
Nasdaq’s Blockchain-Based Securities Platform Records First Transaction - jackgavigan
http://blogs.wsj.com/moneybeat/2015/12/30/nasdaqs-blockchain-based-securities-platform-records-first-transaction/
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brianclements
This is not my field, but I'm trying to understand crypto-currency econ here
so please clue me in:

So if the only reason for mining in currency blockchains is the incentive to
earn, what would be the incentive for a private blockchain network that didn't
incorporate a currency? Could it be that their incentive is the reduced cost
(in fiat money) of doing business? So that they could in effect voluntarily do
the verification part of mining without the need for currency incentives?

I would imagine that it shouldn't be too difficult to set up enough
adversarial but voluntary mining parties in a huge financial system such as
the US financial system to bring a collective sense of safety to that closed
blockchain no?

~~~
sanswork
Public blockchains use mining as a means to decide who gets to add the next
block. That is all it is good for. That is useful in public chains because 1
entity adding multiple blocks in a row basically gives them control of the
history.

In a private chain where you know all the participants this doesn't matter
since there are easier ways to decide who gets to go next(ie. round robin). So
no mining is needed for a private chain and it is no less secure(probably even
more secure than most public chains due to the cheapness of 51% attacks )

~~~
mooneater
how does this differ from say using git, with access controls, where each
commit is a transaction.

to me blockchain implies proof of work.

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mooneater
This confuses me. What is the point of a blockchain without proof of work and
a vast 'mining' network to provide security? Without that it boils down to
something akin to git.

I would love to know more about how their implementation works.

~~~
sanswork
It allows you to have an immutable distributed database with known entry
ordering that can be shared between multiple parties.

~~~
mooneater
if its between trusted parties... why not just use git. I dont understand
where the innovation is. they seem to have remove the one truly unique feature
of bitcoin but continue to call it a blockchain.

~~~
sanswork
The part you're missing is that it doesn't matter if you understand or even if
there is innovation. Why not use git? Because it's not designed for these use
cases and it doesn't handle a few of the required features. Seriously the fact
that you are asking this says a lot about either your knowledge or honesty of
your argument.

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m-i-l
Does anyone know what technology they are using for their private distributed
ledger? I heard a rumour that it was based on SharePoint - not sure if this
was a joke, but wouldn't be surprised if it were true. As per some of the
other comments, a private distributed ledger doesn't need to use the
innovations of the public blockchain and so could use pretty much any data
datastore.

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brianclements
Looks like it _is_ bitcoin after all.[1] Related [2]

[1] [https://coincenter.org/2015/05/wall-street-is-using-
bitcoin-...](https://coincenter.org/2015/05/wall-street-is-using-bitcoin-not-
just-the-blockchain/)

[2] [http://www.nasdaq.com/article/is-a-blockchain-without-
bitcoi...](http://www.nasdaq.com/article/is-a-blockchain-without-bitcoin-
possible-or-practical-cm482964)

~~~
sanswork
What makes you say that? This article doesn't say that and last I heard they
said they weren't using Bitcoin.

~~~
mintplant
See article [1] in the parent comment.

~~~
sanswork
It came out later that everyone just assumed they were using Bitcoin because
they were using OAP. I can't find the source at the moment but I'm pretty sure
someone from Chain or Nasdaq mentioned that they weren't using Bitcoin at
20/20\. Unfortunately all I can find in /r/bitcoin is people confirming they
aren't and not the source.

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cookiecaper
The proliferation of "blockchain-backed technologies" is one fad that I really
do not like. It makes me want to sell my Bitcoin, in fact. There is some vague
feeling that this trend is just going to result in a collapse and loss for
everyone.

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pythondz
Do they intend to keep the blockchain private ? I mean, at some point, someone
will break into their private network (partners come and go...) and get a copy
of the blockchain... Maybe even add a block on top of it.

