
Blockchain: A technical primer - halfbrown
https://www2.deloitte.com/insights/us/en/topics/emerging-technologies/blockchain-technical-primer.html
======
apo
_A blockchain is a digital and distributed ledger of transactions, recorded
and replicated in real time across a network of computers or nodes (figure 1).
Every transaction must be cryptographically validated via a consensus
mechanism executed by the nodes before being permanently added as a new
“block” at the end of the “chain.” There is no need for a central authority to
approve the transaction, which is why blockchain is sometimes referred to as a
peer-to-peer trustless mechanism._

I see this kind of explanation a lot. It's misleading at best. A block chain
is most definitely not a ledger, as is claimed by too many sources to count.

A block chain is a tool allowing a group of users to produce a single, unique
transaction _log_.

To this end, transactions are grouped into _blocks_. A block references two
pieces of information: (1) its ordered list of transactions; and (2) its
parent block. Two or more blocks may claim the same block as a parent.
Therefore, a collection of blocks can be assembled into a tree with one or
more children pointing to a parent.

Each user maintains its own copy of the tree. All paths through the tree are
followed and scored. The path with the highest score is designated as the
_active chain_.

The active chain is what many people think of when they use the term
"Blockchain."

However, the structure of this chain is mostly boring and unremarkable. The
most interesting thing about it are transactions. Like blocks, transactions
link together. Additionally, transactions run programs that induce global
state changes.

The secret sauce of "Blockchain" boils down to incentivizing each user to
choose the same active chain in an adversarial environment. The best-tested
procedure uses "proof-of-work."

If the relative order of events plays an important part in what you're trying
to do, and you operate in an adversarial environment, then a block chain might
help.

Otherwise, there's not much a block chain can do for you.

~~~
tilt_error
I thought a ledger was a transaction log. It was in relation to a ledger I
first came by the term transaction (or “trans”).

~~~
apo
You might be thinking of a "journal":

 _Journals and ledgers are where business transactions are recorded in an
accounting system. In essence, detail-level information for individual
transactions is stored in one of several possible journals, while the
information in the journals is then summarized and transferred (or posted) to
a ledger. The posting process may take place quite frequently, or could be as
infrequent as the end of each reporting period. The information in the ledger
is the highest level of information aggregation, from which trial balances and
financial statements are produced._

[https://www.accountingtools.com/articles/what-is-the-
differe...](https://www.accountingtools.com/articles/what-is-the-difference-
between-a-journal-and-a-ledger.html)

A ledger can be created from a journal (transaction log), but then again, many
other kinds of things can be created from a transaction log (e.g., the "World
Computer" idea for Ethereum).

~~~
darcys22
Ah a journal is more like a block. It is transaction with several line items.

This is then transferred into the ledger which is just a list of transactions.
Exactly like a blockchain

------
seibelj
Blockchain is very applicable to industries where middlemen extract large
value by being intermediaries between competing parties.

As an example, in telecom there is the issue of settlement. Every phone call
generates a Call Data Record (CDR) that has information about who called who,
call length, etc. This is critical because every telco negotiates individual
rates for voice, SMS, data roaming, etc. between every other carrier on earth
(although often you negotiate with one company that provides a package rate
for multiple telcos). Your "unlimited" plan obfuscates the fact that how you
use your plan, what carriers the people you call are on, where you use data,
reflect different levels of profitability for you as a customer.

Large companies like Amdocs[0] make billions of dollars handling settlement
for telcos. Every month, a carrier has to "settle" all of their CDR's with
every other carrier. Issues get sorted out because CDR's never match
perfectly, and then carriers pay each other to balance out based on their
contractual obligations.

A blockchain solution that all telcos agreed on would guarantee data
correctness (CDR's all look alike), allow instant settlement and payment
(settlement happens once a month), and eliminate the middlemen like Amdocs,
Synchronoss, etc. in regards to settlement.

Obviously this is a tough problem to crack, and you'd need to get the telcos
on board, but I am explaining this as an example where blockchain could
provide real value.

Indeed, Maersk, the largest shipping conglomerate, is going to release a
blockchain solution to move the international shipping industry away from
paper and to a unified system.[1] Maersk is in a unique position to do this
because they are the largest player, and most other companies just follow what
they do, but I mention this as an example where blockchain can help competing
companies interact more efficiently.

[0] [https://www.amdocs.com/](https://www.amdocs.com/)

[1] [https://www.economist.com/briefing/2018/04/26/the-global-
log...](https://www.economist.com/briefing/2018/04/26/the-global-logistics-
business-is-going-to-be-transformed-by-digitisation)

~~~
pphysch
Going from "paper" directly to blockchain, with not a peep about traditional
databases.

