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How Blockchain Works

blockchain.mit.edu

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Re: How Blockchain Works

#151

Post by vec »

thedancollins wrote: post #145
vec wrote: post #124

Earlier quoted context omitted.

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 bank…

Yes, you have paper money in your possession that is only worth as much as a centralized bank SAYS it is. And the awesome thing about that is that centralized banks never print ridiculous amounts of money and devalue their own currencies. That would be crazy and short-sighted. What sort of idiots would do that? Crytpocurrencies are useful to people for a variety of reasons. And if a bank wants to deal in crytpocurren…

> Yes, you have paper money in your possession that is only worth as much as a centralized bank SAYS it is...

Do you really want to bring volatility into this? Because in the real world fiats are orders of magnitude more stable than cryptos.

Besides, that's tangential to why people prefer banks to cash. If the Federal Reserve screws up and tanks the dollar I'm just as screwed regardless of whether my money's in a dollar-denominated bank account or a suitcase under my bed. Why do you think the vast majority of people prefer to keep their dollars in the bank instead of the suitcase?

> I am glad that you have no doubt they will be profitable but you are pulling such sentiment out of thin air.

I'm pulling that sentiment out of a basic understanding of a bank's business model and value proposition, neither of which are actually directly related to the underlying currency. We had banks with metal-backed currencies, we have them with fiats, and we're starting to see them with cryptos. Unless you can somehow convince me that Coinbase isn't a bank.

> And the final point, the ledger is open, and everyone can see everything.

Right, I can see that three dozen pseudonymous wallets owe me for 15 minutes of service each.

Anyway, the whole point of credit is I can't actually pay up today, but there's reason to believe I will be able to in 30 days. Or 6 months. Or 10 years.

Re: How Blockchain Works

#152

Post by Moodles »

sparkzilla wrote: post #140
UncleMeat wrote: post #139

Earlier quoted context omitted.

So what happens when your verifier fails? Do you prevent the publication of the text? That hardly seems decentralized. Asking humans to review the accuracy of all published text will never scale.

The amount of verification required depends on the data. Simple data, such as sports results -- coming from high-quality sources doesn't require much verification, and can be automated. More complex data requires human verification, but that will gradually be replaced by distributed machine learning.

If an article says Trump gave a speech, how do you verify with machine learning, using a blockchain, that Trump literally gave a speech?

I don’t really understand your business. It’s a business, but also dencentralised. Are you trying to verify if news is fake or not? Why do you need a blockchain or machine learning for this? Do you have your own coin?

Re: How Blockchain Works

#153

Post by qnmaster »

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…

>Is that the point of mining? To make inserting hordes of cheap lying nodes impossible?

That's called a Sybil attack, and yes that's one of the reasons.

Mining also makes creating blocks have a real world energy cost. So rewriting history quickly becomes almost impossible as blocks are added. An attacker would have to have more than 50% of all mining power for a sustained period of time.

I suggest reading the Bitcoin whitepaper, it's short and sweet.

https://bitcoin.org/bitcoin.pdf

Re: How Blockchain Works

#154

Post by qnmaster »

romaniv wrote: post #102
prostoalex wrote: post #65

Earlier quoted context omitted.

> 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.

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'…

>as opposed to authorities signing current state

That's what it solves. It removes the need for trust and dependence in a central authority. There's no central actor to hack, or that can abuse the system, or be compelled to censor.

Consider Paypal. They're obligated to follow the regulations of every single government whose citizens they serve. Paypal themselves can also make value judgements. That severely limits who can use the system, for what purposes, in what quantities, and how frequently.

Re: How Blockchain Works

#155

Post by qnmaster »

hef19898 wrote: post #78
the_snooze wrote: post #23

Earlier quoted context omitted.

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…

It's not an end-all for supply chains, but that doesn't make it useless. It still prevents forgery of old records. If someone signs something, they can't later go back and change it or claim they didn't.

Re: How Blockchain Works

#156

Post by qnmaster »

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.

There's a lot of bullshit, but it would be a huge mistake to assume that there's nothing significant there. Check out the Bitcoin whitepaper for a technical primer.

Re: How Blockchain Works

#157

Post by as300 »

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.

>Publishing a DB dump with a checksum has been around for decades

This solves the problem of where you would publish said checksum. Instead of publishing it in an issue of the New York Times, say (which could theoretically be forged), you publish it somewhere that you can be 99.99% sure won't be forged, is viewable to everyone, and can be done fairly cheaply and would likely hold up in any court of law.

However, that's pretty much it. That's the whole benefit. You could also probably publish said checksum on facebook, with the same likelihood of it not being tampered with.

Note that I'm not arguing that blockchain won't gain adoption, just as people probably could have made a similar value-based argument about facebook in its early days, I personally believe there are cultural forces that will keep some blockchain asset in somewhat high demand.

Re: How Blockchain Works

#158

Post by aklemm »

olalonde wrote: post #3

This ship seems to have sailed already but I feel like it really should have been "How blockchains work". We don't say "How relational database works", "How operating system works", "How computer works", etc. We do say "How Linux works" or "How Bitcoin's blockchain works".

It's like Apple welcoming me to "iPhone"...it should be "your iPhone" or "this iPhone" or "an iPhone". iPhone is not a state of being.

Re: How Blockchain Works

#159

Post by aklemm »

cryptica wrote: post #85

I remember that a lot of people were saying that cryptocurrency is not revolutionary but that blockchain is. I think the opposite is true. Cryptocurrency is revolutionary and blockchain is just one of several known technologies that make it possible. Cryptocurrency is the most important use case for blockchain tech. What I like most about cryptocurrency is the fact that it financially incentivizes massive collaborati…

But if those cryptocurrencies keep never amounting to anything, then the bribing won't keep working, right?

Re: How Blockchain Works

#160

Post by justicezyx »

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…

I think you mean the idea of applying a naive concesus algorithm revolutionary, right?
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