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The "shared ledger" analogy for blockchains is limiting. If you want to understand the potential applications, you should stop using it in your thinking. Block

by natrius 11y ago

The "shared ledger" analogy for blockchains is limiting. If you want to understand the potential applications, you should stop using it in your thinking. Blockchains give us publicly writable databases. Such a thing never existed before. A blockchain has one or more programs that define what can be written to the public database. Bitcoin's program is mostly about distributing the 21 million coins to miners and preventing users from sending more bitcoins than they own. A blockchain's program can manage any data, though. There are so many human interactions that are governed by private databases—that used to be the only way to do it. The sea change you are about to witness is those interactions transitioning to public databases. Everything will be rebuilt, especially where companies are charging for those interactions, like Uber and Airbnb. Applications will be able to read from and write to all of the public databases, and they will all use the same cryptographic identities for seamless integration. Every application can trivially have payments built in. Or ride hailing. Or package shipping. Network effects are public goods, and we now have the technology to provide them in a public manner. Go build something.

TheDong 11y ago
It gives you a publicly writable database that is only secured by people desiring to throw away large sums of computation in an environmentally unfriendly manner. Writes are also slow (10 mins...) and requires relatively high bandwidth and space to be used securely. There's no reason that AirBnb or Uber would want their database to be public, slower, and broken as soon as people lose interest in splitting up mining. In fact, the more valuable stuff goes on a block chain, the more people will want to break it in order to be able to manipulate that information. It's neat how the generals problem can work when the blockchain is for money. If it weren't for money, then why would people have an incentive to throw computation at it? To secure their AirBnb trip? If it's only AirBnb that has such an incentive, then suddenly it's a massively expensive enterprise to do so compared to running a normal distributed database that they control read/writes to.
- natrius 11y ago
  Blockchains can be built without 10 minute block times or wasteful proof-of-work for mining. You can just pick people the users trust to make blocks or use proof-of-stake mining. Blockchains are harder to break than most corporate databases. Reading up on Ethereum will answer most of your questions.
  - TheDong 11y ago
    If your "blockchain" doesn't have a proof-of-work beyond trusted people, that's hardly different than a company publishing their database full of signed transactions. I'm aware that 10 minutes is a configurable number, but there's a reason it's as high as it is. I'm also familiar with Ethereum, and I still don't see it as better than a company-run database for anything like uber/airbnb/etc with a central company behind it. > Blockchains are harder to break than most corporate databases. Strange, Google and Amazon and many other sites have done just fine with databases (though there are exceptions like Ashley Madison etc) while there have already been real double-spends with the bitcoin Blockchain and numerous other issues. Proportional to usage, I'd say bitcoin has proven to be terrible compared to databases. So yeah, citation needed. Additionally, if you change your mining to be "people users trust", your security is now equivalent to corporate database security -- a lead pipe to the head to get a password in.
    - brighton36 11y ago
      There's precisely two (and maybe one) reasons where blockchains offer an economic efficiency. Immutability and/or regulatory arbitrage. When you can buy crack on Google and Amazon, then we'll no longer see an efficiency with blockchains.
    - natrius 11y ago
