What does "blockchain" even mean in this generalised context? When we are talking about crypto currencies, it is a distributed database with a consensus mechanism that is extremely costly to run. But this is not something you would need or want in most other situations, because there is always some degree of trust with your counterparties (and legal recourse if necessary).
If we strip away the consensus mechanism, all that is left is a trivial data structure that anyone with a CS background could come up with. So, the question becomes where the real value proposition is in "blockchain technology" outside of the realm of crypto currencies. What are the things you can only do with "blockchain technology" that cannot be achieved with existing technology? It looks more like a marketing buzzword than anything that has actual merit for the average use case.
Coming from a logistics background, coordinating tracability data is painful within a company, even with help of ERP like SAP. But when you need tracability across an industry, it becomes almost impossible.
I had professional experience in an industry where we had to go to the plants to ensure rolls of paper certified from suppliers using responsibly-managed forests were physically separated from the non-certified ones. We needed the paperwork coming from China, then another one from the transformation plant in Morocco, then in customer warehouses across Europe.
An external protocol that would provide universal tracability, usable by any actor of the chain, seem like a great solution to a real problem. Blockchain provides some "neutrality", ie no need for each actor to find its own certificate provider (I imagine that service shops would help larger companies set up their systems, but the back-end would be common across all actors).
I'm not very convinced by pseudo-decentralized apps in most domains, but in logistics... very bullish !
I never quite got my head around the value proposition for distributed ledgers in logistics ('smart warehouses / supply chains') and manufacturing ('industry 4.0').
Say you want to trace eco paper rolls around the globe. What could the blockchain do for you? Who are the nodes/miners/coins in this application?
When you suspect some intermediate in the paper chain to exchange eco paper for cheaper ordinary paper, how does distributing the information that he has X rolls on store prevent this scenario.
I think the OP stated that blockchains would alleviate the bureaucratic pains of international trade considerably. As bureaucracy requires labour, which is costly, I feel the value proposition is plausible.
Another feature is not related to inventory. Ledgers that have acute accountability features attached, where some stakeholders may have incentives to fake the records.
Like, for example transport truck driving schedules. Drivers are allowed only to drive so much, and there are penalties involved if the drivers don't rest enough. The main accountability measure here is the driving ledger. Whose maintainer has incentives to fudge it (the driver or the employer of the driver).
Logistics are a great place for this technology, but first you must purge your mind of Cryptotokens and their economics. They aren't applicable for a logistics use case.
To understand this, first you have to understand why we structure mining. In the case of Bitcoin or Ethereum, you need a method that allows any arbitrary computational device to verify and add to a given blockchain. In lieu of trusting that device, the blockchain makes it do a massive amount of busywork, called mining, to prove it isn't bullshitting the network. Different implementations have different busywork, but it's designed to make it hard to change the network by arbitrary devices. This is why we can allow any untrusted device on the network.
In the case of logistics, we are already operating under some amount of trust. This is through a mechanism of certification of goods, suppliers, verifying the goods are what they say they are, and the verification of those approvals and certifications. Even in a trusted environment, managing that coordination of certifying and verifying is slow, bureaucratic, and grows with the size of the logistic network. Additionally, many supply chains generally certify new entrants before allowing them to contribute. This creates a barrier to entry when establishing trust in the same way busywork creates a barrier for devices. Then there are whole units of auditors that go through and recheck all those certifications to make sure the whole chain is authentic with regards to the goods moving through it.
Blockchain technology is a mechanism of creating certifications (signing a transaction) and verifying those certifications (miners/verifiers on a chain) that can operate in a decentralized but coordinated way. It allows for the whole system to better coordinate information and certification that used to be done manually.
This is helpful I am total neophyte when it comes to blockchain but its continued to surface in a number of conversation that seem credible- I need to launch a anonymous,but verified, de-centralized but coordinated way where users can contribute and consume with appropriate transaction costs- Blockchain seems to be an approach, as an underlying structure but I am concerned that its too hyped to be taken seriously and also seems to compete directly with other database approaches that today have computational scale issues but wont always due to low cost distributed technology- thoughts?
