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> The pilot will run until February 2021 and will use block-chain technology, the Riksbank said. Will it really? Riksbanken can have a central server to resol

by lawn 7y ago

> The pilot will run until February 2021 and will use block-chain technology, the Riksbank said. Will it really? Riksbanken can have a central server to resolve any double spends, which is only really a problem in a decentralized network. Once you have a singular authority you can just let them decide, and you'll have no need for an inefficient cryptocurrency. > which is being developed by consulting firm Accenture Accenture is quite famous for developing bullshit solutions for made-up problems, so I guess this is a good fit for them. > The sharp decline in the use of cash and competition from alternative currencies, such as Facebook’s Libra, has also prompted central banks around the world to consider issuing their own electronic currencies. This is poor reporting, as e-krona predates Facebook's Libra, which is still far from being launched. They probably mean the perceived competition from Bitcoin.

rabuse 7y ago
It's buzzwords being thrown around again. Blockchain is highly inefficient for anything other than decentralized consensus.
- tzumby 7y ago
  For sure, doesn’t seem like there’s a need to solve for adversarial Byzantine style attacks here. Even a permissioned proof of authority blockchain is overkill for this (which is most likely what Accenture is building/configuring for them)
- derpherpsson 7y ago
  Maybe the blockchain is meant for "offline" transactions, when neither part is in contact with the Main Server. Disclaimer: I dont know
- tadfisher 7y ago
  Blockchains are highly inefficient for decentralized consensus as well.
  - darawk 7y ago
    But they are the most efficient known solution to the problem. Efficiency is relative.
    - tadfisher 7y ago
      No, they are the most efficient known solution to global consensus for double-spend. There are alternatives that relax the constraints using extra information such as connections in the network to get a relatively good approximation of the global consensus. See Safecoin, for example.
- teh_infallible 7y ago
  Are blockchains inefficient if you’re not using proof of work? I thought it was the latter that was a source of inefficiency, and you don’t need PoW on a permissioned network.
  - tzumby 7y ago
    If you're not using proof of work, blockchains start to look more like distributed storage with an audit trail and immutable row level db constraints - if it's a Proof of Authority is like a way to deal with who has access to write to the db - the distributed consensus part is well researched (Raft, Paxos etc) The only advantage that I can think of is interoperability: you will be able to communicate with the public blockchain for point in time "backups". Also, building your internal smart contracts you can use an existing language like Solidity.
  - lawn 7y ago
    Even if you use some other consensus mechanism they're still inefficient. All full nodes in the network still have to propagate, validate and store all transactions forever. This is indeed much more inefficient compared to a centralized solution and it's very difficult to create a decentralized network that can handle the amount of transactions that VISA processes for example.
notyourwork 7y ago
> Accenture is quite famous for developing bullshit solutions for made-up problems, so I guess this is a good fit for them. Came here to see what consulting firm was behind this tomfoolery.
duxup 7y ago
It seems inevitable that when the buzzwords wear off some executive will ask "So we have this central server we trust right? Why not just use that?"
- acuster 7y ago
  External Auditing. I can't audit the central bank's server but I can audit the publicly published blockchain.
  - dandanua 7y ago
    This can be solved by making all ordinary transactions public. Blockchain is not needed in 100% of the cases when central authority is in place.
    - darawk 7y ago
      There is a difference between deciding all transactions will be published and making them public by design constraint. Blockchains make transactions public by design, and this design cannot be easily subverted by the people running it.
      - jernejzen 7y ago
        Not really. Ever heard Monero or Zcash fe?
        darawk 7y ago
        I certainly have. But this system is not designed like them.
        lawn 7y ago
        All transactions in both Monero and ZCash are public, and we can verify that they're valid. But what we cannot do is see all transactions details, such as the transaction amount. These are two different things.
socialdemocrat 7y ago
Problem with a central server for money is that it makes the whole state vulnerable. If everybody use central bank e-currency you can just attack their sever to destroy the flow of all money. But if it is distributed like real crypto currency, you have to be able to attack and take down hundreds or thousands of severs geographically spread.
- teh_infallible 7y ago
  I don’t know why your comment is being downvoted. That was my understanding as well. A distributed ledger is much harder to tamper with, which is why “blockchain technology” is actually a reasonable solution to this problem, IMO. I am open to being proven wrong, though
  - lawn 7y ago
    I did not downvote him, but a cryptocurrency is only tamper proof because the entities that decide the rules are distributed (in Bitcoin it's the miners who extend the blockchain). So to being down the Bitcoin network you need to bring down all the miners, which is basically impossible. But here there's only a single entity that decides the rules. So if you shut down riksbanken's servers, the servers that are deciding which transactions are valid, you essentially shut down the network. Sure you can have thousands of servers around the globe sharing the last seen state or new but not yet verified transactions, but that's not a very useful network. They would instantly be discarded once riksbanken's servers come online to sort out the mess. You can have this problem in Bitcoin too, if you isolate a majority of the miners from the rest of the network, essentially splitting it in too. But that's much harder to do. Edit: Here I refer to deciding double spends, which the critical problem any digital currency needs to solve. Without it anyone can print money out of thin air.
- deleted 7y ago
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- deleted 7y ago
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- surfsvammel 7y ago
Mangalor 7y ago
When one of these banks inevitably gets hacked, we're talking billions stolen overnight. Part of the appeal of Bitcoin was it's decentralized authority, giving people more confidence in a currency that was digital.
ChainOfFools 7y ago
> Once you have a singular authority you can just let them decide, and you'll have no need for an inefficient cryptocurrency. Unfortunately the mass of confused language around blockchainism has made its own miniature political weather system, and consequently there is a growing niche for such Potemkin Decentralization models. I would even buy the argument that all decentralization models turn out to be mere smokescreens that misdirect the focus of critical attention on to one aspect of a complex system, only to obfuscate de facto centralization accumulating in a different part of that same system. By the time this concentration of leverage has become too dominant to hide, the new Potemkin Decentralization system has made serious inroads into the incumbent it seeks to displace.
surfsvammel 7y ago
I believe Riksbanken want it to be decentralised though. They don’t want to have to bother with Know-Your-Customer stuff. I believe they don’t want to have to store personal data. At the same time they don’t want it to be anonymous. That’s why a solution where the commercial banks drive the chain, and keeps the KYC, allocating “anonymous” blockchain addresses, or accounts at the riksbank, has been proposed. The customers bank know the customer, the Riksbank does not. But the Riksbank, can still issue interest directly on the currency directly to the customer. There are several ways that the nodes, or commercial banks, or whoever it might be, can make the whole think pseudo-anonymous for the customer. Would also let commercial banks offer services around it, making it easier to get the banks on board.
erikpukinskis 7y ago
> Once you have a singular authority you can just let them decide There are still a few benefits of crypto here: - the “service” can stay up even when gov’t servers go down - you can even make some transactions without network access at all - transparency about money supply

