6 ms·

> but who owns the database? And who enforces the contract? And who owns the actual data? > Blockchain provides satisfactory answers to all those problems. W

by jVinc 8y ago

> but who owns the database? And who enforces the contract? And who owns the actual data? > Blockchain provides satisfactory answers to all those problems. What problems? I mean your arguing like something like public transportation is an impossibility without blockchain backing because: "Who owns the stations, who enforces the schedules and who owns the actual busses?" Those are not problems. They are all just questions that are always insanely easy to answer in the specific case. With your banking credits, who owns the database? the bank, who enforces the contracts? the legal system? And who owns the actual data? Depending on law, there's ownership relations between yourself and the bank. You an way to many crypto proponents are arguing like ownership rights, legal systems and databases don't exist outside of blockchain based solutions.

shepardrtc 8y ago
But what if two banks are transferring money between themselves? Which bank owns the database? Why should the other bank trust that database?
- toomuchtodo 8y ago
  Trusted third party owned by the banks, or providing audited services to the banks. Banks trust the third party because contracts are enforced by law as well as federal and industry regulations. Ain't no judge gonna throw up is hands and go "well, the smart contract says so, my hands are tied!". Blockchain doesn't solve anything where there is a functioning legal framework. You can't use technology to solve a problem that isn't a technology problem.
  - scott_s 8y ago
    Agreed. I phrase this as "technology does not solve civil problems" (https://news.ycombinator.com/item?id=17809559 https://news.ycombinator.com/item?id=17809559).
  - mattkevan 8y ago
    It doesn’t solve anything if there isn’t a functioning legal framework either. You still have to trust the other party will abide by the results of the smart contract. If there is no legal framework they could just shoot you and have done with it, if they didn’t like the result. Smart contracts and blockchains are still laws, just laws for people who don’t like some of the existing ones. Numerical rather than societal. If there’s no rule of law, then blockchain laws can’t exist either.
- rublev 8y ago
  This already occurs and has been occuring. Has zero relevance to blockchain. Heard of escrow?
- roywiggins 8y ago
  "SWIFT was founded in Brussels in 1973 under the leadership of its inaugural CEO, Carl Reuterskiöld (1973–1989), and was supported by 239 banks in fifteen countries. It started to establish common standards for financial transactions and a shared data processing system and worldwide communications network designed by Logica and developed by the Burroughs Corporation. Fundamental operating procedures, rules for liability, etc., were established in 1975 and the first message was sent in 1977. SWIFT's first United States operating center was inaugurated by Governor John N. Dalton of Virginia in 1979" https://en.wikipedia.org/wiki/Society_for_Worldwide_Interbank_Financial_Telecommunication https://en.wikipedia.org/wiki/Society_for_Worldwide_Interban... See also: https://en.wikipedia.org/wiki/Clearing_House_Interbank_Payments_System https://en.wikipedia.org/wiki/Clearing_House_Interbank_Payme... https://en.wikipedia.org/wiki/Fedwire https://en.wikipedia.org/wiki/Fedwire
  - shepardrtc 8y ago
    SWIFT is a messaging system, not a settlement system. Its also far slower than blockchain, more complex, and more prone to error. I think around 6% of transactions just disappear.
    - twic 8y ago
      I'd be interested to see actual numbers for transaction volume, latency, and reliability of SWIFT and blockchain in practical use cases. I worked on a payment system using the UK's Faster Payment Scheme a while ago. The SLA for latency is two seconds end-to-end, and is usually much faster than that, was simple enough for a gang of underpaid COBOL programmers to implement it successfully, and didn't have a mechanical error rate worth bothering about. In January it moved 186.1 million payments and 161 billion pounds: http://www.fasterpayments.org.uk/statistics http://www.fasterpayments.org.uk/statistics FPS is UK-only, but there's nothing about the technology or the commercial and legal machinery that wouldn't work internationally. If SWIFT is really as bad as you say, it could be replaced with a better instance of the same technology; it doesn't require a haunted git repository to fix it.
      - 8y ago
- bunderbunder 8y ago