Thanks a lot for your explanations. I'm very interested in that space. However, I'm a complete outsider. Would you have any pointers how to break into logistics + blockchain space as a developer? Like blogs to follow, companies, suitable jobs etc? Very much appreciated
I'd love to read more about this if you or someone else has written about it in-depth. I'm still not clear on the connection between "mining" (spending computing power) and the type of work that logistics professionals do when verifying parts of your supply chain.
Mining, or intentional computational busywork, is one method of allowing anonymous transaction processors, uh, process transactions. A logistics system does not need anonymous transactors; it can rely on it's own network of trust. A logistics solution is much more like Proof of Stake model, where reputation is the collateral instead of a fictional financial token.
In this model, I'll refer to it as Proof of Reputation (PoR), an actor might be a certified as a reputable party in the network. You might be a certified producer of bananas, verified and certified as fair trade and humane organic hand-crafted conditions by other organizations. I'm a buyer of bananas, but I want to make sure I'm buying fair trade bananas. I can look at your certification-of-origin and verify that you are reputable as fair trade. A port authority can confirm that I bought your bananas and put them on the USS Boaty McBoatface destined for Los Angeles to meet the huge banana split market. You as a consumer can check these certifications at the store.
As it stands, all of these processes operate haphazardly and it's insanely difficult for major countries to coordinate and verify what is going on. The coordination technologies, like Ethereum's GHOST implementation, combined with public-key infrastructure helps reduce the "deadlock" time of coordinating these large public and private bureaucracies.
I know I'm not explaining this well. I'm still working on a more concrete model. In my mind the process of creating, signing, and verifying a cryptotoken transaction is eerily similar to what logistics management is all about. You need to prove the origin, verify they made the transaction, and then have a reputable actor process said transaction. There's still a lot of manual work, but the system of sharing and coordinating that work is also painful and manual. The technologies that power cryptotokens can help with the latter problem.
How do you verify that the physical objects the digital certificate is attached to, is actually attached to the things it is meant to certify, and not replacement counterfeit?
The same way you verify it now. The technology does not change the process of physically inspecting the product. It makes it far easier to coordinate the paperwork of certifying and verifying.
At it's heart logistics is a global concurrency problem. The "locks" we use now are large sprawling bureaucracies that manually coordinate the transfer of information among many independently moving agents. Getting information into and out of this organization is a tedious, labor-intensive, and time consuming process. The technology that empowers cryptotokens is an alternate computerized concurrency management for this kind of information transfer and lookup that doesn't rely on a central organization or system.
Ok, but if _someone_ is certifying who can and who cannot write to the blockchain, why wasn't this solved 2 decades ago with that someone running a database with an API front-end that all involved parties can use?
Sorry, I replied somewhere else, I don't feel like copypasting, but roughly the blockchain would not prevent false declaration. It would 1) considerably simplify the non-fraudulent papertrail 2) provide an auditable record for investigation in case of either fraud investigation or certification audit
I've heard the logistics value prop from a number of people, and not a single person has ever been able to fully articulate an answer to "okay walk me through how it works". I once literally went through 5+ iterations of this with a friend that devolved into hand-waving.
how about scanning a barcode or a RFID reader ? This information is already read and stored in ERP. Is it such a technological step to imagine a RFID reader or an ERP module that would write the information in a blockchain? I don't see the objection here.
The blockchain would be a decentralized papertrail accessible to all actors of the supply chain, down to the end consumer ideally, instead of the current nightmare of shipment papers, siloed ERPs and so on
Lazy actor: receiver will scan the codes and see that data doesn't match, thus they can't trust the sender.
Bad actor: unless you intend to use rolls by yourself, what do you gain? You can't sell the better rolls as such, because you have broken chain of trust.