by lawn 7y ago

rabuse 7y ago

It's buzzwords being thrown around again. Blockchain is highly inefficient for anything other than decentralized consensus.

tzumby 7y ago
For sure, doesn’t seem like there’s a need to solve for adversarial Byzantine style attacks here. Even a permissioned proof of authority blockchain is overkill for this (which is most likely what Accenture is building/configuring for them)
derpherpsson 7y ago
Maybe the blockchain is meant for "offline" transactions, when neither part is in contact with the Main Server. Disclaimer: I dont know
tadfisher 7y ago
Blockchains are highly inefficient for decentralized consensus as well.
- darawk 7y ago
  But they are the most efficient known solution to the problem. Efficiency is relative.
  - tadfisher 7y ago
    No, they are the most efficient known solution to global consensus for double-spend. There are alternatives that relax the constraints using extra information such as connections in the network to get a relatively good approximation of the global consensus. See Safecoin, for example.
teh_infallible 7y ago
Are blockchains inefficient if you’re not using proof of work? I thought it was the latter that was a source of inefficiency, and you don’t need PoW on a permissioned network.
- tzumby 7y ago
  If you're not using proof of work, blockchains start to look more like distributed storage with an audit trail and immutable row level db constraints - if it's a Proof of Authority is like a way to deal with who has access to write to the db - the distributed consensus part is well researched (Raft, Paxos etc) The only advantage that I can think of is interoperability: you will be able to communicate with the public blockchain for point in time "backups". Also, building your internal smart contracts you can use an existing language like Solidity.
- lawn 7y ago
  Even if you use some other consensus mechanism they're still inefficient. All full nodes in the network still have to propagate, validate and store all transactions forever. This is indeed much more inefficient compared to a centralized solution and it's very difficult to create a decentralized network that can handle the amount of transactions that VISA processes for example.

