Corporate America's Blockchain and Bitcoin Fever is Over (axios.com)

S&P 500 executives are dropping blockchain buzzwords less on earnings calls and during presentations to analysts and investors. Analysts are also asking about it less. From a report: The hype was just that. The odds of a company turning blockchain "headlines into reality" are slim, as Forrester Research predicts. The prospect of incorporating blockchain technology or cryptocurrency into businesses excited investors and drove up share prices temporarily -- just look at Kodak, beverage company Long Blockchain, or Hooters franchisee Chanticleer Holdings -- so it's no wonder executives wanted shareholders to know that they too might get in on the new technologies. At the peak earlier this year, "blockchain" was mentioned 173 times, according to an analysis of company transcripts by Axios. The number has since fallen as much as 80%.

Comments

Power requirements

[john83]

Can someone who knows more about these things comment on the efforts to make blockchain realisable using less power than, say, Denmark? That seems like the single largest hurdle to it potentially taking off.

Re:Power requirements

[Mathinker]

I'm certainly no expert, but last time I checked, Ethereum was trying to get a viable proof-of-stake algorithm up and running.

Re:Power requirements

[InvalidsYnc]

Blockchain and huge power requirements aren't synonymous. Bitcoin, and other cryptocurrencies that use the technology are where the power usage is, and that is because it is actually built into the algorithms for the currency.

Blockchain methodologies are actually very cheap to compute and use, it just the matter of other resource usages over time as the "chain" spreads out and is housed in more places in part or in whole. A big chain can be many, many petabytes in aggregate stored over hundreds and thousands of machines. That doesn't even cover the bandwidth required to transmit all of that data. Granted, some chains are "self contained" in that they aren't spread widely, mainly used in house, but they can be anywhere in between.

Anyway, that's my take on it. Not an expert by any means. Some some schmuck with an opinion.

Re:Power requirements

[quarrel]

Blockchain does not particularly need a lot of power.

However, some of the alt-coins that are implemented using the blockchain, such as Bitcoin and Ethereum, rely on an ever increasing amount of CPU cycles (effectively) to "mine" a new coin. If they didn't, all the coins would just get mined and that'd be that (which can be fine too). This uses lots of power.

There are lots of other blockchain techs and other alt-coins that just have all coins essentially pre-mined. The biggest of these in probably Ripple / XRP.

Another alternative is someone comes up with some other proof-of-work scheme that involves some other type of work, or that takes type but isn't particularly electricity dependent. I don't know what such tech would look like though, and it may not exist :)

Re:Power requirements

[religionofpeas]

It's not the blockchain technology itself that requires a lot of power. What requires the power is the distributed trust model (which bitcoin uses).

You could make a public blockchain where a central trusted agent just signs all the blocks with their private key. This would take no effort at all, and would be suitable for most private companies. The rest of the world can verify all the transactions, but cannot add to them directly.

Re:Power requirements

[jythie]

The power requirements only get high if your ecosystem involves competing over solving the blocks, it becomes an arms race. If you are just using the blockchain as a tool to track things then the power requirements are fairly inline with other tools like conventional databases.

Re:Power requirements

[DontBeAMoran]

And while they're trying to do that, Reddcoin has been using proof-of-stake for years.

Re:Power requirements

[Anonymous Coward]

"Anyway, that's my take on it. Not an expert by any means. Some some schmuck with an opinion."

Because we don't have enough schmucks with opinions around here ...

Re:Power requirements

[ceoyoyo]

Blockchain weirdly conflates a bunch of things. Any shared writeable document, whether it's a hash tree or not, needs to have rules to decide when and who is allowed to edit it. For cryptocurrencies, the document is public, and enforcement of the writing policy is done by public agreement.

Bitcoin bases the right to write on computing power. Write opportunities are assigned in a weighted random way, where the weighting is determined by the relative amount of compute power you're willing to dedicate to the competition. So if lots of people want to write to that document....

You can imagine other schemes. Many of the crypto currencies are considering or use a "proof-of-stake" where the weighting is based on how much of the currency you own.

You must have a way of assigning authority. Every method has downsides.

