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I have co-authored/assisted in research for a series of articles on their potential application for indirect tax collection and remission. Indirect tax fraud (V

I have co-authored/assisted in research for a series of articles on their potential application for indirect tax collection and remission. Indirect tax fraud (VAT, mostly) is a big problem, and a huge source for funding for terrorism. In a lot of places border states that do a lot of trade super don't trust each other. Having a self-auditing trustless database, of sorts, really would be a game changer.

speedgoose 5y ago
Wouldn't a standard database with a merkle tree provide the same kind of features without the bad parts of the blockchain?
- aranchelk 5y ago
  How would you meaningfully integrate a Merkle tree into a “standard” database? I’m familiar with Merkle trees and several popular dbs, but I’m just not seeing it.
  - speedgoose 5y ago
    Assuming a popular standard transactional database, PostGreSQL for example, you could have a checksum column and a column containing the reference to the previous row primary key. The checksum value could be computed from the previous row checksum and the new row data. You would have to insert data sequentially though, so you would probably need something in front of the database to do that sequentially, and you would probably need some trigger to fail a transaction if the another row exists with a reference to the previous row so you are sure you don't have branches in your tree. All of this would require some PL/pgSQL.
    - tldrthelaw 5y ago
      This (to my read) handles the self-auditing aspect, but how would you handle the need for the central database to be hosted "somewhere?" Not challenging your conclusion, just asking.
      - speedgoose 5y ago
        Some international agency could take care of hosting the database. You would need some kind of trusted international agency anyway for such a project, the way the database works is a technical detail that is not super important IMHO. You don't fix such a problem with a blockchain database and a website.
        tldrthelaw 5y ago
        Yeah I get your point. I'd note though that in policy often times it is less about the realities of a project and more about how that project can be sold. While it is certainly true that this should be handled at an international/community level, it often just isn't. Selling the idea of solving indirect (VAT or sales) tax fraud through invoice matching and handling cross border trades while simultaneously not needing one state to trust another (even if that isn't strictly and in all instances true) can be a powerful pitch.

speedgoose 5y ago

Wouldn't a standard database with a merkle tree provide the same kind of features without the bad parts of the blockchain?

aranchelk 5y ago
How would you meaningfully integrate a Merkle tree into a “standard” database? I’m familiar with Merkle trees and several popular dbs, but I’m just not seeing it.
- speedgoose 5y ago
  Assuming a popular standard transactional database, PostGreSQL for example, you could have a checksum column and a column containing the reference to the previous row primary key. The checksum value could be computed from the previous row checksum and the new row data. You would have to insert data sequentially though, so you would probably need something in front of the database to do that sequentially, and you would probably need some trigger to fail a transaction if the another row exists with a reference to the previous row so you are sure you don't have branches in your tree. All of this would require some PL/pgSQL.
  - tldrthelaw 5y ago
    This (to my read) handles the self-auditing aspect, but how would you handle the need for the central database to be hosted "somewhere?" Not challenging your conclusion, just asking.
    - speedgoose 5y ago
      Some international agency could take care of hosting the database. You would need some kind of trusted international agency anyway for such a project, the way the database works is a technical detail that is not super important IMHO. You don't fix such a problem with a blockchain database and a website.
      - tldrthelaw 5y ago
        Yeah I get your point. I'd note though that in policy often times it is less about the realities of a project and more about how that project can be sold. While it is certainly true that this should be handled at an international/community level, it often just isn't. Selling the idea of solving indirect (VAT or sales) tax fraud through invoice matching and handling cross border trades while simultaneously not needing one state to trust another (even if that isn't strictly and in all instances true) can be a powerful pitch.