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  • I've read through this whole thread, and I still haven't really come to any solid conclusions on it. I'm skeptical of crypto as a kind of idiotic speculative market, but that's also every market ever. But then, the blockchain is apparently different from crypto, even though they're both hype-laden marketing terms that have been completely fucked up. I think doing [redacted] with crypto is still potentially cool, though I think it still has limited anonymity, from what I've heard, and the speculative market also fucks it up.

    Is "the blockchain" just like some nerd shit that's for internal hospital ledgers, and beyond that it's all kind of moot garbage, or what? Someone spoonfeed me.

    • One is the tech, the other is an example of a type of the tech. A square is a rectangle, but a rectangle is not a square.

      For most applications, this isn't necessary:

      There are some examples like in biotech/finance that I personally believe will require a blockchain to be truly "fair" at the end

    • Blockchain is often described as a solution in search for a problem. It’s a clever technology, but people don’t really know what it can be used for besides storing cryptocurrency transactions.

      People have thought about storing other kinds of data in the blockchain, like health records, but no one can really point out to why this would be better than other solutions.

      To achieve something similar with health records without blockchain, all that is needed is just a cryptographic signature. The hospital cryptographically signs a digital health document and email it to you. The hospital in turn stores it in some shared database accessible by other hospitals. Done.

      If the health record is somehow lost from the shared database, then you got your own copy of it as backup. They can’t modify the health record either, because then it would diverge from your own copy.

      The worst thing they can do is to add falsified health records without your approval, but that’s a problem with blockchain as well. Blockchain cannot verify that the input data is truthful (garbage in, garbage out).

      The cryptographic signature step is a part of blockchain either way, so there’s no extra technical overhead in the non-blockchain way.

    • The cryptography has much simpler algebraic analogues - what we are looking for is a "one-way function". This means a mathematical symbol that only works on the left side of the equals. The simplest one is the remainder of a division. For example if I told you that I had a remainder of 5 after dividing by 20, you wouldn't know if the original numerator was 25, 45, 65, 85, and so on. This operator is called mod (modulus). Even if you don't know what value I started with, It's not hard to guess what possible numerators could be with modulus. That's where the cryptography comes into play: a cryptographic hash is designed so that it's practically impossible to guess the original numerator. We'll stick with the modulus for explanatory purposes, but imagine that you can't list off possible numerators like I did.

      Now we can invent a puzzle for a computer to solve. We'll start off with the same values as before, but - again - we are disallowing easy guesses. This forces us to check 1 mod 20, 2 mod 20, 3 mod 20, 4 mod 20, 5 mod 20 and so on. Eventually we'll hit 25 mod 20 giving us the solution to X mod 20 = 25. Now you can go back to the person that gave you the puzzle and prove that you've done 25 steps of work to arrive at a solution (or have made a lucky 1/25 guess). This is called "proof of work". A cryptographic has consists of a certain number of bits, such as 256 bits - this means a series of 1' s and 0's 256 long. The puzzle presented to the computer is "find the numerator that results in the first 50 bits being zero" (the more bits are required to be zero, the longer it will take to find the answer). Because of the incredibly slim chance of guessing the correct numerator, it doesn't really matter if the computer counts up (like we did with modulus) or guesses. So, in practice, everybody trying to find the solution starts at a random number and starts counting, or trying other random numbers, until someone wins the jackpot. It's basically a lottery, but the correct numbers have to be discovered instead of being dropped out of a glass ball at the end of the week. Once a computer finds a solution, everybody else playing the game can check their numerator as [probabilistic] proof that they have done work.

      Now we can use this lottery to create a blockchain. We start with 5 things: a globally agreed on solution we are looking for (789), an initial block (which is just a number - lets say 12345), Bob's account #5 of $100, and Sally's account #6 of $200, and a huge amount of players of the above game. Sally wants to transfer $20 to Bob, so she says to all the players: "I'm #6 and want to give #5 $20. There's a $1 prize for finding a new block for me." All the players make a new denominator, by placing the numbers next to eachother - so 12345 6 200 5 100 20 1 - or just 1234562005100201. All the players start trying to find the number that will result in 789. Eventually someone finds 1234562005100990 after a lot of work/guesses. Everybody checks their work 1234562005100990 mod 1234562005100201 = 789. The winning player receives their prize, and now everybody has a new block to start from: 1234562005100201 1234562005100990. Next time someone wants to send some money they will use 12345620051002011234562005100990 as the initial block instead of 12345. Hence, we have set up a chain starting with:

      12345 -> 12345620051002011234562005100990 -> ...

