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

Owned by Justin Obara
Last updated: Jan 11, 2018
3 min read

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

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.