How Blockchain Works • Hacker News Board

Re: How Blockchain Works

#161

Post by lawn » Thu, Sep 27, 2018, 7:32 AM UTC

thedancollins wrote: post #141

lawn wrote: post #119

Earlier quoted context omitted.

What do you mean struggles to be viable? Cryptocurrencies is already viable and used in a lot of places. If you mean other usages of blockchain I do agree. And please don't bring up scaling (it's already viable today so the future is irrelevant to the point) or high fess (caused by Bitcoin's incompetent devs).

The technology cannot support millions of transactions per second - at least not in the case of a bitcoin blockchain which uses a PoW consensus mechanism. I am not sure how to respond to the second statement as there is some hand-waving and dogmatic proclamation that scalability is not an issue. Saying that cryptocurrencies are used in certain cases today and therefore - scalability is not an issue is like saying you…

I'm saying it's already viable and as such handles the scale we have today. Complains like "but it can't scale to all of the payments in the world" is severely missing the point.

Also we can already achieve PayPal like transaction amounts today, with Bitcoin Cash having in practice 20% of throughput. The limiting factor to scale further is software limited, not hardware. Furthermore it's possible to reach VISA levels of throughput with further work.

Scaling is one of the hardest issues for sure, but dismissing the viability of cryptocurrency because of it is naive.

Re: How Blockchain Works

#162

Post by rstuart4133 » Thu, Sep 27, 2018, 7:45 AM UTC

as300 wrote: post #157

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.

>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…

> However, that's pretty much it.

That's not quite it. The other thing you get is "and this database guaranteed to have some properties". In the case of bitcoin for example you are guaranteed every transaction was authorised by the owner of the bitcoin being exchanged and there are no double spends.

But even that's not quite it, because those properties are flexible - even for bitcoin. They are actually assertions made by computer programs, something the lines of "if the database says X an Y are true, then I say Z is true". For example X might be "I have the put $x in an escrow account". Y might be "I have not paid the supplier $x in the agreed y days". Z might be "The escrow agent is allowed to deduct an fee from $x for himself, and pay the balance to myself and the supplier as he sees fit".

And thus we have gone from publishing the checksum of a database to controlling what can happen to $x in the future.

In general taking a snapshot of a blockchain at a single point in time and saying "all I have done is published an immutable database" misses the bigger picture. The blockchain is a chain of assertions about what has happened in the past and based on those what can happen in the future - and you can't alter the control of those future assertions re-writing the past, which is prohibitively expensive.

We currently have another way of doing a similar thing that has been refined over the centuries - contracts, interpreted by courts rather than software, enforced by governments, police and guns. Right now the new boy on the block, blockchains, only thrives where this existing system refuses to play - which is to say illegal transactions. (And maybe its detractors are right - maybe it will always be too clumsy and slow to expand beyond that.) However to say the blockchain is merely a snap shot of its database rendered immutable by a published checksum is like saying our system of law is a just the series of title deeds on house, rendered immutable because they line in some government office.

Re: How Blockchain Works

#163

Post by jondubois » Thu, Sep 27, 2018, 9:36 AM UTC

aklemm wrote: post #159

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?

It will but maybe it will be harder to do it.

It's like if you could give some shares of your startup to a journalist in exchange for writing an article about your startup. Cryptocurrency can act like shares without central authority. If enough software services rely on a specific cryptocurrency as payment, then it has actual intrinsic value

Re: How Blockchain Works

#164

Post by tsukikage » Thu, Sep 27, 2018, 11:34 AM UTC

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.

Blockchain is a revolutionary solution to the problem of achieving distributed consensus without a central authority that everyone must talk to and trust.

Unfortunately, this is a problem almost no-one has; meanwhile, where parties are able to agree on a trustworthy central authority - as parties operating within the rule of law, relying on cooperation with protocol and old-fashioned police/lawyers to identify and punish defectors in old-fashioned meatspace, generally are - blockchain is an incredibly expensive solution to the problem of distributed consensus compared to other options available to them.

Re: How Blockchain Works

#165

Post by thedancollins » Thu, Sep 27, 2018, 1:01 PM UTC

lawn wrote: post #161

thedancollins wrote: post #141

Earlier quoted context omitted.

The technology cannot support millions of transactions per second - at least not in the case of a bitcoin blockchain which uses a PoW consensus mechanism. I am not sure how to respond to the second statement as there is some hand-waving and dogmatic proclamation that scalability is not an issue. Saying that cryptocurrencies are used in certain cases today and therefore - scalability is not an issue is like saying you…

I'm saying it's already viable and as such handles the scale we have today. Complains like "but it can't scale to all of the payments in the world" is severely missing the point. Also we can already achieve PayPal like transaction amounts today, with Bitcoin Cash having in practice 20% of throughput. The limiting factor to scale further is software limited, not hardware. Furthermore it's possible to reach VISA levels…

Ah, point taken! One of the obvious courses is that there wiull be multiple blockchains each handling various arenas. In that case we run into the interesting blockchain-of-blockchains problems where we have to engineer not only under one blockchain but we have to figure out how to overcome the "slowest node" problem. Truly an engineering feat waiting for a hero (or heroine). Thoughts?