      > I'm also familiar with Ethereum, and I still don't see it as better than a company-run database for anything like uber/airbnb/etc with a central company behind it. It's better because no one is taking a cut off of the transactions that the network enables. No one has to approve a new application that uses the network, so every application can build on top of the network. The people own the network, not companies. This isn't just better, it's better to the degree that the Internet was better than private networks. That difference was world changing, and this one will be too. > Additionally, if you change your mining to be "people users trust", your security is now equivalent to corporate database security -- a lead pipe to the head to get a password in. Blockchains have programs that validate transactions. You'd have to get every validator to incorporate a fraudulent transaction. Hacking three financial institutions at the same time, for example, is pretty hard. Ten is even harder.
- mcintyre1994 11y ago
  I agree with you on most points but the idea would be an Airbnb or Uber that don't take a large fee and make a large profit right? I know this is all wishful thinking stuff but it doesn't seem fair to say this is terrible because companies that exist to centralise transactions within a space won't want it. You're right that it doesn't seem to work without money though, and if it is a centralised service it's way more expensive than before. It all feels too theoretical when you get talking about multiple blockchains.
dogma1138 11y ago
Calling it a public database is misleading, it's not really public even the Bitcoin blockchain ins't really public as it's access isn't free (proof of work). The blockchain that will be used by banks won't be public just like SWIFTNet and other similar banking networks aren't public. What WS and the banks want is a private blockchain to replace the current messaging and clearance systems and services into something which will be cheaper, faster and will have lower intrinsic risk. Banks, clearinghouses and other similar financial institutions will have access to it and will provide the needed infrastructure to support it, it will allow them to conduct their financial operations at a much lower costs increasing their profit margins it's not meant for you to be accessing it from your mobile phone everytime you use apple pay.
- natrius 11y ago
  Access isn't free, but anyone can write to it without permission. That makes it public. Individuals couldn't compete with SWIFT because they had no way to coordinate their actions. Public databases change that. The first phase will be financial institutions using blockchains to lower their costs. The second phase will be financial institutions pursuing new business models around blockchains anyone can access every time they use Apple Pay. The genie is out of the bottle. Middlemen are no longer necessary for anything.
  - dogma1138 11y ago
    Again you think that those blockchains will be publicly accessible which is incorrect, they'll have their own blockchains for their own settlement, maybe they'll have some sub-chains in the long run for end-users but still you can bet your house on that they'll find a way to ensure that users can't simply join the blockchain "fully" (e.g. find a way to separate wallets from mining, like BC does with mining pools for example but for another reason) like they can currently with Bitcoin. And having a non-free access make it non-public by definition sorry. Bitcoin is moderated by the amount of effort needed to perform certain operation, some take very little like generating your key and address tomorrow they can change that to a point where only the large bitcoin farms could do it would you still call it a public system? If so so is SWIFTNet sure you just need a couple of billion and to open a bank but hey any one can join.... BTW you see a similar thing today, BC is "complicated" this is why things like coinbase become more and more popular, people don't keep their bitcoins in their own wallets anymore they use a 3rd party mostly in the form of various bitcoin exchanges. If a "public" based system has already degraded into pretty much a hierarchy what do you think a system designed by the financial sector will turn out like?
kalleboo 11y ago
> Blockchains give us publicly writable databases. Such a thing never existed before Not true. We had Microsoft SQL Server[0] [0] https://en.wikipedia.org/wiki/SQL_Slammer https://en.wikipedia.org/wiki/SQL_Slammer
hliyan 11y ago
I think the shared ledger analogy is meant as a simplification for the general public. I did the same thing in my explanatory article two years ago: http://zen.lk/2013/11/28/how-i-finally-understood-bitcoin/ http://zen.lk/2013/11/28/how-i-finally-understood-bitcoin/

