one person to make. “Beyond” Blockchain as an Industrial Tool Kenji Saito Senior Researcher, Keio Research Institute at SFC, Keio University [email protected] “Beyond” Blockchain as an Industrial Tool — 2019-07-09 – p.1/14
Keio University Chief Science Officer, BlockchainHub Inc. Representative Director, Beyond Blockchain Representative Director, Academy Camp Bio M.Eng in Computer Science from Cornell University, 1993 Ph.D. in Media and Governance from Keio University, 2006 (on digital currency research) Conducting research on P2P (Peer-to-Peer) and digital currencies at Keio University for more than 18 years Representing “Academy Camp” for children in Fukushima since summer 2011 Last summer, at SFC, we held Academy Camp 2018 Summer “OK Google, Do My Homework!” This summer, at SFC, etc., we will hold Academy Camp 2019 Summer “REINVENT THE WORLD” → Connected in my mind (I believe that children should partake in social design hereafter) “Beyond” Blockchain as an Industrial Tool — 2019-07-09 – p.2/14
so that their existence and content cannot be denied by anyone Many have talked about possibilities of applying the technology widely, not limited to financial fields where it was originated On the other hand, many inherent problems of the technology have also been known In this talk, we try to grasp the essential reason for the existence of this technology, and introduce a new design that would solve many of the problems, and think about the value of the enhanced version of this technology to many industries “Beyond” Blockchain as an Industrial Tool — 2019-07-09 – p.3/14
nobody stop anyone from spending their own money (no denial of transactions) → (Payment) records can be proven (that they have not been altered) Proven = independent from authority = no trust on the center ⇒ rather, the center should be automated Fuss over what are really “features of the Internet itself” Which are not unique to blockchains, and blockchains cannot really provide them by themselves “Decentralization”, “consensus”, “zero downtime”, “secure”, “low-cost sharing”, . . . , etc. The worst is perhaps “consensus” Confusion between a casual everyday word and a computer science (CS) term What it really means is automatic selection of one record among contradicting many (consensus in CS) “Matching intentions” can be represented by multi-signatures (consensus is expressed on the data after achieving an agreement elsewhere) “Beyond” Blockchain as an Industrial Tool — 2019-07-09 – p.4/14
to people is like “explaining how vacuum tubes work to would-be YouTubers” Name of Technology Tele-vision Ledger Real Goal To transmit images to remote places To prove that records have not been altered (in order to freely spend money) First Technology Brown (Vacuum) Tube Blockchain First Model TV Bitcoin Evolved Into YouTube, Skype, etc. ???ɹ (Real applications) The first technology and first model become obsolete . . . Evolve so that the real goal (true value) can be pursued more freely “Beyond” Blockchain as an Industrial Tool — 2019-07-09 – p.5/14
block_no : n block_no : n+1 block_no : n+2 block_no : n+3 block_no : n+1 block_no : n+2 block_no : n+3 block_no : n+4 Histroy with the largest cost to record or modify (history the most difficult to alter) is chosen Cryptographic digest of the previous block Transactions are digitally signed To create a block, its cryptographic digest needs to be below some certain number (Proof of Work) or one needs to win by voting weighted by the stakes in cryptocurrency (Proof of Stake) (costly) Creator of a block can record the reward in cryptocurrency in the block, which is effective only when the block is included in the chosen history Means are provided to confirm existence of transactions validity existence uniqueness In proof of work, cast cost of electricity balances with market price of the cryptocurrency Proof is achieved by everyone following the recording system protected by cost of cryptocurrency “Beyond” Blockchain as an Industrial Tool — 2019-07-09 – p.6/14
Validity e.g. UTXO structure and digital signature Proof of Existence e.g. hash-chain with proof of work Consent of Uniqueness e.g. Nakamoto consensus Description of Rules e.g. transfer of bitcoins - The content of a transaction cannot be altered, - not contrary to past history of transactions regarding the asset, - and the transaction is cast by a legitimate user - Cannot delete the evidence of an existing transaction in the past, - and cannot fabricate an evidence of a transaction that did not exist - When two mutually contradicting transactions are cast, (eventually) everyone chooses the same one to place in the history - Application logic to decide what valid transactions are From bottom to top (examples are of Bitcoin, but different technology can be applied in each layer) Maybe easier to read if you replace assets with “bonds” and transactions with “buying and selling bonds” Bitcoin is special because the currency does not represent debts Where’s novelty? “Beyond” Blockchain as an Industrial Tool — 2019-07-09 – p.7/14
Validity e.g. UTXO structure and digital signature Proof of Existence e.g. hash-chain with proof of work Consent of Uniqueness e.g. Nakamoto consensus Description of Rules e.g. transfer of bitcoins - The content of a transaction cannot be altered, - not contrary to past history of transactions regarding the asset, - and the transaction is cast by a legitimate user - Cannot delete the evidence of an existing transaction in the past, - and cannot fabricate an evidence of a transaction that did not exist - When two mutually contradicting transactions are cast, (eventually) everyone chooses the same one to place in the history - Application logic to decide what valid transactions are Digital signatures suffice! Needed to rely on trust! Design-dependent feature! Application layer! From bottom to top (examples are of Bitcoin, but different technology can be applied in each layer) Maybe easier to read if you replace assets with “bonds” and transactions with “buying and selling bonds” Bitcoin is special because the currency does not represent debts Where’s novelty? “Beyond” Blockchain as an Industrial Tool — 2019-07-09 – p.7/14
