaries that each credit card transaction travels through - each taking their fraction of a penny and delivering questionable value - all to eventually have that transaction finally settle 2-3 DAYS later. On a blockchain that can happen in…

> I am sure somebody else can provide more color but it is my understanding that there are 6 or 7 intermediaries that each credit card transaction travels through - each taking their fraction of a penny and delivering questionable value - all to eventually have that transaction finally settle 2-3 DAYS later.

I worked on Square's payment systems and I agree. Most credit card payments at least go through a merchant acquirer, one or two card networks (they can proxy to one another), and the card issuer. Settlement tends to involve other parties like First Data. Sometimes there are extra middlemen like Braintree.

Settlement is slow mainly because of the ancient technology. Payments are usually settled in batches, which are typically processed once a day, and transferred with some variant of FTP. Since there are a few parties involved, it usually takes a few days for each of their batch settlement jobs to complete. The companies involved tend to be very cautious and slow to change; a lot of them still use COBOL running on IBM mainframes.

> On a blockchain that can happen in as little as 10 minutes

Or a matter of seconds with BFT systems :) I'm working on a BFT system with a goal of subsecond consensus.

Post reply on HN