9 ms·

Blockchain: A technical primer

154 points by halfbrown 8y ago

gfs 8y ago
> In fact, it can be considered one of the biggest technology breakthroughs in recent history, similar to the advent of the Internet in the early 1990s. If this were the case, wouldn't we see the technology in the wild more? That seems like a bold claim for something that is still being vetted and explored. I certainly see value in blockchain but the applications that are using it today don't excite me. The hype puts me off but I am hoping to see it bloom into other areas of software that aren't ICOs or proof of concepts.
- fredgrott 8y ago
  big changes usually require more time in the adoption phases..autos did at the beginning of the 19th century.
  - morley 8y ago
    Not to mention that the industries that could be most transformed by adopting blockchains -- banking being the obvious one -- are among the most slow-moving and change-averse.
  - pphysch 8y ago
    Technologies that are actually useful tend to be aggressively adopted by military, academia, industry. Internet and IC engine were. On the contrary, blockchain finds its activism among SQL-illiterate people, and certainly not the aforementioned groups. Mind that we're already a decade in.
    - proofofmoon 8y ago
      With a SQL database, how do you achieve consensus on a proposed transaction without a middleman taking an arbitrary cut of the proceeds?
      - pphysch 8y ago
        The two parties either agree, or they don't. Full stop. Blockchain, or any buzzword technology, doesn't solve this eternal problem. Third parties have historically been pretty good at sussing out consensus from the two. Judicial systems, market exchanges, etc. When you pay a middleman, you are literally paying for Trust-as-a-Service, among other things (brokerage, etc). Blockchain also costs money to build and maintain as a service, but it's probably the fact that the enormous cost is socialized that makes it an easy pill for many to swallow.
        proofofmoon 8y ago
        Who maintains the source of truth for this record of agreement? If it is one entity, that's the unaccountable middleman. Blockchain is not right for every environment, but there are industries where the middlemen are taking more than the equivalent of every party maintaining a blockchain team. And court cases are even more expensive.
        deleted 8y ago
        [deleted]
        deleted 8y ago
        [deleted]
      - TheDong 8y ago
        All consensus does in bitcoin is determine whether a transaction is possible or impossible (avoid double spends). With a SQL database, this is not an issue because SQL transactions can have constraints preventing said double spend.That is to say, the SQL database can take a lock on the row and ensure no other concurrent transaction modifies it in parallel. Consensus solves a problem that only exists in a decentralized system. Since SQL databases are centralized, that problem doesn't exist. Even for multi-master / distributed SQL variants, there's typically a way to wait for a write to commit across N nodes before going on, which solves the problem much more easily. In short, I think your question makes no sense.
      - spookthesunset 8y ago
    - CryptoPunk 8y ago
      What do you define as aggressively adopted? The Ethereum Enterprise Alliance has 500+ members including many Fortune 500 companies. There is widespread experimention with blockchain technology by government, academia and industry. For example, the majority of central banks are experimenting with blockchain/distributed-ledger technology: https://qz.com/1083712/one-in-five-central-banks-say-they-will-be-using-blockchain-tech-by-2019/ https://qz.com/1083712/one-in-five-central-banks-say-they-wi... NASA is researching using blockchain technology for spacecraft navigation: https://www.uakron.edu/engineering/ECE/news-detail.dot?newsId=c9a2717e-4327-4dcb-9040-87e788d068c4 https://www.uakron.edu/engineering/ECE/news-detail.dot?newsI...
seibelj 8y ago
Blockchain is very applicable to industries where middlemen extract large value by being intermediaries between competing parties. As an example, in telecom there is the issue of settlement. Every phone call generates a Call Data Record (CDR) that has information about who called who, call length, etc. This is critical because every telco negotiates individual rates for voice, SMS, data roaming, etc. between every other carrier on earth (although often you negotiate with one company that provides a package rate for multiple telcos). Your "unlimited" plan obfuscates the fact that how you use your plan, what carriers the people you call are on, where you use data, reflect different levels of profitability for you as a customer. Large companies like Amdocs[0] make billions of dollars handling settlement for telcos. Every month, a carrier has to "settle" all of their CDR's with every other carrier. Issues get sorted out because CDR's never match perfectly, and then carriers pay each other to balance out based on their contractual obligations. A blockchain solution that all telcos agreed on would guarantee data correctness (CDR's all look alike), allow instant settlement and payment (settlement happens once a month), and eliminate the middlemen like Amdocs, Synchronoss, etc. in regards to settlement. Obviously this is a tough problem to crack, and you'd need to get the telcos on board, but I am explaining this as an example where blockchain could provide real value. Indeed, Maersk, the largest shipping conglomerate, is going to release a blockchain solution to move the international shipping industry away from paper and to a unified system.[1] Maersk is in a unique position to do this because they are the largest player, and most other companies just follow what they do, but I mention this as an example where blockchain can help competing companies interact more efficiently. [0] https://www.amdocs.com/ https://www.amdocs.com/ [1] https://www.economist.com/briefing/2018/04/26/the-global-logistics-business-is-going-to-be-transformed-by-digitisation https://www.economist.com/briefing/2018/04/26/the-global-log...
- TylerE 8y ago
  But if all the telcos have to agree anyway, why not just use a centralized db with cryptographic signatures?
  - abtinf 8y ago
