
How Blockchain Will Change Your Life - ozdave
http://www.wsj.com/articles/how-blockchain-will-change-your-life-1478564751
======
zwegner
First off, when did "blockchain" become an uncountable noun? "blockchains" or
"blockchain technology" sounds much more natural.

Anyways, I wish more people in the media would differentiate between the
Merkel tree, providing the immutable ledger part, and the proof-of-work
distributed consensus algorithm, which provides some degree of trust through
burning an ever-increasing amount of power. Most of the benefits the author
lists would be true of just the Merkel tree without needing the wasteful
proof-of-work consensus system, if it's used between trusted parties. Also,
even if there's not complete trust, it would still provide an audit trail so
that appropriate actions could be taken against bad actors.

When the author later talks about governance boards, that just underscores the
incongruity even more. While I'm sure governance boards could be shoehorned
into some DAO-like system over distributed consensus, it seems a lot easier to
just get rid of the whole distributed consensus altogether and give some
digital signatures to the governance board that can sign/bless the Merkel
tree.

~~~
Animats
_Most of the benefits the author lists would be true of just the Merkel tree
without needing the wasteful proof-of-work consensus system, if it 's used
between trusted parties._

The parties don't have to be trusted. It's the opposite. A good blockchain
needs mutually mistrustful parties who are not anonymous. If somebody tries to
tamper with the ledger, all the other parties can easily tell who did it. It
takes collusion of all parties to change history invisibly. Thus, you want
parties who are not entirely cooperative.

~~~
EdHominem
> The parties don't have to be trusted.

Actually, zwenger was right. Without a proof of work, they do.

What's a blockchain? It's a data structure with a cryptographically strong CRC
mechanism. But there's nothing stopping me from writing a new set of data into
a new chain and passing it off as the original.

Sure, you may notice, but you can't prove my new chain is forged. I'll say the
backup chain you're using as proof is the forgery...

It takes a proof of work to make the chain effectively uneditable. (Uneditable
without paying for the work, which has been selected to be too expensive to be
practical.)

~~~
schoen
> Sure, you may notice, but you can't prove my new chain is forged. I'll say
> the backup chain you're using as proof is the forgery...

If the items in the chain have digital signatures, you can prove that the
people they're signed by contradicted themselves (or lost control of their
signing keys). In Bitcoin people have felt that this wasn't good enough by
itself, perhaps because there's not necessarily recourse against a
counterparty who double-spends money, but you can still show that the double-
spend attempt _happened_ and who (in the sense of a signing key/address) was
responsible for it.

~~~
EdHominem
If the signatures are enough, you don't need the chain. If the signatures
aren't enough, you need the chain _and_ a proof of work.

~~~
zmanian
You can use a "blockchain", an enforcer of security deposit against double
spending rather than as the raw double spend prevention mechanism.[0]

[0] [https://eprint.iacr.org/2016/1033](https://eprint.iacr.org/2016/1033)

~~~
schoen
"Soothly we live in mighty years!"

It looks like the underlying mechanism that they use for this was described in

[https://dl.acm.org/citation.cfm?doid=2810103.2813686](https://dl.acm.org/citation.cfm?doid=2810103.2813686)

------
qertoip
I can't help but plug my take on why enterprise blockchains are almost
entirely bullshit: [https://medium.com/@qertoip/enterprise-blockchains-are-a-
hug...](https://medium.com/@qertoip/enterprise-blockchains-are-a-huge-
overpromise-7ca2d19324b3)

~~~
buckie
Before I founded a company[1] in this space I investigated blockchain
applications for JPM and I agree with your take on bitcoin-style blockchains
being mostly BS for industry. I'd take it a step further to note that mining
is incompatible with private blockchains of any form because the new
coins+fees incentive structure doesn't exist.

Permissioned/Private Blockchains don't need to look like Bitcoin, they just
need to offer many of the same features plus a few more. What we're really
talking about is a database that competitors can share, which is largely
inspired by Bitcoin's system. Some things it needs to actually work:

\- Vastly increased performance: 5-15 transactions per second is useless for
industrial use.

\- Smart Contract languages designed for safety over generality: more of an
empowered SQL than a C/Go. Tokenization doesn't provide enough of a benefit
over traditional approaches and generalized computation is too dangerous.

\- Deterministic BFT Consensus: this is to replace mining + remove anonymous
participation, it needs to be fast and scale.

\- Confidential transaction support: the trickiest of the lot, as we cannot
currently hit performance + double-spend protection at once.

In case you're curious what our approach is: BFT Raft-like for consensus
(8k-12k trans/sec), soon to be open sourced smart contract language, signal
protocol over the chain for confidential stuff.

[1]: [http://kadena.io](http://kadena.io)

