Money today is completely decentralized. There is no central registry of where every single piece of money is, which has to be updated every time anyone makes a transaction. It flows and is converted to goods and vice versa in a completely decentralized and parallel way.
Remember: the ledger is completely centralized (there is a single, unique, monolithic ledger). Only processing of the ledger is distributed.
It is probably the worst possible way to design a currency.
Duh, it does. If the ledger is processed in a distributed way across many peers doesn't change the fact that there is a single central ledger. If a transaction isn't in the ledger, it doesn't exist.
If I give you $10 and we don't tell anyone about it, do you still have the money? Yes.
If I give you BTC10 and we don't tell anyone about it, do you still have the BTC? No.
Compare this to actual currencies, that have millions (or even billions) of independent, parallel, distributed, ledgers.
Or compare this to DNS. There isn't a single, unique, central DNS record, it is a system of distributed records across he entire internet.
>How do I know the manufacturer doesn't know the private key?
>When you first plug in a new Opendime, it has no private key. It shows up as a writable drive and the user must copy files onto the drive. They are immediately forgotten, but the the file contents are hashed (SHA256). It's the hashed output of that which forms the private key (along with the unit serial number and entropy we derive from the environment). That happens as soon as 256k worth of bytes have been written to the drive. The private key is created and the drive "ejects itself" and comes back read-only and in "normal" mode... only the public key is shown until unsealed.
>Is the private key unique and secret?
>Yes. Opendime is delivered without any private key. You must give it entropy (random numbers) the first time you use it. Once it's gotten enough numbers, it will hash them all together and use that to pick a random number to use as the private key. At that point, the payment address is generated and set in stone.
>This whole process is very easy: just copy some files into the USB drive. When it's got enough bits (256k bytes) it will eject itself and come back with its final payment address.
Assuming you know who everyone is, you can use traditional consensus mechanisms like Byzantine Paxos and get much higher transaction rates than public blockchains can do right now.
Not really, you can have a blockchain managed by a single company. In the most basic definition, a blockchain is simple an authenticated linked sequence of records. It can be public or not, it can be processed centrally, distributed across a single organization, or distributed in a peer-to-peer fashion.
In your example of multiple companies coordinating on a single blockchain, who would be paid to manage it?
If a block isn't finalized, and you build a transaction based on particular conditions in that block, and the finalized block has different conditions, then your transaction just fails.
The same data in a specific block, but not everyone necessarily agrees that the same block is the latest one. That's why you don't have 100% confidence in a single block confirmation.
A pessimistic answer would be that blockchains are the latest buzz tech.
What makes it more scalable than a database when a characteristic is a redundancy of copies beyond what would reasonably be needed for sufficient backup? What makes it anymore trustworthy than a database with only trusted actors authorized with write access?
The trustful, or verifiable aspects of a blockchain come as a side-effect of independent actors competing for a financial reward. How does one replicate that dynamic in a single organization? Why would one bother trying?
a number of benefits over a traditional database
A blockchain doesn't provide a number of benefits over a traditional database.
A database isn't even a particularly fine-grained description of a blockchain.
A blockchain is a key component of an experimental currency inspired by a particular political ideology that is at odds with many aspects of western civilization, such as the benefit of trust in a society.
It's not really useful insofar as most people can tell in any other contexts. Even it's usefulness in it's native context is not highly established.
There's no reason in principle a blockchain is better at solving this problem than a trusted central bank. But if the existing central bank is moving slowly or has annoying policies, it's much easier to bootstrap a blockchain than bootstrap a new trusted authority.
https://en.m.wikipedia.org/wiki/Nostro_and_vostro_accounts
This is a long solved problem. No blockchains necessary.
As an aside this is a problem I often see in fintech pitches...
No, there's no global ledger, and it isn't required. There are checks and balances and regulations that allow money to work in a completely distributed way. Unlike cryptocurrencies that use a centralized ledger (all the 'major' ones, at least).
Maybe for more efficient netting? If A owes B $100 and B owes C $100 and C owes A $100 then no money has to ever change hands, even in the sense of crediting or debiting accounts at the central bank.
Matt Levine has been speculating on this a lot recently: banks traditionally have hugely underinvested in infrastructure upgrades. I imagine if you're in IT at a bank, it must be awfully tempting to go "blockchain! secret project!" to get management on board because the suits are all caught up in the hype. Then you can just immediately pivot to Apache Cassandra (which is strictly superior to blockchain in pretty much every proposed business use of blockchain I've ever seen) and no one's the wiser.
Blockchain is on its way to becoming a hollowed-out incantation, like "green technology" or "democratic" or "brawndo"
What even is a "blockchain," not in the context of something like bitcoin? How does a blockchain even work within a single organization? However it may or may not work, the dynamics involved would seem to make it qualitatively different from something like a bitcoin blockchain.
So you're asking for a comparison between something that does exist and something that doesn't. And in fact something that can never exist, if we are going to stick to the convention of treating names as more or less unique identifiers of a certain set of characteristics.
(Transfers between many banks in the UK were instantaneous for a decade or so, so apparently it can be done without a blockchain ;-) )