      There's your block...chain. Anybody can independently verify that the work has been done by checking the answers. It's incredibly elegant but, as we've seen, incredibly destructive.

    • A blockchain is just an verifiable chain of transactions using cryptography and some agreed upon protocol. Each "block" in the chain is a block of data that follows a format specified by the protocol. The protocol also decides who can push blocks and how to verify a block is valid. The advantages it has comes from the fact the protocol can describe a method of giving authority across a pool of untrusted third parties, while still making sure none of them can cheat. Currently the most popular forms are Proof of Work (PoW) and Proof of Stake (PoS).

      Bitcoin for example is just an outgoing transaction to a specific crypto key (which is similar to a checking account) as a reward for "mining" the block, followed by a list of transactions going from a specific account to another account. These are verified by needing a special chunk of data that turns the overall hash of the entire block to a binary chunk containing a number of 0 bits in front, which makes it hard to compute and a race to get the right input data. This way of establishing an authority is called Proof of Work, and whoever is first and gets their block across the network faster wins. Other cryptocurrencies like Ethereum use Proof of Stake where you "stake" currency you've already acquired as a promise that you won't cheat, and if someone can prove you cheated your stake is lost.

      The problem it solves is not needing a trusted third party to handle this process, such as a government agency or an organization. Everyone can verify the integrity of a blockchain by using the protocol and going over each block, making sure the data follows the rules. This blockchain is distributed so everyone can make sure they are on the same chain, else it's considered a "forked" chain and will migrate back to the point of consensus. This can be useful for situations where the incentive to cheat the system for monetary or political gain outweigh the cost of running a distributed ledger. It can also be useful when you don't want anyone selectively removing past data as the chain of verifiability will be broken. The only issue with this is you need some way to reach a consensus of who gets to make each block in the chain, as someone need to be the authority for that instant in time. This is where the requirement of Proof of Work (PoS) or Proof of Stake (PoS) come in. Without these or another system that distributes the authority to create blocks, you lose the power of the blockchain.

      Examples I've heard of are tracking shipments or parts (similar to how the FAA already mandates part traceability) and medical records. This way lots of organizations can publish records relating to these to a central system that isn't under any single entities control, and can't change their records to suit their needs.

      These systems are not fool proof though, PoW has the ability to be abused using a 51% attack and PoS requires some form of punishment for trying to cheat the system (in cryptocurrency you "stake" currency and lose it if you try to cheat the system). Both of these run into issues when there is no incentive to invest resources into the system, a lack of distribution across independent parties, or one party has sufficient power to gain a majority control of the network.

      Overall you are right to be skeptical of cryptocurrency, it's been a long time since I participated due to the waves of scam coins and general focus on illegal activities such as gambling. The lack of central authorities also perpetuates the problem of cryptoscams, as anyone can start one and there are limited controls over stopping such scams. This is not dissimilar to previous investment scams though, it's just the modern iteration of such scams. The real question is does it solve a real problem, as Bitcoin did in the sense it helps facilitate transactions outside of government controls. You might not agree with that but it does give it an intrinsic value to a large number of people looking to move currency without as much paperwork. Now if it makes it worth $68.5k USD (at current prices) is a different story, different people have different use cases and I only highlighted one of those.

      • I read all the replies in kind of, an order going from simplest to what looked to be like the more complicated ones, and this seems like the least charged and best explanation of the sort of, externalities, and it seems like a pretty good overview of it. The other guy did a good summary of how the technology works for a dumbass like me but I'm still not sure I got all of it.

