Master Card, Cisco, and Scotiabank Join the Enterprise Ethereum Alliance(entethalliance.org)
entethalliance.org
Master Card, Cisco, and Scotiabank Join the Enterprise Ethereum Alliance
https://entethalliance.org/enterprise-ethereum-alliance-becomes-worlds-largest-open-source-blockchain-initiative/
176 comments
I heard the head of R&D (of Scotiabank) talk at a conference a little over a month ago and at the time he made it seem like Scotiabank had experimented with existing cryptocurrencies and blockchain tech and were disatisfied and thought it would be some time before the technology was approachable for their bank. I guess they were just playing coy.
Or, that statement is true, but the genuinely want to explore blockchain technology and thought joining the EEA would be the best way to do that.
Quite possible. They've definitely obfuscated their hand. Their R&D department is respectable, I have to say, so I'm sure whatever approach they're taking is measured.
Seeing as the EEA is primarily a group to coordinate research and development on this implementation of blockchain tech, it makes sense to join even as an investigation into it.
Seeing as the EEA is primarily a group to coordinate research and development on this implementation of blockchain tech, it makes sense to join even as an investigation into it.
Being part of such an alliance is helpful to make sure that you can implement it once it works. It's probably not expensive for them to be part of the network and it gives them the chance to be one of the first to make use of it if they want.
I too saw that guy speak and spoke to him before he went on. Oddly dismissive of all things crypto/blockchains....
At BigDataTO/AIToronto?
There was a lot of positivity toward blockchain tech on whole. My favourite was Dr. Dan McGillivray (Associate, Yeates School of Graduate Studies)[0] dept discussing Toronto's [and Brooklyn's] microgrid projects.
I really enjoyed Suhail's[1] talk. He came from engineering as I recall, so as a lead he was very in tune with the technicals. He was also very cautious. I don't think he was too down on blockchain tech as a potential solution for certain problems (otherwise why bother experimenting), but he was very clear about their sentiment toward existing cryptocurrencies. However, I'm starting to think maybe he was referring more to Bitcoin because of the selection of his audience -- which was largely bankers and other corporate non-technicals receiving an introduction to new tech.
But overall the sentiment seemed to lean toward positivity, even if it was not directed at a singular implementation.
[0] https://www.canadianinstitute.com/ontario-power-277w15-tor/s...
[1] https://twitter.com/suhailshergill?lang=en
[1] https://github.com/suhailshergill
There was a lot of positivity toward blockchain tech on whole. My favourite was Dr. Dan McGillivray (Associate, Yeates School of Graduate Studies)[0] dept discussing Toronto's [and Brooklyn's] microgrid projects.
I really enjoyed Suhail's[1] talk. He came from engineering as I recall, so as a lead he was very in tune with the technicals. He was also very cautious. I don't think he was too down on blockchain tech as a potential solution for certain problems (otherwise why bother experimenting), but he was very clear about their sentiment toward existing cryptocurrencies. However, I'm starting to think maybe he was referring more to Bitcoin because of the selection of his audience -- which was largely bankers and other corporate non-technicals receiving an introduction to new tech.
But overall the sentiment seemed to lean toward positivity, even if it was not directed at a singular implementation.
[0] https://www.canadianinstitute.com/ontario-power-277w15-tor/s...
[1] https://twitter.com/suhailshergill?lang=en
[1] https://github.com/suhailshergill
Andhra Pradesh, one of the four who have joined this alliance in the announcement, is a state of India. Visakhapatnam is its largest city, with just about 50 million people, more than the state of California.
And it's great to see that they're interested in the technology. Blockchain could be a great way for governments to keep track of data in a transparent way and could potentially be implemented much cheaper than current database solutions.
Ethereum as a currency will never go mainstream with a price swings like this
Unlike bitcoin which was originally intended to be used by the consumer for paying for real-world things, ETH is mostly intended to be used for paying for 'gas' in order to execute code in the virtual machine. The good thing is that gas and ETH have been decoupled, which means that the gas prices are always constant, and what you pay per transaction tends to get automatically adjusted based on the price of Ether, so transaction costs don't fluctuate as much.
What you're probably interested in are "Stable Coins", crypto that is pegged to a fiat currency such as the USD or EUR. It may be possible that stable coins may be developed to run on top of Ethereum as smart contracts. One interesting project under development is Maker Dao, see https://makerdao.com/
What you're probably interested in are "Stable Coins", crypto that is pegged to a fiat currency such as the USD or EUR. It may be possible that stable coins may be developed to run on top of Ethereum as smart contracts. One interesting project under development is Maker Dao, see https://makerdao.com/
Enterprise Ethereum Alliance is not about the currency, so I fail to see how this is relevant.
No crypto-currency will be mainstream because payment verification takes longer. Credit cards can now confirm a payment in less than a second with contactless payments.
Where those technologies will rather be used is in the background. Storing those payments or access to details across companies could be done more efficiently than currently.
Where those technologies will rather be used is in the background. Storing those payments or access to details across companies could be done more efficiently than currently.
There are various price-stable currency projects hosted on the eth/evm, backed by uncorrelated off-chain and on-chain collateral.
It's still very young, and I think there may be multiple dApps built with eth that will be used in real life in the next 5 years.
maybe, but hundreds will just sit there without gas :)
I see the mastercard logo, but not included in the list.
See this reddit comment (https://www.reddit.com/r/ethereum/comments/6o2o3d/enterprise...):
>AK on behalf of EEA here. Mastercard is indeed a new member of EEA. They asked not to be in the press release document but approved being on the EEA official website. They may be doing their own communications on this.
>AK on behalf of EEA here. Mastercard is indeed a new member of EEA. They asked not to be in the press release document but approved being on the EEA official website. They may be doing their own communications on this.
If you are into the EEA, you should check it out its cousin, the Monero Enterprise Alliance: https://mea.business/
Slightly off-topic: it's a pretty unfortunate acronym, also standing for European Economic Area.
I find the backstory pretty funny (because I didn't lose money, of course): One of the leaders of Monero decided to red-team his own community.
http://bitsonline.com/fluffypony-speaks-troll-monero-market/
What are the advantages Ethereum has over Bitcoin, except faster transactions?
People like to compare the two but they are actually quite different. Bitcoin is supposed to be a store of value, Ethereum is a new decentralized web protocol. ETH is the gas used to power smart contracts on this protocol.