~~~
trhway
>What we're really talking about is a database that competitors can share

>BFT Raft-like for consensus

exactly. Blockchain right now is just the most "simple" and open format of
sharable append-only-log-structured database and consensus protocol for it.

~~~
spopejoy
It's still a blockchain though. Bitcoin is also a database-backed BFT
consensus, with a fixed transaction batch size, a fixed data schema, and a
probabilistic consensus/BFT algorithm.

Deterministic BFT consensus systems that maintain linear, incrementally-hashed
logs are blockchains with a block size of 1. Since they are so much faster,
the block concept is unnecessary.

~~~
cgio
If the block size is 1, is it still a chain?

~~~
buckie
Of course. If Bitcoin dropped the number of transactions per block to 1
tomorrow would it stop being a blockchain?

~~~
cgio
I must have misinterpreted the statement. It felt like block count rather than
size in the context of the sentence.

------
serg_chernata
I still love the fact that in this age of social sharing and selfies we don't
really know who invented this revolutionary technology.

~~~
hinda
That's not particularly surprising. If you're smart enough to implement and
seed a distributed Merkle tree ledger you're smart enough to extrapolate the
implications of indiscriminately offering yourself as an indefinitely
persisted data feed.

~~~
Retra
That's a nice rationalization of the situation, but history shows that being
smart enough to do one thing has almost no correlation with being smart enough
to do any other specific thing that wasn't already necessary to do the first.
I doubt the ability to implement blockchains has anything to do with such
socio-political analysis, and so should you.

~~~
bduerst
I would say expertise in cryptography correlates with expertise in keeping
your information private, no?

~~~
scintill76
Expertise yes, but not necessarily desire to keep your information private.
There are many expert cryptographers who are much more public than Satoshi.

~~~
bduerst
It wasn't a question of motive, but of skill.

~~~
ska
That's a good way of putting it. Many other people in a similar position may
have chosen to be public. Many other people would have chosen to remain
private but failed at. It takes skill to chose to remain private about
something like this in a way the remains (at least so far) resistant to at
least som concerted skilled effort to find you.

------
davidgerard
I am literally writing a book about this. And boy am I read up on the hype.
[http://davidgerard.co.uk/bitcoin/](http://davidgerard.co.uk/bitcoin/)

Everything in this article is content-free BS.

"80% of banks are working on blockchain projects" \- this means they've told
someone to "investigate", which doesn't in any way mean a product is in the
offing.

And so on with all the other claimed examples.

The product here is the Hyperledger initiative, run by IBM. The “IBM
Blockchain – What is Blockchain?” page is a good example of content-free
Blockchain hype:

[http://www.ibm.com/blockchain/what_is_blockchain.html](http://www.ibm.com/blockchain/what_is_blockchain.html)

Almost every “is” on that page is a “might” or “could” – no blockchain does
all the things it describes in present-day terms, and particularly not any of
the code dumps at Hyperledger.org.

Hyperledger.org is a corporate open source Potemkin village of the sort IBM
has long favoured: the illusion of an open project, with no “there” there. I
spent half an hour dredging the site and could not find one clear statement of
_what this software is actually intended to do_ , let alone differences from
and similarities to existing blockchains. Even Bitcoin blog CoinDesk noted:
“Among the doubts facing Hyperledger is a perceived lack of clarity on what
might be ultimately produced by the initiative.”

If you click long enough, you'll find a page where the participating companies
have dumped their unfinished blockchain experiments. The main code contributor
is Digital Asset Holdings, who dumped Hyperledger Fabric there; their joining
announcement (on their own site, not hyperledger.org) gives as technical
details only that Hyperledger is an append-only ledger and has an actual
Bitcoin-style blockchain in it.

(This makes it more "blockchain" than others. e.g., R3 Corda is a "Blockchain
Product" that doesn't include a blockchain in its default configuration. The
key factor to "Business Blockchain" is that any examples that work, aren't
actually a blockchain. You get Merkle trees just shoving your transactions
into a git repo.)