Re:Power requirements

[mysidia]

The power requirements only get high if your ecosystem involves competing over solving the blocks

And if your ecosystem doesn't involve competing over a scarce resource to solve blocks; then the entire ecosystem is at greater risk that a single actor, such as a nation state, can get enough computing power to rewrite the entire chain.
POW secures Bitcoin, because not even a 3-letter agency could afford to procure enough computing power to double-spend or rewrite history. "Blockchains" that aren't reliant on a scarce resource won't work, because there are single actors out there who can afford to corrupt the network.

Proof of Stake coins like REDD have a similar issue ---- instead of the validation power being distributed rather well, and anyone that can stand up a mining operation of a certain size - Under PoS the power is concentrated in a small number of entities (usually the founders) that horde large quantities of the coin; corrupt 1 or 2 of these people, and you can undermine a Proof of Stake coin easily ---- that is well within the compass of a state actor to do : target the people Hording / HOLDING / MINING PoS crypto. And the perfect pre-text exists to do so...... controlling a large number of crypto tokens can be deemed a basis for suspicion

Re:Power requirements

[religionofpeas]

Blockchain refers specifically to the distributed nature of the beast where there is no possibility of a central trusted authority.

The essence of a blockchain is just a set of transactions, combined in blocks, where each block contains a secure hash of the previous one, hence they form a chain. It is typically used in a distributed fashion, but that doesn't mean that this is the only possible way to apply the technology.

(if the data is in one place then there is only one place to change it)

No, because if all the blocks are published, and stored in multiple places, then it's impossible to change any of them without people noticing.

(if there is only one place the calculation has happened then how can you verify it is correct).

You can verify the correctness by means of the public key that's also published.

Re:Power requirements

[Immerman]

Not quite - nothing in the spec inherently requires the amount of processing power to increase. Instead the difficulty of adding a new ledger page scales automatically so that new pages are added at a roughly constant rate (I want to say one every 14 minutes) no matter how much computing power is applied to the task.

Where the upward spiral comes in is in the incentive structure - adding a new page of transactions essentially requires computationally expensive gambling, and the faster pages are created, the lower your odds of "winning" in any given attempt to add your page and claim the reward (transaction fees offered by users, and at least early on, a steadily decreasing "page bounty" (aka "mining"), where one of the transactions you record is "$bounty_amount new money added to my account".)

So, by using more power you increase your odds of "winning" by the simple method of "buying more tickets" in the same amount of time. But when everyone does that, the rate at which new pages are added starts to increase, and the governing algorithm automatically lowers your odds of winning to compensate.

Long story short, if everyone agreed to cut their "mining" power to 1/100th of the current amount, the algorithm would automatically adapt and transaction rates would remain unchanged. Everyone would win, except the people selling mining hardware. Unfortunately, so long as the average cost of the electricity and amortized hardware required to add a new page is lower than the total reward, there's constant incentive for everyone to steadily increase the amount of power they're using.

Re:Power requirements

[Immerman]

It's not explicitly in the software spec, but it's pretty much an inevitable result of the incentive structure created by that spec.

In other words, the problem isn't in the algorithm itself, it's with the humans who behave exactly how the algorithm was designed to encourage them to behave. Which is to say... it' *is* the algorithm's fault - it's just in the part that runs on humans, rather than on computers.

Re:Power requirements

[Immerman]

I should qualify that with "as used by Bitcoin and similar proof-of-work blockchains"

Re: Power requirements

[iggymanz]

You were misinformed, crypto currency does not use such levels of power, absurd hysteria aped by popular press. If you look at the original IEEE article about the "aburd" power consumption of crypto currency, it compared to city

A little logical reflection would make one realize the planets porn industry takes more electricity

Bitcoin and similar may be stupid and wasteful, but not at that level

Re:Power requirements

[jdavidb]

Granted, some chains are "self contained" in that they aren't spread widely, mainly used in house

Other than testing, can you tell me why a blockchain would be used in house, in preference to just using a database system?

Re:Blockchain is like the Internet or "the cloud"

[Anonymous Coward]

No it won't.

Those issues will never be solved. Its been like 5 years and no none has made blockchains into something useful.

Its not going to happen

Re:But the miners keep running

[religionofpeas]

Miners should be fined for every kilowatt they wasted on mining.

