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Maybe Blockchain Really Does Have Magical Powers

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Re: Maybe Blockchain Really Does Have Magical Powers

#41

Post by coriny »

twblalock wrote: post #36
spullara wrote: post #23

Earlier quoted context omitted.

Goes back to an old stock prediction scam. You choose 1024 and send 512 the prediction that a stock will go up and 512 the prediction that the same stock will go down. Each day you repeat this process only with the group where you were right. So, 512 -> 256 -> 128 -> 64 -> 32. Eventually you have a small number of people that think you can predict the future and you can ask them for money that you will invest on thei…

This also happens in the sports betting world. People use this method to convince others that they can consistently predict the outcome of games, or the spread, or the other stuff people want to bet on.

Nicely demonstrated in Derren Brown's "The System": https://www.youtube.com/watch?v=9R5OWh7luL4.

Though we've rather ruined the twist ...

Re: Maybe Blockchain Really Does Have Magical Powers

#42

Post by DougN7 »

JoshTriplett wrote: post #24
marcosdumay wrote: post #10

Earlier quoted context omitted.

The best theory I could found is that everybody just starts trusting an old enough snapshot of the chain, and its end becomes the chain's beginning. Then everybody just throws the older transactions away. I can imagine this working in a low volume chain. I do really doubt it would ever work on current Bitcoin chain or anything bigger.

It seems reasonable even on a massive chain. Some people do need to keep the whole archived part of the chain, and anyone who wants to verify it can do so, while day-to-day transactions can just compress that part of the chain down to a hash. You'd need to keep enough of the chain live for all "live" transactions; that would likely have a time bound (days, perhaps). People who run a "full" client that verifies the co…

I'm a blockchain noob, but what about people like me that own some bitcoin, but don't touch them for a decade. I imagine my ownership of said coins would be in that part that is truncated/archived/hashed. So how would I then use them?

Re: Maybe Blockchain Really Does Have Magical Powers

#43

Post by wc- »

DougN7 wrote: post #42
JoshTriplett wrote: post #24

Earlier quoted context omitted.

It seems reasonable even on a massive chain. Some people do need to keep the whole archived part of the chain, and anyone who wants to verify it can do so, while day-to-day transactions can just compress that part of the chain down to a hash. You'd need to keep enough of the chain live for all "live" transactions; that would likely have a time bound (days, perhaps). People who run a "full" client that verifies the co…

I'm a blockchain noob, but what about people like me that own some bitcoin, but don't touch them for a decade. I imagine my ownership of said coins would be in that part that is truncated/archived/hashed. So how would I then use them?

Someone more familiar with this than me feel free to correct me here, but this is my basic understanding:

If you think of your bitcoins as following a path from address to address, the pruning process would retain the final node or two on that path but discard any previous nodes. So your 10 year old bitcoins at address X are still the most recent node on that chain and are kept around. However, once they are finally sent to another address the bits recording your current address can be forgotten.

Re: Maybe Blockchain Really Does Have Magical Powers

#44

Post by coderzach »

the_mitsuhiko wrote: post #32
lhl wrote: post #3

I'm all for deflating blockchain hype, but I found the overall tone of the article pretty disagreeable, and more importantly, wholly missing the point. "In other words, the only thing previously stopping the standardization of reconciliation processes was the unwillingness of financial institutions to collaborate." No, actually, the one thing the blockchain provides, which was literally unsolved before pre-Nakamoto,…

> No, actually, the one thing the blockchain provides, which was literally unsolved before pre-Nakamoto, was a working implementation of "trustless" consensus. That's the part banks do not care about so I think it's largely irrelevant in the context of this article.

> That's the part banks do not care about so I think it's largely irrelevant in the context of this article.

I have no idea where you got that idea, but it's not true. Which is why any deal that happens between institutions (and sometimes intra-institution) has an army of middle men who are responsible for verifying, monitoring, reporting, etc etc.

Re: Maybe Blockchain Really Does Have Magical Powers

#45

Post by hinkley »

JoshTriplett wrote: post #24
marcosdumay wrote: post #10

Earlier quoted context omitted.

The best theory I could found is that everybody just starts trusting an old enough snapshot of the chain, and its end becomes the chain's beginning. Then everybody just throws the older transactions away. I can imagine this working in a low volume chain. I do really doubt it would ever work on current Bitcoin chain or anything bigger.

It seems reasonable even on a massive chain. Some people do need to keep the whole archived part of the chain, and anyone who wants to verify it can do so, while day-to-day transactions can just compress that part of the chain down to a hash. You'd need to keep enough of the chain live for all "live" transactions; that would likely have a time bound (days, perhaps). People who run a "full" client that verifies the co…

This is probably a gap in my knowledge, but I hope this isn't a terribly obvious question.