Aside from the technical upside of Ethereum, the community around BTC is about as toxic, fractured, and petty as it gets.
They are two different technologies for two different problems. Your question is analogous to asking what advantages gold has over oil.
Genrally:
- Bitcoin is a store of value token with the goal of becoming a decentralized reserve currency.
- Ethereum is a smart contracts token with the goal of turning all business operations into programmatic traceable transactions.
Genrally:
- Bitcoin is a store of value token with the goal of becoming a decentralized reserve currency.
- Ethereum is a smart contracts token with the goal of turning all business operations into programmatic traceable transactions.
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More capable embedded code that can implement interesting criteria to be enforced on transactions.
I'm just learning but are there any real world examples of this yet? any idea what % of transactions utilize this today?
Your probably looking for some working examples of dApps (decentralized apps). Install MetaMask for Chrome and visit one of these sites: http://etheroll.com, http://etherdelta.github.io, and http://oasisdex.com are all working examples of smart contracts at work.
>I'm just learning but are there any real world examples of this yet?
Yes. The whitepaper lists many potential applications [0]. Some interesting ones today include issuing tokens for crowdsales ("ICO"s), gambling applications (FunFair), distributed computing (Golem), peer-to-peer payments and distributed apps (Status). There are many more that I am not familiar with.
>any idea what % of transactions utilize this today?
https://etherscan.io/accounts/c lists all smart contracts along with the amount of ETH they hold and the number of transactions that have called them. This doesn't completely answer your question, sorry.
[0] - https://github.com/ethereum/wiki/wiki/White-Paper#applicatio...
Yes. The whitepaper lists many potential applications [0]. Some interesting ones today include issuing tokens for crowdsales ("ICO"s), gambling applications (FunFair), distributed computing (Golem), peer-to-peer payments and distributed apps (Status). There are many more that I am not familiar with.
>any idea what % of transactions utilize this today?
https://etherscan.io/accounts/c lists all smart contracts along with the amount of ETH they hold and the number of transactions that have called them. This doesn't completely answer your question, sorry.
[0] - https://github.com/ethereum/wiki/wiki/White-Paper#applicatio...
That is a disadvantage. You can shoot yourself in the foot with real money.
a Turing complete scripting language for smart contracts that looks like Java
Looks like JavaScript
Actually there are languages outside of Solidity, lll (lisp like) is the most intriguing to me, and Serpent(python like), there is one more (which I am failing to recall).
But Solidity is the flagship language.
But Solidity is the flagship language.
https://twitter.com/VitalikButerin/status/886400133667201024
Serpent is outdated; Viper is an up-and-coming replacement.
Serpent is outdated; Viper is an up-and-coming replacement.
They both have curly braces but...
Solidity: strong static typing, class-based, all numbers are integers.
Javascript: weak dynamic typing, prototype-based, all numbers are floats.
Solidity: strong static typing, class-based, all numbers are integers.
Javascript: weak dynamic typing, prototype-based, all numbers are floats.
That is not an advantage though.
Better politics, internally and externally. Internally because the community isn't as hardcore. Externally because it hasn't been publicly associated with black markets the way Bitcoin has.
As a relative outsider, it doesn't seem to me like ethereum has a great history of good politics, given the whole DAO, hard fork, eth classic setup (https://www.cryptocompare.com/coins/guides/the-dao-the-hack-...)
I'm not a fan of the DAO decisions, but reversing a prima facie fraudulent transaction is uncontroversial in banking.
Bigger than that is the tone with which the Bitcoin communicates. There's that prominent Bitcoin enthusiast who likes to cuss and scream and demonize perceived opponents on Twitter. There's another one (maybe the same guy?) who moderates with a vengeful bias on Reddit. That kind of shit-throwing is anathema to a large company.
Bigger than that is the tone with which the Bitcoin communicates. There's that prominent Bitcoin enthusiast who likes to cuss and scream and demonize perceived opponents on Twitter. There's another one (maybe the same guy?) who moderates with a vengeful bias on Reddit. That kind of shit-throwing is anathema to a large company.
> There's another one (maybe the same guy?) who moderates with a vengeful bias on Reddit. That kind of shit-throwing is anathema to a large company.
Also due to some being unhappy with the moderation of /r/bitcoin there's a separate community called /r/btc. Then again, there are many communities on Reddit that have split up due to disagreements about moderation, such as for example /r/meirl vs the previously vastly more popular /r/me_irl [1]. (The latter of these still has about 3x the amount of subscribers though, but /r/me_irl has grown to become large indeed.)
[1]: https://www.reddit.com/r/OutOfTheLoop/comments/3z2pax/me_irl...
Also due to some being unhappy with the moderation of /r/bitcoin there's a separate community called /r/btc. Then again, there are many communities on Reddit that have split up due to disagreements about moderation, such as for example /r/meirl vs the previously vastly more popular /r/me_irl [1]. (The latter of these still has about 3x the amount of subscribers though, but /r/me_irl has grown to become large indeed.)
[1]: https://www.reddit.com/r/OutOfTheLoop/comments/3z2pax/me_irl...
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It's weird to me that the justification is "banks do this all the time" when the whole point of cryptocurrencies is to not replicate the bank system.
ETH is a premined coin, that is also much more centralized that bitcoin
the developer experience and tooling is easier the bitcoin I believe, it has an official javascript api for its blockchain, and also has a framework/language (Solidity) for creating financial applications on top of it
I would also list this in the "con" side. It can be very difficult to spot malicious bugs in the blockchain scripts.
The price is lower and market less deep so it is easier to get rich by buying now.
> The EEA describes itself as a standards group designed to help enterprises build their own interoperable technology, mostly using private versions of the ethereum blockchain.
Ether price soaring right now, but isn't Master Card's bussiness direct competition of the public Ethereum blockchain as a payment system?
Ether price soaring right now, but isn't Master Card's bussiness direct competition of the public Ethereum blockchain as a payment system?
I don't understand why the coin would increase in value, it's the tech that they are looking at, to use among themselves on private block chains.
For now, because the public chain doesn't have the privacy and scalability they need. They expect that to change, and which point they plan to migrate some applications to the public chain. In the meantime they're being careful to stay compatible, and contributing development resources. Also JP Morgan has a client that bridges public and private chains.
Source: I watched the EEA conference, and some smaller presentations later.