        So, like, you could kind of conceive of a use for these technologies generally, right, but it would seem like, even from your explanation and also from what I kind of passively know already, this is kind of, reliant on a libertarian conception of society, which isn't necessarily bad. I think more concerningly it also seems like both of the basic technologies, there, PoW and PoS, are vulnerable to abuse from the powerful, or from those who have more resources, with maybe PoS being less so, I dunno, still don't really get how that one works specifically which might change it. Which is sort of, antithetical to a libertarian conception of society. I mean unless you're an ancap but those guys are dumbasses.

        So I dunno. It seems like a kind of inherently conflicted technology to me, like, paradoxical. I kinda hope someone can conceivably work out the problems of power abuse, but that would seem to be what I define as a "whole enchilada" style of issue, there.

        Still, I do like the ability to freely buy drugs and circumvent the government, that's kind of epic. Well, most of the time, anyways. Maybe not when the CIA does it, or when narcos and cartels do it, but I dunno how much either of them have tied up in crypto, it'd probably make more sense for both of them just to deal in fiat currency or trade resources or something.

    • So data stores tend to present interfaces which allow the CRUD operations on each record: Create, Read, Update, and Destroy.

      Create: You hit submit on a comment form Read: Your client app shows the content of the comment Update: You hit submit on the comment editing form Destroy: You delete the comment

      Well, in some cases it’s very handy to make a data store with only two operations: Create, and Read.

      This is called a “log”. A log is an append-only data structure.

      One of the benefits of using a log is that two different processes can operate on the data, at different times, and can be confident they’re operating on the same context despite not being in communication with each other.

      This “log” structure could be useful for instance in recording the moves of a chess game. Then, a hundred years later, someone can read each move out of a book and deterministically re-create the board state.

      Now they know that they are looking at the same chess game that Ben Franklin was in 1775, despite not being in touch with Ben at all.

      Really big, distributed systems benefit from this “synchronization without communication” feature of logs.

      Excellent article on this data structure and its benefits here: https://engineering.linkedin.com/distributed-systems/log-what-every-software-engineer-should-know-about-real-time-datas-unifying

      Blockchain is a log.

      Relying on a log requires you to trust that nobody else has Update or Destroy access. For it to work correctly and everyone be on the same page, Updates and Destroys need to never happen.

      With a coordinated system like people trying to understand historical chess games, or a corporation like LinkedIn seeking its own self interest, there’s no trust issue.

      But with other things, like “who’s got how much money”, people don’t want to have to trust that some centralized log owner is modifying the data on the sly.

      That’s where blockchain goes beyond a regular log. It’s a log designed to resist tampering, because each “block” in the chain goes through a distributed checking process where many copies of the log are used, and everyone checks each other’s copies to ensure nobody is cheating.

    • It's the whole web 3 concept of the community powers the infrastructure to run the community. It's an enticing concept, The people using the service pay with their CPU and internet connection to use the service. It makes what would be a rather expensive infrastructure almost free.

      With blockchain they're doing some smart things, you can wrap code around the ledgers, in the end it's just varying fancy levels of receipts verified and secured by the community. It's verifiable but anonymous.

      But then you've got cryptocurrency doing complex math burning through tons of electricity looking for unicorns to add to the ledger, in a massive pyramid scheme. Okay, it's not exactly a pyramid scheme. Whoever starts a given currency makes the vast majority of the money off of it when the coins are easy to find, but at some point it is pretty close to any other given financial system, with the benefits of being anonymous and verifiable.

      The bitcoins are just entries on the ledgers. But then s*** like NFTs are on ledgers. Someone sells you a receipt for a JPEG on a URL. It's all only worth what someone will pay you for it. And without a whole bunch of regulation, it's not exactly a safe market.

  • I think it's funny how most lemmy users are pro open source, pro privacy, pro digital rights; but once it comes to money all that is thrown out of the window and they happily get on their knees for paypal and the few other large players.

    Yes, the current state of crypto is a mess. People are attracted by the promise of the big payout, rather then seeking an alternative payment system, making them ripe for scammers that promise the world, but in the end only rug "investors". Even "functional" cryptos are often highly centralized, making them as bad as banks in terms of reliability. Almost none implement any privacy features, and if they do, its typically a tacked on afterthought.

    But this does not make the original idea invalid. Will it ever live up to the promise of alternative money? Maybe. Maybe not. Only time will tell if the issues that exist right now will be fixed.

423 comments