- Decentralised Autonomous Corporations — Charlie Stross’s near-future fiction of Accelerando comes closer to reality: Malice – revenge for waking him up – sharpens Manfred’s voice. “The president of agalmic.holdings.root.184.97.AB5 is agalmic.holdings.root.184.97.201. The secretary is agalmic.holdings.root.184.D5, and the chair is agalmic.holdings.root.184.E8.FF. All the shares are owned by those companies in equal measure, and I can tell you that their regulations are written in Python. Have a nice day, now!” He thumps the bedside phone control and sits up, yawning, then pushes the do-not-disturb button before it can interrupt again. After a moment he stands up and stretches, then heads to the bathroom to brush his teeth, comb his hair, and figure out where the lawsuit originated and how a human being managed to get far enough through his web of robot companies to bug him.
- Coding is Not the New Literacy (Chris Grainger) — We build mental models of everything – from how to tie our shoes to the way macro-economic systems work. With these, we make decisions, predictions, and understand our experiences. If we want computers to be able to compute for us, then we have to accurately extract these models from our heads and record them. Writing Python isn’t the fundamental skill we need to teach people. Modeling systems is. Amen!
- Let’s Stop Laughing at Groupon (Fortune) — it is much easier to survive a valuation decline as a public company than as a private one.
- nsq — Bitly’s open sourced realtime distributed messaging platform.
Understanding the value of the blockchain above and beyond bitcoin.
Editor’s note: Lorne Lantz is a program co-chair for our O’Reilly Radar Summit: Bitcoin & the Blockchain on January 27, 2015, in San Francisco. For more on the program and for registration information, visit the Bitcoin & the Blockchain event website.
I remember the first time I heard about bitcoin. It was June 2012, and I was invited to a bitcoin meetup. The whole time I was sitting there, I thought these were a bunch of computer geeks playing around with nerd money.
At the same time, I felt excited about the possibilities. If what the bitcoin believers were saying was true, it could become something very big. When I took a closer look, I realized why it could be so groundbreaking: decentralization.
Unlike other currencies and payment networks, bitcoin is not controlled by a bank, government, or financial institution. Instead, thousands of computers around the world verify transactions and manage a global decentralized ledger. This innovative technology is called the blockchain, and it provides a unique pathway that allows — for the first time — many computers that don’t trust each other to achieve consensus. In bitcoin’s case, they are achieving consensus on updates to the global ledger. Read more…
A look at the stumbling blocks to blockchain scalability and some high-level technical solutions.
Author note: Vitalik Buterin contributed to this article.
Editor’s note: Kieren James-Lubin is a program co-chair for our O’Reilly Radar Summit: Bitcoin & the Blockchain on January 27, 2015, in San Francisco. For more on the program and for registration information, visit the Bitcoin & the Blockchain event website.
“I have no worries that bitcoin can scale, and the simple reason for that is that I know that IPv4 can’t, and yet I use it every day.”
The issue of bitcoin scalability and the phrase “blockchain scalability” are often seen in technical discussions of the bitcoin protocol. Will the requirements of recording every bitcoin transaction in the blockchain compromise its security (because fewer users will keep a copy of the whole blockchain) or its ability to handle a great number of transactions (because new blocks on which transactions can be recorded are only produced at limited intervals)? In this article, we’ll explore several meanings of “blockchain scalability” and some high-level technical solutions to the issue.
The three main stumbling blocks to blockchain scalability are:
- The tendency toward centralization with a growing blockchain: the larger the blockchain grows, the larger the requirements become for storage, bandwidth, and computational power that must be spent by “full nodes” in the network, leading to a risk of much higher centralization if the blockchain becomes large enough that only a few nodes are able to process a block.
- The bitcoin-specific issue that the blockchain has a built-in hard limit of 1 megabyte per block (about 10 minutes), and removing this limit requires a “hard fork” (ie. backward-incompatible change) to the bitcoin protocol.
- The high processing fees currently paid for bitcoin transactions, and the potential for those fees to increase as the network grows. We won’t discuss this too much, but see here for more detail.
We’ll consider these first two issues in detail. Read more…
There is a burgeoning landscape around the blockchain’s decentralized consensus protocol technologies.
Although it may be early to baptize new buzz lingo like “Blockchain as a Service” (BaaS) or “Blockchain as a Platform” (BaaP), there is a burgeoning landscape of various implementations and activity in and around the blockchain’s decentralized consensus protocol technologies.
I’ve already covered the blockchain’s sweet spot as a development platform in “Understanding the blockchain,” so it is no surprise that its landscape will be made up of platforms, protocols, and (smart) programs.
Breaking-up the bitcoin-blockchain paradigm
In a perfect world, we would have a single blockchain and a single cryptocurrency. But that doesn’t seem to be in the cards, whether it is technically feasible or not. Although wide-scale adoption and a critical mass of users aren’t there yet, the market is signaling for a diversification of choices, some based on the bitcoin currency and its blockchain protocol, and others not. Read more…
We must be prepared for the blockchain’s promise to become a new development environment.