But such arguments lead nowhere. Of course you can come up with scenarios which can be misused. The real challenge (and one that is being solved by lots of people in crypto world - well, at least those that aren't consumed by greed) is finding scenarios that work. The ability to store information cheaply and immutably can change many industries, but technology must be deployed in such way that it makes sense.
"If we strip away the consensus mechanism, all that is left is a trivial data structure that anyone with a CS background could come up with. So, the question becomes where the real value proposition is in "blockchain technology" outside of the realm of crypto currencies. What are the things you can only do with "blockchain technology" that cannot be achieved with existing technology?"
To paraphrase -- "if you discount everything a blockchain does, what can you only do with a blockchain". This is not a reasonable approach.
Yes, blockchains are (now, at least), trivial. A merkle tree or simile distributed database with multiple writers and time-based consensus...a lot like git, really. There are an enormous number of potential uses of such a technology -- security and land ownership, contracts, etc. Virtually anything where you want an auditable, immutable historical record and where the data has many interested parties. This historically was accomplished via a centralized trusted database, but that doesn't mean that's the only solution.
HN, in many ways, is overly cynical at times, and is too eager to try to knock down the hypesters, throwing the baby out with the bath water to make a point.
You do not answer the question: What are the things you can only do with "blockchain technology" that cannot be achieved with existing technology? The things you mention can already be done with centralized trusted databases, just as you said.
GP means to say that git can cover most use cases via Merkle operations/properties. What Merkle does is give a trustless distributed ledger. Mining/PoW allow fully trustless+anonymous while other methods are trustless in the sense you can create rules and identites leveraging signatures atop the Merkle in various ways and audit changes before voting, eg. PKI in my experience.
It's funny how all these replies are almost an answer in an of themselves. You laid down a basic truth: the only thing technically distinctive about a blockchain is the trustless consensus algorithm. The rest of it is perfectly run of the mill tech. And yet the deluge of replies is completely focused on the run of the mill tech like merkle trees and distributed datastores. Some good ideas maybe but nothing to do with blockchains.
The question that no one bothers to ask is, "What problem is this technology solving that can't be solved cheaper and just as effectively with 'traditional' technology?" When you look at it this way I think the realistic use cases go way down.
Those are commonly copy-pasted claims but the reason why it keeps coming up is that the question of what makes it better is either unanswered or, in cases like voting or storage, known to be worse.
Your language is inadvertently quite revealing: “non-believer” isn’t how you talk about technical issues with well understood tradeoffs. It’s how you talk about something which you’d like to be true but isn’t.
^ Detailed analyses that explain why blockchain is an appropriate solution
But please do elaborate how they are "known to be worse." By whom and can you cite the analysis that proved so? Certainly not known by Google if they invested in a blockchain-based storage solution?
>well understood tradeoffs
That's definitely not the case if you take the time to read any blockchain-related thread on HN. But, please, feel free to tell me what are better solutions for the cases I mentioned.
Your second link discusses the problems with voting and correctly votes that they are unsolved, which was the entire point. Every solution proposed so far is a huge regression for privacy or coercion, so it’s dishonest to claim that as anything other than an area which could become not-worse if future fundamental breakthroughs occur.
File storage is similar: lots of people want you to buy their pet project but if you want reliable, secure, and cost effective it’s all “maybe sometime in the future when we have something different”. Talk about it as an advantage when it’s competitive for most people.
I thought the point was that "they are known to be worse."
>Every solution proposed so far is a huge regression for privacy or coercion
Can you please elaborate how is the solution proposed in the paper linked in the first URL a regression over non-blockchain solutions?
>it’s dishonest to claim that
I replied to the question of "what problem is this technology solving," and the paper you mentioned claims that "it seems reasonable that blockchain technology can help to achieve some of the desired properties." What exactly am I being dishonest with? I cited a paper where a protocol is proposed to help solving the eVoting problem. It directly answers the question I was aiming to answer--I never said my list was about already working, deployed, tested solutions.
>File storage is similar: lots of people want you to buy their pet project but if you want reliable, secure, and cost effective it’s all “maybe sometime in the future when we have something different”. Talk about it as an advantage when it’s competitive for most people.