Source: I watched the EEA conference, and some smaller presentations later.
Interesting, are they funded in anyway by eth coin?
As far as I know the big corporations haven't invested in ETH. There are also some ICO-funded startups involved. I don't think the Ethereum Foundation is funding any private chain efforts, though they are collaborating with the EEA.
Them using the tech privately is seen as an indication of support (or at least interest) in the platform. So the public coin benefits from exposure and validation of its tech.
Ethereum is a platform and is not meant to be a payment system per se. One can however build a payment system (and other things) on top of the platform.
They were reportedly doing research about two months ago into using Ripple as a cross border payment solution.[0]
Circle is using Ethereum presently for cross-border payments.
It might be that they're investigating Ethereum for a similar purpose.
[0] edited for link: http://www.amis.org.mx/amis/img/convenciones/2017/PDF/Plenar...
Circle is using Ethereum presently for cross-border payments.
It might be that they're investigating Ethereum for a similar purpose.
[0] edited for link: http://www.amis.org.mx/amis/img/convenciones/2017/PDF/Plenar...
I have always thought that but it just crossed my mind that credit cards are basically just terrible loans. You could still give out loans in cryptocurrencies. Maybe Master Card could just switch if a particular crypto currency gained wide adoption. They could start issuing new cards with some sort of technology that allowed for cryptocurrency transactions at businesses. Or maybe they can use existing card tech, I really don't know anything about that.
What makes them terrible loans?
Also, much of the benefit of credit cards is from the fraud protection and mediation that companies provide -- it's not so much that they're loaning me $X00, but that they're covering the transaction details against fraudulent use and provide a dispute mechanism if don't feel the merchant has lived up to their offer post payment.
I find it much more likely that MC is trying to be the MC of cryptocurrencies -- eg, by packaging up a USB dongle that automates transactions using "secure" means, which they then insure against abuse. From that perspective, ETH makes a reasonable platform.
Also, much of the benefit of credit cards is from the fraud protection and mediation that companies provide -- it's not so much that they're loaning me $X00, but that they're covering the transaction details against fraudulent use and provide a dispute mechanism if don't feel the merchant has lived up to their offer post payment.
I find it much more likely that MC is trying to be the MC of cryptocurrencies -- eg, by packaging up a USB dongle that automates transactions using "secure" means, which they then insure against abuse. From that perspective, ETH makes a reasonable platform.
I think he just meant because it's a 20%+ loan typically. But really a person shouldn't be holding a balance on a credit card.
Credit card loads are the best to me as a consumer, since there is 0% interest for 1,5 month on average.
So maybe I don't understand this, but one of the purported advantages of cryptocurrencies is that the supply cannot be expanded by loose credit.
Thus it is seemingly impossible (to me at least) for a bank to for a bank to extend credit.
Thus it is seemingly impossible (to me at least) for a bank to for a bank to extend credit.
Even if the supply of the currency can't be expanded, can't credit still be issued from the supply of currency that the lender has?
Not really. Ethereum payments sell on being trustless, which means you have to upfront the money. Mastercard deals in credit. You'll never get the benefits of a credit based system in ethereum. This is why all ethereum dapps stink so far too. People are used to exchanging trust for goods and perks.
mastercard deals in credit? banks deals in credit, mastercard is a payment network.
This is true. But mastercard facilitates the liquidation of this credit via their payment systems, which people will continue to use. Initially people will likely use ether as a store of value/hedge against the traditional economy. Also dapp fuel, as we all hope.
Furthermore, take a look at coinbase as an example of a company profiting heavily on this new payment system. Mastercard has an opportunity to capture some of the new value being created in the ecosystem. They don't have to fall off the map if we all start using ether. If they do, they failed to innovate. I suspect their execs understand this.
Furthermore, take a look at coinbase as an example of a company profiting heavily on this new payment system. Mastercard has an opportunity to capture some of the new value being created in the ecosystem. They don't have to fall off the map if we all start using ether. If they do, they failed to innovate. I suspect their execs understand this.
Coinbase makes a percentage on each purchase/sale of a cryptocurrency, much like how a bank makes money when we buy forex. As far as I know, they don't take a fee for transfers of cryptocurrencies, which is more along the lines of what Mastercard does.
It's too bad that Etherium prices are down so much right now from a few weeks ago.
Does that make it a good time to buy?
It's only bad if you bought in at the peak expecting it to keep climbing.
ETH price fluctuates wildly. The latest dip had no real connection to any news, all speculation.
My advice: If you believe in the tech, buy in. If you are looking for a get-rich-quick investment, be prepared to lose a ton of money.
ETH price fluctuates wildly. The latest dip had no real connection to any news, all speculation.
My advice: If you believe in the tech, buy in. If you are looking for a get-rich-quick investment, be prepared to lose a ton of money.
The only tech you need to technically believe in is that blockchain could be used as a currency - which it already does act as, and then it is a matter of adoption.
Which blockchain? In the long run, most likely a blockchain would be used as a currency and it will have a quite large market cap, and the others will be near zero.
Indeed, which, and how does that winning blockchain algorithm allocate value. And will it be society as a whole that decides or the people who will gain the most value from their blockchain being adopted - with current algorithms making the earliest adopters have more value/other peoples' wealth transferred to them?
It seems like Ethereum is getting a lot more industry support than Bitcoin ever did.
If Ethereum continues it looks like it could kill off Bitcon, the looming possibility of a hard fork might be contributing make that happen really soon.
If Ethereum continues it looks like it could kill off Bitcon, the looming possibility of a hard fork might be contributing make that happen really soon.
Is this industry support, or more collaborative research project like R3?
I have talked to some bank representatives, and while they have been testing ethereum technology, they do it on their private chains on their private networks. No word of production use. In general banks seem to budget a lot of funds towards various r&d activity, on which majority of stuff never ends up anywhere.
I have talked to some bank representatives, and while they have been testing ethereum technology, they do it on their private chains on their private networks. No word of production use. In general banks seem to budget a lot of funds towards various r&d activity, on which majority of stuff never ends up anywhere.
It's industry support for this particular implementation of blockchain tech, which seems to have a validating effect on the larger community surrounding it.
There have been talks/speculation about interaction between the public chain and private chains in an analog to internet/intranet relationships -- that is, being of a common protocol.
There have been talks/speculation about interaction between the public chain and private chains in an analog to internet/intranet relationships -- that is, being of a common protocol.
