How Blockchain Will Change Your Life

http://www.wsj.com/articles/how-blockchain-will-change-your-life-1478564751

by ozdave • 10 years ago

122 76 10 years ago

wsj.com

satysin• 10 years ago

The article is behind a paywall so here is the article text -

How Blockchain Will Change Your Life

The technology’s potential goes way beyond finance.

By GINNI ROMETTY Nov. 7, 2016 7:25 p.m. ET

Until the mid-1990s, the internet was little more than an arcane set of technical standards used by academics. Few predicted the profound effect it would have on society. Today, blockchain—the technology behind the digital currency bitcoin—might seem like a trinket for computer geeks. But once widely adopted, it will transform the world.

Blockchain offers a way to track items or transactions using a shared digital “ledger.” Blocks of new transactions are added at the end of the chain, and encryption ensures that it remains unbroken—tamper-proof and error-free. This is significantly more efficient than the current methods for logging and sharing such information.

Consider the process of buying a house, a complex transaction involving banks, attorneys, title companies, insurers, regulators, tax agencies and inspectors. They all maintain separate records, and it’s costly to verify and record each step. That’s why the average closing takes roughly 50 days. Blockchain offers a solution: a trusted, immutable digital ledger, visible to all participants, that shows every element of the transaction.

Financial institutions are becoming early adopters: The World Economic Forum estimates that 80% of banks are working on blockchain projects. CLS, the world’s largest multicurrency cash-settlement system, is implementing blockchain in the foreign-exchange market. The Bank of Tokyo-Mitsubishi UFJ has developed a smart-contract prototype for multiparty business transactions. China UnionPay is using blockchain for loyalty programs that operate across multiple banks.

But the potential goes beyond finance. We at IBM estimate that applying blockchain to global supply chains could generate more than $100 billion in annual efficiencies. Toyota and the U.S. Postal Service are exploring this already.

Visa and DocuSign are working on a blockchain system that enables a car buyer to sit in the driver’s seat, configure the aspects of a lease on the dashboard, and drive away immediately. La’Zooz, an Israel startup, has a blockchain ride-sharing app that allows drivers to connect directly with customers, without needing a middleman like Uber or Lyft.

All of this is promising. But for blockchain to go beyond pilots, the technology needs a system of transparent governance. Remember what guided the development of the internet: not-for-profit groups like the Internet Engineering Task Force and the World Wide Web Consortium. Their involvement gave businesses confidence that the internet would be stable and based on open standards.

The same must be true for blockchain. More than 80 leading finance and technology organizations, including IBM, have joined the Linux Foundation Hyperledger, a project aimed at creating an enterprise-grade blockchain framework. More than 600 additional firms have already applied to join the consortium.

There’s one more lesson to draw from the early days of the internet. If you had understood in 1995 the opportunities and threats it would ultimately present to your company or industry, what would you have done differently—to become the disrupter rather than the disrupted? That is where we are with blockchain today.

Ms. Rometty is the chairman, president and CEO of IBM.

taesu• 10 years ago

is it legal to post content that is behind a paywall to the public?

x1798DE• 10 years ago

It's not even legal to repost wholesale content that is not behind a paywall in most situations, since it's a copyright violation.

EdHominem3• 10 years ago

Are you looking for advice for yourself, or is that really a passive aggressive comment?

Anyways, the legality depends on where the poster is located. Where do you want an answer for?

myowncrapulence• 10 years ago

"Blockchain" ... not even "the block chain"..

Already can tell this person is a PR manager and knows nothing about the technicalities and only about buzzwords used to entice investors.

This is like saying "How Internet Will Change Your Life" instead of "the internet".

kevinSuttle• 10 years ago

"PR manager"? Try 'the CEO of IBM'.

serg_chernata2• 10 years ago

Did you even get to the last sentence?

davidgerard7• 10 years ago

It is consistently true that any writeup that says "Blockchain" (capital B, no article) will be somewhere between wrong and not-even-wrong.

