back to article Cash, fear and uncertainty: The Holy Trinity of Bitcoin and blockchain

Writing anything about Bitcoin or blockchains is a challenge. It's not the easiest technology to understand – not because it's particularly complex, but because it's grown into something of a confused mess of different technologies and applications. It also "looks" strange compared to most technologies that we're used to. Plus …

  1. Anonymous Coward
    Anonymous Coward

    Great article - thanks

    I'm currently spinning up an Azure Ubuntu blockchain machine for a demo on Friday !

  2. Pascal Monett Silver badge

    "systems where trust cannot be exploited"

    I wonder if it is possible to create such a system when based on digital data.

    Encryption seems not to be a solution - if the solution has a part of it encrypted, someone has to have the key and that someone is therefor a weak link.

    1. Dave 126 Silver badge

      Re: "systems where trust cannot be exploited"

      > if the solution has a part of it encrypted, someone has to have the key and that someone is therefor a weak link.

      Um, no. Er, it can be a bit hard to wrap one's head around the blockchain concept, but I found the explanations that take the form of talking through the steps needed to have a way of Alice sending Bob a digital credit note (without sending the same note to Charlie, Dan, Edwina, et al). Try this one: http://www.coindesk.com/bitcoin-explained-five-year-old/ (and please, genuinely, forgive the title, I don't mean to be condescending)

      In answer to your specific point, the blockchain can't be changed by a single person with a key because the blackchain is stored by every participant. A hash of the block chain is then used in generating the next blockchain, every few minutes. To make a retrospective illegitimate edit to the ledger, you would have to brute-force many successive generations of encryption, all within minutes. And even if you managed that impossible feat, the ledger that everyone is storing would look dodgy, so you would have to control over 50% of the computing resources in the community in order to force a consensus.

      1. Doctor Huh?

        Re: "systems where trust cannot be exploited"

        That last sentence is worth some thought. Why do you believe it is particularly difficult to control over 50% of the computing resources in the community? Over the years, people have cornered the market (or come close) in any number of commodities, and blockchain computing resources are just another commodity. Bitcoin mining is dominated by a few major players who can expend the capital necessary for large amounts of electricity and massive GPU farms, and it seems to be headed in the direction of chip fabrication, where each 2x increase in performance requires a 10x (or at least something more significant than 2x) increase in cost. As time progresses, it seems reasonable that fewer and fewer entities will be capable of investing in the infrastructure required to write to the blockchain. At that point, trust has been largely re-centralized. There are indications that this is happening already, and that it is an unavoidable feature of the blockchain.

        1. Charles 9 Silver badge

          Re: "systems where trust cannot be exploited"

          That's a thought.

          I was dabbling in Bitcoin in its early days but decided to bail out some time before things got wily (got something out of it, though--enough money for a new phone). You mention the idea of mining becoming centralized, and I agree that's an issue.

          The issue that made me bail out of Bitcoin was the blockchain itself: essentially Bitcoin's ledger. Now, ask yourself. For any bank that has been around for a long, LONG time, where do they keep the official ledgers going back that long? That's the situation I'm starting to see with Bitcoin. You say anyone can obtain the blockchain.

          That blockchain is currently approaching 65GB in size. In other words, it's a ledger the size of several libraries...and growing. This makes getting into Bitcoin in a serious way rather a PITA, especially for those with tight data caps. And the whole business seems to put you smack between Scylla and Charybdis. Keeping the blockchain decentralized is the only way to ensure its integrity, but it also means lots of people are going to have to keep copies of that huge blockchain. OTOH, trying to clip the chain into "volumes" has the potential to concentrate the number of sources of the complete blockchain much like how the miners are concentrated. This raises the potential for subverting or even usurping the blockchain.

          The whole things seems to be rather like a huge, messed-up games without regulation because people don't trust the regulators.

