objectivefunction wrote: ↑
Wed Sep 13, 2017 5:06 am
mnaspbh wrote: ↑
Tue Sep 12, 2017 7:43 pm
No cryptocurrency is required to make use of blockchain technology
That's not true of Ethereum (it has a native ether currency) and I don't believe it is true of blockchain in general. I don't believe blockchain divorced from a native currency will ever work. The whole reason Bitcoin works is because miners have an incentive to extend the blockchain---an incentive paid in bitcoin. That incentive compensates miners for the real cost they expend and makes miners part of the ecosystem.
I think that financial institutions will attempt to divorce the blockchain from bitcoin, but either end up making something that is centralized and unnecessarily uses blockchain when some other technology would have worked better or make something that differs from bitcoin in name only (i.e. CitiCoin).
There are already private Ethereum blockchains that don't use Ether at all (gas prices of zero, or valueless tokens)--they just need willing miners. There are forum posts where Ether "investors" are crushed to learn that businesses can benefit from Ethereum-style blockchain- and smart-contract technology without having to drive up the price of Ether. A blockchain is just a series of cryptographically-linked entities (the "immutable ledger"). It may be advantageous to make the blockchain public, or to encourage decentralization, but those are not requirements. Bitcoin uses a cryptocurrency to try to encourage decentralization and encourage participation, but that's not required. I can start a new blockchain without any cryptocurrency, while still gaining the advantages of a blockchain. Here's one right now:
742 This paragraph is a blockchain. Each "block" (line)
584 has a hash based on previous blocks. To compute the
385 hash of a new line, add up the values of each character
871 in the line, where 1 is 1, 2 is 2, a is 10, b is 11,
730 and so on. Ignore punctuation. Then add the hash from
586 the previous line or the "genesis" value of 42 for the
452 first line. If the sum is greater than 1000, just use the
392 last three digits. Anyone can check the blockchain entries
294 by computing the hash values themselves. Of course,
236 this is not a very useful blockchain. The hash function
190 is very weak, as it is pretty easy to find some kinds of
059 changes that still have the same hash. There should be a
015 clear process for how new lines get added to the paragraph,
930 like a voting scheme. The contents of the blocks are not
868 useful, but instead of rambling they could be lines that
766 represent transactions like "Alice owes Bob 7 dollars",
319 "Alice sends 10 dollars to Bob" and then
926 "Bob sends 3 dollars back to Alice as change".
719 This paragraph is still a blockchain, and there is
718 no cryptocurrency involved. But anyone who sees this
632 post and trusts in this blockchain can tell that Alice
082 and Bob had a debt and settled it.
The banks, governments, and businesses interested in blockchain are not interested in creating new cryptocurrencies, and generally not interested in using existing ones. They want the advantages that a blockchain can provide--an immutable and auditable record of transactions. Are these forms of blockchains more useful than non-blockchain technology? In a lot of cases, I think so--a lot of companies are riding the hype wave, and even some governments are doing so too trying to show they're "with it" and are "modern". But most people hear "bitcoin" when someone says "blockchain" without understanding the distinction (or deliberately ignore it to try to promote their favorite cryptocurrency).
I'm already seeing "No True Scotsman" arguments popping up from bitcoin advocates. It's not a *real* blockchain unless it has a publicly-spendable cryptocurrency attached. It's not a *real* blockchain unless there are no big backers. It's not a *real* blockchain unless the whole thing is always public. And so on.