I commend to you “Ignoring Blockchain Is Corporate Suicide: Why Blockchain is the biggest single threat to all CEOs for destroying corporate value” by Nick Ayton, in analyst newsletter Innovation Enterprise (7 July 2016). In the several years I’ve been following Bitcoin and blockchains, this is the single worst, stupidest and most incoherent piece of “Blockchain” hype I’ve seen; you definitely need to read it, to inoculate yourself against the worst excesses of this foolishness.

https://channels.theinnovationenterprise.com/articles/ignori...

first comment: "Did a Markov chain generate this horseshit?"

senthil_rajasek• 10 years ago

Did you try the "web" link above?

bdcravens• 10 years ago

That's what the "web" link is for

sheepdestroyer• 10 years ago

doesn't work for me, still paywaled

serg_chernata2• 10 years ago

I still love the fact that in this age of social sharing and selfies we don't really know who invented this revolutionary technology.

hinda• 10 years ago

That's not particularly surprising. If you're smart enough to implement and seed a distributed Merkle tree ledger you're smart enough to extrapolate the implications of indiscriminately offering yourself as an indefinitely persisted data feed.

Retra• 10 years ago

That's a nice rationalization of the situation, but history shows that being smart enough to do one thing has almost no correlation with being smart enough to do any other specific thing that wasn't already necessary to do the first. I doubt the ability to implement blockchains has anything to do with such socio-political analysis, and so should you.

troymc• 10 years ago

I didn't know that over 600 firms have applied to join the Hyperledger consortium. That seems like a large number.

zwegner• 10 years ago

First off, when did "blockchain" become an uncountable noun? "blockchains" or "blockchain technology" sounds much more natural.

Anyways, I wish more people in the media would differentiate between the Merkel tree, providing the immutable ledger part, and the proof-of-work distributed consensus algorithm, which provides some degree of trust through burning an ever-increasing amount of power. Most of the benefits the author lists would be true of just the Merkel tree without needing the wasteful proof-of-work consensus system, if it's used between trusted parties. Also, even if there's not complete trust, it would still provide an audit trail so that appropriate actions could be taken against bad actors.

When the author later talks about governance boards, that just underscores the incongruity even more. While I'm sure governance boards could be shoehorned into some DAO-like system over distributed consensus, it seems a lot easier to just get rid of the whole distributed consensus altogether and give some digital signatures to the governance board that can sign/bless the Merkel tree.

Animats• 10 years ago

Most of the benefits the author lists would be true of just the Merkel tree without needing the wasteful proof-of-work consensus system, if it's used between trusted parties.

The parties don't have to be trusted. It's the opposite. A good blockchain needs mutually mistrustful parties who are not anonymous. If somebody tries to tamper with the ledger, all the other parties can easily tell who did it. It takes collusion of all parties to change history invisibly. Thus, you want parties who are not entirely cooperative.

EdHominem3• 10 years ago

The parties don't have to be trusted.

Actually, zwenger was right. Without a proof of work, they do.

What's a blockchain? It's a data structure with a cryptographically strong CRC mechanism. But there's nothing stopping me from writing a new set of data into a new chain and passing it off as the original.

Sure, you may notice, but you can't prove my new chain is forged. I'll say the backup chain you're using as proof is the forgery...

It takes a proof of work to make the chain effectively uneditable. (Uneditable without paying for the work, which has been selected to be too expensive to be practical.)

kushti• 10 years ago

"A good blockchain needs mutually mistrustful parties who are not anonymous" - in opposite, blockchain is a good solution for open system with anonymous participants. For other settings, there are more efficient solutions(e.g. PBFTs)

grubles• 10 years ago

First off, when did "blockchain" become an uncountable noun?

When the businessmen/marketers/cryptocurrency-illiterate got their hands on it and tried to distance themselves from the only useful blockchain in existence: the Bitcoin blockchain.

countingteeth• 10 years ago

You've overcounted useful blockchain (lol) by one.

paulcole• 10 years ago

First off, when did "blockchain" become an uncountable noun? "blockchains" or "blockchain technology" sounds much more natural.

Good to see we're focusing on what matters.

dozzie• 10 years ago

You may want to revise your view on who invented the data structure. It wasn't Merkel (Angela?), it was Ralph Merkle. You use incorrect name too consistently for it to be just a typo.

qertoip• 10 years ago

I can't help but plug my take on why enterprise blockchains are almost entirely bullshit: https://medium.com/@qertoip/enterprise-blockchains-are-a-hug...

davidgerard7• 10 years ago

One of the best explanations of why Business Blockchain is not like Bitcoin or its assorted altcoins is actually this post from the R3 Consortium:

https://r3cev.com/blog/2016/4/4/introducing-r3-corda-a-distr...