          1. Dave 126 Silver badge

            Re: "systems where trust cannot be exploited"

            >That blockchain is currently approaching 65GB in size. ... This makes getting into Bitcoin in a serious way rather a PITA,

            That's another interesting issue. I'm sure it's been discussed by people who know what they are talking about, unlike me. As a layman, I imagined that a solution could involve torrents, and hashes made so that you know you're not downloading a doctored segment. Upon googling it just now, it seems that some proposed solutions do involve Bittorrent-like systems and hashing, but with some extra cleverness that starts to make my brain hurt:

            https://bitcoinmagazine.com/articles/how-to-ensure-network-scalibility-fighting-blockchain-bloat-1415304056

            I'm no expert, and my interest in this is only idle.

            1. Charles 9 Silver badge

              Re: "systems where trust cannot be exploited"

              I've read into it myself, but I think one of the chief controversies is that the moment you segment the chain, what's to stop someone flooding the world with a fake earlier segment that still resolves to the latter half and do the "tell a lie enough times" routine to gain the consensus and thus usurp the early blockchain. I think they have this issue already with blockchain forks, where two blocks chain to the same previous block because they link in isolation to each other.

        2. Dave 126 Silver badge

          Re: "systems where trust cannot be exploited"

          >Why do you believe it is particularly difficult to control over 50% of the computing resources in the community?

          I don't, especially in a nascent community.

          The point I was trying to make is that a blockchain - properly designed and audited - can't be commandeered by an individual with some some sort of magic master key.

          I might have sounded dismissive of the 50% weakness, but then it doesn't bother me personally - I've never mined or bought Bitcoin - and discussing it doesn't now help the OP at this stage, because his misunderstanding was a little more fundamental. (It's also worth noting that Bitcoin is but one implementation of the blockchain concept, and whilst Bitcoin gives a massive advantage of ASICs for mining, blockchains based on other algorithms still allow CPUs to be competitive. GPUs haven't been worthwhike for a while now. )

  3. Seajay#

    $6Bn

    The thing which needs most explaining to me is, how is the Bitcoin supply worth more than $6Bn?

    As you say it's a basket case for three main reasons:

    1) It's no good as a long-term store of value because it's neither tied to some real comodity* nor backed by a government.

    2) It's no good as a medium of exchange because

    a) it's much more volatile than other currencies and

    b) it's limited to about 3 transactions / second.

    3) If it is successful and remains outside government control then at some point the US government is going to say. Hmmm, we've put a lot of effort in to anti money laundering rules and this is making all that work pointless. Let's ban transfers between US financial institutions and bitcoin. They were happy to hit HSBC with a $1.9Bn fine and that's just one bank (who were mostly doing their best to comply) so don't imagine that they will have any worries about wiping out $6Bn of "terrorist / drug dealer money" with a stroke.

    .

    * Although you need electricity to create bitcoins you can't exchange them back the other way so it isn't backed by electricity.

    1. Anonymous Coward
      Anonymous Coward

      Re: $6Bn

      I think it might be a bitbearly to speculate on whether or not bitcoin is backed by a commodity etc.

      If we go way back before the current fiat paradigm I think you'll find currency worked in a way similar to bitcoin. It had nothing backing it. It had value because it could be traded for other stuff. Its value likely linked to local taxes / church confession tariffs.

      Also vendors way back would mint their own tokens that people could use to purchase goods and services off them in lieu of stock levels I presume.

      Its far easy to give 10 tokens than to give 10 cucumbers that you may not have at that time due to the season / crop quality etc.

      Currency being backed by a single commodity is a reasonably recent concept.

      Just for the sake of argument...whats backing the value of gold?

      I already know the answer...its the same answer driving the price of bitcoin.

      The value in bitcoin is the ease with which it can change hands and the protections in place to prevent fraudulent transactions. Until bitcoin the only way to electronically trade was via a middleman (the bank). The reason for this is perceived security. The bank has a nice big vault to protect your cash.

      A person recieving bitcoin can be comfortable in the knowledge that the token(s) they have received cannot (at least for the foreseeable future) be duplicated.