This is a serious security flaw.

~~~
sanswork
I doubt it, and it wouldn't matter if someone got a copy because it would
likely be hard to understand without their software to convert the refs in the
transactions with actual data.

What makes you think they would accept some block added by an unapproved
entity? And what would it matter if they did if the block didn't contain valid
transactions it would be rejected and if it did include valid transactions
than it would be no different from any other block on the chain. The ability
to add A block doesn't matter in blockchains. The ability to create a longer
chain that is accepted does and it's quite easy to avoid that possibility in
private chains.

It isn't a security flaw at all.

~~~
mooneater
1) ah, security by obscurity 2) ah, security by credentials

completely the opposite approaches to bitcoin itself.

~~~
sanswork
1) I didn't imply that at all. Secrecy by obscurity maybe but it's not part of
the security model.

2) who cares except Bitcoin owners? Bitcoin isn't the be all of blockchains
and it isn't suitable for all problems. You say security by credentials like
it's flawed too which is just you grasping for something to say.

~~~
mooneater
I think there is nothing at all wrong with more conventional security
strategies, like credentials, and sure, obscurity can be a useful tactic.

All I am saying is: what is super special about the BTC blockchain, is that it
doesnt rely on those at all, it doesnt need those things, because it has the
magical property of security by Proof Of Work.

Removing that and still talking about a Block Chain like its a special thing,
makes no sense to me.

Anyways this is all conjecture, its not even clear what they are doing in
there. Would love to hear details.

~~~
sanswork
And all I'm saying is it doesn't matter how Bitcoin does it. The problems
being solved are different. Bitcoin has to use a stupidly inefficient method
of selecting who adds the next block because the participants aren't known.
That's it. The proof of work waste adds nothing else to the security of the
system except when you don't know the participants. So if you don't have to do
that then proof of work adds nothing. You're hung up on proof of work but it
seriously sounds like you're over estimating how important it is to the
process. The block chain itself has nothing to do with proof of work. Remove
proof of work and you have a blockchain. PoW is only for deciding who adds
blocks.

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andr
From an earlier article[1],

”It’s not a 24/7 market, there’s no peer-to-peer transactions right now.”

So without any P2P ability, is there any value to having a single-server
private chain?

[1] [http://www.coindesk.com/hands-on-with-linq-nasdaqs-
private-m...](http://www.coindesk.com/hands-on-with-linq-nasdaqs-private-
markets-blockchain-project/)

~~~
sanswork
As a stepping stone to a peer-to-peer service.

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SatoshiRoberts
Who is doing the mining/securing if they aren't using Bitcoin?

~~~
sanswork
You don't need mining for private chains.

~~~
mintplant
So, what, they're glorified Merkle trees?

~~~
sneak
Yes, as it turns out, cryptographically timestamped ordering of
cryptographically signed individual transactions is a useful thing for trading
markets.

~~~
mooneater
so, basically git

~~~
sneak
...but with a network protocol, peer discovery/exchange, record gossip, and
defined strict data format for the contents of commits; but basically yes.

Blockchains aren't any fundamentally new underlying technology, they're just
existing technology bolted together in a new way that enables new
applications. DHT and BitTorrent are similar in that regard.

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MrBlue
Private blockchain == glorified database.

~~~
sanswork
Public blockchain == glorified database too. What's your point?

~~~
vidarh
The point is that a private blockchain would lose the one thing that a public
blockchain is good for:

Allowing a distributed network of untrusted peers to cooperate to come to
consensus on how to update the glorified database.

If your peers are trusted, or can put behind an authenticated, authorising
gateway, you don't need a blockchain - you can just use a normal database.

~~~
sneak
A private blockchain allows a distributed network of arms-length peers to
cooperate to come to cryptographically-verifiable consensus about who traded
what and in what order - a settlement network.

A traditional centralized database doesn't easily allow irrefutability. A
blockchain allows one to do this with low trust, as all of the data integrity
comes from crypto.

Think of it as a database with signed tx records, and countersigned with
timestamps for ordering. Any participant can assess the valid state of the
world, without all of the hairy distributed database timestamping/integrity
issues we all know so well.

~~~
mooneater
thats just git with access controls