The question is, do they use or plan to use this technology in production? I very much doubt that, at least anytime soon. However great opportunity to pump the price :)
I suppose it depends on whether or not their work with other members of the EEA produces anything viable. If not, c'est la vie. It's a step in that direction, though.
I think it's definitely a plus to have industry-experienced groups participating in looking into whether or not the tech is worthwhile. (It's kind of the Jobs-mind to the Wozniaks who dominate the space presently)
I think it's definitely a plus to have industry-experienced groups participating in looking into whether or not the tech is worthwhile. (It's kind of the Jobs-mind to the Wozniaks who dominate the space presently)
It might just be research on private chains for now but that is something I never saw someone as big as MasterCard do for Bitcoin.
The hard fork will likely have enough hash rate and industry support that it will go smoothly.
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I suppose the Enterprise Ethereum Alliance should be contrasted with IBM and friends Hyperledger. These are a couple of well backed consortia which from 30,000 feet are similar.
https://www.hyperledger.org/
https://www.hyperledger.org/
What exactly is hyperledger solving?
From what I have seen and read, they aren't solving problems that haven't already been solved, merely attempting to improve the security and efficiency of a solution. One example they have touted is their work with Maersk on tracking shipping containers and their contents in a tamper-proof fashion as well as providing a way to interact with that data. Will any of this really result in greater efficiency, interoperability and savings? Time will tell.
Always surprises me a bit because it seems to me like those large corporate players don't necessarily need all the features offered by Ethereum (or Bitcoin), especially proof-of-work, since there's enough non-adversarial cooperation between them that a simple distributed ledger with traditional (efficient) consensus mechanisms would suffice for most of their applications. They wouldn't have to deal with the drawbacks of Ethereum's very strict threat model.
I'm curious what applications they have in mind, or if they maybe just participate to get in on the hype and explore their options.
I'm curious what applications they have in mind, or if they maybe just participate to get in on the hype and explore their options.
Why the assumption they have "applications" in mind?
Big-corps sit on piles of cash. They have an "innovation department". They have VC arm. They throw money in accelerators, they organise fintech hackathons, They invest in small startups. They do many a strange thing with their money!
EDIT:
>just participate to get in on the hype
This.
Big-corps sit on piles of cash. They have an "innovation department". They have VC arm. They throw money in accelerators, they organise fintech hackathons, They invest in small startups. They do many a strange thing with their money!
EDIT:
>just participate to get in on the hype
This.
Those companies are using Ethereum without PoW in their private networks. They plug in a different consensus model.
Are they? I know it's possible but I can't think of a single use where traditional software and/or contracts are more convenient.
What does Ethereum with no PoW bring to the table?
What does Ethereum with no PoW bring to the table?
I don't understand what you mean by this. To my understanding, the companies' transactions/data are either on the Ethereum blockchain or not. Do you mean that they are using some other type of distributed ledger algorithm unconnected to Ethereum?
You can use the Ethereum project code to speed up and reduce the cost of development, since a lot of man-hours has gone into R&D by the Ethereum foundation (you fork the codebase). Ethereum is open source, anyone can do this. EEA members will likely run private, permissioned blockchains, likely using proof of stake or some other energy efficient consensus mechanism.
When you use a private blockchain, I like to think of it as being a bit like using a corporate intranet vs the public internet. It's disconnected, but it's possible at some point that data will flow across the public Ethereum blockchain if it's in the members' interest.
For example, imagine a private, permissioned blockchain using proof of stake for the insurance industry[1]. Since it's permissioned, only the major players get invites, and since they know each other, trust is higher than on a public blockchain. Each player has a certain number of shares/tokens, used to validate transactions. They use this to streamline their business. At some point (purely speculative on my part) they may wish to share information with some other entity who is not a part of their private blockchain. It's possible that data from the private blockchain could pass along the public Ethereum blockchain at this point, perhaps to an external auditor, regulator, other financial institution, etc.
[1] There is a proof of concept in this vein- http://www.swissre.com/reinsurance/insurers_and_reinsurers_l...
When you use a private blockchain, I like to think of it as being a bit like using a corporate intranet vs the public internet. It's disconnected, but it's possible at some point that data will flow across the public Ethereum blockchain if it's in the members' interest.
For example, imagine a private, permissioned blockchain using proof of stake for the insurance industry[1]. Since it's permissioned, only the major players get invites, and since they know each other, trust is higher than on a public blockchain. Each player has a certain number of shares/tokens, used to validate transactions. They use this to streamline their business. At some point (purely speculative on my part) they may wish to share information with some other entity who is not a part of their private blockchain. It's possible that data from the private blockchain could pass along the public Ethereum blockchain at this point, perhaps to an external auditor, regulator, other financial institution, etc.
[1] There is a proof of concept in this vein- http://www.swissre.com/reinsurance/insurers_and_reinsurers_l...
By joining the EEA you are not committing to use the public Ethereum blockchain.
In most cases, I think companies are likely to use the Ethereum codebase and run their own private chain using their own servers.
That mostly defeats the purpose of a blockchain, but it arguably still provides more security than using a single, centralized database somewhere.
In most cases, I think companies are likely to use the Ethereum codebase and run their own private chain using their own servers.
That mostly defeats the purpose of a blockchain, but it arguably still provides more security than using a single, centralized database somewhere.
It's not, they're on enterprise eth, it's just being used to hype regular eth
>> maybe just participate to get in on the hype and explore their options.
Yes. Or rather a small group in the company, that is trying to get political advantage, improve its profile, or simply impress the boss' boss, put together a convincing internal reason to join the alliance, and with high enough backing it becomes real. Something like that project was undoubtedly tried in every major bank and finance house - the few that got through shows that the internal decision making at those other places is actually working quite well :-)
Yes. Or rather a small group in the company, that is trying to get political advantage, improve its profile, or simply impress the boss' boss, put together a convincing internal reason to join the alliance, and with high enough backing it becomes real. Something like that project was undoubtedly tried in every major bank and finance house - the few that got through shows that the internal decision making at those other places is actually working quite well :-)
EDI and other JIT Hub technologies have nonrepudiation as a core feature. I always wondered if blockchain could be adapted for that. If so then it would make sense for almost every B2B interaction.