      You dont have to be physically present and you can cut out the middleman. More importantly the process is completely transparent thanks to the ledger.

      With the bank in the middle you have no idea how your cash is moving about.

      If you pop a £50 note into your friends account in London and he withdraws that £50 in Manchester it is not the same £50.

      There is a record of that transaction on both bank statements but the fate of the original £50 note is unknown to both parties.

      It doesnt really matter to either of you if the nifty fifty comes out the other end...but what if it doesnt?

      What if that fifty was deposited via a quick deposit box at the bank and never shows up in your chums account? How can you locate that note? How do make someone accountable?

      Even if you wrote the bill number down you may never find it. Because the banking system isnt transparent.

      A bitcoin has its every move logged in the ledger. There is no obtrusive bullshit in the middle. Each and every bitcoin (and fractions thereof) can be tracked from the point they were mined to their current position.

      What concerns me about bitcoin is human error...i.e. people losing access to their wallets.

      Over time there will be more and more unusable bitcoin.

      Im not entirely sure its possible to calculate how many bitcoins are technically out of circulation because of this.

      If it were known it'd likely have some sort of effect on the price.

      1. Dave 126 Silver badge

        Re: $6Bn

        >Im not entirely sure its possible to calculate how many bitcoins are technically out of circulation because of this.

        I don't it is - Butcoins might be sat there doing nothing for all to see, but we won't know if the owner has lost the key or if the owner is saving them for a rainy day.

        Your comment did make me think of how (or if) minters of real cash account for inaccessibly lost or destroyed coins or notes. Anyone here have any ideas?

      2. c1ue

        Nerd Mona Lisas

        Super wrong.

        Currency is a concept that existed well before church taxes. This is best exemplified by the ever lowering gold content of Roman coins over centuries.

        Furthermore, gold and silver coinage itself is currency. If you trade rice for a shirt, that's barter but the rice sellers and shirt sellers coming to an agreement on how much X amount of gold or silver or whatever equals Y amount of rice or Z amount of shirt - that is precisely currency.

        The ultimate problem with bitcoin is that it is fundamentally limited. Huge swathes of the population don't have computers - how then can they participate in bitcoin?

        Furthermore, the so-called benefit of no trust in the bitcoin network means that bitcoin is fundamentally useless for many of the requirements of modern society.

        How do you lend bitcoins when fundamentally the value varies dramatically? Who enforces contracts based on bitcoin? Who fights fraud and theft?

        Lastly: Rich financial wankers buy daubs on canvas, rich nerds make and hold bitcoin.

        As for the blockchain - it is simply a new version of deux ex machina

        1. Anonymous Coward
          Anonymous Coward

          Re: Nerd Mona Lisas

          Actually, the really rich buy good land. It's one of these things that are guaranteed to be BOTH scarce AND getting scarcer every day. Then they don't even need to sell it off when the need arises; they just borrow against it, then leave the debt to their children when they die so they can use tax tricks like carryover basis to pay it off at a reduced liability.

          1. Nigel 11

            Re: Nerd Mona Lisas

            Actually, the really rich buy good land.

            Why only the really rich?

            Obviously, it makes no more sense to buy one square foot of land than it does to buy one square foot of a building. But in the case of a building, there are plenty of REITs (Real Estate Investment Trusts) which own a portfolio of buildings in which you can buy shares. If you wish, you can look up the exact buildings and the exact number of shares and work out what you have legal rights in when you buy £1000 or whatever of shares.

            Oddly, I am not aware of any collective investment vehicle for investing in good farmland or farms. Somebody maybe ought to set one up. Or am I just insufficiently well informed?

            Also the gevernment's recent tax changes on second home stamp duty and buy to let seem aimed at encouraging larger collective investment vehicles to be the entities which own homes and rent them out. Why, though? Is it better to rent (ultimately, through other intermediaries) from Grainger (listed on the London Stock Exchange) rather than from Shiela Bloggs, who rents out her one old flat that she doesn't need since she married Joe? Or is it just easier for the government to take a larger slice and screw generation rent even more?