As Hyperledger found out, all manner of businesses – financial institutions,
beef industry, shoe brands, confectioners – don’t want to share data even with
all participants in their blockchain, but only with the people the specific
deal is actually with, funnily enough:

[https://lists.hyperledger.org/pipermail/hyperledger-
requirem...](https://lists.hyperledger.org/pipermail/hyperledger-requirements-
wg/2016-September/000012.html)

[https://lists.hyperledger.org/pipermail/hyperledger-
technica...](https://lists.hyperledger.org/pipermail/hyperledger-technical-
discuss/2016-September/000391.html)

This was apparently news to them. It turns out that IBM set up an elaborate
hammer design consortium without first finding out if there are nails.

~~~
wmf
The lack of clarity is kind of a feature, as Hyperledger is intended to be a
modular, completely general framework for building any possible blockchain you
can imagine.

~~~
davidgerard
Also, airy promises are not only cheap - it's a dessert wax _and_ a floor
topping! - but highly available and widely distributed in the Business
Blockchain environment!

The other main code dump on hyperledger.org is Intel's. Their "Sawtooth Lake"
replaces the blitheringly stupid and wasteful Proof of Work with something
equally stupid but less wasteful, Proof of Elapsed Time, which might as well
be called Proof of Buying An Intel CPU. Rather than have miners compete to
produce the next block, a timer running in an environment secured by a DRM
mechanism built into your Intel CPU picks if you get to do the next block. The
white paper is an extended advertisement for Intel® Software Guard Extensions™
(SGX™). Also, they only have a simulated Proof of Buying An Intel CPU
mechanism as yet.

[https://intelledger.github.io/introduction.html](https://intelledger.github.io/introduction.html)

This doesn’t provide any security against malicious participants; the excuse
is that private blockchains need speed over security. You might think that at
that point you don’t need a blockchain at all, but you’re hardly going to sell
any consultant hours with _that_ sort of thinking.

~~~
RustyRussell
OK, now I want to buy your book!

~~~
davidgerard
There's a link on my site to go on the alerts mailing list :-) It's literally
not finished yet. (21,284 words of body text at this moment and I have maybe
5k-10k to add. I was _targeting_ 15k for a quickly dashed-off Kindle short,
and I appear to have turned the project into a miniature Sistine chapel.) I
have excerpts from the draft up at the site. Which I just moved to
[http://davidgerard.co.uk/blockchain/](http://davidgerard.co.uk/blockchain/) .

------
troymc
I didn't know that over 600 firms have applied to join the Hyperledger
consortium. That seems like a large number.

------
markkat
The article didn't mention tokenization of shares and token-based fund-
raising. Presently, that is a far more disruptive and interesting use case for
blockchains.

~~~
sit12
Do you have any examples?

~~~
TD-Linux
The DAO. It was, indeed, pretty disruptive.

------
murbard2
This raises the question: what will blockchain mean for web?

~~~
kordless
Trusted deployments of SaaS like software on your own infrastructure, for one
thing. Using the merkle tree plus some currency's consensus gives us a path to
trusted software deployment models, done on trusted infrastructure.

~~~
pfraze
Doubtful that it would involve a currency consensus, but the
cryptographically-auditable log portion is right