Their Corda Distributed Ledger Designed for Financial Services seems the most sensible of all the Business Blockchain approaches: after careful consideration of the fact that the Bitcoin-style blockchain was expressly designed to be the direct opposite of what large paying customers with money want, their “Blockchain Product” does not, in its default configuration ... contain a blockchain.

PREDICTION: Merkle trees are great, and business is about to discover how to use them as a tamper-evident ledger. That's what will be left of this in a year or so. Possibly branded "Blockchain".

buckie7• 10 years ago

Before I founded a company[1] in this space I investigated blockchain applications for JPM and I agree with your take on bitcoin-style blockchains being mostly BS for industry. I'd take it a step further to note that mining is incompatible with private blockchains of any form because the new coins+fees incentive structure doesn't exist.

Permissioned/Private Blockchains don't need to look like Bitcoin, they just need to offer many of the same features plus a few more. What we're really talking about is a database that competitors can share, which is largely inspired by Bitcoin's system. Some things it needs to actually work:

- Vastly increased performance: 5-15 transactions per second is useless for industrial use.

- Smart Contract languages designed for safety over generality: more of an empowered SQL than a C/Go. Tokenization doesn't provide enough of a benefit over traditional approaches and generalized computation is too dangerous.

- Deterministic BFT Consensus: this is to replace mining + remove anonymous participation, it needs to be fast and scale.

- Confidential transaction support: the trickiest of the lot, as we cannot currently hit performance + double-spend protection at once.

In case you're curious what our approach is: BFT Raft-like for consensus (8k-12k trans/sec), soon to be open sourced smart contract language, signal protocol over the chain for confidential stuff.

[1] http://kadena.io

cloudjacker• 10 years ago

When's the ICO?

trhway• 10 years ago

What we're really talking about is a database that competitors can share
BFT Raft-like for consensus

exactly. Blockchain right now is just the most "simple" and open format of sharable append-only-log-structured database and consensus protocol for it.

bgibson2• 10 years ago

Hi buckie, first I've seen of Kadena but like your approach. Deterministic BFT, built in Haskell, what looks like a Lisp for contract language prioritizing safety. Good work.

I'm helping organize a conference at Stanford in January on blockchain protocol design and security, would you guys have any interest in presenting about your approach and/or things you've learned so far:

https://cyber.stanford.edu/blockchainconf/

sandGorgon• 10 years ago

this is very cool!

quick question - why did you decide to build your own rather than use an infrastructure like Ethereum.

We were thinking of leveraging Ethereum (with a consensus protocol) to build a database that can be shared between a few competitors that are in our ecosystem.

Would love to hear your thoughts.

P.S. I'm not a blockchain expert.

markkat• 10 years ago

The article didn't mention tokenization of shares and token-based fund-raising. Presently, that is a far more disruptive and interesting use case for blockchains.

sit12• 10 years ago

Do you have any examples?

TD-Linux• 10 years ago

The DAO. It was, indeed, pretty disruptive.

davidgerard7• 10 years ago

I am literally writing a book about this. And boy am I read up on the hype. http://davidgerard.co.uk/bitcoin/

Everything in this article is content-free BS.

"80% of banks are working on blockchain projects" - this means they've told someone to "investigate", which doesn't in any way mean a product is in the offing.

And so on with all the other claimed examples.

The product here is the Hyperledger initiative, run by IBM. The “IBM Blockchain – What is Blockchain?” page is a good example of content-free Blockchain hype:

http://www.ibm.com/blockchain/what_is_blockchain.html

Almost every “is” on that page is a “might” or “could” – no blockchain does all the things it describes in present-day terms, and particularly not any of the code dumps at Hyperledger.org.

Hyperledger.org is a corporate open source Potemkin village of the sort IBM has long favoured: the illusion of an open project, with no “there” there. I spent half an hour dredging the site and could not find one clear statement of what this software is actually intended to do, let alone differences from and similarities to existing blockchains. Even Bitcoin blog CoinDesk noted: “Among the doubts facing Hyperledger is a perceived lack of clarity on what might be ultimately produced by the initiative.”