    A key element of blockchain is the associated business logic (smart contracts). You need an immutable ledger and you need agreed upon business logic. You have your choice of consensus algorithms. Most of the time when people say blockchain, they mean the public networks like bitcoin or ethereum. But if you move to a private, permissioned network model, you can use consensus algorithms that don’t need mining and have very high transaction speeds. This is the approach taken by IBM Blockchain (via the Linux Foundation’s open source hyperledger fabric project) and a few others.
rdiddly 8y ago
Pretty good primer for newcomers, though it seems to take it as a given that blockchains are (or to hear them say it, "blockchain is") just fully as amazing and applicable as the hype suggests, and here's what you are going to have to do when you inevitably get with the program!
- tumba 8y ago
  This is understandable, given the fact that this is from Deloitte, who would like to sell consulting services.
guiomie 8y ago
They explain the basics of permisionless blockchains and they go on and say "Prominent blockchain consortia include Enterprise Ethereum Alliance, R3, and Hyperledger", this can confuse people since R3 and Hyperledger are quite different from a permissionless chain with mining, and the value added of such platforms without crypto-currencies is highly debatable in my opinion.
apo 8y ago
A blockchain is a digital and distributed ledger of transactions, recorded and replicated in real time across a network of computers or nodes (figure 1). Every transaction must be cryptographically validated via a consensus mechanism executed by the nodes before being permanently added as a new “block” at the end of the “chain.” There is no need for a central authority to approve the transaction, which is why blockchain is sometimes referred to as a peer-to-peer trustless mechanism. I see this kind of explanation a lot. It's misleading at best. A block chain is most definitely not a ledger, as is claimed by too many sources to count. A block chain is a tool allowing a group of users to produce a single, unique transaction log. To this end, transactions are grouped into blocks. A block references two pieces of information: (1) its ordered list of transactions; and (2) its parent block. Two or more blocks may claim the same block as a parent. Therefore, a collection of blocks can be assembled into a tree with one or more children pointing to a parent. Each user maintains its own copy of the tree. All paths through the tree are followed and scored. The path with the highest score is designated as the active chain. The active chain is what many people think of when they use the term "Blockchain." However, the structure of this chain is mostly boring and unremarkable. The most interesting thing about it are transactions. Like blocks, transactions link together. Additionally, transactions run programs that induce global state changes. The secret sauce of "Blockchain" boils down to incentivizing each user to choose the same active chain in an adversarial environment. The best-tested procedure uses "proof-of-work." If the relative order of events plays an important part in what you're trying to do, and you operate in an adversarial environment, then a block chain might help. Otherwise, there's not much a block chain can do for you.
- tilt_error 8y ago
  I thought a ledger was a transaction log. It was in relation to a ledger I first came by the term transaction (or “trans”).
  - apo 8y ago
    You might be thinking of a "journal": Journals and ledgers are where business transactions are recorded in an accounting system. In essence, detail-level information for individual transactions is stored in one of several possible journals, while the information in the journals is then summarized and transferred (or posted) to a ledger. The posting process may take place quite frequently, or could be as infrequent as the end of each reporting period. The information in the ledger is the highest level of information aggregation, from which trial balances and financial statements are produced. https://www.accountingtools.com/articles/what-is-the-difference-between-a-journal-and-a-ledger.html https://www.accountingtools.com/articles/what-is-the-differe... A ledger can be created from a journal (transaction log), but then again, many other kinds of things can be created from a transaction log (e.g., the "World Computer" idea for Ethereum).
xmly 8y ago
Another amateur's writing about blockchain. If you want the immutability, the blockchain is not immutable, just difficult to modify. Also you only need hash signature for this purpose.
rafiki6 8y ago
I find this to be less of a whitepaper and more of an opinion piece. For e.g. "For example, two business parties transacting would not need to maintain their own record of the transaction and would use the blockchain as a single source of truth instead." Ummmmmm...isn't the whole idea of blockchain that we all have a copy (our version of the truth) and a transaction is validated by several participants or miners? That's basically how we get rid of the middlemen? The sentence is clearly trying to convey that this is somehow more efficient than a current system based on a centralized authority, but there's no actual evidence that this is true. Blockchain might bring efficiency to an industry like shipping that currently uses a VERY inefficient system, but it's disingenuous to tell others (especially if you are trying to sell something), that it is more efficient than a well implemented centralized system.
volaski 8y ago
"technical primer", yeah right. I guess this counts as "technical" to people at Deloitte.
mar77i 8y ago
> In fact, it can be considered one of the biggest technology breakthroughs in recent history, similar to the advent of the Internet in the early 1990s. Audibly sighing. read this: https://shkspr.mobi/blog/2018/06/how-i-became-leonardo-da-vinci-on-the-blockchain/ https://shkspr.mobi/blog/2018/06/how-i-became-leonardo-da-vi... It's the internet of shit in crypto, all over again. Come on. There's nothing like 50% of the swarm simply declaring your transactions null and void, but that's obviously how the blockchain is currently operating for some ... uh, criminal reason.