notyourwork 7y ago

> Accenture is quite famous for developing bullshit solutions for made-up problems, so I guess this is a good fit for them. Came here to see what consulting firm was behind this tomfoolery.

duxup 7y ago

It seems inevitable that when the buzzwords wear off some executive will ask "So we have this central server we trust right? Why not just use that?"

acuster 7y ago
External Auditing. I can't audit the central bank's server but I can audit the publicly published blockchain.
- dandanua 7y ago
  This can be solved by making all ordinary transactions public. Blockchain is not needed in 100% of the cases when central authority is in place.
  - darawk 7y ago
    There is a difference between deciding all transactions will be published and making them public by design constraint. Blockchains make transactions public by design, and this design cannot be easily subverted by the people running it.
    - jernejzen 7y ago
      Not really. Ever heard Monero or Zcash fe?
      - darawk 7y ago
        I certainly have. But this system is not designed like them.
      - lawn 7y ago
        All transactions in both Monero and ZCash are public, and we can verify that they're valid. But what we cannot do is see all transactions details, such as the transaction amount. These are two different things.

socialdemocrat 7y ago

Problem with a central server for money is that it makes the whole state vulnerable. If everybody use central bank e-currency you can just attack their sever to destroy the flow of all money. But if it is distributed like real crypto currency, you have to be able to attack and take down hundreds or thousands of severs geographically spread.

teh_infallible 7y ago
I don’t know why your comment is being downvoted. That was my understanding as well. A distributed ledger is much harder to tamper with, which is why “blockchain technology” is actually a reasonable solution to this problem, IMO. I am open to being proven wrong, though
- lawn 7y ago
  I did not downvote him, but a cryptocurrency is only tamper proof because the entities that decide the rules are distributed (in Bitcoin it's the miners who extend the blockchain). So to being down the Bitcoin network you need to bring down all the miners, which is basically impossible. But here there's only a single entity that decides the rules. So if you shut down riksbanken's servers, the servers that are deciding which transactions are valid, you essentially shut down the network. Sure you can have thousands of servers around the globe sharing the last seen state or new but not yet verified transactions, but that's not a very useful network. They would instantly be discarded once riksbanken's servers come online to sort out the mess. You can have this problem in Bitcoin too, if you isolate a majority of the miners from the rest of the network, essentially splitting it in too. But that's much harder to do. Edit: Here I refer to deciding double spends, which the critical problem any digital currency needs to solve. Without it anyone can print money out of thin air.
deleted 7y ago
[deleted]
deleted 7y ago
[deleted]
surfsvammel 7y ago

Mangalor 7y ago

When one of these banks inevitably gets hacked, we're talking billions stolen overnight. Part of the appeal of Bitcoin was it's decentralized authority, giving people more confidence in a currency that was digital.

ChainOfFools 7y ago

> Once you have a singular authority you can just let them decide, and you'll have no need for an inefficient cryptocurrency. Unfortunately the mass of confused language around blockchainism has made its own miniature political weather system, and consequently there is a growing niche for such Potemkin Decentralization models. I would even buy the argument that all decentralization models turn out to be mere smokescreens that misdirect the focus of critical attention on to one aspect of a complex system, only to obfuscate de facto centralization accumulating in a different part of that same system. By the time this concentration of leverage has become too dominant to hide, the new Potemkin Decentralization system has made serious inroads into the incumbent it seeks to displace.

surfsvammel 7y ago

I believe Riksbanken want it to be decentralised though. They don’t want to have to bother with Know-Your-Customer stuff. I believe they don’t want to have to store personal data. At the same time they don’t want it to be anonymous. That’s why a solution where the commercial banks drive the chain, and keeps the KYC, allocating “anonymous” blockchain addresses, or accounts at the riksbank, has been proposed. The customers bank know the customer, the Riksbank does not. But the Riksbank, can still issue interest directly on the currency directly to the customer. There are several ways that the nodes, or commercial banks, or whoever it might be, can make the whole think pseudo-anonymous for the customer. Would also let commercial banks offer services around it, making it easier to get the banks on board.

erikpukinskis 7y ago

> Once you have a singular authority you can just let them decide There are still a few benefits of crypto here: - the “service” can stay up even when gov’t servers go down - you can even make some transactions without network access at all - transparency about money supply