  I can't speak to banks, but I have some personal experience with this sort of thing in the case of trading. I'm guessing it's at least somewhat similar to how it works among banks. All the big players have got real-time feeds they're sharing with each other to keep track of who's made what transactions, and they're constantly reconciling them against each other, to make sure that everyone's looking at the same picture. There are also daily reports summarizing the previous day's activity, and they are also reconciled as a second check. The proactive parties work together to sort out any discrepancies they find as soon as they find them. None of this is strictly necessary, because there is a central source of truth that you can rely on. But it tends to operate much too slowly for a lot of people's needs, and mistakes do happen, and they can be costly, so it pays to be proactive. Meaning that, in general, nobody's actually relying on the central authority to keep this organized. The actual real-time feeds are log-structured: You can add new records, but not delete old ones. If you want to reverse a transaction, you just add a new entry to the ledger to back it out. In that sense, it works a lot like how a blockchain would work. The only difference is, nobody's bothering with all that crypto stuff, because all it would do is make the whole thing more expensive. Like, literally, that's the only impact I can see. It won't help with preventing errors - when mistakes happen, it's invariably because of an error at the boundary of the system, and fiddling around with hashes of the previous message when sending new ones does nothing to guard against that. All it would do is slow both the throughput and latency of transactions by introducing more spots where synchronization must occur together with a bunch of ancillary computational load. In a world where time is money, that sure sounds to me like a $100 solution to a 1¢ problem.
  - shepardrtc 8y ago
    > All the big players have got real-time feeds they're sharing with each other to keep track of who's made what transactions, and they're constantly reconciling them against each other, to make sure that everyone's looking at the same picture. That is exactly what blockchain is. It is literally doing that. > None of this is strictly necessary, because there is a central source of truth that you can rely on. But who is running that? And why do you trust them not to change things around every so often? > it works a lot like how a blockchain would work Except there's no central source of truth because no one trusts anyone. Which is why its so strong. There's no need to trust. > The only difference is, nobody's bothering with all that crypto stuff, because all it would do is make the whole thing more expensive That's what makes blockchain immutable. You can't alter it without an enormous amount of resources. And even then, the actions of the rest of the network work to discourage that sort of thing. In PoW, everyone else is checking the non-altered data, and in consensus, everyone else has already agreed on non-altered data.
- deleted 8y ago
  [deleted]
- arcticbull 8y ago
  In every jurisdiction I can think of, this was answered decades ago. Each country has a national association or clearinghouse. In some it's government operated, in some it's a consortium of businesses. The US has NATCHA.
- beefield 8y ago
  >Which bank owns the database? Central bank? > Why should the other bank trust that database? Because if that database fails, it is likely that the failure is one of the smaller problems of the bank?
- pnw_hazor 8y ago
  It is a trust based system. How long do you think a bank or any business can operate if it routinely defrauds its peers or customers. Goodwill is an asset that companies care about.
shrimpx 8y ago
We are talking about ownership, which of course doesn't matter in your example because you don't own the buses or the stations. If you own a house, where's the record? The title is with an insurance company. Why? Because your ownership of this house can be questioned at any time since there's no equivocal record. It's recorded in a bunch of "databases", some of which you and your insurance company may not know exist.
- afiori 8y ago
  Blockchain offer no satisfactory solutions to this, houses can change, people can lose access to identification, people can be evicted, people can make mistakes. The last thing I would want is to be evicted with (by design) no chance to get my house back because my computer got hacked. I cannot understand how at the same time lots of people are worried about "superintelligent machines eating the world" and proposing to remove humans from all important decisions in our lives. Next step is to build a social graph on blockchain?
- nradov 8y ago
  In the US there's only one real estate database per county, maintained by the county government. Owners can purchase title insurance to protect against other claims or liens, but the insurance company doesn't hold the title. And title insurance is quite cheap because in practice the risk is miniscule.

