Blockchain technology is going to change everything: the shipping industry, the financial system, government … in fact, what won’t it change? But enthusiasm for it mainly stems from a lack of knowledge and understanding. The blockchain is a solution in search of a problem.
RT @balajis: This piece is better than most in that it engages with the tech, but misses the point.
A public blockchain is a massively multiclient database where every user is a root user. As opposed to a few privileged sysadmins at a social network or bank. https://t.co/LMeMKDRzGH
This piece is better than most in that it engages with the tech, but misses the point.
A public blockchain is a massively multiclient database where every user is a root user. As opposed to a few privileged sysadmins at a social network or bank. https://t.co/LMeMKDRzGH
His first job was to explain what blockchain is. When I asked him, he said it is “a kind of system that can’t be stopped”, that it’s “actually a force of nature”, or rather, “a decentralised consensus algorithm”. OK, it’s hard to explain, he conceded eventually.
" there are now three mining pools – a type of company that builds rooms full of servers in Alaska and other locations way up above the Arctic circle – "
Mining Farm = Lots of mining hardware owned by one person/entity like described. Yes, there are some big ones, as you can read here. But nowhere near the size of mining pools.
Mining Pool = A group of independent miners splitting their mining profits. Rather than waiting a really really long time to get a mining payout, you can join the pool to get a small portion of each payout proportional to how much you mine. (More consistent payout.)
Yes, 51% controlled by one person/entity can in theory have the power to double spend transactions. In practice for 51% attacks you usually need much more (say 60%-70% of the hashing power). Mining pools have, in the past controlled 51%, and in those cases, miners at that pool actively switched to avoid the issue.
Mining pools make a lot of profit for the operators. Facilitating a double-spend would be a very large damage to the reputation of the mining pool (probably fatal), and the return from that would be limited to the amount of bitcoin that could be double-spent by participants.
In order to create a double-spend, you'd need to distribute modified mining software. While most people probably won't check this, many of the miners are very experienced and it only takes one to spread the knowledge. It's unlikely this could be orchestrated and coordinated in secret, and that several independent mining pools would all agree to tarnish their reputation to pull this off. A double-spend is a very public big deal and everyone would know which mining pools are responsible nearly immediately. However, certainly anything is possible.
> Mining pools have, in the past controlled 51%
You mean, ONE pool (GHash) had more than 50% all by itself. But now half a dozen pools have 80%
> miners at that pool actively switched to avoid the issue.
Specifically, BitFury pulled out of GHash and established its own pool. You mean, to avoid the *appearance* of an issue
> In order to create a double-spend, you'd need to distribute modified mining software
I am assuming that by "double spend" you mean a fraudulent reversal of a previously N-confirmed payment. The attacking miners need only mine an alternative branch that starts before that transaction was recorded in the blockchain, and include in that new branch a transaction that sends the same coins to a different address. Once that branch has more work than the current one, everybody -- users, relay nodes, exchanges, and other miners -- will automatically and silently accept it; thus cancelling the previous payment and accepting the new tx.
You need to convince everybody to download new software only to do a "hard fork" type of change to the protocol -- like increasing the block size limit or the block reward, confiscating arbitrary coins, etc. To do that you need at least 70% of the total hashpower, so that you can sabotage the current chain while mining the new one.
>half a dozen pools have 80%
According to [BTC.com](https://BTC.com), the top half dozen mining pools hold 68.89%.
* [BTC.com](https://BTC.com) 17.54 %
* F2Pool 14.82 %
* Poolin 11.06 %
* AntPool 9.81 %
* Huobi.pool 8.35 %
* OKExPool 7.31 %
Regardless, the article was suggesting you could be successful with just 3. Even assuming it was 6, are you suggesting it's reasonable for a mining pool operator to convince 5 other mining pool operators to all collude so a transaction can be reversed?
>The attacking miners need only mine an alternative branch that starts before that transaction was recorded in the blockchain, and include in that new branch a transaction that sends the same coins to a different address.
So apparently mining pools can dictate the chain for miners. Sounds a bit like waiting for your coach to tell you that the race has started before you start running, but I suppose that the mining pool bottleneck is really fast to validate transactions, and would only delay all miners in the pool by a fraction of a second.
Still it would seem at least a bit suspicious and a deviation from normal mining protocol if a pool operator asked miners in their pool to mine an alternate branch and ignore the current active longest chain which is being publicly broadcast? I can't see something like that going over well, especially if a malicious double spend was being supported. Do you think the mining pool of a big exchange like OkEx is going to knowingly participate in a double-spend attack?
> the top half dozen mining pools hold 68.89%
That is more than 50%, enough for any soft fork -- such as a fraudulent transaction reversal. And more than 66.667% -- technically, enough to impose a hard fork.
(Funnily, [this chart](https://blockchain.info/pools) shows BTC.com at 8th place in the ranking, while BTC.com's site shows it at first place. What is going on? Is BTC.com responsible for most of the 25% "Unknown" in that piechart?)
> are you suggesting it's reasonable for a mining pool operator to convince 5 other mining pool operators to all collude so a transaction can be reversed?
