Decentralized Technology - Discussion

Blockchain Business Course
#21

Here is the one I originally was looking for from McKinsey, for inspiration:

image
image1037×667 87.8 KB

5 Likes
#22

Hi @filip

In the quiz on the 'Blockchain recap section", third question is “Which answers are benefist that comes from using a blockchain? (check multiple answers)”. One answer option being “Can help eliminate third-parties” but this is marked as wrong. Why? Don’t you class this a benefit?

Please can you clarify?

All the best,
Mark

#23

Thanks for the heads up. That should be correct. Sorry about that. I have corrected it now.

#24

Hi @filip and @ivan

there is no quiz in the section

#25

Sorry about that. It’s been added now. Didn’t get properly moved when we switch to the new website.

#26

Hi Filip,

Question about decentralized technology data:

  1. Bitcoin: It is straight forward as it only involves one type of transaction data, which 1 MB per block. We can download online. very huge size.

  2. Ethereum: Since it allows for smart contract, the Ethereum blockchain should be bigger size, a. may I know where is this data being stored? b. Only access by peers who involved in the contract or on the Ethereum blockchain?

  3. Hyperledge: Permissioned blockchain, example IBM Blockchain. a. Where is this data stored? In IBM data? Does it sound like a centralized database?

Thanks.

1 Like
#27

You said that in a permissioned blockchain you must trust the nodes goodwill. What can be done if they write wrong information on the blockchain though? How have permissioned blockchain out there addressed the issue, if at all?

1 Like
#28

Hi I dont understand the question. Maybe i have to watch the video again, but as I understand tit, I want to answer that if a node try to write wrong information, that block would be orphened, because it wouldn´t get the consensus from the rest of the network.

I hope that answered your question? Can you tell me what part of the course you are currently in?

Ivo

#29

Hi,

My question was referring to the class called ‘‘Permissionless vs Permissioned Blockchains’’.

I think your answer is true in the case of Bitcoin and other permissionless blockchains that have to reach a consensus. However, consensus doesn’t even happen in the other kind of blockchain, that is permissioned blockchains, because there is no reason to do it since the nodes are supposed to be trustworthy. In fact, nodes are chosen to do their “data entry” job by the owner or owners of the blockchain who probably know them personally or who have been having working relationship for years. My question is how to design such a blockchain to minimize the risks of nodes writing false information?

I will make an example we can use in the food industry which is one area where permissioned blockchains are used. Let’s say that the banana industry wants to assure the customers that its product is of the best quality possible. They industry gets together and decides to use a permissioned blockchain to do so because of its transparency property. Let’s say that a banana must meet the following criteria to meet the standard of excellence that they want to sell to the customer: a) must reach the consumer within 14 days from harvest, and b) must not be exposed to extreme heat at any point during the shipping. Because of these requirements, there are three players in the supply chain that are chosen as nodes by the council. Each node will have to write some pieces of information in the blockchain. So the first node would be a farmer, the second a transportation company and the third a retailer. At the time of harvest, the farmer writes in the blockchain the date of the harvest. Then the batch is handed to the transportation company who has to take care of the shipment across the sea. The company uses sensors in the containers to track the temperature of the cargo and writes on the blockchain whether the temperature has ever gone above 50 degrees celsius or not. If it does its bad for the bananas quality. Its cold outside so it doesn’t. Finally, the bananas get to the retailer who writes the date of arrival of the shipment. Customers can check the date of arrival and the date of harvest and make a decision whether to buy it or not. Because they are sure that these two criteria are met they can spend their money without worrying. But its not really the case is it? the shipment company could have wrote the wrong information? Especially if they had incentives to do it such as that their paycheck was at risk. How is this solved in real life?

1 Like
#30

Wow, This was the best example I have ever read. Bravo… :raised_hands: :clap:

I totally agree with you that it is not completely trustworthy as long as we humans are involved in recording the information.

But again, I think that in order for such a solution to work, it has to be a form of control of the data being recorded. I imagine that the control functions are system-based to the extent that they are digitally controlled by the system.
With the amount of data we can collect, the companies in the banana supply-chain will be able to merge and develop software that solves that. Because if all the nodes only, for example, use IoT devices to record the information on the blockchain. That can be anything from the weight of the banana box, if the box has been opened etc. etc. (This is actually done to a great extent already today.) It may not prevent the nodes from registering incorrect information, but it will allow the system to send an “alarm” to the others that something is wrong.

But I think the challenges in this kind of blockchains are and will always be the human aspect.

Ivo

3 Likes
#31

So its clear in this section that permisioned blockchain and permissionless blockchain have some trade off in terms of execution and scalability. thanks!

1 Like
#32

This section is about private and public blockchains, or to be more precise, why business does not use public blockchains such as Etherium or EOS which are blockchain platforms where you can run smart contracts.
Corporations have NEEDS when it comes to implementing distributed systems for computing or storage:

  1. Privacy - a need for storing data and code privately - this can be achieved to some extent by using encryption with public blockchains - but it is still something that companies feel uncertain about - there is uncertainty especially when storing private customer information on a public blockchain.
  2. Trust - businesses need to be able to trust the nodes in the system - with sensitive data - with sensitive data businesses have a need of trusting the nodes that get to review the data - and gets to improve the data, so they might not want random nodes to look into their data.
  3. Cost Effectiveness - businesses always strive to be cost effective, one problem with public blockchains is that they are slow and expensive to both create and to manage - this goes against many of the principles that companies are looking for when upgrading IT systems - it also needs to be an upgrade in terms of efficiency.
  4. Ease of integration - This means that a buisness will have a network of existing IT systems that need to be integrated with a blockchain (KERCHING!) because in most situations the upgrade will include a number of aspects in which the inclusion of a blockchain is one small part. A business wouldn’t use a blockchain to handle its HR system for example. The new blockchain system needs to be easy to integrate with all the existing IT systems that exist within a corporation - the public blockchains are not built with this necessity in mind - or a system might need to handle a collaboration between different business partners within the company - Public blockchains are built as a decentralised ledger that can do Turin complete computations and are not built with a business perspective in mind.
  5. Efficiency - Public blockchains are very slow due to their decentralised nature - when you have a highly decentralised system, it makes it difficult to corrupt, and it makes the computations very secure in terms of how many computers actually do the computation - but this makes the computations less efficient and the computations take a lot of time and resources. The efficiency in terms of computation in public blockchains is another factor that corporations and businesses will want to consider.
  6. Rules and Regulations - compliance. Businesses are uncertain about the rules and regulations around, for example, cryptocurrencies - are blockchains compatible with rules on privacy such as the GDPR in the EU? - businesses don’t know how to handle these uncertainties wthin the business - they don’t know what the rules are around Ether, for example - and they want to stay away from that uncertainty.
  7. Good PR - this is linked to the PR side of a business - businesses want to be seen to be trustworthy, and don’t want to be publicly associated with something that their clients might perceive as being dodgy - many people, including the public and businesses, have a perception of cryptocurrencies and associated practices such as mining, as being linked to money laundering and terror financing - from a PR perspective, they don’t want to be associated with that - also they don’t want to be associated with the stress that mining puts on the environment. Some companies are very cautious about staying away from these things.
    So, overall, a public blockchain can’t supply these needs, at least at this time, for the time being the private blockchains are more appealing to the businesses and corporations.

How do Private Bllockchains solve this?
With a private blockchain:

  1. Data and code is saved within trusted nodes - the data stays within the trusted nodes that verify and prove the blocks.
  2. No mining - no need for mining because you can trust all the nodes - therfore your data is not spread to multiple decentralised nodes - and the environmental consequences of mining are eliminated - the consensus protocol is always secure.
  3. Cheap to run due to easy consensus. In a private blockchain it’s quite easy to achieve consensus if you only have ten trusted nodes that are connected to your network, and you are business partners who are all good friends with each other - you have the same view on your business. This is very different to running a full consensus algorithm that is spread out around millions of computers around the world.
  4. Quick execution due to less decentralization - a few nodes that are known to run the code are a lot quicker than an much slower decentralized system.
  5. Easier to integrate and upgrade - Private blockchains are built to be easy to integrate into previous business logic - easier to integrate and upgrade (KERCHING!) - Public blockchains such as Etherium are immutable - can’t change a smart contract if you have published it. Difficult for a business to build on Etherium - but a private blockchain will provide the flexilbility that a business needs.
  6. More certainty about laws and regulations. - the business has more control over their own system with a private blockchain because they know where they are storing their data.
  7. No Cryptocurrecy needed to achieve the consensus - no need for a consensus algorithm that is built on financial incentives. Instead, the incentive for nodes in a private blockchain business system is that the business is going to be profitable for the long-term - no cryptocurrency required therefore they don’t have to be associated with something that they don’t like such as cryptocurrencies and mining. Businesses tend to focus on private blockchains like Hyperledger.
#33

Hi Filip, I’m still confused about why private blockchains are beneficial in the long term vs the current traditional methods of data storage.

From what I understand, the major benefit of blockchain technology is the elimination of trust by allowing for “the transfer of value between 2 parties without the need for reliance on a 3rd party intermediary”.

Surely if we have private blockchains, the only real added benefits from blockchain technology is the immutability of the data being stored on the blockchain? If so, is this truly that groundbreaking?

I don’t want to sound doubtful because I 100% see the revolutionary value in public blockchains, but am struggling to be as optimistic if we’re removing trust. Perhaps the answer to my own question is that in order to promote long term global blockchain adoption we need to start with private blockchains and then hopefully over time transition to a public version?

Thanks for the great content!

Matt

1 Like
#34

I recommend the Video on the link is the cherry on top of the cake

3 Likes
#35

@filip , first of all great course, structure and presentation - very helpful.
i chose in the quiz also “Slow transactions compared to a normal database”- why is that answer not correct? at least Bitcoin chain is super slow in comparison to VISA etc… thanks, martin

1 Like
#36

HI FILIP, done my quiz fine.

1 Like
#37

Hi @filip,

in one of your videos you said blockchain is inefficient in terms of storage of data. Can I ask why? Is it because of its decentralization and it needs to be approved by most of the nodes? In comparison with normal database where you just enter data and it is there?

Also in quiz Blockchain recap are two answers:

  • Fast transactions compared to a normal database
  • Slow transactions compared to a normal database

However both answers are incorrect as I found out from my quiz and quiz of others. Can you please explain? Thanks.

Maybe also @Fabrice or @ivga80 can help?

#38

Rofl, I answered “Fast transactions compared to a normal database” and it is also incorrect.

To be honest I spent a lot of time thinking about this answer. My final thoughts were that it is faster because there is no 3rd party through which should transaction go and therefore should be faster. However this might be different if you take different scenarios into account. I would be grateful for some explanation too.

#40

Hi!

In the beginning of ‘Blockchain recap’ video Filip mentioned a course that is called ‘Deep fundamentals’, but I can`t find it in the course list even though I have ‘Premium’ subscription (with access to all courses).

Could anyone clarify on that? :slight_smile:

1 Like
#41

Hey @yana_holoborodko, hope you’r well.

Now the Deep Blockchain Fundamentals course was a big course that has been divided into many

  • Bitcoin & Blockchain 101
  • Ethereum 101
  • Bitcoin Attacks

If you have any more questions, please let us know so we can help you! :slight_smile:

Carlos Z.

1 Like