I thought this Factom video was interesting, describing how companies like BoA paid billions of dollars in fines due to fraud in mortgages. Presumably, if the documents were on the block chain this could be adverted.
https://youtu.be/2Dj3qZeSLdY
https://youtu.be/2Dj3qZeSLdY
I'm really surprised at seeing Govt. of Andhra Pradesh here. Curious how they got here in the first place.
Microlending applications?
Based on this, it seems to me that financial corporations didn't want to take the risk of decentralized crypto-currencies making them obsolete, so they decided to create their own crypto-currency, one they can control...
Regardless of your opinions about Ethereum, its origins were decidedly non-corporate.
According to Wikipedia it was started as, and at, a Swiss corporation, followed by raising a crowd investment.
So it was a funded corporation before it was a cryptocurrency.
So it was a funded corporation before it was a cryptocurrency.
however that swiss corporation is Ethereum Switzerland GmbH which kinda exists for the sole purpose of making Ethereum
That is the opposite of the truth.
At this time, there are 78 comments to this post, none of them addressing technical concerns. Quite unusual for HN.
I've devoted my life to cryptocurrency since 2011 and still question whether or not this system even makes sense. It seems too expensive with the technology we have today. Once privacy, such as zk-SNARK, is added, it becomes unreasonable.
Perhaps this is what a bubble looks like. I wasn't there for the dotcom boom. Loss of critical thinking.
I've devoted my life to cryptocurrency since 2011 and still question whether or not this system even makes sense. It seems too expensive with the technology we have today. Once privacy, such as zk-SNARK, is added, it becomes unreasonable.
Perhaps this is what a bubble looks like. I wasn't there for the dotcom boom. Loss of critical thinking.
I think there is little technical to discuss at the moment, because a lot of these companies have not made their direct technicals known. In fact a few of them have been patenting development[0] they've done with blockchain expressly to protect it from the public (and as one would assume, any potential for gain).
We can only speculate on the technical problems if we don't really know for certain what the application is that they have in mind.
Everybody seems to see value in blockchain tech, though nobody seems certain what the best applications of it are. I admired the UN's use of Ethereum as a tokenized payment method for refugees to 'purchase' relief supplies at camps in Jordan[1]. Problem is, scale that up to consumer-level transactions and we have a problem (at present, anyway).
If you want to go back to discussing the root viability of Ethereum's tech, sure -- but I think that's another subject than the main one in this thread.
[0] https://www.bloomberg.com/news/articles/2016-12-21/who-owns-... [1] https://www.wired.de/collection/tech/blockchain-fluechtlinge...
We can only speculate on the technical problems if we don't really know for certain what the application is that they have in mind.
Everybody seems to see value in blockchain tech, though nobody seems certain what the best applications of it are. I admired the UN's use of Ethereum as a tokenized payment method for refugees to 'purchase' relief supplies at camps in Jordan[1]. Problem is, scale that up to consumer-level transactions and we have a problem (at present, anyway).
If you want to go back to discussing the root viability of Ethereum's tech, sure -- but I think that's another subject than the main one in this thread.
[0] https://www.bloomberg.com/news/articles/2016-12-21/who-owns-... [1] https://www.wired.de/collection/tech/blockchain-fluechtlinge...
It'd be great if you could expand on that. Why doesn't it make sense, why is it too expensive, why unreasonable?
Not the poster above, but I think the main issue is with the cost to provide proof of work in a trustless network. For example, bitcoin is already at or close to the point where the most efficient mining operations have a hard time turning profit without a major bubble drawing in outside capital. 3 years from now it may well be unsustainable.
Isn't it by design? The Bitcoin difficulty move depending on the mining power, thus lowering or increasing the cost of operating a miner. If it's unsustainable, then miners will go out, the mining power will decrease and it will cheaper again.
I guess an outside force (private corporation or government) can try to leverage that as a weakness by injecting capital into their own mining operation, thus making it unsustainable for miner to operate and then getting the majority but that would be a whole other story (and we would still have ways to mitigate it).
There could also be some kind of critical point where too many miners keep doing it unsustainably, in hope to survive longer than others and stay up (but that would be absurd, they could just start it up again later when it will be sustainable again, but humans are humans...). They all close at a similar point and the difficulty stay way too high and it's literally too expensive to reach the next difficulty change. Even then, we could try to inject cash at that point or developpers may force a difficulty change... but it may be too expensive and we abandon Bitcoin because of that.
I guess an outside force (private corporation or government) can try to leverage that as a weakness by injecting capital into their own mining operation, thus making it unsustainable for miner to operate and then getting the majority but that would be a whole other story (and we would still have ways to mitigate it).
There could also be some kind of critical point where too many miners keep doing it unsustainably, in hope to survive longer than others and stay up (but that would be absurd, they could just start it up again later when it will be sustainable again, but humans are humans...). They all close at a similar point and the difficulty stay way too high and it's literally too expensive to reach the next difficulty change. Even then, we could try to inject cash at that point or developpers may force a difficulty change... but it may be too expensive and we abandon Bitcoin because of that.
>There could also be some kind of critical point where too many miners keep doing it unsustainably, in hope to survive longer than others and stay up (but that would be absurd, they could just start it up again later when it will be sustainable again, but humans are humans...).
This is not absurd at all, most miners have a lot of sunken capital as well as ongoing costs such as fixed term rent and electricity contracts they cannot easily get out of, thus many continue to operate at a loss just in case price improves over time. A lot of traditional businesses also follow this model.
This is not absurd at all, most miners have a lot of sunken capital as well as ongoing costs such as fixed term rent and electricity contracts they cannot easily get out of, thus many continue to operate at a loss just in case price improves over time. A lot of traditional businesses also follow this model.
Ethereum is planning a switch away from proof of work.
It's unclear whether or not the alternative 'proof of stake' technique will be more efficient than proof of work. It is susceptible to abuse, and is likely to require an arms race of CPU power to prevent attackers from abusing it.
It's definitely more efficient than proof-of-work, since no energy is burned off with the only purpose being to calculate a proof of this.
The problem is that it makes consensus harder to reach, since there's no problem with having 10 different chains, because no energy needs to be burned off for each chain. This, effectively, makes your account balance a democratic decision by nodes in the Ethereum network (as opposed to forcing someone to burn off large amounts of energy if they want to alter your balance).
History being decided by democratic vote is exactly what proof-of-work avoids, or at least makes extremely expensive.