            And for keeping track of who owns how many square feet, without trusting the intermediary holding company / Investment Trust ... maybe we come full circle to Bitcoin and its like.

            1. Dave 126 Silver badge

              Re: Nerd Mona Lisas

              >Actually, the really rich buy good land.

              >>Why only the really rich?

              In addition to our summer and winter estate, [my father] owned a valuable piece of land. True, it was a small piece, but he carried it with him wherever he went.

              - Woody Allen, Love and Death

            2. allthecoolshortnamesweretaken

              Re: Nerd Mona Lisas

              "Oddly, I am not aware of any collective investment vehicle for investing in good farmland or farms. Somebody maybe ought to set one up. Or am I just insufficiently well informed?

              I'm afraid you are insufficiently well informed.

          2. Anonymous Coward
            Anonymous Coward

            Buying land

            If you fear the collapse of government and want to avoid having currency, let's say dollars because you worry about the US, holding land in the US is no better. Without a government, who is going to enforce your ownership rights over that land?

            When some replacement government becomes the new local authority, whether it is the result of revolution in the US, military takeover by China or by Canada, or some post apocalyptic warlord like in Mad Max, they will be the ones who say who owns "your" land. Just because you have documents from the old government saying they are yours, even if you have been continuously occupying and defending it since the collapse, won't mean squat.

            There is basically nothing you can do to insure against such a disruption. The US government won't go down without a fight, and during the time between its fall and the consolidation of power by its replacement, things would going get bad. Bad enough that having land or gold or certainly bitcoins won't be much better than having a stacks of $100 bills stuffed in a mattress. Canned food, clean water, and ammunition will be the new coin of that realm. I'll grant that the gold will come in handy after the new government is established, assuming you maintain physical possession of it and the new government doesn't confiscate all gold as one of their first acts to consolidate their power. Sure, you could continue hiding it, but if you have it and can't spend it, that's really no better than not having it unless you play the long game and hope things will change twenty years down the road.

            1. Charles 9 Silver badge

              Re: Buying land

              "There is basically nothing you can do to insure against such a disruption."

              There are possibilities. Praise the Lord and Pass the Ammunition for starters. You're basically describing a period of anarchy, and the savvy will recognize that it's every man for himself in such a time. You simply fight off intruders, including a new government if necessary (just look at Iraq). If you really want to defend your land, you can mine it and rig it to blow on a dead-man trigger as a last resort. Then your oppressors have to consider which is better: 10% of something or 100% of nothing.

        2. Lance the Boil

          Re: Nerd Mona Lisas

          "The ultimate problem with bitcoin is that it is fundamentally limited. Huge swathes of the population don't have computers - how then can they participate in bitcoin?"

          Not true. You can print out your Bitcoins. They are after all just a string of characters and a key that is a string of characters.

      3. Seajay#

        Re: $6Bn

        > I think it might be a bit early to speculate on whether or not bitcoin is backed by a commodity etc.

        It's not speculation, it is not backed by a commodity. A currency on the gold standard is backed by gold, that means the issuing authority promise that they will give you a certain amount of gold for each note at any time you like so the value of those notes is set because if the value of the notes falls someone will want to buy them up and swap them for gold. No one is promising to give you anything for a fixed amount of bitcoin at an arbitrary point in the future Therefore bitcoin is not backed by anything. That's not necessarily a bad thing, we've all come off the gold standard because it was deflationary, but it does leave a credibility issue which for normal currency is filled by the government.

        > If we go way back before the current fiat paradigm I think you'll find currency worked in a way similar to bitcoin. It had nothing backing it. It had value because it could be traded for other stuff. Its value likely linked to local taxes / church confession tariffs.