Yes, they already do that. It's called the electricity bill. Is that not enough ? Then raise the price of electricity.

Re:Blockchain is like the Internet or "the cloud"

[DontBeAMoran]

Those issues will never be solved. Its been like 5 years and no none has made blockchains into something useful.

Ripple has been working with banks for the last five years or so. They have a private system that works very well and is energy-efficient.

If the chain is public how do you prevent

[rsilvergun]

tampering without the large computation requirement (and matching power requirement)? And if it's not public why not just use a regular database?

I guess I still don't understand the point of blockchain by itself. I get the idea of having a distributed database. You can make your customers' computers do your database computation for you. It'd be like Bit Torrent for databases. You'd shift those costs onto your customers and they probably wouldn't notice since it's a few bucks a year in aggregate.

But then you throw in heavy users. If it's a currency you get lots of those and the chain stays "democratic" for lack of a better word; e.g. no one person can take control of the chain and make updates. But if I understand things correctly it's a mess if one person has too many nodes on the chain. They can start controlling what gets committed to the chain.

Again, I haven't looked that closely into it (I mostly cared because I was shopping for a graphics card a year ago and couldn't find one for less than $500 bucks). But it just seems like Blockchain doesn't really do what people wanted it to do. Bitcoin works because, let's face it, it's being used to launder money and buy drugs, so it's always got a market. But I don't see any other practical applications. By "practical" I mean, "it's the best solution to this problem".

Re:If the chain is public how do you prevent

[sfcat]

tampering without the large computation requirement (and matching power requirement)? And if it's not public why not just use a regular database? I guess I still don't understand the point of blockchain by itself. I get the idea of having a distributed database. You can make your customers' computers do your database computation for you. It'd be like Bit Torrent for databases. You'd shift those costs onto your customers and they probably wouldn't notice since it's a few bucks a year in aggregate.

Because the blockchain isn't a distributed database and who ever told you it did doesn't know the first thing about blockchains. A blockchain solves a CS problem called the Byzantine Generals Problem. It solves problems involving trust. If you want a DB, use a DB. If you want to do solve some sort of trust problem, you use a blockchain. The two are not substitutes for each other.

Re: If the chain is public how do you prevent

[iggymanz]

Ignorant point of view, of course it is a distributed database with a particular method of checksum

It's a very poor and bottlenecked one at that for normal business use, which is why interest is dying

Re:If the chain is public how do you prevent

[Immerman]

>But I don't see any other practical applications.
Two big ones spring to mind - ones that were touted even in the early days. Both are institutional rather than technical, but that's rather the point.

The first already sees widespread use:

It can be a quick, cheap, and effective way to send money overseas, especially if the banking industry in one or both countries is colluding to charge outrageous fees for international money transfers. Or if there are government regulations restricting sending or receiving such transfers, or imposing disadvantageous official exchange rates. Any idiot willing to buy bitcoin for a fair price becomes an effective end-run around such abuse of power.

The second is a bit more pie-in-the-sky (though it has seen some real-world usage in extreme situations) and depends on the speculators eventually leaving the market after the usage has become widespread enough to make it a "real" currency with a relatively stable value:

It's a currency whose value can not be effectively manipulated by governments - those entities who routinely publicly conspire to create inflation in order to promote certain economic behaviors, or just because they're broke and allowed to print money. Either way, every dollar printed steals its value from everyone who has wealth stored in dollars.

Re:Blockchain is like the Internet or "the cloud"

[Mouldy]

Those issues are being solved - and the solutions are being tested and proven right now. We live in a very exciting time. Here are some examples;
- Bitcoin's lightning network is hoping to move the bulk of day-to-day transactions off of the blockchain with only final settlement happening on-chain
- Bitcoin cash has opted to use larger blocks so more transactions can be mined into a block at a time
- IOTA & Nano's DAG offers better sharding & scalability than a traditional single blockchain
- Pre-mined coins, like Ripple, can remove the need to spend CPU cycles creating new coins if they can solve (or ignore) decentralisation via other means
- Coins like Ethereum are looking to move away from Proof of Work to Proof of Stake for a bunch of reasons, including better scalability & throughput

There are loads of cryptocurrencies that use blockchain or some derivative of it to achieve safe transactions with immutable history - which is the key use case for cryptographically secure chains of data.
Many of the buzzword-bandwagoners who haphazardly throw words like 'blockchain' into their earnings calls often miss the point of what a blockchain is good for and often just think blockchains can solve everything.