At least two of those 6 pools have overlapping if not identical ownership, and AFAIK the first 8 in that pie-chart are all in China. The Chinese pools have taken a united front before, e. g. when they signed a joint commitment to support Gavin's 8 MB BIP101 hard fork proposal.
If there is motivation for a pool to consider a 51%or 67% attack, it will probably apply to all those 8 pools. For instance, if a drop in the price would cause more than half of the hashpower to shut down while still in the red. Or if China threatens to jail them for money laundering or drug trafficking if they do not reverse a certain transaction or do not confiscate certain coins. And China could do that to please some important trading partner...
> So apparently mining pools can dictate the chain for miners.
Yes, it is the pools, not the actual miners, who validate the transactions, assemble the candidate blocks, and choose the parent of each block. The miners don't get to see the transactions; they get only the block header's template, and they don't even need to parse it.
The actual miners may not even know which coin they are mining, and they should not care. Their contract with the pool says that their payoff is in BTC and proportional to their hashing work. As long as the pool payoff is enough, they should be happy. And, conversely, if a miner refuses to work on a block that the pool distributed, he will not receive any payments from the pool.
A miner may switch pools, but only if he believes that (a) the new pool will not join the attack, and (b) the attack will fail. And a pool that is not cooperating in the attack will lose any coins that it may mine in the old branch, if the attack succeeds.
I generally agree it's a solution looking for a problem, but:
And for what? This is actually the most important question: what problem does blockchain actually solve? OK, so with bitcoin, banks can’t just remove money from your account at their own discretion. But does this really happen? I have never heard of a bank simply taking money from someone’s account. If a bank did something like that, they would be hauled into court in no time and lose their license. Technically it’s possible; legally, it’s a death sentence.
I think this is kind of niave. It provides an interesting opportunity in under-banked and or overtly corrupt nations.
It facilitates the transfer of money in ways that banks simply cannot.
> I think this is kind of niave. It provides an interesting opportunity in under-banked and or overtly corrupt nations.
> It facilitates the transfer of money in ways that banks simply cannot.
Crypto currencies have a lot of price volatility and some of them have quite high fees.
Also, you would need a way to convert it back to your countries currency, like selling it on an exchange for your national currency and have it deposited into your bank account. That leads to even more fees, and it doesn't really benefit the unbanked. Unless you live somewhere that you can pay for everything you need with crypto.
> Unless you live somewhere that you can pay for everything you need with crypto.
That's the idea. But yea obviously it isn't *actually* used as a currency in many places at all. I know NewEgg does - or did - accept it as a payment, as well as Wikipedia, but that's all I know of.
Blockchain isn’t good for payments/transactions where we already have extremely robust risk diffusing infrastructure in place.
Blockchain is fantastic for things like logistics & supply chain management. Block chain is fantastic for things like non-collateralizing transactions or eliminating escrow requirements.
It is utterly ridiculous how people taking a “deep look” into block chain technologies seem to only find bitcoin and etherium use cases when there are hundreds of other, extremely creative and valuable solutions that are effectively using block chain to mitigate mutual uncertainty in business to business transactions.
Quick litmus test to tell if blockchain would be useful:
* Is there a process where more than one party must have the same information at the same time before each can continue with their subsequent steps?
* In this relationship, are there scenarios where one party’s failure to share or receive that information could/would cause meaningful harm to one or more other parties?
If yes/yes, then blockchain solves this problem. Here’s a little story for you to help clarify -
You run an ice cream making business. You sell to big box stores like Walmart, Target, big grocery chains, etc.
You get an order to deliver a truck full of ice cream to a warehouse. You send a confirmation that you’ve received the order and you will deliver on Wednesday. You fill the truck on Tuesday night, and it arrives on Wednesday, but the warehouse doesn’t have room for your order in cold storage. They say you never told them the shipment was coming. You show them the response you sent, clearly they just missed your response, it’s their fault. Your ice cream is sitting in a refrigerated truck (that you’re paying for while this is sorted out) at the warehouse’s dock, slowing down the warehouse’s other deliveries. The warehouse has to scramble to make room for your truck full of ice cream in their cold storage space.
Who messed up? Who should pay for the loss? If you’re dealing with Walmart, they absolutely are not paying for your dead loss, even if you genuinely sent the confirmation message with the delivery date/time. They are much bigger than you and closer to your customer, so they dictate much of the terms - you pay them a fine for showing up to their warehouse “unannounced”, even if you did announce it but they neglected to hear you. That’s bad for you, it’s bad for Walmart, it’s bad for customers (because it increases product prices and reduces supply consistency).
How do you solve the problem of the two generals? (https://youtu.be/IP-rGJKSZ3s)
You can’t (not really), but you can alter the risk/responsibility distribution across mutually interested parties. Instead of SLAs that fuck vendors for their VAN failing to deliver a file successfully, blockchain solutions allow those vendors to validate when their shipment notice has been posted to the blockchain, and the retailer sees it at the same time, meaning both parties are committed to shipping/receiving the truck full of ice cream instead of the absolute clusterfuck that I described above.