So let's say I buy a bunch of bitcoins and I just sit on them.

A year or two from now, they're worth a bunch of money, so I use them or sell them. How does everyone with the truncated blockchain know that the bitcoins I'm using aren't being double-spent?

Re: Maybe Blockchain Really Does Have Magical Powers

#46

Post by amalcon »

spullara wrote: post #23
Kinnard wrote: post #13

Earlier quoted context omitted.

Why can't you place multiple bets? Hedging?

Goes back to an old stock prediction scam. You choose 1024 and send 512 the prediction that a stock will go up and 512 the prediction that the same stock will go down. Each day you repeat this process only with the group where you were right. So, 512 -> 256 -> 128 -> 64 -> 32. Eventually you have a small number of people that think you can predict the future and you can ask them for money that you will invest on thei…

Preventing one individual from making multiple predictions doesn't necessarily solve this problem. You can do the same thing by getting 1024 people together to make a variety of predictions. At the end, one person looks prescient.

Re: Maybe Blockchain Really Does Have Magical Powers

#47

Post by zby »

jnbiche wrote: post #9
andrewfromx wrote: post #4

tldr; this whole breakthru in technology called the blockchain isn't a new idea at all. Banks have known about "shared" ledgers since 1800s. But because everyone is talking about Blockchain now in 2016, banks are finally ready to embrace some standards.

> tldr; this whole breakthru in technology called the blockchain isn't a new idea at all I haven't read the article, and I been tired of blockchain hype for multiple years, but if this is an accurate tldr of the article, it isn't true at all. Blockchains are far more than simple shared ledgers. They're trustless shared ledgers, which is a huge leap forward from simple shared ledgers, and a pretty big deal for financi…

The point is that the trustlesness is not needed for the applications mentioned in the original report.

Also they probably don't want Proof of Work for its wastefulness.

Re: Maybe Blockchain Really Does Have Magical Powers

#48

Post by jhallenworld »

The example clarifies my feeling about blockchain: How would the example provided (avoiding the clearing house) work without the banks accepting something like a mining-backed crypto-currency like bitcoin?

With bitcoins, there is no possibility for dispute: bank A gives bank B the money during the transfer.

Any other scheme involves a promise (a legal contract), so you will not know for sure that bank A really had the money to give to bank B. The solutions to this are all in use today:

(1) Bank A previously gave B money (they have a correspondence account in B). So the transfer is really between accounts at bank B.

(2) Bank A gives bank B physical money.

(3) Bank A transfers money to B between accounts at some other bank (or the fed). It means A had money in the other bank to begin with.

(4) Bank B gives credit to bank A (i.e., Bank B trusts Bank A) and accepts IOUs from them. The banks could cancel out each others IOUs. The IOUs become new money. This used to be done in the old days, but the basis for trust was each bank's gold reserves.

Re: Maybe Blockchain Really Does Have Magical Powers

#49

Post by wmf »

semi-extrinsic wrote: post #30
jcoffland wrote: post #15

> The technological innovation of a blockchain is that it combines cryptographic signatures with a fault-tolerant distributed database. This is the naive view that has allowed the financial industry to ditch Bitcoin and run with blockchain. The problem that Bitcoin solves and private blockchains do not is called the Byzantine generals problem which did not have a known solution until Bitcoin came along. Private block…

> The problem that Bitcoin solves and private blockchains do not is called the Byzantine generals problem which did not have a known solution until Bitcoin came along. I'm not an expert in any way, but the Wikipedia page for Byzantine Fault Tolerance suggests a solution to this problem was known as early as 2001, used in the Boeing 777 avionics software. See abstract of the paper below. That significantly predates Bi…

There were known solutions given a fixed set of generals. Nakamoto consensus handles the case of an unknown number of anonymous generals (miners) who may come and go when they please.

Re: Maybe Blockchain Really Does Have Magical Powers

#50

Post by jcoffland »

Marazan wrote: post #31
jcoffland wrote: post #15

> The technological innovation of a blockchain is that it combines cryptographic signatures with a fault-tolerant distributed database. This is the naive view that has allowed the financial industry to ditch Bitcoin and run with blockchain. The problem that Bitcoin solves and private blockchains do not is called the Byzantine generals problem which did not have a known solution until Bitcoin came along. Private block…

What? The Byzantine generals problems most certainly did have solutions before Block chain came along.

Not for an unknown number of generals.
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