by jVinc 8y ago

shepardrtc 8y ago

But what if two banks are transferring money between themselves? Which bank owns the database? Why should the other bank trust that database?

toomuchtodo 8y ago
Trusted third party owned by the banks, or providing audited services to the banks. Banks trust the third party because contracts are enforced by law as well as federal and industry regulations. Ain't no judge gonna throw up is hands and go "well, the smart contract says so, my hands are tied!". Blockchain doesn't solve anything where there is a functioning legal framework. You can't use technology to solve a problem that isn't a technology problem.
- scott_s 8y ago
  Agreed. I phrase this as "technology does not solve civil problems" (https://news.ycombinator.com/item?id=17809559 https://news.ycombinator.com/item?id=17809559).
- mattkevan 8y ago
  It doesn’t solve anything if there isn’t a functioning legal framework either. You still have to trust the other party will abide by the results of the smart contract. If there is no legal framework they could just shoot you and have done with it, if they didn’t like the result. Smart contracts and blockchains are still laws, just laws for people who don’t like some of the existing ones. Numerical rather than societal. If there’s no rule of law, then blockchain laws can’t exist either.
rublev 8y ago
This already occurs and has been occuring. Has zero relevance to blockchain. Heard of escrow?
roywiggins 8y ago
"SWIFT was founded in Brussels in 1973 under the leadership of its inaugural CEO, Carl Reuterskiöld (1973–1989), and was supported by 239 banks in fifteen countries. It started to establish common standards for financial transactions and a shared data processing system and worldwide communications network designed by Logica and developed by the Burroughs Corporation. Fundamental operating procedures, rules for liability, etc., were established in 1975 and the first message was sent in 1977. SWIFT's first United States operating center was inaugurated by Governor John N. Dalton of Virginia in 1979" https://en.wikipedia.org/wiki/Society_for_Worldwide_Interbank_Financial_Telecommunication https://en.wikipedia.org/wiki/Society_for_Worldwide_Interban... See also: https://en.wikipedia.org/wiki/Clearing_House_Interbank_Payments_System https://en.wikipedia.org/wiki/Clearing_House_Interbank_Payme... https://en.wikipedia.org/wiki/Fedwire https://en.wikipedia.org/wiki/Fedwire
- shepardrtc 8y ago
  SWIFT is a messaging system, not a settlement system. Its also far slower than blockchain, more complex, and more prone to error. I think around 6% of transactions just disappear.
  - twic 8y ago
    I'd be interested to see actual numbers for transaction volume, latency, and reliability of SWIFT and blockchain in practical use cases. I worked on a payment system using the UK's Faster Payment Scheme a while ago. The SLA for latency is two seconds end-to-end, and is usually much faster than that, was simple enough for a gang of underpaid COBOL programmers to implement it successfully, and didn't have a mechanical error rate worth bothering about. In January it moved 186.1 million payments and 161 billion pounds: http://www.fasterpayments.org.uk/statistics http://www.fasterpayments.org.uk/statistics FPS is UK-only, but there's nothing about the technology or the commercial and legal machinery that wouldn't work internationally. If SWIFT is really as bad as you say, it could be replaced with a better instance of the same technology; it doesn't require a haunted git repository to fix it.
    - 8y ago
bunderbunder 8y ago
I can't speak to banks, but I have some personal experience with this sort of thing in the case of trading. I'm guessing it's at least somewhat similar to how it works among banks. All the big players have got real-time feeds they're sharing with each other to keep track of who's made what transactions, and they're constantly reconciling them against each other, to make sure that everyone's looking at the same picture. There are also daily reports summarizing the previous day's activity, and they are also reconciled as a second check. The proactive parties work together to sort out any discrepancies they find as soon as they find them. None of this is strictly necessary, because there is a central source of truth that you can rely on. But it tends to operate much too slowly for a lot of people's needs, and mistakes do happen, and they can be costly, so it pays to be proactive. Meaning that, in general, nobody's actually relying on the central authority to keep this organized. The actual real-time feeds are log-structured: You can add new records, but not delete old ones. If you want to reverse a transaction, you just add a new entry to the ledger to back it out. In that sense, it works a lot like how a blockchain would work. The only difference is, nobody's bothering with all that crypto stuff, because all it would do is make the whole thing more expensive. Like, literally, that's the only impact I can see. It won't help with preventing errors - when mistakes happen, it's invariably because of an error at the boundary of the system, and fiddling around with hashes of the previous message when sending new ones does nothing to guard against that. All it would do is slow both the throughput and latency of transactions by introducing more spots where synchronization must occur together with a bunch of ancillary computational load. In a world where time is money, that sure sounds to me like a $100 solution to a 1¢ problem.
- shepardrtc 8y ago
  > All the big players have got real-time feeds they're sharing with each other to keep track of who's made what transactions, and they're constantly reconciling them against each other, to make sure that everyone's looking at the same picture. That is exactly what blockchain is. It is literally doing that. > None of this is strictly necessary, because there is a central source of truth that you can rely on. But who is running that? And why do you trust them not to change things around every so often? > it works a lot like how a blockchain would work Except there's no central source of truth because no one trusts anyone. Which is why its so strong. There's no need to trust. > The only difference is, nobody's bothering with all that crypto stuff, because all it would do is make the whole thing more expensive That's what makes blockchain immutable. You can't alter it without an enormous amount of resources. And even then, the actions of the rest of the network work to discourage that sort of thing. In PoW, everyone else is checking the non-altered data, and in consensus, everyone else has already agreed on non-altered data.
deleted 8y ago
[deleted]
arcticbull 8y ago
In every jurisdiction I can think of, this was answered decades ago. Each country has a national association or clearinghouse. In some it's government operated, in some it's a consortium of businesses. The US has NATCHA.
beefield 8y ago
>Which bank owns the database? Central bank? > Why should the other bank trust that database? Because if that database fails, it is likely that the failure is one of the smaller problems of the bank?
pnw_hazor 8y ago
It is a trust based system. How long do you think a bank or any business can operate if it routinely defrauds its peers or customers. Goodwill is an asset that companies care about.

shrimpx 8y ago

We are talking about ownership, which of course doesn't matter in your example because you don't own the buses or the stations. If you own a house, where's the record? The title is with an insurance company. Why? Because your ownership of this house can be questioned at any time since there's no equivocal record. It's recorded in a bunch of "databases", some of which you and your insurance company may not know exist.

afiori 8y ago
Blockchain offer no satisfactory solutions to this, houses can change, people can lose access to identification, people can be evicted, people can make mistakes. The last thing I would want is to be evicted with (by design) no chance to get my house back because my computer got hacked. I cannot understand how at the same time lots of people are worried about "superintelligent machines eating the world" and proposing to remove humans from all important decisions in our lives. Next step is to build a social graph on blockchain?
nradov 8y ago
In the US there's only one real estate database per county, maintained by the county government. Owners can purchase title insurance to protect against other claims or liens, but the insurance company doesn't hold the title. And title insurance is quite cheap because in practice the risk is miniscule.