I was hoping you would link to people actually using blockchains, not hypothetical use cases published by companies trying to sell you Blockchain services.
> Quick litmus test to tell if blockchain would be useful:
Here's a better one: https://i.redd.it/uu0qg8t28tq11.png
As far as I know, nothing other than cryptocurrencies have made it to the end of that flowchart.
It's funny that you mention Walmart, the kings of supply chain, who have somehow perfected their craft without blockchains. Blockchain is a solution in search of a problem. Or, more accurately, it's a convoluted solution to problems that have already been solved.
“I don’t know of anyone actually using blockchain, therefore no one is using blockchain” - u/StrengthFormal7113
That's a private permissioned blockchain. It's basically an append-only internal database. Along with EDI and IoT it looks like they were trying to cram as many buzzwords as possible into a single product.
Some VP was trying to look innovative and spent millions of dollars on a slow database...
Both use cases I cited are shared with third parties - Walmart’s is tied to its food vendors, Santander’s os ties to other international banks. I get that it’s hard to accept when you’re wrong, but it’s an important skill for you to learn. Please try harder in the future.
Read this: https://i.redd.it/uu0qg8t28tq11.png
Step 2: Do you need more than one entity to contribute data? If not, you don't need a blockchain. You can use a database.
It's 2020. Blockchains were invented in 2009. Every article that about blockchains being used uses the word "pilot" in there somewhere. Don't you think that after 11 years we'd be past the piloting stage?
Now that you've devolved into insults I'm guessing that your knowledge about blockchains has been exhausted here. Keep reading.
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Blockchain is an amazing solution for keeping track of all money and transactions within a system without error, as I understand it. Then you take bitcoin and compare it to visa, bitcoin uses blockchain to verify if a transaction is real, its bitcoin that cost the money per transaction not blockchain, get it right people. Usps wouldnt be trying to use blockchain for voting if you had to run a computer for 200 hours per vote.
True. Also applicable argument for the entirety of The Universe. It doesn't really solve a problem, it exists only to serve it's own existence. Or say how Indiana Jones didn't matter in Raiders. But it does exist nonetheless, so we will do stuff with it.
Carrying out a payment with Visa requires about 0.002 kilowatt-hours; the same payment with bitcoin uses up 906 kilowatt-hours, more than half a million times as much, and enough to power a two-person household for about three months
What? I knew it was bad, but that it was that bad. Can it ever be switched off? Thats just ridiculous!
Out of my depth, but some data: https://digiconomist.net/bitcoin-energy-consumption
This source pegs per-transaction consumption at ~600kWh, equivalent to 20 days of a single US household. Which seems, truly, insanely inefficient.
It will just keep using more and more power every year as more powerful hardware gets released. Miners are in a constant competition with each other to get the highest hashrate they can in order to mine more coins.
As you can see from this chart, the hash rate (and therefore power consumption) is increasing at a faster rate year after year.
That's just for bitcoin
Only thing that will stop this is a collapse in price to make it less profitable for them to mine. Which is entirely possible because of how manipulated the price is due to Tether (that's a whole other story entirely), when the Tether house of cards come crashing down, everything will come down.
If you are interested in the Tether stuff:
https://cryptoslate.com/tether-accused-of-minting-400-in-uncollateralized-udst-to-prop-up-bitcoin/ (The Tether issues has gotten MUCH worse since this article was written, they are printing $100m of Tethers per day to keep the btc price propped up, and there is no evidence that it is backed 1:1 by the US dollar like they claim)
>Maybe this is blockchain’s greatest merit: it’s an awareness campaign, albeit an expensive one... Yes, it took a few wild, unmet promises, but the result is that administrators are now interested in the boring subjects that help make the world run a bit more efficiently – nothing spectacular, just a bit better.
Man, you weren't kidding about the "this is good for Bitcoin!"-style hopium.
Blockchain is WAY too inefficient to be useful to anyone en-masse. And the real problem the world wants solved is the Byzantine fault/failure problem itself so you don't have to trust others. But you don't need a blockchain that works exactly like the current blockchain to do it.
This can be done far more efficiently with algos like PBFT, BFT-Paxos or BFT-Raft.
Algos build upon these listed algos will likely be what really gives the world a distributed ledger that works. And it would be run on tens of computers, not millions, that's way too many.
The smartest thing about blockchain, Matt Levine wrote, is that the rest of the world was forced to “pay attention to those back-office technology upgrades, and to think that they might be revolutionary”.
Oh come on, most businesses were already too enthusiastic about technological upgrades for the sake of technological upgrades.
L’articolo non mi sembra ne parli ma la Blockchain risolve il vero problema del digitale: la scarsità/replicabilità di esso.
Fino a senza Blockchain qualsiasi cosa digitale poteva essere replicata infinitamente, dopo la Blockchain non più. E`il vero passaggio, e il bisogno di questa cosa se ne sente da decenni, sopratutto per artisti, il BTC e le varie crypto sono un derivato.
There is the value of being a "distributed DB" but even then there are far better solutions.
A block chain patent system has been the most reasonable idea I have seen that made any ammount of sense thus far.