The problem is that it makes consensus harder to reach, since there's no problem with having 10 different chains, because no energy needs to be burned off for each chain. This, effectively, makes your account balance a democratic decision by nodes in the Ethereum network (as opposed to forcing someone to burn off large amounts of energy if they want to alter your balance).
History being decided by democratic vote is exactly what proof-of-work avoids, or at least makes extremely expensive.
That's a bit early to say for certain. Nobody has made PoS work in an adversarial environment yet.
It is misleading to describe PoS as a democratic vote. There is no voting as that could be faked.
If you want an allegory maybe jury duty for the richest. That also captures the basic problem with it, when the chosen few collude. Let's just say it is an active research area.
It is misleading to describe PoS as a democratic vote. There is no voting as that could be faked.
If you want an allegory maybe jury duty for the richest. That also captures the basic problem with it, when the chosen few collude. Let's just say it is an active research area.
> It is misleading to describe PoS as a democratic vote. There is no voting as that could be faked.
I disagree. With PoS there is, ultimate, only the democratic vote.
For example, in a network with 1,000 nodes, let's say 95% follow one chain and ignore another chain, and that the remaining 5% follow that other chain. The two chains are completely different, but are both valid. In a PoS-system there would be no way, besides democratic vote, to determine which chain is the right one. You're forced to either ask someone you know which chain he's using, or just go with the 95%-chain. With Bitcoin, the answer is very simple: you follow the chain with the largest amount of work, regardless of how many nodes say the one with less work is the right one.
Bitcoin is inherently non-democratic in this scenario, as all nodes only care about chain work, and not how many nodes follow which chain. As opposed to PoS, where two competing, valid chains only differ in which (trusted/untrusted?) -- and how many -- nodes follow each chain.
I disagree. With PoS there is, ultimate, only the democratic vote.
For example, in a network with 1,000 nodes, let's say 95% follow one chain and ignore another chain, and that the remaining 5% follow that other chain. The two chains are completely different, but are both valid. In a PoS-system there would be no way, besides democratic vote, to determine which chain is the right one. You're forced to either ask someone you know which chain he's using, or just go with the 95%-chain. With Bitcoin, the answer is very simple: you follow the chain with the largest amount of work, regardless of how many nodes say the one with less work is the right one.
Bitcoin is inherently non-democratic in this scenario, as all nodes only care about chain work, and not how many nodes follow which chain. As opposed to PoS, where two competing, valid chains only differ in which (trusted/untrusted?) -- and how many -- nodes follow each chain.
What you describe should not be valid in any well working blockchain, not sustainably. Guaranteed global consensus is the whole point, and a simple majority vote would be useless for obvious reasons. I'm not sure if you have something specific in mind, but what you write is not true in the general case.
In a POW network with 1,000 miners (with equal hash power), let's say 95% follow one chain and ignore another chain, and that the remaining 5% follow that other chain. The two chains are completely different, but are both valid.
The second chain is just an alt coin resulting of a fork.
The second chain is just an alt coin resulting of a fork.
POW is as much a democratic decision by your description. If a group of miners decide to reach a consensus you have the sames results. The real difference is that the right to vote in the system in POW is determined by how many electricity you spend, in POS is determined by how many currency you own.
CPU power doesn't come into it. More ETH = higher returns.
I haven't seen any specific details for Ethereum bonded validators, but the hardware required is likely to be a cheap VPS with a reliable internet connection, at least judging by other active proof of stake projects.
https://github.com/ethereum/wiki/wiki/Proof-of-Stake-FAQ#how...
I haven't seen any specific details for Ethereum bonded validators, but the hardware required is likely to be a cheap VPS with a reliable internet connection, at least judging by other active proof of stake projects.
https://github.com/ethereum/wiki/wiki/Proof-of-Stake-FAQ#how...
Ethereum wants a PoS that works, so they will need to do something different. We don't know what that will look like.
Other projects using PoS survive by doing things like frequent block chain checkpoints (a notary stamped block if you will), which arguably isn't very decentralized or at least not trustless. If you have a notary anyway there are more efficient ways to go about things.
Other projects using PoS survive by doing things like frequent block chain checkpoints (a notary stamped block if you will), which arguably isn't very decentralized or at least not trustless. If you have a notary anyway there are more efficient ways to go about things.
> If you have a notary anyway there are more efficient ways to go about things.
like trusting in bob: http://intheoreum.org/
be warned: this link contains humor.
like trusting in bob: http://intheoreum.org/
be warned: this link contains humor.
Who, exactly, gets to decide that?
The short answer: The developers gets to decide.
The longer answer can be found here[0]
[0]:https://www.cryptocompare.com/coins/guides/what-is-the-ether...
The longer answer can be found here[0]
[0]:https://www.cryptocompare.com/coins/guides/what-is-the-ether...
[deleted]
The users of the platform get to decide what software they want to use.
Really intrigued by your comment!
Could you elaborate on what drives the high cost? Or what would need to change for this to viable?
Could you elaborate on what drives the high cost? Or what would need to change for this to viable?
Decentralized validation and ordering of transactions is expensive. In Bitcoin, it requires:
1. Miners to validate 1MB of transactions every 10 minutes
2. Users to be able to confirm that the entire chain of transactions was properly validated by the miners
Some ways to make #1 more efficient make #2 more difficult, so they are somewhat at odds with each other. For now, we're looking at a write throughput of between 1tps to 20tps for Bitcoin and Ethereum.
If you don't care about #2, then you don't need the mining model anymore, or even a blockchain. You can just put all your transactions in MySQL, Cassandra, R3 Corda or whatever and you can subsequently crank up your transaction throughput. You can get >10,000tps with MySQL.
1. Miners to validate 1MB of transactions every 10 minutes
2. Users to be able to confirm that the entire chain of transactions was properly validated by the miners
Some ways to make #1 more efficient make #2 more difficult, so they are somewhat at odds with each other. For now, we're looking at a write throughput of between 1tps to 20tps for Bitcoin and Ethereum.
If you don't care about #2, then you don't need the mining model anymore, or even a blockchain. You can just put all your transactions in MySQL, Cassandra, R3 Corda or whatever and you can subsequently crank up your transaction throughput. You can get >10,000tps with MySQL.
as long as it doesn't go to 0 than I would say there is something to cryptocurrency. Having a way for early adopters to partake in the value creation of metcalfe's law is also an innovation.