done without blockchain? Ex1 : Digitization of the last will and testament (just thought-experimental) Private key used for signing may no longer be kept secret after the person dies Notary testifying “preserved as signed before death” cannot be trusted (possible collusion with malicious heir) Ex2 : Online banking passbook as an evidence security (for bank’s debt) Downloaded CSV files can be fabricated by anyone, and therefore is no evidence Even so with bank’s digital signature after the private key is (intentionally) leaked Prove (instead of trusting someone’s testimony) that data digitally-signed at some certain point of time in the past has not been altered “The Last Will Test” questions whether or not your blockchain can do it Test to find out if some product someone tries to sell you as a “blockchain” is really meaningful or not Bitcoin’s blockchain is a combination of existing technology around the idea (hash-chain with proof of work) that would satisfy the true value (in certain conditions) “Beyond” Blockchain as an Industrial Tool — 2019-07-09 – p.8/14
that passes “The Last Will Test”? Some public blockchain can, while the market price of the cryptocurrency is high Protection by forcing payment of huge cost against alteration If the market price goes down, no longer trustable Most private ledgers cannot, as they just provide testimonies “Blockchain made and operated by a private company” is usually meaningless Please be careful We are developing a new technology that would pass the test BBc-1 (Beyond Blockchain One; https://github.com/beyond-blockchain) There is an inherent problem surrounding records and physical entities Including problems technology alone cannot solve (Does the public key really belong to the person?) Including openness of the source code, roughly speaking . . . It is the question of “how we can trust automated mechanisms” “Beyond” Blockchain as an Industrial Tool — 2019-07-09 – p.9/14
⇒ No probabilistic behavior before commitment of a transaction Difficulty to conceal (securing verifiability by all) ⇒ Conceal content of transactions outside application domains Oneness (distribution vs. replication) Not scalable (cannot scale if replicated for all) ⇒ Scales out by domains, and DHT, etc., can be applied within a domain Difficulty to evolve (cannot change if everyone needs to be doing the same things) ⇒ Autonomy within domains (don’t care intra-domain protocols) Incentive mismatch Supported by the price of native currency (all applications stop upon market crash) ⇒ No native currency, and Proof of Context is mutually beneficial Proof of Context : embeds evidences (digests) of transactions in unrelated contexts among randomly selected domains, and makes them searchable “Beyond” Blockchain as an Industrial Tool — 2019-07-09 – p.10/14
Preserved . . . Fair preservation of documents is to fix the common understanding in society Documents are the cornerstone of society (e.g. text of law) (Is putting them on GitHub an answer? ← Washington D.C. example) Also at the heart of automation (e.g. automatic contract enforcement) Computer program code is also a document in the first place ↑ The true value of so-called “smart contracts” Ensuring the authenticity of the program code being executed Perhaps that for P2P code is a special case (e.g. Ethereum) Whether or not you can place the trust of the society in a system of digital document management is the basis for solving many problems that may be possible with “blockchains” “Automation (of the center)” is an important keyword “Beyond” Blockchain as an Industrial Tool — 2019-07-09 – p.11/14
of use / ownership, for public goods in particular It can be said that money was the first application as it is a public good Can provide proof of existence For notarization (e.g. digitization of the last will and testament is possible for the first time) For managing supply chains (needs to be careful about matching records and physical entities) Can dismantle banks and financial institutions . . . Money transfer bypassing the banking network Can freely design monetary media (the world with so-called “token economy”) Complicated when lots of new monetary media come out . . . Assumed that money becomes invisible, and complicated operations related to their use will be performed by a software agent belonging to each person “Beyond” Blockchain as an Industrial Tool — 2019-07-09 – p.12/14
will have new eyes, ears, arms and legs Ex1 : Can know “rain clouds are approaching Fujisawa” wherever you are ← We’re here Ex2 : The robots will take in and fold home laundry Many things are automated ⇒ Money is no longer necessary? (1) Money as compensation for labor, and “labor” will change (2) “Double coincidence of wants” is automated, or “exchange” itself becomes obsolete ⇒ But is the information known through the new eyes and ears correct? And is the judgment of control correct, fair, and unbiased? “how we can trust automated mechanisms” ← where ledger technology comes in “Beyond” Blockchain as an Industrial Tool — 2019-07-09 – p.13/14
hidden sub-problem of “sustainable resistance” Can it endure maintenance of the testament written at the age of 50 while occasionally renewing it in a hundred years of life? In any case, the ability to create an information infrastructure that will last for a long time is an important issue I think it is necessary to break the dependence on cryptocurrency to solve this What is now called a “blockchain” needs a new design In any case, it is important to consider “what is the problem to solve?” Rather than making money or spending it freely (the motivation for Bitcoin), it should be necessary to consider how the consumer society is creatively destroyed by the evolution and deepening of digital technology and its acceptance in the first place “Beyond” Blockchain as an Industrial Tool — 2019-07-09 – p.14/14
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