Re: How Blockchain Works

#166

Post by cromulent » Thu, Sep 27, 2018, 1:11 PM UTC

thedancollins wrote: post #148

cromulent wrote: post #121

Earlier quoted context omitted.

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

This is a perfectly cromulent response (see what I did there)? I'd argue that you did not settle a transaction but more exchanged in a barter of one item for another. I am glad it worked out well for you and pray that you will experience continued expedient transactions in the future - blockchain-powered or not.

Nope, no barter - exchanged goods for currency, not for goods.

What would you mean by "settle" if you don't mean the point when the seller receives payment?

Re: How Blockchain Works

#167

Post by thedancollins » Thu, Sep 27, 2018, 1:13 PM UTC

vec wrote: post #151

thedancollins wrote: post #145

Earlier quoted context omitted.

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 dol…

>Because in the real world fiats are orders of magnitude more stable than cryptos.

Yes, but if you'll allow me a little latitude - the fiat currency is under centralized control. And in that case is remarkably stable - until it is not. And 2008 happens. Blockchain is decentralized and yes, volatile. But fiat currency is FALSELY stable - it is engineered to be stable by a centralized authority that does not understand what it is doing and the machinations are generating an increasingly problematic economic environment. I can't stress this enough - the stability that is trumpeted as such a wonderful aspect of fiat currency is manufactured and at the whim of fools.

And absolutely, point taken about banks. I do not fully appreciate the role of centralized banking and certainly, few do. I should qualify some of my statements with the idea that banking is an option, but not a necessity. and that optionality certainly applies to the marble facade we see all over the American landscape.

And finally, yes, you can setup as many accounts as you like - and that behavior will be partially obfuscated because those IDs do not have to be linked. But if you would please give me a modicum of credit (pun intended) - the smart contract would likely require its own level of background on any given ID. If shenanigans are present - the ID is not permitted access to the transaction. Or it might not care - I guess it would depend on the potential exposure. Trivial problems have trivial solutions. There are much bigger problems that would need to be tackled. Thoughts?

Re: How Blockchain Works

#168

Post by thedancollins » Thu, Sep 27, 2018, 1:20 PM UTC

UncleMeat wrote: post #135

thedancollins wrote: post #114

Earlier quoted context omitted.

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.

Why does this matter? What can I do with ten minute settlements that I can't do with my debit card?

One of the ideas is that smaller payment amounts are viable on a blockchain - and there will be mining or transaction fees assessed but there will be fewer and smaller fees. Point-to-point transactability cuts out the ubiquitous payment middlemen and it gives the person making the transactions CONTROL of their transaction data. No longer will business pay credit companies to learn about you - they will have to pay YOU to learn about you.

Data is worth billions and trillions of dollars. And blockchain allows you to take control of it.

Re: How Blockchain Works

#169

Post by thedancollins » Thu, Sep 27, 2018, 1:28 PM UTC

justicezyx wrote: post #160

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?

I mean that the potential impact that a blokchain-based system could have on the way we generate and exchange value - could be revolutionary. It could be one way that wealth distribution could be facilitated if you buy the idea that data is the new currency. Blockchain brings power to the people because it puts data in the hands of the person with the keys to that data. Ideally, we are careful enough to maintain those keys and not abdicate control of them to yet another centralized authority.

Re: How Blockchain Works

#170

Post by thedancollins » Thu, Sep 27, 2018, 1:36 PM UTC

cromulent wrote: post #166

thedancollins wrote: post #148

Earlier quoted context omitted.

This is a perfectly cromulent response (see what I did there)? I'd argue that you did not settle a transaction but more exchanged in a barter of one item for another. I am glad it worked out well for you and pray that you will experience continued expedient transactions in the future - blockchain-powered or not.

Nope, no barter - exchanged goods for currency, not for goods. What would you mean by "settle" if you don't mean the point when the seller receives payment?

>Nope, no barter - exchanged goods for currency, not for goods Tomayto - tomahto amigo!

I mean when the seller receives payment. And I concede that there are banks that are releasing funds on a tighter timeline. But that decision is still backed by a credit requirement at some level and at the whim of a centralized bank. What they deign to grant to us they can also take away from us.

The current system is familiar and comforting but it is not the stable panacea we like to think it is in comparison to a scary blockchain. The stability is manufactured at the cost of the occasional blow-up - which we conveniently forget about as the market rebound to new and loftier heights.