154 points by halfbrown 8y ago

gfs 8y ago

> In fact, it can be considered one of the biggest technology breakthroughs in recent history, similar to the advent of the Internet in the early 1990s. If this were the case, wouldn't we see the technology in the wild more? That seems like a bold claim for something that is still being vetted and explored. I certainly see value in blockchain but the applications that are using it today don't excite me. The hype puts me off but I am hoping to see it bloom into other areas of software that aren't ICOs or proof of concepts.

fredgrott 8y ago
big changes usually require more time in the adoption phases..autos did at the beginning of the 19th century.
- morley 8y ago
  Not to mention that the industries that could be most transformed by adopting blockchains -- banking being the obvious one -- are among the most slow-moving and change-averse.
- pphysch 8y ago
  Technologies that are actually useful tend to be aggressively adopted by military, academia, industry. Internet and IC engine were. On the contrary, blockchain finds its activism among SQL-illiterate people, and certainly not the aforementioned groups. Mind that we're already a decade in.
  - proofofmoon 8y ago
    With a SQL database, how do you achieve consensus on a proposed transaction without a middleman taking an arbitrary cut of the proceeds?
    - pphysch 8y ago
      The two parties either agree, or they don't. Full stop. Blockchain, or any buzzword technology, doesn't solve this eternal problem. Third parties have historically been pretty good at sussing out consensus from the two. Judicial systems, market exchanges, etc. When you pay a middleman, you are literally paying for Trust-as-a-Service, among other things (brokerage, etc). Blockchain also costs money to build and maintain as a service, but it's probably the fact that the enormous cost is socialized that makes it an easy pill for many to swallow.
      - proofofmoon 8y ago
        Who maintains the source of truth for this record of agreement? If it is one entity, that's the unaccountable middleman. Blockchain is not right for every environment, but there are industries where the middlemen are taking more than the equivalent of every party maintaining a blockchain team. And court cases are even more expensive.
        deleted 8y ago
        [deleted]
        deleted 8y ago
        [deleted]
    - TheDong 8y ago
      All consensus does in bitcoin is determine whether a transaction is possible or impossible (avoid double spends). With a SQL database, this is not an issue because SQL transactions can have constraints preventing said double spend.That is to say, the SQL database can take a lock on the row and ensure no other concurrent transaction modifies it in parallel. Consensus solves a problem that only exists in a decentralized system. Since SQL databases are centralized, that problem doesn't exist. Even for multi-master / distributed SQL variants, there's typically a way to wait for a write to commit across N nodes before going on, which solves the problem much more easily. In short, I think your question makes no sense.
    - spookthesunset 8y ago
  - CryptoPunk 8y ago
    What do you define as aggressively adopted? The Ethereum Enterprise Alliance has 500+ members including many Fortune 500 companies. There is widespread experimention with blockchain technology by government, academia and industry. For example, the majority of central banks are experimenting with blockchain/distributed-ledger technology: https://qz.com/1083712/one-in-five-central-banks-say-they-will-be-using-blockchain-tech-by-2019/ https://qz.com/1083712/one-in-five-central-banks-say-they-wi... NASA is researching using blockchain technology for spacecraft navigation: https://www.uakron.edu/engineering/ECE/news-detail.dot?newsId=c9a2717e-4327-4dcb-9040-87e788d068c4 https://www.uakron.edu/engineering/ECE/news-detail.dot?newsI...