> At this time, there are 78 comments to this post, none of them addressing technical concerns. Quite unusual for HN.
https://www.reddit.com/r/ethtrader/comments/6o3hev/link_to_e...
https://www.reddit.com/r/ethtrader/comments/6o3hev/link_to_e...
How pointless.
The whole point of Bitcoin was to have uncensorable, decentralized asset that can be used to exchange value without any trust etc.
That is the only reason we endure this utterly shitty and inefficient blockchain thing, and we exchange money for this otherwise pointless online points.
I have no problem with ETH as cryptocurrency / smart contract platform. But this whole Enterprise Ethereum Alliance is just one big BS. Etherum community is trying to pump ETH value by associating with brand names, and corporations are trying to pump their stock value by presenting themselves as innovative. BS - empty words and marketing gimmicks. Just read through that page.
Just watch Blockchain vs. Bullshit: https://www.youtube.com/watch?v=SMEOKDVXlUo
The whole point of Bitcoin was to have uncensorable, decentralized asset that can be used to exchange value without any trust etc.
That is the only reason we endure this utterly shitty and inefficient blockchain thing, and we exchange money for this otherwise pointless online points.
I have no problem with ETH as cryptocurrency / smart contract platform. But this whole Enterprise Ethereum Alliance is just one big BS. Etherum community is trying to pump ETH value by associating with brand names, and corporations are trying to pump their stock value by presenting themselves as innovative. BS - empty words and marketing gimmicks. Just read through that page.
Just watch Blockchain vs. Bullshit: https://www.youtube.com/watch?v=SMEOKDVXlUo
The EEA was formed in response to Hyperledger, the heavily IBM-backed private blockchain. I think it was the only possible move. The risk of Hyperledger taking over the world of blockchain was too great. EEA is sort of to Ethereum/Blockchain what RedHat is to Linux. A necessary evil.
It's an industry working group to shape the direction of the Ethereum project, similar to a million working groups (ex Bluetooth) where companies are motivated to agree on and advance a technology.
Nothing about being in EEA says that company will use the public chain. Most of them will probably use private chains.
You presenting it as if it's possible for an open source project to recruit a long list of multinational corporations to sign on to collude on a pointless project just to make everyone involved look "cool" and get rich. If only.
Nothing about being in EEA says that company will use the public chain. Most of them will probably use private chains.
You presenting it as if it's possible for an open source project to recruit a long list of multinational corporations to sign on to collude on a pointless project just to make everyone involved look "cool" and get rich. If only.
Enterprise Ethereum has almost nothing to do with Ethereum the public blockchain, or crypto-currency. Ethereum based blockchains (that is based on Ethereum the software, not the canonical global instance of that software) provide an ability to create an auditable log of events.
Those events might be "who accessed my credit card account and when" or "who requested access to my health records and when". These chains can exist entirely independently of of the global "Ethereum" chain, and can operate entirely without the concept of a crypto-currency (aside from using it as a scheduling mechanism within your blockchain cluster).
People need to stop getting hung up the cryptocurrency aspect of blockchains.
Those events might be "who accessed my credit card account and when" or "who requested access to my health records and when". These chains can exist entirely independently of of the global "Ethereum" chain, and can operate entirely without the concept of a crypto-currency (aside from using it as a scheduling mechanism within your blockchain cluster).
People need to stop getting hung up the cryptocurrency aspect of blockchains.
> Ethereum based blockchains provide an ability to create an auditable log of events
If all they want is a log of events, why not use a tried and true database whose performance is more well understood? MySQL, Cassandra, whatever.
You can add the ability to audit the tables by signing data updates with public key crypto.
If all they want is a log of events, why not use a tried and true database whose performance is more well understood? MySQL, Cassandra, whatever.
You can add the ability to audit the tables by signing data updates with public key crypto.
Federated blockchains allow multiple parties in an industry (for example) to maintain a shared trusted database, with no single owner, or single point of failure. (Also, changing immutable data or posting fraudulent transactions requires collusion between multiple parties.)
This is why many large industries like healthcare and finance are actively exploring this space.
This is why many large industries like healthcare and finance are actively exploring this space.
Distributed databases can be configured to work that way as well.
Why do you need a proof-of-work blockchain? With such a small number of participants doesn't that weaken it's integrity to attacks, especially without capital incentives?
Why do you need a proof-of-work blockchain? With such a small number of participants doesn't that weaken it's integrity to attacks, especially without capital incentives?
There's nothing that ties a blockchain to proof of work. Proof of work just just one consensus protocol. For instance, JP Morgan's Quorum is working on Raft based consensus. https://github.com/jpmorganchase/quorum/blob/master/raft/doc...
The nodes are federated and you're still calling this a blockchain? What definition of the word "blockchain" are you using? Is this not more commonly called a "distributed database"?
A "blockchain", taken as a primitive, is essentially an append-only (geographically-)distributed database.
Consider: a Starcraft 1v1 ladder match is, by this definition, synchronized using a "blockchain", whose participating nodes are the two players' computers and the auditing ladder-server instance. That's not a reductio ad absurdam; that's actually what you should be picturing when you say "blockchain" generally: participant nodes, an event stream chunked into blocks, and a consensus mechanism for validating blocks.
Proof-of-work is just one consensus mechanism for blockchains. Mutually-agreed arbitration oracles (as above) is another. First-claim using a global hierarchy of signed-timestamping servers is a third. Etc.
Consider: a Starcraft 1v1 ladder match is, by this definition, synchronized using a "blockchain", whose participating nodes are the two players' computers and the auditing ladder-server instance. That's not a reductio ad absurdam; that's actually what you should be picturing when you say "blockchain" generally: participant nodes, an event stream chunked into blocks, and a consensus mechanism for validating blocks.
Proof-of-work is just one consensus mechanism for blockchains. Mutually-agreed arbitration oracles (as above) is another. First-claim using a global hierarchy of signed-timestamping servers is a third. Etc.
To me, "blockchain" implies the individual nodes don't trust each other, while "distributed database" does.
Replying to myself since we hit max comment depth (probably an indicator it's time to move away from this thread anyway). but to address the sibling reply by hudon, yes, a blockchain is a form of a distributed database (maybe highly replicated data base is a better term since every node has the full working data set).
The key trait of a blockchain is that each new entry cryptographically verifies all previous entries. At the end of the day, yes, a blockchain is a distributed db. It's a distributed db that never forgets.