        What you're describing is not before the fiat paradigm, it is the fiat paradigm. Government issues the coins, government will accept payment of taxes in those coins, that sets a floor on the value of those coins (assuming that you're confident the government will continue to exist and will continue to be in a position to demand taxes by the end of the year). There is no floor on the value of bitcoin, nothing about which you can say "Well, worst case at least I know that I can use it for...". That means that once something triggers a crisis of confidence in bitcoin, its value won't fall it will crash to zero.

        1. Anonymous Coward
          Anonymous Coward

          Re: $6Bn

          I dont fully agree. Fiat is not backed by gold. Not these days. You also cannot go to a bank and demand a withdrawal in gold.

          Also government backing isnt worth a hell of a lot. Here in blighty they only guarantee upto around £30-40k.

          1. Seajay#

            Re: $6Bn

            "I dont fully agree. Fiat is not backed by gold. Not these days. You also cannot go to a bank and demand a withdrawal in gold."

            We* may be mixing up terminology here. Of course fiat currencies are not backed by gold, that's what fiat means. To be clear, sterling is not backed by any commodity, dollars are not backed by any commodity. That's fine, they've got credibility because the UK and US stand behind them. The issue is that when a currency is backed by neither a commodity NOR a government.

            "Also government backing isnt worth a hell of a lot. Here in blighty they only guarantee upto around £30-40k."

            I think you're referring to the deposit guarantee scheme where the government guarantees that if your bank goes bust, you'll still get the contents of your current account back up to a limit. That is not them backing the currency, that's them backing the banks.

            By the government backing the currency, I mean that you can always be confident that the notes in your pocket will continue to be worth about the same as they were last week. They give that confidence with an independent, inflation-targeting central bank, and through setting an example. So you can buy your tax disc or your TV license with sterling at a fixed in advance price. Those things seem obvious but that's exactly the sort of thing which has gone wrong in countries that end up with hyper-inflation.

            .

            * By 'we' I mean, of course 'you' ;-)

  4. Stan 2

    Blockchain is still doing the hype cycle but it's old news at this stage, many open source projects based on Bitcoin have separated out the blockchain to function as the security backbone and built out from it with more suitable platforms for the features they want to implement. Dash (dash.org) is one I'm involved with and that uses a second tier to handle more advanced features such as instant and anonymous transactions, greater capacity, no download needed, etc, etc. There are hundreds of similar projects working on a multitude of different advances but caution is needed, many of those projects are nothing more than get rich quick schemes looking for victims but there are plenty of gems of innovation amongst them.

  5. Anonymous Coward
    Anonymous Coward

    Completely Missed the point

    Banks exist to give people a relatively trustworthy place to keep their money. Everything we have seen with BitCoin suggests thats one of its major flaws - either your PC and wallet get p0wned or some scumbag in an Exchange runs off with it instead.

    One of the major reasons banks were invented in the first place.

    yes there is room to cut into banks profits - mostly by doing the same thing they do but cheaper. Bitcoin and blockchain offer some possibilities for that as do other FinTech "innovations". Then there's is the other 90% of the "disruption" that just VC/Shoreditch/Valley w*nk. Or at best a way of replacing a web of existing service providers with ones that have ethics like Google and Uber. ie not an improvement on the current lot and very likely worse given their desire to be first-mover monopolies.

    1. EvilBanana

      Re: Completely Missed the point

      "Banks exist to give people a relatively trustworthy place to keep their money."

      - Relatively to what? P2p banks? Gold? Silver? Mattress stuffing?

      "Everything we have seen with BitCoin suggests thats one of its major flaws"

      - generalising much? Everyone?

      "either your PC and wallet get p0wned or some scumbag in an Exchange runs off with it instead."

      - so secure your PC, encrypt your wallet and back it up and don't leave your bitcoin for ages in SPV wallets or exchanges.

      1. Seajay#

        Re: Completely Missed the point

        "Banks exist to give people a relatively trustworthy place to keep their money."

        - Relatively to what? P2p banks? Gold? Silver? Mattress stuffing?

        .

        Take your pick. If you include likelyhood of theft too then banks are much safer than any of those options.