seibelj 8y ago

Blockchain is very applicable to industries where middlemen extract large value by being intermediaries between competing parties. As an example, in telecom there is the issue of settlement. Every phone call generates a Call Data Record (CDR) that has information about who called who, call length, etc. This is critical because every telco negotiates individual rates for voice, SMS, data roaming, etc. between every other carrier on earth (although often you negotiate with one company that provides a package rate for multiple telcos). Your "unlimited" plan obfuscates the fact that how you use your plan, what carriers the people you call are on, where you use data, reflect different levels of profitability for you as a customer. Large companies like Amdocs[0] make billions of dollars handling settlement for telcos. Every month, a carrier has to "settle" all of their CDR's with every other carrier. Issues get sorted out because CDR's never match perfectly, and then carriers pay each other to balance out based on their contractual obligations. A blockchain solution that all telcos agreed on would guarantee data correctness (CDR's all look alike), allow instant settlement and payment (settlement happens once a month), and eliminate the middlemen like Amdocs, Synchronoss, etc. in regards to settlement. Obviously this is a tough problem to crack, and you'd need to get the telcos on board, but I am explaining this as an example where blockchain could provide real value. Indeed, Maersk, the largest shipping conglomerate, is going to release a blockchain solution to move the international shipping industry away from paper and to a unified system.[1] Maersk is in a unique position to do this because they are the largest player, and most other companies just follow what they do, but I mention this as an example where blockchain can help competing companies interact more efficiently. [0] https://www.amdocs.com/ https://www.amdocs.com/ [1] https://www.economist.com/briefing/2018/04/26/the-global-logistics-business-is-going-to-be-transformed-by-digitisation https://www.economist.com/briefing/2018/04/26/the-global-log...

TylerE 8y ago
But if all the telcos have to agree anyway, why not just use a centralized db with cryptographic signatures?
- abtinf 8y ago
  A key element of blockchain is the associated business logic (smart contracts). You need an immutable ledger and you need agreed upon business logic. You have your choice of consensus algorithms. Most of the time when people say blockchain, they mean the public networks like bitcoin or ethereum. But if you move to a private, permissioned network model, you can use consensus algorithms that don’t need mining and have very high transaction speeds. This is the approach taken by IBM Blockchain (via the Linux Foundation’s open source hyperledger fabric project) and a few others.

rdiddly 8y ago

Pretty good primer for newcomers, though it seems to take it as a given that blockchains are (or to hear them say it, "blockchain is") just fully as amazing and applicable as the hype suggests, and here's what you are going to have to do when you inevitably get with the program!

tumba 8y ago
This is understandable, given the fact that this is from Deloitte, who would like to sell consulting services.