Right... so your counter-argument is that "it's not yet ready" despite claiming that "they are known to be worse." No one said they're ready. They're using experimental technology and they're small teams. They already have beta implementations out if you want to test them. Yes, they're not polished and ready for consumers, is this your entire point?
> I thought the point was that "they are known to be worse."
Yes, for example, here's the full quote about voting including the sentence immediately after the one you quoted:
> Due to the requirements, it seems reasonable that blockchain technology can help to achieve some of the desired properties. However, to the best of our knowledge, so far no solution has been proposed that has been shown to be secure, verifiable, and private and there are still many open challenges.
There's simply no proposed system which is not worse than the status quo, and that's ignoring the additional challenge that even in the event of a major academic advance you'd have the additional concerns of having to be cost-competitive and establishing public trustworthiness before you could call it better. That kind of work is measured in decades.
The situation is less severe for file storage since you don't have as many attacks but, again, there just isn't something which is comparable on cost, performance, or reliability. I'm comfortable saying that's “known to be worse”.
> It simply gets tiring for people to argue ad infinitum about this with every non-believer.
And the true believers are the ones who will be lambo rich as long as they keep buying and holding, right? Just keep hyping up all these empty promises... some rube out there will buy into it.
- Brendan Eich was purged for being found to have donated to anti-gay marriage campaigns. Therefore, donating anonymously is obviously desirable for many people as your current beliefs may affect your career when the general rhetoric changes. Similarly, anonymous donations, which are very common, may be your preferred choice simply because you don't want the receiver or anyone else to know
- You were diagnosed with a mental disorder in your home country, and you move to a different country. In the new country, the medication you were prescribed is not available for pharmacies to sell. All the alternative medications you tried do not work, and it's illegal to buy your medication that was legal in the other country. With non-anonymous payments, buying the medication through financial services would put you at a high risk, so you would be forced to sacrifice your wellbeing/mental health.
- Your government is aggressively hyperinflating your national currency or capital controls limit the amount that you can cash out daily to $X. Use of credit or debit to pay out of the country is banned. You want to use a decentralized currency that need not be approved by the government or any other third party that you need to trust. Anonymity is optional, but perhaps you don't want to risk having your digital wealth traced back to your real ID.
- You value your privacy. Maybe because you don't want companies to sell your data for machine learning algorithms to track your payment behavior and apply "price discrimination" algorithms to you. Maybe you believe that it is only your business who you pay and what you pay for, and you don't trust that any of these will not be used against you in the future if used via a centralized entity.
All based on real events.
>I think that's where we disagree
We disagree that situations that are not relevant to you may be relevant to others?
"Brendan Eich was purged for being found to have donated to anti-gay marriage campaigns. "
I love how the takeaway from this is always, "We need more private ways to exchange money!" rather than, "You know, maybe you should have opinions that respect the human rights of others."
At the time, neither Hillary or Obama supported gay marriage. No political view can stand the wind of time. Should Hillary have been a viable candidate in 2016, given that she "didn't respect the human rights of others" in her 2008 run for the dem nomination?
A mere 10 years later you are insulting someone you likely don't know for 'not respecting human rights'!
Example 1: It's possible that eating non-labgrown meat will be considered a crime within fifty years. Who knows? Are you sure you want all of your current actions judged by some unknown future values?
Example 2: How sure are you that future society will agree with the current 'clump of cells' argument? Would you want to be on the record forever donating to abortion clinics? Your political ideology may not always be in charge either (Mike Pence).
Example 3: Society in a decade might consider us brutes for driving cars manually. How do we accept ~1/X000 high school students dying in car crashes, mostly by preventable causes (drinking, distractions, speeding, seat belt, etc).
We have not reached moral perfection as a society. Future society practicing moral relativism is not guaranteed. So, protect your future self, and protect your privacy.
It was an example. Change it to pro civil rights in the south in the 60s or something you agree with that becomes unpopular when political opinions change.