        The financial crisis is an excellent example of that; even when it all went wrong, anyone who had an current account with RBS still has all of their money.

  6. Anonymous Coward
    Anonymous Coward

    "or some scumbag in an Exchange runs off with it instead."

    Err, isn't that what the banks did last decade ?

    ( to be fair we have got a little of our money back via the various fines for other dodgy dealings )

    1. amanfromMars 1 Silver badge

      Twisted Logic or Bullseye Money Shot?

      “or some scumbag in an Exchange runs off with it instead."

      Err, isn't that what the banks did last decade ? …. Anonymous Coward

      Money does run off with somebody/something and disappear, AC, it just get laundered and deposited by banks elsewhere. So now y’all know where the real crooks are hiding in plain sight, and desperately planning to remain immune and free from just prosecution ….. which puts the entire justice system somewhat on the spot and in the spotlight too, defending itself against charges of systemic corruption and perversions of justice/selective subjective persecutions, whenever lengthy punitive incarcerations in mind-bending penitentiaries are not forthcoming for leading agents and supporting cabal members, both active and proactive and retroactive in the field.

      Whatever are they thinking, to be so incredibly stupid whilst imagining themselves so brilliantly clever, and paying themselves absolute fortunes for the pleasure of rendering themselves criminals.

      J’accuse.

      1. amanfromMars 1 Silver badge

        Re: Twisted Logic or Bullseye Money Shot?

        Oh dear, did nobody spot the deliberate mistake?

        Money does NOT run off with somebody/something and disappear, AC, it just get laundered and deposited by banks elsewhere. ...... etc etc.

  7. timnich

    Twiiter on the blockchain

    "From a non-commercial perspective, some sort of new version of Twitter that used a blockchain to record messages would fit that model because all the messages ("transactions") are public, and getting everyone to trust each other is impossible"

    Such a thing exists I believe. It is called "Twister" Much loved by the Chinese as it seems to get round the great firewall of China. See http://twister.net.co

    1. Old Handle

      Re: Twiiter on the blockchain

      There's Bitmessage too, though as of last time I checked, that looked kind of rudimentary.

  8. captain veg Silver badge

    neologism

    So, the author apologises for the word "disintermediation" but then sprinkles it copiously across the article. What's wrong with "cutting out the middleman"? OK, its more words, but fewer syllables.

    And what does "use case" add to "use" alone other than a word?

    -A.

    1. Seajay#

      Re: neologism

      For a certain value of 'neo', 1967 in this case*. It's hardly yolo.

      Personally, I don't mind this one. It's a piece of academic jargon with a definite meaning. If you're an economist who writes about disintermediation all day every day, I can see why you don't want to keep writing "cutting out the middleman".

      I'm with you on use case though, dangerously close to the most unnecessary word of them all utilise.

      * http://www.merriam-webster.com/dictionary/disintermediation

      1. captain veg Silver badge

        Re: neologism

        Apart from extreme ugliness, I object to the lack of any substantive core to disintermediation. It's all affixes. Reminds me of when I had to explain to a colleague that disenable is not a word. How about demiddleman? Unmiddlification? Or if cod-Latin pretention is important, just exmediation.

        Keep quiet about utilise. Before you know it the buggers will be going on about utilisation cases. or worse, utilization cases.

        -A.

  9. amanfromMars 1 Silver badge

    Keeping Things Simple is the Easiest and Best Way Going Forward ‽ .

