The blockchain is simply a type of database. Nothing more, and nothing else.
What for? It’s used to keep records of historical transactions between parties.
Those transactions could be anything. The accountants already had a name for it : Ledger.
So why call it “blockchain”? The name reflects how the records are stored. (In containers, or blocks, that are ordered in a chronological sequence, forming a chain.* In addition, that chain is unique because it’s “fingerprinted.”) * Strictly speaking, it’s not quite a chain but a tree-like data structure. There are different ways to choose the valid branch; in Bitcoin, it’s the branch that has the greatest proof-of-work invested in it. Ethereum, by contrast, uses the GHOST rule (Sompolinsky and Zohar, 2013).
In itself, there is nothing disruptive about a blockchain. The interesting bit are the implementation options Permissioned
Permissionless
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You mean? Bitcoin uses a blockchain protocol for achieving consensus on a public ledger that records bitcoin transactions.
Buy and exchange bitcoins, use them for purchases or save them as investment
Help the processing of transactions, mining blocks for bitcoins (received as incentive)
Improve (add functionality or features) to bitcoin, build new services that use bitcoin
The places where bitcoin holders can exchange them for other currencies
And by the way‌ Bitcoin (with capital B) is the protocol, bitcoin (lowercase b) refers to the Token.
Permissionless blockchains are the ones the community considers truly disruptive and game-changing (because the man in the middle “giving trust” is gone; trust is de-facto decentralized).
Like pretty much everything in life, such “disruption” typically comes at a cost (you cannot avoid trade-offs). To understand why, a detour :
Nakamoto [2008] attempted to overcome the above limitation by introducing computational puzzles into the mix (or proofs of work) first described by Dwork and Naor [1992].
Why? Because it’s become another fact of life, or let’s say connectivity, that people in a computer network cannot all be updated at exactly the same time.
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Corollary? Nakamoto’s protocol does not ensure consistency (common knowledge) in an asynchronous system, other than with high probability.
Does this matter?
Adapted from M Conti, S Kumar, Chhagan Lal and S Ruj (2017). A Survey on Security and Privacy Issues of Bitcoin (online version downloadable from https://arxiv.org/abs/1706.00916v2)
Or a variation of this theme: “Whether we like it ot not, the mere act being alive is inherently risky.” So why bother too much? As long as you can reasonably mitigate that risk, you’ll be fine.
The big promise of permissionless networks
The “costs” of operating this model
The questions that have to be answered ‒
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Argentina, 2001 Freeze of bank accounts, known as Corralito
United Kingdom, 2007 The demise of Northern Rock
Greece, 2015 Greek debt crisis and imposition of capital controls
Greece, 2017 A. Vinnik arrested, accused of links to BTC-e and money laundering
New York, 2016 M. Swanepoel (CEO, BITX) talking about the Bitfinex hack, second biggest breach in history of a bitcoin exchange
Japan, 2014 MtGox collapses into bankrupcy
“...to be sure, any confusion between the ideas suggested by science and science itself must be carefully avoided; but it is just as necessary that scientifically warranted conclusions be resolutely pursued to the point where their full meaning becomes clear.�
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It builds a Blockchain protocol with some desirable characteristics.
This is a new protocol, not forked from existing implementations (Bitcoin, Ethereum).
The sequence in the blockchain fuses the sugar-phosphate backbone and bases (that make the real DNA nucleotide) into the backbone itself
This happens in a similar way as proteins bind to a DNA molecule
GenS
No miners required. The blockchain self-regulates, to say it somehow.
Correspondingly, the actual blockchain “capacity� (determined by the number of binding sites available for docking, one per Token issued) is also determined algorithmically, balancing supply to market demand.
The concatenation of planar (1-sided) blockchain strands through the transcription motifs is expected to be of low cost when connected through a sparse overlay network.
Inspired by two approaches: onion-peeling (and source of the Matryoshka name) and the verifiable shuffle algorithm. Still in development, we hope it will deliver strong, provable security guarantees whilst achieving reasonable efficiency.
‒ The “paper and pencil” (a-la old school for many) development stage ‒ Coding to date
‒ Other work in the pipeline