It's not perfect for that either. There have already been cases where tokens were stolen and blockchains were forked to recover them. The very last thing I want for my money is for errors and/or malicious acts to be permanent and uncorrectable.
> being able to undo transactions is a feature not a bug of the modern financial system.
Best takedown of cryptocurrencies that I've seen. Explains, as succinctly as possible, the fatal flaw in the idea. I'm gonna steal this line for the future.
yeah that’s also why cash and gold are worthless XD. who in the world would take cold hard cash or gold bullion in exchange for goods??!! you can’t reverse it!! and guess what, someone can hold a gun to your head and take it.
> and guess what, someone can hold a gun to your head and take it.
Those are contradictory statements. The government can absolutely reverse a criminal taking your money by arresting them and returning the stolen cash.
Can't the government do the same with cryptocurrencies though? They can also "arrest the criminal and return the stolen cryptocurrencies". Not very practical 99% of the time though...
> it also protects you in cases where someone holds a gun to your head and forces you to make a transaction.
No. The only case when someone ever threatened to hold gun to my head and demanded money was taxation. With cryptocurrency it's possible to avoid that, because they don't know how much money you have. And even when they do know, it's much harder for them to take it, they need to know password.
Because there's no point in going through all the steps, but that's exactly where it would end if you absolutely refused to pay taxes and refused to pay fines or go to jail for not paying.
I fail to see how having a gun to your head is in any way true. Can you give any examples of this happening?
Tax evasion is a crime and you should go to jail (you are exploiting the benefits you have received from society). But big companies find tax loopholes all the time and they go to white-collar prisons or get away with it anyways.
Transactions aren't "undone". In the event of fraudulent charges to your bank account, they simply eat the cost and comp you. As a result, some portion of the fees that you pay to bank are dedicated to these fraudulent charges.
> they simply eat the cost and comp you. As a result, some portion of the fees that you pay to bank are dedicated to these fraudulent charges.
It is important to note that "they" is usually the company that charged the card, not the bank or merchant processor. It is very similar to receiving a refund.
In the real world, ownership is more complicated than that, which is why the law is interpreted by judges and not computers.
E.g., courts can transfer ownership of your car from you to someone else for a variety of reasons, without your consent. How does this work in a blockchain world?
Your answer might be that the State (or the judicial system, I suppose) should have some special private key that lets them sign transactions transferring anything to anyone, even if the previous owner doesn't consent.
If so, why is that better than just having a plain old centrally controlled, publicly accessible database that the State signs with their private key? What does blockchain technology give you over that?
Agree there is much hype over blockchain, but there is some advantage in the context you raised.
Currently, if you want to buy or sell real-estate, you have to record that transaction on a central government database. These "databases" used to be paper documents, but are now slowly moving to electronic systems. But they are still centrally controlled, and often even new systems are horribly out-of-date and require specialized real-estate companies to record transactions and pull transaction history, with hefty service fees, often several thousand dollars per sale.
If this real-estate system was based on the blockcahin, it could remove the government as a central source of trust and title companies that specialize in interacting with it would face far more competition. In theory, it could reduce transaction costs to buy and sell real-estate. Admittedly, this may solve some problems but create others, but the benefit is quite clear.
Just a transaction record from one account to another of $2M isn't proof that ownership of that property was transferred.
You need to connect that transaction to a contract and the contract in turn needs to be verified by some third-party and some process. In a develop country, that process is going to be tied to government.
"Proof" is a legal definition, and legal definitions are defined by the government. Accordingly, I entirely agree that any real property transaction must be tied in some way to the government.
That said, you should take a look at the current system. In many counties, it's still a large ledger of transactions in pencil and paper. In "modernized" counties, but with with extremely restricted access, made intentionally hard-to-access to keep title insurance companies in business.