    Hi, Matt,

    Regarding …. Disintermediation is about removing intermediaries, and we generally like to remove middlemen because although they provide value, they also take our money for their profit. Take the intermediary out of a system, and others in the chain have a little bit more money. ….. is it more truthful and perfectly right to share …..Disintermediation is about removing intermediaries, and we generally like to remove middlemen because although they can provide value, they also take our money for their profit, which is money for nothing. Take the intermediary out of a system, and others in the chain have a little bit more money and all products and/or services are cheaper

    And as to the thought that ….. Most of what a bank does is designed to keep them sitting in the middle, adding some value, and taking a cut for providing that value. A considerable amount of the value they provide comes from helping people store and move money around. For the "end user," having money in some digital form is a lot easier than dealing with cash, hence why we pay the banks to reward them for provisioning that value rather than realising the fact that the Federal Reserve works not for the people of America, but for its owners - the banks. ….. ie themselves, first and foremost, and here be a prime example ……. Peanuts for Monkeys ….. is a perverted view long past its sell by date.

    Money is/was not about finance and business, it is/was about remote command and anonymous control, and always will be in both arrogant and ignorant circles alike.

    Move on to SMARTR Fields of Virtual Machine Endeavour to Provide Bounty at Practically Zero Sum and Sunk Cost …… http://www.lifehack.org/articles/communication/how-the-sunk-cost-fallacy-makes-you-act-stupid.html

    They and IT are the Future Key Chain Suppliers.

  10. Someone_Somewhere

    It's all fun and games until

    you remember that you don't have to pay for the privilege of using cash, so why then would you want to pay for the electricity required to use bitcoin? It makes no sense whatsoever.

    Furthermore, "most people get very excited about it and run around with a hammer thinking everything they see is a nail."

    If all you have is a hammer, pretty soon everything starts to look like a thumb.

    > In reality, it's hard to find good use cases for it.

    Nail + head.

    1. Dave 126 Silver badge

      Re: It's all fun and games until

      >you remember that you don't have to pay for the privilege of using cash,

      We do pay to use cash, but just not directly. There are costs involved with minting, regulation, sorting, handling... those metalsmiths, accountants and security guards still need to be paid.

      1. Someone_Somewhere

        Re: It's all fun and games until

        > those metalsmiths, accountants and security guards still need to be paid.

        Yeah, but not by you or me - we take our hard-earned home at the end of the day and the only deductions we have to worry about are those taken by the taxman.*

        * who doesn't pay those metalsmiths, accountants and security guards either.

        1. Charles 9 Silver badge

          Re: It's all fun and games until

          What about devaluation via inflation?

          1. Someone_Somewhere

            Re: It's all fun and games until

            > What about devaluation via inflation?

            What about it?

            That has nothing to do with currncy: it's to do with Capitalism/Moentarism - name me a currency that /isn't/ subject to it.

            And do you think BC's wild commodity-value fluctuations are somehow better?

  11. Anonymous Coward
    Anonymous Coward

    65Gb (ledger size problem)

    Firstly, ISTR many experts have suggested that the *BitCoin* implemenmtation of the BlockChain (remember BitCoin != Blockchain. Something I am going to hammer home hard when I demo on Friday) is actually quite inefficient, and could be vastly improved (a fact which might help identify or eliminate any candidates for the creation of BTC.

    Secondly, not every node needs the entire blockchain - just the relevant summaries. The point is if you don't trust the summaries (or want to ensure they are what they purport to be) then you are quite at liberty to download the entire (65Gb for BTC) blockchain and regenerate it from scratch to verify each subsequent summary.

    Just been discussing various possible future uses of blockchain, and the ASKMID database sprang to mind. Currently a batch-updated database (as any driver stopped and forced to walk home knows), it could be implemented in real-time using a blockchain. When my colleague said "can't we do that anyway ?" the answer is "Yes, but you need an audit trail in a separate database. With Blockchain, each transaction effectively verifies the previous".

  12. Anonymous Coward
    Anonymous Coward

    The point is that Blockchains are great for keeping records. Bitcoin uses a Blockchains for recording financial transactions, it's just one record type.

    Other Blockchains uses:

    Recording births and deaths, ongoing census.

    Recording examination results, could be done globally.

    Recording software/code updates in any library/system.

    Recording of medical records.

    Recording of patent filing data.

