It's just the current "Blockchain" frenzy. It's now a bigger buzzword than Bitcoin and everyone wants to use it for everything despite not understanding the basic concepts.

Satoshi's paper never included the word.

He talked about it as a "chain of signatures" in the paper, and it is very much the groundbreaking part of bitcoin. It was the necessary component for the creation of a distributed timestamping server, which was the missing piece to make a system like bitcoin fully decentralised.

I agree though that there is a lot of hype for "blockchain technology" and this seems like a weird use of it, since you already have a central third party that everyone has to trust.

It's a Merkle tree [1]. I don't see governments urged to use more B-trees or inverted indexes.

1. https://en.wikipedia.org/wiki/Merkle_tree

"chain of digital signatures" was referring to the method of assigning value between owners via transactions (s2). That's not the blockchain, nor was it a new concept -- see bmoney, Wei Dai, 1998.

They described the blockchain as an "ongoing chain of hash-based proof-of-work, forming a record that cannot be changed without redoing the proof-of-work"

Thanks for the correction re: terminology used, it's been years since I read the paper.

In the UK specifically there is a strong push by the public to prevent the government from being a large holder of public data. That is the reason we don't have a public ID card scheme, instead we have a distributed ID system[1] which is used to identify you. I would assume that this portion would benefit from stronger guarantees as there isn't a single arbiter of truth there.

[1] https://www.gov.uk/government/publications/introducing-govuk...

I thought the reason we don't have an ID card system was that it was too bloody costly.

That aside, one of the identity partners is Verizon, which don't even do business in the UK. What's their incentive here? Why is giving my passport or driving license details to Verizon better than giving it to Government, a branch of which issued it in the first place? Frankly I think it's nuts and not a win for privacy.

They do a fair bit of enterprise business, but not much in the way to customer facing.

The emperor spent a billion dollars on his new clothes. A small child pointed out that he's naked. He's presently trying his hardest to make naked chic.

Have you heard of the health benefits of being naked? Naked is so easy to clean. You never need to mend naked. Naked never goes out of style. Naked is easy to color coordinate.

It isn't entirely relevant to the emperor whether he succeeds in getting naked accepted as the latest fashion or not, as long as he succeeds in not getting laughed at. Being naked is ultimately survivable, being tricked is not.

I strongly suspect that you would enjoy the writings of Izabella Kaminska over at the FT:

  Techies look upon the financial world and find its messy structures
  hard to reconcile with the physical reality around them.

  Which is why we’re going to propose that the blockchain fad is mostly
  about putting finance in terms that are understandable to techies — i.e.
  as something absolute – and having them learn for themselves through
  trial and error why that’s actually a flawed assumption in finance.

http://ftalphaville.ft.com/2015/10/30/2143506/if-you-call-it...

It's like how bank accounts are always used as an example when describing transactional systems, despite not working that way in reality (two near-simultaneous transactions can result in you having a negative balance, and this is a feature not a bug). Naive assumptions about how the world works can certainly produce software that is clear, logical and wrong.

However, what I hear there is "oh sure, you might be able to write software for all of these other things, but not this thing that I'm an expert in, that's way too complicated". Many people have been wrong about this in other domains, and it seems to me that essential complexity can only delay the point at which software can usefully automate things, not prevent it entirely.

>The study of money, above all other fields in economics, is the one in which complexity is used to disguise truth or to evade truth, not to reveal it.

-John Kenneth Galbraith, Money: Whence it Came, Where it Went

It would be good if there was a way to bet against Blockchain technology in general. Prediction markets seem like the only option currently available...

Maybe it's my problem, but that essay just sounds confused to me. Can you summarize what she's saying there?

Basic idea of double entry bookkeeping is that if you borrow money, it represents both an asset to you which you can spend, but also a liability (for the lender the reverse is true) because you have an obligation to repay it later, and that any accounting system should reflect all this lending that goes on. Knowing what they owe and are owed in future is as important to banks as knowing what payments they've just received and just made.

She's contrasting that with a "techie" view where all that matters is securely and immutably recording the fact that a borrower has received the "coin" (which represents mainstream blockchain implementations, though I'm sure blockchains could be designed to reflect debt relationships and even enforce debt repayment), and suggesting that what the distributed consensus actually records is only a subset of the relationships a centralised accounting/clearing system deals with.

