Tech and Banking Giants Ditch Bitcoin for Their Own Blockchain • Hacker News Board

Re: Tech and Banking Giants Ditch Bitcoin for Their Own Blockchain

#101

Post by pyre » Fri, Dec 18, 2015, 2:55 AM UTC

brighton36 wrote: post #95

sanswork wrote: post #93

Earlier quoted context omitted.

That entire paper is about PoS and dynamic membership systems where the participants aren't known. Relevance to the current discussion? Zero. All those attacks are based on unknown dynamic participants which isn't an issue. So ya argue against a system they aren't trying to implement.

So if the trust each other - passing messages in the style of SMTP (or soap) is drastically better than a hokey round robin "blockchain emulation" architecture. At least you understand now that immutability requires energy...

This discussion might be a little above my pay-grade, but you're seeming to conflate "unknown participants" with "untrusted participants" from this response. It's possible to know someone without trusting them. I think that it's pretty apparent that there is a difference between an unknown anonymous actor, and an actor that you know, but just can't 100% trust.

Re: Tech and Banking Giants Ditch Bitcoin for Their Own Blockchain

#102

Post by nostrademons » Fri, Dec 18, 2015, 3:11 AM UTC

sanswork wrote: post #98

zik wrote: post #64

Earlier quoted context omitted.

I doubt their private blockchain will work for the very same reason they want a private blockchain - they're not trustworthy. The bitcoin blockchain is secured by the large number of disparate people mututally checking the system. When it's just banks involved the number of players is reduced by many orders of magnitude and it becomes very much easier to game the system. The incentive to steal large amounts of money…

How would you steal large amounts of money on a private chain?

Add a new transaction to the end of the chain saying that counterparty X has paid you $1B. Publish this transaction. Counterparty X, of course, publishes a version of the blockchain where you have paid them $1B dollars. How do participants in a private blockchain determine which published version represents reality?

Or alternatively: Pay counterparty X $1B. Then immediately turn around and pay counterparty Y the same $1B, before they've gotten an updated ledger from counterparty X. When counterparty X and Y share their ledgers, who owns your $1B?

The point of mining in Bitcoin is to resolve conflicts like this. By forcing whichever node digitally signs the latest block to perform a computationally-intensive problem, it represents that the latest block is the consensus of a majority of the network, as measured by computing power. Any node is free to publish a fraudulent block, but then any other node can inspect the block, see that the SHA256 hash doesn't match, and then reject it. Or if they get lucky and happen to find the right SHA256 hash, they will get outpaced on the next block (the Bitcoin protocol specifies that clients should assume the longest chain is correct), and the rest of the network will ignore their fraudulent transaction.

What's the alternative in private blockchains? I'm genuinely curious; I have little invested in Bitcoin, but I did spend some time understanding how the protocol works and why it includes the features it does.

Re: Tech and Banking Giants Ditch Bitcoin for Their Own Blockchain

#103

Post by joveian » Fri, Dec 18, 2015, 3:39 AM UTC

ihsw wrote: post #30

It should be noted that there is a far more interesting implication -- tech and banking giants ditch SWIFT for their own blockchain. The blockchain and SWIFT are very similar in spirit and in actuality, and it stands to reason that there is consensus that a private blockchain network would be more robust, fast, and secure than SWIFT.

I don't know how financial stuff works and hadn't heard of SWIFT, but searching came up with an announcment of them joining this effort: http://www.swift.com/about_swift/shownews?param_dcr=news.dat...

Re: Tech and Banking Giants Ditch Bitcoin for Their Own Blockchain

#104

Post by sanswork » Fri, Dec 18, 2015, 3:53 AM UTC

nostrademons wrote: post #102

sanswork wrote: post #98

Earlier quoted context omitted.

How would you steal large amounts of money on a private chain?

Add a new transaction to the end of the chain saying that counterparty X has paid you $1B. Publish this transaction. Counterparty X, of course, publishes a version of the blockchain where you have paid them $1B dollars. How do participants in a private blockchain determine which published version represents reality? Or alternatively: Pay counterparty X $1B. Then immediately turn around and pay counterparty Y the same…

In example 1 you would have to forge a signed transaction to do that. Otherwise Bitcoin miners could just steal everyone's coins.