Legalize drugs

[rsilvergun]

completely. Treat the hard stuff (Meth/Heroine/Cocaine) as a medical condition. Let addicts go to gov't clinics for their fixes and the as soon as they come down from their high they go into rehab. Netherlands did this and it works. It'll kill the primary use for Bitcoin.

Then crack down on money laundering and you're pretty much set. This crack down is coming btw. Police are slow to react to new tech, but it's not hard to trace money laundering through Bitcoin. It works today because the police haven't caught up. They will in a few years. There's already been a few folks nailed for money laundering via bitcoin and they'll be more soon.

Anyway do those two things and Bitcoin goes back to being a curiosity and a hobby toy for anarchists. It's too slow for regular transactions and the solutions to the speed problem all have centralized authorizes similar to how the Credit Card companies work or they're easy for hackers to break.

Re:Legalize drugs

[drinkypoo]

The money laundering crackdown is in progress. Governments and financial institutions move slowly, but they have been doing things to move that agenda forwards. In fact, they've even been doing it on the high end! Even the USA has been going after tax havens, for example. Reporting for so-called "suspicious transactions" has been ratcheted up, and civil asset forfeiture is still in full swing.

Legalizing drugs, on the other hand, is not going to happen any time soon. A few small countries will do it, but there's too much money involved in enforcement and punishment in the big ones.

Re:Legalize drugs

[sfcat]

Then crack down on money laundering and you're pretty much set. This crack down is coming btw. Police are slow to react to new tech, but it's not hard to trace money laundering through Bitcoin. It works today because the police haven't caught up. They will in a few years. There's already been a few folks nailed for money laundering via bitcoin and they'll be more soon.

The AML laws came in after 9/11, about 17 years ago. They are very strict and evolving to be more strict. At first, the bank had to file a special form with the IRS for every transaction over $10,000. Then it became an issue if you made many transactions with values just less than $10,000. Now you must file these IRS forms for any aggregate set of transaction over a certain amount (I think something like $100K, not sure it changes frequently). Also, most criminals don't use BTC these days even if they do use various forms of crypto.

Re:Legalize drugs

[drinkypoo]

Just curious, but are you specifically talking about 'hard' drugs? Or is Canada considered a small country? (Or, on the off chance you missed it, they recently legalized recreational cannabis, it is being sold in most provinces by the government run liquor corporations).

I'm specifically talking about "all" drugs, as was proposed above. There's too much popular support for cannabis for prohibition on that to continue for long in most of the civilized world.

Re:But the miners keep running

[religionofpeas]

So I should have my power prices raised because some asshole neighbour with a twenty gpu rig is busy calculating hashes?

Yes. The other solution requires defining what is wasteful/rightful use of electricity, and setting up a special police force to check on everybody's private life to see whether they are compliant. Oh, you're watching foreign cartoons on a big plasma TV ? Sorry buddy, can't tolerate that.

Yes, it's a fucking database

[Wraithlyn]

"A blockchain, originally block chain, is a growing list of records, called blocks, which are linked using cryptography." - https://en.wikipedia.org/wiki/...

How is a list of records NOT a type of database?

The above article then goes on to describe blockchain technology, using the word "database" no less than 11 times.

Blockchain is also frequently referred to as a "distributed ledger":

"The distributed ledger database is spread across several nodes (devices) on a peer-to-peer network" - https://en.wikipedia.org/wiki/...

Let's lookup Cryptocurrency:

The decentralized control of each cryptocurrency works through distributed ledger technology, typically a blockchain, that serves as a public financial transaction database. - https://en.wikipedia.org/wiki/...

Looks like everyone considers it a database except you.

Re:Yes, it's a fucking database

[Immerman]

It's a data *set*, but a data*base* is designed to efficiently look up information based on various criteria, which bitcoin decidedly does NOT. A database is typically also easy to modify as needed - while the whole point of a blockchain is that it's *extremely* difficult to modify.