Surely the executive is just using blockchain as a buzzword for database.

~~~
diroussel
How do you make a traditional database immutable? Who controls writes and
updates? Well it’s a matter of consensus.

~~~
pards
Blockchains are not immutable - the DAO hack and subsequent hard-fork proved
that to the tune of millions of dollars.

~~~
zeroxfe
That was a fork, not a mutation of the database. You can still today go back
and see the history play out in the different chains.

------
gfs
> In fact, it can be considered one of the biggest technology breakthroughs in
> recent history, similar to the advent of the Internet in the early 1990s.

If this were the case, wouldn't we see the technology in the wild more? That
seems like a bold claim for something that is still being vetted and explored.

I certainly see value in blockchain but the applications that are using it
today don't excite me. The hype puts me off but I am hoping to see it bloom
into other areas of software that aren't ICOs or proof of concepts.

~~~
fredgrott
big changes usually require more time in the adoption phases..autos did at the
beginning of the 19th century.

~~~
pphysch
Technologies that are actually useful tend to be aggressively adopted by
military, academia, industry. Internet and IC engine were.

On the contrary, blockchain finds its activism among SQL-illiterate people,
and certainly not the aforementioned groups. Mind that we're already a decade
in.

~~~
proofofmoon
With a SQL database, how do you achieve consensus on a proposed transaction
without a middleman taking an arbitrary cut of the proceeds?

~~~
pphysch
The two parties either agree, or they don't. Full stop. Blockchain, or any
buzzword technology, doesn't solve this eternal problem.

Third parties have historically been pretty good at sussing out consensus from
the two. Judicial systems, market exchanges, etc.

When you pay a middleman, you are literally paying for Trust-as-a-Service,
among other things (brokerage, etc).

Blockchain also costs money to build and maintain as a service, but it's
probably the fact that the enormous cost is socialized that makes it an easy
pill for many to swallow.

~~~
proofofmoon
Who maintains the source of truth for this record of agreement? If it is one
entity, that's the unaccountable middleman. Blockchain is not right for every
environment, but there are industries where the middlemen are taking more than
the equivalent of every party maintaining a blockchain team.

And court cases are even more expensive.

------
rafiki6
I find this to be less of a whitepaper and more of an opinion piece. For e.g.

"For example, two business parties transacting would not need to maintain
their own record of the transaction and would use the blockchain as a single
source of truth instead."

Ummmmmm...isn't the whole idea of blockchain that we all have a copy (our
version of the truth) and a transaction is validated by several participants
or miners? That's basically how we get rid of the middlemen? The sentence is
clearly trying to convey that this is somehow more efficient than a current
system based on a centralized authority, but there's no actual evidence that
this is true.

Blockchain might bring efficiency to an industry like shipping that currently
uses a VERY inefficient system, but it's disingenuous to tell others
(especially if you are trying to sell something), that it is more efficient
than a well implemented centralized system.

------
guiomie
They explain the basics of permisionless blockchains and they go on and say
"Prominent blockchain consortia include Enterprise Ethereum Alliance, R3, and
Hyperledger", this can confuse people since R3 and Hyperledger are quite
different from a permissionless chain with mining, and the value added of such
platforms without crypto-currencies is highly debatable in my opinion.

------
mar77i
> In fact, it can be considered one of the biggest technology breakthroughs in
> recent history, similar to the advent of the Internet in the early 1990s.

Audibly sighing. read this: [https://shkspr.mobi/blog/2018/06/how-i-became-
leonardo-da-vi...](https://shkspr.mobi/blog/2018/06/how-i-became-leonardo-da-
vinci-on-the-blockchain/)

It's the internet of shit in crypto, all over again. Come on. There's nothing
like 50% of the swarm simply declaring your transactions null and void, but
that's obviously how the blockchain is currently operating for some ... uh,
_criminal_ reason.

------
volaski
"technical primer", yeah right.

I guess this counts as "technical" to people at Deloitte.

------
rdiddly
Pretty good primer for newcomers, though it seems to take it as a given that
blockchains are (or to hear them say it, "blockchain is") just fully as
amazing and applicable as the hype suggests, and here's what you are going to
have to do when you inevitably get with the program!

~~~
tumba
This is understandable, given the fact that this is from Deloitte, who would
like to sell consulting services.

------
xmly
Another amateur's writing about blockchain. If you want the immutability, the
blockchain is not immutable, just difficult to modify. Also you only need hash
signature for this purpose.

