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Well, if you only need to maintain transactions within your own organization and there is full trust, why not just use a simple SQL database to record transacti

Well, if you only need to maintain transactions within your own organization and there is full trust, why not just use a simple SQL database to record transactions instead of a much more expensive and complex blockchain? If there are multiple parties, what's to stop one of the nodes from, say, buying 1000 GPU instances on EC2 and massively increasing their hashing power. Even if you have some type of network control settings that only allow certain nodes access to the network, the proof of work could be distributed and you could just proxy the answer back to the machine that has access to the network.

wmf 9y ago
The case for private ledgers is coordination among a moderate number of non-anonymous mostly-untrusted entities. (Whether this case ever exists is left as an exercise for the reader.) They can't use a central database but they don't need mining either; variants of BFT can be used that work as long as (n/2)+1 entities are honest.
- eterm 9y ago
  If things are non-anonymous, you are far far better off having highly fungible but also highly audited databases. Make it easy to do but also easy to undo anything, while also having a very large amount of transparency in the system so any "bad actor" can be dealt with swiftly. That seems to work for the banking system, where any malicious transactions are easily "reversed" (often just reversed on one side actually, 'paid for' by insurance / banks) and a large amount of auditing which makes it possible to clamp down on the bad actors quickly. Abusing the system then no longer becomes a technical challenge so it removes the possibility that someone with the right technical prowess can "break" the system. Robbing a bank is the easiest thing in the world, just walk in and ask for money, it's getting away with it that's difficult.
  - askmike 9y ago
    > That seems to work for the banking system, where any malicious transactions are easily "reversed" (often just reversed on one side actually, 'paid for' by insurance / banks) and a large amount of auditing which makes it possible to clamp down on the bad actors quickly. I work for a bank on blockchain projects. It's almost never this simple. You'd be suprised how much banking is paper based right now for the simple reason that no party wants a central solution controlled by any other party.
    - mercer 9y ago
      That's fascinating. Could you tell more about that, or maybe provide a link to more information? I find the topic interesting, and as a geek am inclined to find blockchain stuff cool and useful, but I know very little about the real-world situation/concerns.
      - askmike 9y ago
        A lot of companies in all kinds of sectors (finance, healthcare, etc) are looking into blockchain (or DLT) because it allows for a database model that is not centralised. This is great in situations where you don't fully trust other parties you are doing business with. A lot of these companies are doing experiments using private blockchains (like the private ethereum network linked in OP). However depending on how much you trust the "other" parties allowed to mine (or sign blocks), you might still have the risk where one or more conspire against you and 51% attack you. Periodically putting a blockheader of your private chain into a public blockchain would be a great solution to this, as pulling off a 51% attack on bitcoin is rather hard.
        mercer 9y ago
        Thanks for the info! Do you perhaps have some suggestions for what a good 'next step' is when it comes to understanding all this in more detail?
    - just_one_time_ 9y ago
      Can you speak more to where your industry is now in adoption? If there were some "major event" would companies like yours be ready to jump ship into cryptos quickly or are they going to be too late?

wmf 9y ago

The case for private ledgers is coordination among a moderate number of non-anonymous mostly-untrusted entities. (Whether this case ever exists is left as an exercise for the reader.) They can't use a central database but they don't need mining either; variants of BFT can be used that work as long as (n/2)+1 entities are honest.

eterm 9y ago
If things are non-anonymous, you are far far better off having highly fungible but also highly audited databases. Make it easy to do but also easy to undo anything, while also having a very large amount of transparency in the system so any "bad actor" can be dealt with swiftly. That seems to work for the banking system, where any malicious transactions are easily "reversed" (often just reversed on one side actually, 'paid for' by insurance / banks) and a large amount of auditing which makes it possible to clamp down on the bad actors quickly. Abusing the system then no longer becomes a technical challenge so it removes the possibility that someone with the right technical prowess can "break" the system. Robbing a bank is the easiest thing in the world, just walk in and ask for money, it's getting away with it that's difficult.
- askmike 9y ago
  > That seems to work for the banking system, where any malicious transactions are easily "reversed" (often just reversed on one side actually, 'paid for' by insurance / banks) and a large amount of auditing which makes it possible to clamp down on the bad actors quickly. I work for a bank on blockchain projects. It's almost never this simple. You'd be suprised how much banking is paper based right now for the simple reason that no party wants a central solution controlled by any other party.
  - mercer 9y ago
    That's fascinating. Could you tell more about that, or maybe provide a link to more information? I find the topic interesting, and as a geek am inclined to find blockchain stuff cool and useful, but I know very little about the real-world situation/concerns.
    - askmike 9y ago
      A lot of companies in all kinds of sectors (finance, healthcare, etc) are looking into blockchain (or DLT) because it allows for a database model that is not centralised. This is great in situations where you don't fully trust other parties you are doing business with. A lot of these companies are doing experiments using private blockchains (like the private ethereum network linked in OP). However depending on how much you trust the "other" parties allowed to mine (or sign blocks), you might still have the risk where one or more conspire against you and 51% attack you. Periodically putting a blockheader of your private chain into a public blockchain would be a great solution to this, as pulling off a 51% attack on bitcoin is rather hard.
      - mercer 9y ago
        Thanks for the info! Do you perhaps have some suggestions for what a good 'next step' is when it comes to understanding all this in more detail?
  - just_one_time_ 9y ago
    Can you speak more to where your industry is now in adoption? If there were some "major event" would companies like yours be ready to jump ship into cryptos quickly or are they going to be too late?