She also pointed out that our financial system being built around debt relationships actually guarantees there will be some non-zero level of demand for dollars/Euros/Yen etc in future, whereas building the Bitcoin ecosystem around who holds the Bitcoin at a given point in time doesn't actually guarantee people will still want them tomorrow (especially if they owe repayments on dollar-denominated debt to buy BTC or mining equipment)

OK, that's essentially what I got, but that seems to refute the idea that blockchain should be used to replace all accounting(!), which is something that I never saw anyone advocate for. Bitcoin is just electronic cash, and that's how it was presented. And which can be, or not, tracked by accounting systems.

It just reads like a poorly structured argument against a huge strawman.

It's not particularly well structured and veers in the direction of straw man.

But most arguments in favour of blockchains as a superior way of doing things are centred around the idea that replicating cash is the most important thing about building a monetary system, when cash is actually the least important (and most likely to be deprecated!) part of the monetary system the world today is built on. If you still need a separate authority or method of reaching consensus to reconcile debts, then making the record of who controls the assets independent and immutable is a bug of the monetary system rather than a feature.

I always liked Terry Pratchetts take on this which was "The Story of the Whole Crowd Who Were Rounded Up by the Guards and Told 'This Didn't Happen, OK? Does Anyone Want to Argue?'"

The one possible benefit would be immutable databases.

But can't this be achieved with a simple cryptographic signature?

No, because you need a chain to know if things haven't been removed or added.

Some amount of decentralization is still nice for them I guess. The big problem they don't have to solve is an anonymous defense against a Sybil attack.

They would probably be better handpicking a group of institutions / people / orgs and have them regularly sign statements of what's been going on since last time.

I have never heard the term Sybil attack. I presume in the case of bitcoin a Sybil attack would be having your private key stolen?

The term refers to subverting a reputation system by creating loads of spurious participants. See https://en.wikipedia.org/wiki/Sybil_attack for details.

With regards to Bitcoin: The value in a distributed block chain is to ensure participants don't double-spend their coins. An attacker in a Sybil attack would spend their coins, broadcast the transaction and (after the recipient believes he's received the transfer) use fake identities to "vote against" including said transaction in the public ledger. That way, he could then go on to spend the coins again. To prevent this, Bitcoin uses a proof of work function: each participant in the network gets a share of the voting power corresponding to the effort he or she spends on calculating sha256 hashes, not to the number of identities one represents.

> To prevent this, Bitcoin uses a proof of work function: each participant in the network gets a share of the voting power corresponding to the effort he or she spends on calculating sha256 hashes, not to the number of identities one represents.

Which leads to the problem that whoever can spend the most money on computing power gets the most votes.

I never understand why some people can't use Google and choose to publicly announce their ignorance.

I never understand why some people always insist on writing the pointless why did you not just Google it response. I am also not convinced that he did not Google it and was asking about clarification about the parents intent. Furthermore not everyone thinks publicly admitting you don't know everything is shameful.

> Plus my understanding is that these ledgers do not scale. Each transaction takes a lot of computing power.

This is a particularly gross distortion of reality by people who for whatever reason want people to believe cryptographic currencies won't scale.

In the infancy of a currency, when there aren't many transactions, the mining power amortized over each transaction will be much more than when many transactions are happening. Each transaction doesn't take mining power, the number of transactions and mining are completely decoupled.

Well, the above poster is half right. Blockchains don't scale as well as, say, a distributed database. It's not due to computational constraints, it's the amount of data handled by every node.

Bitcoin can currently handle about 2 transactions per second.

> Bitcoin can currently handle about 2 transactions per second.

First, this isn't the real number and second 'handle' doesn't describe the situation, which is an artificial limitation built in as an artifact. Whether you are in the camp that believes this will be worked around in bitcoin or not is irrelevant, on a technical level any cryptocurrency can be created that can handle MANY more transactions.

Right now you could sync to the blockchain on the bandwidth T-Mobile gives for free while on international roam in 100 countries.

So the amount of data handled by every node is not even close to any sort of practical limit. Anyone with Netflix could sync to 50x the number of transactions.

I agree with the above and you make a fair point, mine still stands though: a decent distributed db could still do substantially better.

Do better at what? Handle more data? Of course, but computers aren't exactly struggling with handling enough integer math to move a balance from one place to another.

That isn't the problem with things like this. The problem is trust, transparency and accountability. The old "A rasberry PI could handle the same amount of transactions" misses the point completely.

Don't have time for an explanation right now, but saying "why do they need a blockchain if they could just use a replicated database with cryptographic signatures?" is like saying "why do they need a database if they could use a flat file with a query engine?"

It could lower fees for them, increase security, and they could do away with SWIFT, making transfers last minutes rather than days. It won't be public and won't have much to do with consensus or "P2P".