If you click long enough, you'll find a page where the participating companies have dumped their unfinished blockchain experiments. The main code contributor is Digital Asset Holdings, who dumped Hyperledger Fabric there; their joining announcement (on their own site, not hyperledger.org) gives as technical details only that Hyperledger is an append-only ledger and has an actual Bitcoin-style blockchain in it.

(This makes it more "blockchain" than others. e.g., R3 Corda is a "Blockchain Product" that doesn't include a blockchain in its default configuration. The key factor to "Business Blockchain" is that any examples that work, aren't actually a blockchain. You get Merkle trees just shoving your transactions into a git repo.)

As Hyperledger found out, all manner of businesses – financial institutions, beef industry, shoe brands, confectioners – don’t want to share data even with all participants in their blockchain, but only with the people the specific deal is actually with, funnily enough:

https://lists.hyperledger.org/pipermail/hyperledger-requirem...

https://lists.hyperledger.org/pipermail/hyperledger-technica...

This was apparently news to them. It turns out that IBM set up an elaborate hammer design consortium without first finding out if there are nails.

wmf2• 10 years ago

The lack of clarity is kind of a feature, as Hyperledger is intended to be a modular, completely general framework for building any possible blockchain you can imagine.

davidgerard7• 10 years ago

Also, airy promises are not only cheap - it's a dessert wax and a floor topping! - but highly available and widely distributed in the Business Blockchain environment!

The other main code dump on hyperledger.org is Intel's. Their "Sawtooth Lake" replaces the blitheringly stupid and wasteful Proof of Work with something equally stupid but less wasteful, Proof of Elapsed Time, which might as well be called Proof of Buying An Intel CPU. Rather than have miners compete to produce the next block, a timer running in an environment secured by a DRM mechanism built into your Intel CPU picks if you get to do the next block. The white paper is an extended advertisement for Intel® Software Guard Extensions™ (SGX™). Also, they only have a simulated Proof of Buying An Intel CPU mechanism as yet.

https://intelledger.github.io/introduction.html

This doesn’t provide any security against malicious participants; the excuse is that private blockchains need speed over security. You might think that at that point you don’t need a blockchain at all, but you’re hardly going to sell any consultant hours with that sort of thinking.

murbard22• 10 years ago

This raises the question: what will blockchain mean for web?

brainfire• 10 years ago

Can mobile even be first-class with blockchain like it is with cloud?

murbard22• 10 years ago

With app store for blockchain on cloud, just maybe.

kordless• 10 years ago

Trusted deployments of SaaS like software on your own infrastructure, for one thing. Using the merkle tree plus some currency's consensus gives us a path to trusted software deployment models, done on trusted infrastructure.

pfraze• 10 years ago

Doubtful that it would involve a currency consensus, but the cryptographically-auditable log portion is right

brilliantcode• 10 years ago

Blockchains are a solution looking for a problem.

There's a very small niche problem that blockchain is actively solving and that is the enrichment of ICO founders.

Ethereum, Zcash, Ripple, Siacoin, Monero are all essentially the penny stock pump & dump scams of the early days of the internet.

Right now we got a lot of big movers courting blockchain companies but so far we see that it's a horrible ecosystem for building mission critical and scalable apps that is already being solved by AWS, GCE, Azure etc.

Ethereum especially is the biggest blunder out of the blockchain party. Can't scale (capped at low double digit transactions per second) due to it's overly distributed and trustless mechanisms with a huge security vulnerability surface thanks to a turing complete piece-of-crap language called Solidity.

I strongly suspect that we will see the demise of ICOs and blockchain bubble popping when regulators move in as they have previously done with fantasy sports betting startups.

To the adventurous and greedy individual thinking of launching blockchain ICOs: don't count on your coin != fiat because that won't matter when a bunch of people feel victimized enough and start courting the SEC.

disclaimer: I actually hold above cryptocoins but overall extremely pessimistic and feel pretty stupid buying into it.

davidgerard7• 10 years ago

I used to be the proud hodler of 6 dogecoins, until I reinstalled the laptop the wallet was on. Much sorry, very loss.

boggydepot• 10 years ago

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grzm• 10 years ago

Click the "web" link under the title and then choose the article from the Google search results.

How Blockchain Will Change Your Life

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