by natrius 11y ago

TheDong 11y ago

It gives you a publicly writable database that is only secured by people desiring to throw away large sums of computation in an environmentally unfriendly manner. Writes are also slow (10 mins...) and requires relatively high bandwidth and space to be used securely. There's no reason that AirBnb or Uber would want their database to be public, slower, and broken as soon as people lose interest in splitting up mining. In fact, the more valuable stuff goes on a block chain, the more people will want to break it in order to be able to manipulate that information. It's neat how the generals problem can work when the blockchain is for money. If it weren't for money, then why would people have an incentive to throw computation at it? To secure their AirBnb trip? If it's only AirBnb that has such an incentive, then suddenly it's a massively expensive enterprise to do so compared to running a normal distributed database that they control read/writes to.

natrius 11y ago
Blockchains can be built without 10 minute block times or wasteful proof-of-work for mining. You can just pick people the users trust to make blocks or use proof-of-stake mining. Blockchains are harder to break than most corporate databases. Reading up on Ethereum will answer most of your questions.
- TheDong 11y ago
  If your "blockchain" doesn't have a proof-of-work beyond trusted people, that's hardly different than a company publishing their database full of signed transactions. I'm aware that 10 minutes is a configurable number, but there's a reason it's as high as it is. I'm also familiar with Ethereum, and I still don't see it as better than a company-run database for anything like uber/airbnb/etc with a central company behind it. > Blockchains are harder to break than most corporate databases. Strange, Google and Amazon and many other sites have done just fine with databases (though there are exceptions like Ashley Madison etc) while there have already been real double-spends with the bitcoin Blockchain and numerous other issues. Proportional to usage, I'd say bitcoin has proven to be terrible compared to databases. So yeah, citation needed. Additionally, if you change your mining to be "people users trust", your security is now equivalent to corporate database security -- a lead pipe to the head to get a password in.
  - brighton36 11y ago
    There's precisely two (and maybe one) reasons where blockchains offer an economic efficiency. Immutability and/or regulatory arbitrage. When you can buy crack on Google and Amazon, then we'll no longer see an efficiency with blockchains.
  - natrius 11y ago
    > I'm also familiar with Ethereum, and I still don't see it as better than a company-run database for anything like uber/airbnb/etc with a central company behind it. It's better because no one is taking a cut off of the transactions that the network enables. No one has to approve a new application that uses the network, so every application can build on top of the network. The people own the network, not companies. This isn't just better, it's better to the degree that the Internet was better than private networks. That difference was world changing, and this one will be too. > Additionally, if you change your mining to be "people users trust", your security is now equivalent to corporate database security -- a lead pipe to the head to get a password in. Blockchains have programs that validate transactions. You'd have to get every validator to incorporate a fraudulent transaction. Hacking three financial institutions at the same time, for example, is pretty hard. Ten is even harder.
mcintyre1994 11y ago
I agree with you on most points but the idea would be an Airbnb or Uber that don't take a large fee and make a large profit right? I know this is all wishful thinking stuff but it doesn't seem fair to say this is terrible because companies that exist to centralise transactions within a space won't want it. You're right that it doesn't seem to work without money though, and if it is a centralised service it's way more expensive than before. It all feels too theoretical when you get talking about multiple blockchains.

dogma1138 11y ago

Calling it a public database is misleading, it's not really public even the Bitcoin blockchain ins't really public as it's access isn't free (proof of work). The blockchain that will be used by banks won't be public just like SWIFTNet and other similar banking networks aren't public. What WS and the banks want is a private blockchain to replace the current messaging and clearance systems and services into something which will be cheaper, faster and will have lower intrinsic risk. Banks, clearinghouses and other similar financial institutions will have access to it and will provide the needed infrastructure to support it, it will allow them to conduct their financial operations at a much lower costs increasing their profit margins it's not meant for you to be accessing it from your mobile phone everytime you use apple pay.

natrius 11y ago
Access isn't free, but anyone can write to it without permission. That makes it public. Individuals couldn't compete with SWIFT because they had no way to coordinate their actions. Public databases change that. The first phase will be financial institutions using blockchains to lower their costs. The second phase will be financial institutions pursuing new business models around blockchains anyone can access every time they use Apple Pay. The genie is out of the bottle. Middlemen are no longer necessary for anything.
- dogma1138 11y ago
  Again you think that those blockchains will be publicly accessible which is incorrect, they'll have their own blockchains for their own settlement, maybe they'll have some sub-chains in the long run for end-users but still you can bet your house on that they'll find a way to ensure that users can't simply join the blockchain "fully" (e.g. find a way to separate wallets from mining, like BC does with mining pools for example but for another reason) like they can currently with Bitcoin. And having a non-free access make it non-public by definition sorry. Bitcoin is moderated by the amount of effort needed to perform certain operation, some take very little like generating your key and address tomorrow they can change that to a point where only the large bitcoin farms could do it would you still call it a public system? If so so is SWIFTNet sure you just need a couple of billion and to open a bank but hey any one can join.... BTW you see a similar thing today, BC is "complicated" this is why things like coinbase become more and more popular, people don't keep their bitcoins in their own wallets anymore they use a 3rd party mostly in the form of various bitcoin exchanges. If a "public" based system has already degraded into pretty much a hierarchy what do you think a system designed by the financial sector will turn out like?

kalleboo 11y ago

> Blockchains give us publicly writable databases. Such a thing never existed before Not true. We had Microsoft SQL Server[0] [0] https://en.wikipedia.org/wiki/SQL_Slammer https://en.wikipedia.org/wiki/SQL_Slammer

hliyan 11y ago

I think the shared ledger analogy is meant as a simplification for the general public. I did the same thing in my explanatory article two years ago: http://zen.lk/2013/11/28/how-i-finally-understood-bitcoin/ http://zen.lk/2013/11/28/how-i-finally-understood-bitcoin/