------
boggydepot
To Read the Full Story, Subscribe or Sign In

~~~
grzm
Click the "web" link under the title and then choose the article from the
Google search results.

------
satysin
The article is behind a paywall so here is the article text -

 _How Blockchain Will Change Your Life

The technology’s potential goes way beyond finance.

By GINNI ROMETTY Nov. 7, 2016 7:25 p.m. ET

Until the mid-1990s, the internet was little more than an arcane set of
technical standards used by academics. Few predicted the profound effect it
would have on society. Today, blockchain—the technology behind the digital
currency bitcoin—might seem like a trinket for computer geeks. But once widely
adopted, it will transform the world.

Blockchain offers a way to track items or transactions using a shared digital
“ledger.” Blocks of new transactions are added at the end of the chain, and
encryption ensures that it remains unbroken—tamper-proof and error-free. This
is significantly more efficient than the current methods for logging and
sharing such information.

Consider the process of buying a house, a complex transaction involving banks,
attorneys, title companies, insurers, regulators, tax agencies and inspectors.
They all maintain separate records, and it’s costly to verify and record each
step. That’s why the average closing takes roughly 50 days. Blockchain offers
a solution: a trusted, immutable digital ledger, visible to all participants,
that shows every element of the transaction.

Financial institutions are becoming early adopters: The World Economic Forum
estimates that 80% of banks are working on blockchain projects. CLS, the
world’s largest multicurrency cash-settlement system, is implementing
blockchain in the foreign-exchange market. The Bank of Tokyo-Mitsubishi UFJ
has developed a smart-contract prototype for multiparty business transactions.
China UnionPay is using blockchain for loyalty programs that operate across
multiple banks.

But the potential goes beyond finance. We at IBM estimate that applying
blockchain to global supply chains could generate more than $100 billion in
annual efficiencies. Toyota and the U.S. Postal Service are exploring this
already.

Visa and DocuSign are working on a blockchain system that enables a car buyer
to sit in the driver’s seat, configure the aspects of a lease on the
dashboard, and drive away immediately. La’Zooz, an Israel startup, has a
blockchain ride-sharing app that allows drivers to connect directly with
customers, without needing a middleman like Uber or Lyft.

All of this is promising. But for blockchain to go beyond pilots, the
technology needs a system of transparent governance. Remember what guided the
development of the internet: not-for-profit groups like the Internet
Engineering Task Force and the World Wide Web Consortium. Their involvement
gave businesses confidence that the internet would be stable and based on open
standards.

The same must be true for blockchain. More than 80 leading finance and
technology organizations, including IBM, have joined the Linux Foundation
Hyperledger, a project aimed at creating an enterprise-grade blockchain
framework. More than 600 additional firms have already applied to join the
consortium.

There’s one more lesson to draw from the early days of the internet. If you
had understood in 1995 the opportunities and threats it would ultimately
present to your company or industry, what would you have done differently—to
become the disrupter rather than the disrupted? That is where we are with
blockchain today.

Ms. Rometty is the chairman, president and CEO of IBM._

~~~
myowncrapulence
"Blockchain" ... not even "the block chain"..

Already can tell this person is a PR manager and knows nothing about the
technicalities and only about buzzwords used to entice investors.

This is like saying "How Internet Will Change Your Life" instead of "the
internet".

~~~
davidgerard
It is consistently true that any writeup that says "Blockchain" (capital B, no
article) will be somewhere between wrong and not-even-wrong.

I commend to you “Ignoring Blockchain Is Corporate Suicide: Why Blockchain is
the biggest single threat to all CEOs for destroying corporate value” by Nick
Ayton, in analyst newsletter Innovation Enterprise (7 July 2016). In the
several years I’ve been following Bitcoin and blockchains, this is the single
worst, stupidest and most incoherent piece of “Blockchain” hype I’ve seen; you
definitely need to read it, to inoculate yourself against the worst excesses
of this foolishness.

[https://channels.theinnovationenterprise.com/articles/ignori...](https://channels.theinnovationenterprise.com/articles/ignoring-
blockchain-is-corporate-suicide)

first comment: "Did a Markov chain generate this horseshit?"

------
brilliantcode
Blockchains are a solution looking for a problem.

There's a very small niche problem that blockchain is actively solving and
that is the enrichment of ICO founders.

Ethereum, Zcash, Ripple, Siacoin, Monero are all essentially the penny stock
pump & dump scams of the early days of the internet.

Right now we got a lot of big movers courting blockchain companies but so far
we see that it's a horrible ecosystem for building mission critical and
scalable apps that is already being solved by AWS, GCE, Azure etc.

Ethereum especially is the biggest blunder out of the blockchain party. Can't
scale (capped at low double digit transactions per second) due to it's overly
distributed and trustless mechanisms with a huge security vulnerability
surface thanks to a turing complete piece-of-crap language called Solidity.

I strongly suspect that we will see the demise of ICOs and blockchain bubble
popping when regulators move in as they have previously done with fantasy
sports betting startups.

To the adventurous and greedy individual thinking of launching blockchain
ICOs: don't count on your coin != fiat because that won't matter when a bunch
of people feel victimized enough and start courting the SEC.

disclaimer: I actually hold above cryptocoins but overall extremely
pessimistic and feel pretty stupid buying into it.

~~~
davidgerard
I used to be the proud hodler of 6 dogecoins, until I reinstalled the laptop
the wallet was on. Much sorry, very loss.