    Recording if food/animal source/processing/changes

    Recording of history. Today some countries/regimes will re-write history books to suit their own political systems. Imagine if history was written to a Blockchain by consensus: future governments would find it hard to change/dispute and re-write a Blockchain based history record.

    It has so much potential. No wonder so many new firms are springing up to take advantage of this technology/opportunity. Stop thinking Bitcoin. This is much bigger than that.

    1. cyfahead

      Cash, fear and uncertainty: The Holy Trinity of Bitcoin and blockchain

      ....Other Blockchains uses:

      Being ICT-retired I haven't yet read the 'Blockchain Fundamentals and Planning' system engineering guide. Nor any of its 'Red Books' for that matter. I would like to know if I can build associative indices between the elements of individual blockchains which themselves are of [recordtype= blockchain]?

      Although indices of themselves are clearly of interest in utilising blockchain 'bundles' as the true historical source records for 'big data' research and analysis would not creating 'matting' in this way cause the integrity of the index blockchains to be available as validation of the underlying bundles such that by the time quite a small number of indices have been built the complexity factor created would be so great that historical usurping of history when segmented and decentralised would become practically impossible?

      I am not ignoring the index management overhead this generates on an already slow update mechanism..... but I do have trust in the opinion, already voiced, that a lot of work is even now going on to make blockchain operations far more efficient and I am sure this will continue just as in parrallel higher processing speeds, storage capacities and communication infrastructure are poised for a sea-change in the next 5 to 10 years.

      The fact is... if a blockchain data infrastructure were to become feasible at the lowest discreet horizontal levels of societal organisation and yet also be 'viewed' according to any grouping criteria, and this can also be extended both vertically through geographic and governance views out to global scale not only would the 'bridges of trust' primary function of banking be obsolete so would most of the intermediation services provide between individuals by their governments and by nearly every commercial middleman... provided the blockchain matting infrastructure and all the access tools needed were themselves 'constitutionally' free of access and use, paid for by the tax base of individuals for whom it would truly have become 'The Web for Life' in support of 'The Web of Life' (cf. Fritjof Kapra). It would truly facilitate an end to the neoclassical paradigm and the neoliberal religious dogma of one individual's right to oblige another to do things or behave in ways, often involuntarily and unconsciously, that he would not otherwise have done so... i.e. to exploit other individuals where he is able (cf. Risse et al 2012 or 2010?).

      It goes with out saying that we are also talking about it facilitating a supra-institution within an institutional landscape that has at its base an 'archaeo-economic' institution adapted to the systemic realisation of the Humanitarian vision for the future of humanity which has been built up and agreed amongst the world's nations over the past 70 years... one which starts to get very close to 'true democracy' rather than the plutocratic charade which the current 'archaeo-economic' institution, formalised in the late 18th century, early 19th, by Mssrs. Smith and Ricardo. An institution of accepted economic principles and behaviour upon which all institutional landscapes that can and have been built (from undeveloped thru western capitalism and totalitarian communism etc) and which can only tend societies towards common structures embodying systemic exploitation, inequality, consumerism , centralisation and vulnerability to crisis. Which last is itself the consequence of the inevitable loss of resilience, durability, diversity, dispersal and complexity.... all key factors in species survival in the long term and in the universal well-being of individuals and communities in the shorter term.

      Heavy stuff... but such is the characteristic of any paradigm shifting technology!!!

      1. Charles 9 Silver badge

        Re: Cash, fear and uncertainty: The Holy Trinity of Bitcoin and blockchain

        So to cut to the chase, are you proposing the idea of sub-chaining, where a blockchain element can contain the head element of another blockchain that grows independently of the first chain?

        As long as the head element can be properly authenticated, I don't see why not. It could be a way of organizing this kind of information in a more structured way than just a flat ledger.

  13. Adrian Midgley 1

    Money is promises

    Serialised, abstracted, fungible promises.

    As the promises are less certainly believed, inflation occurs, and/or at some critical point the currency stops being money.

    Tories tend to think money is real stuff, a Thing, and also that they should naturally have it.

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