Community Meeting Notes (Jan 10, 2018) - Blockchain to Design

Description

Presenters: Edward Buchi

Participants will learn to create their own addresses.This workshop will introduce the concept of Blockchains to answer two simple questions: what is it, how is it relevant to Design?

Resources

• Slides (keynote, pdf)
• Video Recording

Notes

A broad subject, but Edward has narrowed it down to a few core subjects for our benefit.

Blockchain:

• Bitcoin the first Blockchain
  • 03/Jan/2009 - First time Bitcoin started.
  • Response to how people in the financial industry mismanaged wealth.
  • Typical attributes of currency:
    • scarce
    • durable
    • divisible
    • portable
    • verifiable
    • fungible
  • Added attributes of cryptocurrency:
    • inimitable - cannot be duplicated
    • decentralised - there is no single institution or country controlling the currency
    • digital
  • Cryptocurrency Value = Belief in the utility of the Blockchain network; will automate a lot of what banks do
    
    
• What are blockchains?
  • Are the memory of the Internet.
  • Made of computers, instead of neurons, spread out all over the world.
  • Gives Internet access to data to access critical functions.
  • Does not need to go to the bank; can safely send records to specialists without that data being falsified.
  • Gives the Internet access to data in order to execute critical functions and not rely on external sources of information.
  • Bitcoin - databases owned by banks.
  • A blockchain network is a type of distributed network. It also refers to the structure data is stored in.
    
    
• How Blockchains work (simplified technical explanation)
  
  • A user needs two basic things:
    • A private key and a public key
      • A private key is like a password
      • A public key (aka address) is like a phone number
      • if you lose the private and public key, you'll lose access to your blockchain. 
        • It is difficult to hack, so unlikely able to retrieve the data (e.g. this is how people have lost their bitcoin)
  • Basics components of a block
    • Example: bitcoin blockchain
    • A Hash is a condensed form of a digital file of anything
    • A function that, when data is run through it, will produce an identical (and often unique) result for the same given input
    • Merkle Tree, Merkle Root Hash
    • Component 1: Transaction Hash + Component 2: Previous Block Hash + Compotnent 3: Random number = Block Hash #
    • Change one block it would change the history of the rest of the Blockchain, because it would affect all hashes down the line.
    • Data security is maintained by having a copy of the blockchain
    • If a node would have a faulty copy of the blockchain, the other nodes (the network) would just ignore it
  • Who gets to be a node and what is the incentive?
    • anyone can be a node
    • the more computers there are the harder it is to come up with the NONCE
      • the NONCE is a method to build new blocks
      • only one node has the right to write the next block
        • the first node to "guess" the NONCE, gets to write the next block
        • Mining is volunteering for the network for the intention of winning the reward (NONCE – a hash result).
    • in terms of bitcoin, the node that writes the next block receives 12 bitcoins.
      
      
• Implications in the world at large

• • Decentralised applications
    • The whole program exists on the blockchain network, injected into the blocks themselves. Don't need to get Amazon to host that app; inject it into the network and as long as it is alive, it will run forever.
    • Examples:
      • WeiFund - open-sourced crowd-funding
      • https://www.cryptokitties.co
      • Questions relating to the "enforcability" of artificial scarcity within a given blockchain
  •  Decentralised companies
    • "Smart contract" is a term from Etherium referring to a program that is injected into the chain. A program may spam multiple blocks (e.g. crypto kitties is 6–this helps with edits). Etherium provides a virtual machine (EVM) and has their own programming language that it runs.
    • Example: Slocket - build devices that have smart contracts in them (like bicycle locks)
      • A smart contract pays dividends to the shareholders; if the company were to go bankrupt, the locks would still work if the shares pay shareholders because it still exists on the blockchain.
      • A smart contract will only work well with a large network of users.
    • For Etherium to prevent large programs, which would eat up the resources, they built in a concept of gas. A smart contract needs to pay an amount of gas proportional to their size.
      • crypto kitties actually clogged the blockchain at one point when it became so popular and all the nodes had to process crypto kitties.
  • Decentralised storage
    • Imagine Google Drive but files stored are not owned by Google
    • Example: Filecoin - Treat your hard drives like airbnbs – renting out your hard drive space
    • Example: Sio
  • Machine addresses
    
    • Getting machines/addresses and facilitating payments between them
    • Example: Iota
  • User owned accounts
    • Identity – anything that proves who you are can be stored online and can be used as proof to show you who you are.
    • Example: Civic Secure Identity Platform
  • User owned data
    • Only users own their data; they have control of it as long as they have the private key. Not Google or Dropbox.