Title insurance companies charge thousands of dollars on every sale to insure legal claims to property. Any trustworthy publicly accessible database, crypto-based or not, would be a huge improvement over the current system.
why should the state have any claim to my property? that’s your best argument. regardless, i’ll answer your question.
blockchain are immutable and public. therefore the government can’t be corrupt and steal/funnel people’s property like they do in the real world now. we can all scrutinize the transactions.
That sounds like you're arguing against the idea of the government having a judicial system... If I steal someone's car, and the police catch me and have proof it's stolen, the justice system can take the car away from me and return it to its rightful owner.
How does that work in a blockchain world? If I stole the car's digital title (via hacking, coercion, etc.) and after getting caught, I refuse to cough up my private key... I can effectively prevent any transaction returning the car to its rightful owner. At that point either the ledger is broken and useless OR you need a judge to be able to force a hard fork, and system is no longer decentralized.
Your second paragraph about having an immutable public record to prevent corruption seems like it could be solved more simply by just having the government continually publish a record of transactions, which anyone can archive or mirror to verify the government never tries to secretly rewrite the past. I.e., a public git repo could solve that, no?
The other part to talk about relating to trust is that do you want to be on a system with people that you are blind to knowing, and especially on a system that is designed to allow manipulation of it; there's research that could be referenced showing a few different efforts to boost the value of incentivized crypto-assets.
In this context, it mostly means private, permissioned distributed ledgers serving as a fancy distributed, shared database with some business logic built in. The cost and complexity makes some sense when you have several assorted players taking part in various parts of a value stream. Tradionally each has its own slightly unique copy of the data, lots of legacy, integration and conciliation between them. Some scenarios a company appears whose sole purpose is to be a mediator and custodian of this data, adding complexity and cost to the process. This shared database solution allows everyone to have consensus on the rules, the transactions, and the current state of the data, removing lots of complexity and some intermediaries. This shared database could be a mysql, oracle or whatever instance, but blockchain characteristics make it interesting for this use case, when each member of the consortium doesn't necessarily trust each other, you want equal shared ownership of this distributed database instance, and so on.
More generally, modern blockchain technology brings a lot of capabilities besides this replicated, ownerless consensus that personally I see as building blocks for your architecture. Most of them are not necessarily exclusive to blockchain, in fact lots are cryptography capabilities, but are enabled or facilitated by blockchain architecture or by each other. These are things like:
- Immutability, which is the guarantee that you have a historical record of data stored, and it won't be further changed, accidentally or maliciously.
- Notarization, which is the ability to record and identify the authencity of the originator of the information, even if you don't want to reveal the infromation or the originator identity.
- The balance between transparency, anonimity and privacy: you have tools when designing your solution to make all transactions and information trackable or not. For example you can design it so you can record transactions without revealing sender, receiver and values and still guarantee the consistency of the whole, that there's no double spending or creation of resources. Or you can design it so you can track the whole history of a resource from its creation to its consumption.
- And the coins/tokens per se, particularly when you are not looking at them as general currency or toll tokens that you simply buy and spend somewhere but when you look at them as incentives where you can control how they are created, distributed, deposited, what it means to hold/deposit them, and how to spend them. You can change who the stakeholder is and monetize user's attention, his data, behaviour. I don't think people quite figured it out yet how to properly apply this for things like social networks, journalism or creative work ("patreonism"), but it's being explored and moving along.
Everything is still quite immature and moving at breakneck speed with uncountable new projects and ideas appearing all the time, which I see them as proof of concepts of the capabilities above, variations of them, of even new different ones. And lots of scams or profiteers wanting to get into the blockchain/ICO hype.
It's quite hard to find the balance between the exagerated hype and the naysayers (which I feel lots are just an exagerated reaction against the hype), but I assure you, it's way more than just what anyone with a CS background can come up with.
If we strip away the consensus mechanism, all that is left is a trivial data structure that anyone with a CS background could come up with. So, the question becomes where the real value proposition is in "blockchain technology" outside of the realm of crypto currencies. What are the things you can only do with "blockchain technology" that cannot be achieved with existing technology? It looks more like a marketing buzzword than anything that has actual merit for the average use case.