guiomie 8y ago

They explain the basics of permisionless blockchains and they go on and say "Prominent blockchain consortia include Enterprise Ethereum Alliance, R3, and Hyperledger", this can confuse people since R3 and Hyperledger are quite different from a permissionless chain with mining, and the value added of such platforms without crypto-currencies is highly debatable in my opinion.

apo 8y ago

A blockchain is a digital and distributed ledger of transactions, recorded and replicated in real time across a network of computers or nodes (figure 1). Every transaction must be cryptographically validated via a consensus mechanism executed by the nodes before being permanently added as a new “block” at the end of the “chain.” There is no need for a central authority to approve the transaction, which is why blockchain is sometimes referred to as a peer-to-peer trustless mechanism. I see this kind of explanation a lot. It's misleading at best. A block chain is most definitely not a ledger, as is claimed by too many sources to count. A block chain is a tool allowing a group of users to produce a single, unique transaction log. To this end, transactions are grouped into blocks. A block references two pieces of information: (1) its ordered list of transactions; and (2) its parent block. Two or more blocks may claim the same block as a parent. Therefore, a collection of blocks can be assembled into a tree with one or more children pointing to a parent. Each user maintains its own copy of the tree. All paths through the tree are followed and scored. The path with the highest score is designated as the active chain. The active chain is what many people think of when they use the term "Blockchain." However, the structure of this chain is mostly boring and unremarkable. The most interesting thing about it are transactions. Like blocks, transactions link together. Additionally, transactions run programs that induce global state changes. The secret sauce of "Blockchain" boils down to incentivizing each user to choose the same active chain in an adversarial environment. The best-tested procedure uses "proof-of-work." If the relative order of events plays an important part in what you're trying to do, and you operate in an adversarial environment, then a block chain might help. Otherwise, there's not much a block chain can do for you.

tilt_error 8y ago
I thought a ledger was a transaction log. It was in relation to a ledger I first came by the term transaction (or “trans”).
- apo 8y ago
  You might be thinking of a "journal": Journals and ledgers are where business transactions are recorded in an accounting system. In essence, detail-level information for individual transactions is stored in one of several possible journals, while the information in the journals is then summarized and transferred (or posted) to a ledger. The posting process may take place quite frequently, or could be as infrequent as the end of each reporting period. The information in the ledger is the highest level of information aggregation, from which trial balances and financial statements are produced. https://www.accountingtools.com/articles/what-is-the-difference-between-a-journal-and-a-ledger.html https://www.accountingtools.com/articles/what-is-the-differe... A ledger can be created from a journal (transaction log), but then again, many other kinds of things can be created from a transaction log (e.g., the "World Computer" idea for Ethereum).

xmly 8y ago

Another amateur's writing about blockchain. If you want the immutability, the blockchain is not immutable, just difficult to modify. Also you only need hash signature for this purpose.

rafiki6 8y ago

I find this to be less of a whitepaper and more of an opinion piece. For e.g. "For example, two business parties transacting would not need to maintain their own record of the transaction and would use the blockchain as a single source of truth instead." Ummmmmm...isn't the whole idea of blockchain that we all have a copy (our version of the truth) and a transaction is validated by several participants or miners? That's basically how we get rid of the middlemen? The sentence is clearly trying to convey that this is somehow more efficient than a current system based on a centralized authority, but there's no actual evidence that this is true. Blockchain might bring efficiency to an industry like shipping that currently uses a VERY inefficient system, but it's disingenuous to tell others (especially if you are trying to sell something), that it is more efficient than a well implemented centralized system.

volaski 8y ago

"technical primer", yeah right. I guess this counts as "technical" to people at Deloitte.

mar77i 8y ago

> In fact, it can be considered one of the biggest technology breakthroughs in recent history, similar to the advent of the Internet in the early 1990s. Audibly sighing. read this: https://shkspr.mobi/blog/2018/06/how-i-became-leonardo-da-vinci-on-the-blockchain/ https://shkspr.mobi/blog/2018/06/how-i-became-leonardo-da-vi... It's the internet of shit in crypto, all over again. Come on. There's nothing like 50% of the swarm simply declaring your transactions null and void, but that's obviously how the blockchain is currently operating for some ... uh, criminal reason.