A vaguely similar comparison would be an Excel spreadsheet, or even a PDF file - lots of data, and unlike a blockchain it's (potentially) organized neatly. Still not a database though, it's just not designed for that job.

A blockchain such as used by Bitcoin is basically just a distributed log file with strict rules that make it difficult to add another page, and almost impossible to tamper with old pages since one of the rules is that every new page must contain a reference to the last page, along with its secure checksum. Any attempt to tamper with an old page pretty much requires that you replace every newer page as well. THAT is the power of blockchain - it creates an extremely tamper-resistant log file that can be distributed around the world without having to trust anyone involved.

Bitcoin builds upon that by using the log file to record cryptographically signed bitcoin transactions. "Replay" all the transactions recorded since the very first page was added, and you can calculate the current balance in any given account. There's lots of other implementation details, but that's the 1000' overview.

Re:Yes, it's a fucking database

[Wraithlyn]

I'm sorry but what "typical" databases do doesn't enter into it. I never said it was a typical database.

Database: "a structured set of data held in a computer, especially one that is accessible in various ways". (https://en.oxforddictionaries.com/definition/database)

A blockchain / distributed ledger clearly meets this definition.

Re:Yes, it's a fucking database

[Immerman]

So does a text file todo list.

Re:Yes, it's a fucking database

[Wraithlyn]

Yeah, that's a really great argument dude. "If a blockchain is considered a database, then so is a text file".

Please go argue with Oxford and Wikipedia about their definitions you take such issue with.

Hypino half-life ?

[thragnet]

https://slashdot.org/submissio...

How does it solve that problem?

[rsilvergun]

The wikipedia article says they did it with Proof of work. Am I just misunderstanding here? I thought the proof of work that solves the Byzantine General problem and not the blockchain itself; and that the Proof of Work step was what used all the electricity and time....

Again, I could just be misunderstanding everything. I've never found a really good explanation. Part of the problem I suspect is that money is involved and people get weird when money's involved.

Market crash looking ever more likely

[Tablizer]

Based on more than 100 years of economic patterns, the current bull market and probably the US economy in general is going to have a notable correction (recession) roughly within the next 18 months.

We are overdue by historical patterns of bull market durations, the stock market is jittery of late, stocks are far overvalued compared to earnings, the yield curve is close to inverting, trade wars are slumping many industries, and many countries are already in a recession. Predicting the future is hard, but all the usual needles are pointing the same way.

Re:Market crash looking ever more likely

[Tablizer]

There are probably too many players in the system for any one person to pull that off. At best a single person may delay the crash or speed it up.

Re: But the miners keep running

[iggymanz]

The power use isn't that great, you were duped by false articles using a snippet of the IEEE article mentioning Denmark level in the future if increasing at a assumed rate... That same article said at level of city in the present. Sorry it's not as huge as you imagined. Sure it's wasteful and a scam...

Re: Companies Who Hype...

[iggymanz]

Marketing wank's sheep spotted. Suck that buzzword dick harder and you'll get that gooey reward... That would be your own butt sweat in your otherwise empty wallet

Re:Blockchain is like the Internet or "the cloud"

[DontBeAMoran]

We are discussing the usefulness and real-world usage of blockchain here, we are not talking about crypto-currencies vs banks.

Re:Blockchain is like the Internet or "the cloud"

[Immerman]

Depends on the cryptocurrency. For most of them, before and since Bitcoin was unveiled, the answer is a surround "Not a chance!"

Very few people want to eliminate banks, most of them just want to *become* the bank. That's far more lucrative.

Latest buzzword fads

[Tony Isaac]

Blockchain solves a very specific kind of problem: one which involves the need to have "anonymous" transactions stored in a public manner. In the business world, there are not very many real applications for this. Businesses want to keep their data private, not public. They want their transactions tied to specific people, not anonymous. Yes, I'm sure there are real applications for blockchain, but it's more or less the opposite of the mentality of most businesses. The fad was always just that: a fad.

That was close.

[sabbede]

I was afraid we were dooming ourselves to another financial bubble, but it looks like business is backing out in time.