The key trait of a blockchain is that each new entry cryptographically verifies all previous entries. At the end of the day, yes, a blockchain is a distributed db. It's a distributed db that never forgets.
> The key trait of a blockchain is that each new entry cryptographically verifies all previous entries
I see what you're saying. Basically: distributed database + signatures + merkle tree = blockchain.
I usually use this definition: decentralized and sybil-resistant database + signatures + merkle tree = blockchain.
So I think the key trait that turns a distributed database into a blockchain is not the merkle tree, but is its decentralized nature. Anyone can be a transaction validator and no one can prevent transaction validation.
I see what you're saying. Basically: distributed database + signatures + merkle tree = blockchain.
I usually use this definition: decentralized and sybil-resistant database + signatures + merkle tree = blockchain.
So I think the key trait that turns a distributed database into a blockchain is not the merkle tree, but is its decentralized nature. Anyone can be a transaction validator and no one can prevent transaction validation.
This doesn't work in reality. If you have two companies that need to work with common data it's currently very complex and costly to ensure that both parties can trust the data. That's why trust banks are so big in finance (e.g. Bank of New York, State Street) because it's often cheaper to have a third party you can trust rather than establishing protocols between two companies that auditors approve.
Blockchain can save a lot of money here by making the trusted third party obsolete.
Blockchain can save a lot of money here by making the trusted third party obsolete.
Traditional distributed databases require all nodes to be trusted to achieve consensus (e.g., with Paxos, Raft, etc.) Proof-of-work allows for consensus to occur even if there are malicious nodes -- for up to half the hashrate, which means that major collusion must occur to do something fraudulent.
In these industries the number of participants are in the hundreds -- past the point at which you can trust everyone.
In these industries the number of participants are in the hundreds -- past the point at which you can trust everyone.
Please someone answer this.
By using a blockchain, you enable auditing organizations to participate in the authentication process. For instance, I might publish a private message to the blockchain that is an authentication request to resource X. A smart contract would then act on that authentication request, and publish either an ACCEPT or REJECT message. By bringing auditing organizations into the blockchain, every authentication attempt is sent to the auditing organization before access is granted.
The key is that every transaction must be made known to the auditors before it is acted on. By logging to a traditional db, you're at the mercy of the party responsible for sharing out those logs.
The key is that every transaction must be made known to the auditors before it is acted on. By logging to a traditional db, you're at the mercy of the party responsible for sharing out those logs.
Here is your schema:
DATA | auditor_sig
------------------
Now:
a) Assume 3 components: client, server, auditorService
b) How to write to server:
DATA | auditor_sig
------------------
Now:
a) Assume 3 components: client, server, auditorService
b) How to write to server:
1- client sends DATA to auditorService
2- auditorService signs DATA and returns S(DATA)
3- client writes (DATA, S(DATA)) to server
1- client reads (DATA, S(DATA)) from server
2- client verifies S(DATA)
3.1- valid? -> continue
3.2- invalid? -> delete DATA from server
[deleted]
Interesting. Seems like potentially cool ideas in government and politics for transparency.
If I understand correctly, this is basically a database but in a merkle tree form + crypto. There is also no proof of work as it is not needed.
Maybe the client has key pinning baked in it, where each bank owns a key?
Maybe the client has key pinning baked in it, where each bank owns a key?
If you take Ethereum and you remove ETH/gas, you remove proof of work, you remove decentralized computation because that's just really inefficient and you want high throughput... can you really call what you have left Ethereum?
I agree. Also, the EEA is more of an R&D coordination group than anything else. It's to see if there really is something there, and these companies have joined up their R&D departments and innovation labs to do so. They have a lot of industry pull, especially together -- so if there is something viable that comes out of it, most [North American/Asian at least] people can expect it to impact the way they do things, or the way the tools they use operate.
That doesn't make sense. Read accesses couldn't possibly be logged. You probably wouldn't want sensitive information like health records in a block chain. The risk for leaks is obvious.
Both credit cards records and health records are data where there is a single authoritative data source. You want to know who actually accessed the data, and not any sort of decentralized consensus about the matter.
Agree about the wider aspects however, but those are probably about payouts to stakes in immaterial data or zero knowledge trading of cryptographic keys rather than your health data.
Both credit cards records and health records are data where there is a single authoritative data source. You want to know who actually accessed the data, and not any sort of decentralized consensus about the matter.
Agree about the wider aspects however, but those are probably about payouts to stakes in immaterial data or zero knowledge trading of cryptographic keys rather than your health data.
This is especially true for Health Records with regards to US Health Care, as access control is heavily monitored and Hospital Employees are instructed clearly and frequently that you do not access records for anyone you are not treating, accidental access needing to be reported, and so on. Confidentiality of the patient records requires a clear system to see who accessed what, when, and from where they accessed it.
Blockchain seems like a complete mismatch for such an endeavor.
Blockchain seems like a complete mismatch for such an endeavor.
Just because a node can participate in a blockchain and cryptographically verify the chain doesn't mean the node can access the plaintext of every record in check chain.
Check out permissioned implementations like JP Morgan's Quorum.
Check out permissioned implementations like JP Morgan's Quorum.
There's even evidence of vote manipulation on this very HN thread on the announcement over on Reddit.
Where are the press releases from Master Card, Cisco, and Scotiabank about this? Press releases of "big company partners with little company", coming from the little company, are always suspicious.
It may just mean "they signed up for our mailing list".
Seems like they're doing a separate press release.
[1] https://www.reddit.com/r/ethereum/comments/6o2o3d/comment/dk...
[1] https://www.reddit.com/r/ethereum/comments/6o2o3d/comment/dk...
Title didn't mention the significant partner showcased in the website - 'Andhra Pradesh Government'. The first state govt (India) outside the US to join the alliance. AP was recently divided into separate state (Telengana) and lost it's capital (Hyderabad- home to top IT MNC's) to it. They are actively investing in Fintech, including a new institute for blockchain - http://www.apeita.in/blockchain/
If you'd like an easy way to keep up to date on Ethereum: http://www.weekinethereum.com
Ethereum itself can be used as a financial language, which can be quite revolutionary for the banking industry. Instead of using the proof of work consensus, banks could have their own consensus method. Which does allow for the order of scale that the real world needs.
No mention of Master Card. Mods please edit the title.