For 2 in a rr system you wouldn't be able to submit 2 blocks in a row

Re: Tech and Banking Giants Ditch Bitcoin for Their Own Blockchain

#105

Post by paulsnx2 » Fri, Dec 18, 2015, 12:51 PM UTC

brighton36 wrote: post #67

mongol wrote: post #58

The Economist article on this I found good. "The notion of shared public ledgers may not sound revolutionary or sexy. Neither did double-entry book-keeping or joint-stock companies. Yet, like them, the blockchain is an apparently mundane process that has the potential to transform how people and businesses co-operate. Bitcoin fanatics are enthralled by the libertarian ideal of a pure, digital currency beyond the reac…

This article was a PR release for factom which is an obvious scam (they sell checksums). Notarization for the underserved is not a real idea.

Brighton36 is Factom's favorite troll. Searching brighton36 and Factom will yield more information about our project than nearly any other you might use.

This idea of selling "checksums" is his current favorite smear, but it is of course obvious nonsense.

Re: Tech and Banking Giants Ditch Bitcoin for Their Own Blockchain

#106

Post by DennisP » Fri, Dec 18, 2015, 2:17 PM UTC

brighton36 wrote: post #68

mbgaxyz wrote: post #29

Earlier quoted context omitted.

Yep. Here's an example of creating a private blockchain, issuing and sending assets (all in 90 seconds). https://makebitcoingreatagain.wordpress.com/2015/11/26/creat...

And why is this better than MySQL?

With a central database you're trusting a single entity. Banks aren't willing to do that so interbank settlement takes a couple days to satisfy auditing. They'd like to speed that up, and it looks like some kind of blockchain might accomplish that.

Re: Tech and Banking Giants Ditch Bitcoin for Their Own Blockchain

#107

Post by logfromblammo » Fri, Dec 18, 2015, 4:29 PM UTC

sanswork wrote: post #100

yc1010 wrote: post #63

Earlier quoted context omitted.

There is not reason to use this web thing (thats fully of dirty porn and nerds) for shopping when we have paper catalogues There is no need to send email when you can send a fax There is no need to carry a brick with you to make calls There is no need for plastic cards when one can use cash And so on, just because YOU do not grasp advantages and possibilities that bitcoin has brought along, does mean the rest of us d…

In all those cases they were a clear improvement. Bitcoin is almost always a worse experience though. What ways has Bitcoin improved your life dramatically?

Plastic cards are not a clear improvement over cash. And actually, Fed notes are not even a clear improvement over gold and silver certificate U.S. notes.

They are better for certain, specific goals, but by no means a universal improvement.

There is no bill that I receive that I can more easily pay with Bitcoin than with an electronic bank transfer, bank check, CU draft, or money order. There is no item I want that I can buy more easily with Bitcoin than with cash, check, debit card, or credit card. It is not a reliable store of value. I never need to send or receive international money transfers. I don't buy or sell black market goods or services.

The biggest thing it has going for it is potential.

I really, really hate the giant, swinefornicating, too-big-to-fail banks. Nothing would please me more than their rapid and well-deserved downfall, as people start to use crypto to recapture more of the value of their own economic contributions, and cut out some of the middlemen charging tolls and skimming off the top. But I'll be cursed to the abyss before I replace a Bank of America with a PayPal.

All I can buy with Bitcoin right now is a tiny FOADIAF to the banksters--which would probably feel really good. But right now I'd rather just give them the finger for free and use my spending money to buy pancakes instead of crypto outputs.

Still watching, though. I have been watching since 2010. I keep seeing Bitcoin users creating and using trust-dependent services rather than designing new transactions that remove the need for that trust. And then I see those services fail, to the detriment of the users.

I'm not sure what, exactly, I'm looking for, but I haven't seen it yet. It makes me wish I was even remotely qualified to write crypto at the level required to design a worldwide digital currency system. But I'm not, so I can't personally improve on Bitcoin, even though I want it to be better.