Editor’s note: this post originally published on the author’s website in three pieces: “The Blockchain is the New Database, Get Ready to Rewrite Everything,” “Blockchain Apps: Moving from the Jungle to the Zoo,” and “It’s Too Early to Judge Network Effects in Bitcoin and the Blockchain.” He has revised and adapted those pieces for this post.
There is no doubt that we are moving from a single cryptocurrency focus (bitcoin) to a variety of cryptocurrency-based applications built on top of the blockchain.
This article examines the impact of the blockchain on developers, the segmentation of blockchain applications, and the network effects factors affecting bitcoin and blockchains.
The blockchain is the new database — get ready to rewrite everything
The technology concept behind the blockchain is similar to that of a database, except that the way you interact with that database is different.
For developers, the blockchain concept represents a paradigm shift in how software engineers will write software applications in the future, and it is one of the key concepts that needs to be well understood. We need to really understand five key concepts, and how they interrelate to one another in the context of this new computing paradigm that is unravelling in front of us: the blockchain, decentralized consensus, trusted computing, smart contracts, and proof of work/stake. This computing paradigm is important because it is a catalyst for the creation of decentralized applications, a next-step evolution from distributed computing architectural constructs. Read more…
The O'Reilly Radar Podcast: Mike Belshe on making bitcoin secure and easy enough for the mainstream.
In this week’s O’Reilly Radar Podcast episode, I caught up with Mike Belshe, CTO and co-founder of BitGo, a company that has developed a multi-signature wallet that works with bitcoin. Belshe talks about about the security issues addressed by multi-signature wallets, how the technology works, and the challenges in bringing cryptocurrencies mainstream. We also talk about his journey into the bitcoin world, and he chimes in on what money will look like in the future. Belshe will address the topics of security and multi-signature technology at our upcoming Bitcoin & the Blockchain Radar Summit on January 27, 2015, in San Francisco — for more on the program and registration information, visit our Bitcoin & the Blockchain website.
Multi-signature technology is exactly what it sounds like: instead of authorizing bitcoin transactions with a single signature and a single key (the traditional method), it requires multiple signatures and/or multiple machines — and any combination thereof. The concept initially was developed as a solution for malware. Belshe explains:
“I’m fully convinced that the folks who have been writing various types of malware that steal fairly trivial identity information — logins and passwords that they sell super cheap — they are retooling their viruses, their scanners, their key loggers for bitcoin. We’ve seen evidence of that over the last 12 months, for sure. Without multi-signature, if you do a bitcoin transaction on a machine that’s got any of this bad stuff on it, you’re pretty much toast. Multi-signature was my hope to fix that. What we do is make one signature happen on the server machine, one signature happen on the client machine, your home machine. That way the attacker has to actually compromise two totally different systems in order to steal your bitcoin. That’s what multi-signature is about.”
The core principle in bitcoin is decentralization, and it has important implications for security.
Editor’s note: this is an excerpt from Chapter 10 of our recently released book Mastering Bitcoin, by Andreas Antonopoulos. You can read the full chapter here. Antonopoulos will be speaking at our upcoming event Bitcoin & the Blockchain, January 27, 2015, in San Francisco. Find out more about the event and reserve your spot here.Securing bitcoin is challenging because bitcoin is not an abstract reference to value, like a balance in a bank account. Bitcoin is very much like digital cash or gold. You’ve probably heard the expression “Possession is nine tenths of the law.” Well, in bitcoin, possession is ten tenths of the law. Possession of the keys to unlock the bitcoin, is equivalent to possession of cash or a chunk of precious metal. You can lose it, misplace it, have it stolen, or accidentally give the wrong amount to someone. In every one of those cases, end users would have no recourse, just as if they dropped cash on a public sidewalk.
However, bitcoin has capabilities that cash, gold, and bank accounts do not. A bitcoin wallet, containing your keys, can be backed up like any file. It can be stored in multiple copies, even printed on paper for hardcopy backup. You can’t “backup” cash, gold, or bank accounts. Bitcoin is different enough from anything that has come before that we need to think about bitcoin security in a novel way too.
The core principle in bitcoin is decentralization and it has important implications for security. A centralized model, such as a traditional bank or payment network, depends on access control and vetting to keep bad actors out of the system. By comparison, a decentralized system like bitcoin pushes the responsibility and control to the end users. Because security of the network is based on Proof-Of-Work, not access control, the network can be open and no encryption is required for bitcoin traffic. Read more…
The blockchain is like layers in a geological formation — the deeper you go, the more stability you gain.
Editor’s note: this is an excerpt from Chapter 7 of our recently released book Mastering Bitcoin, by Andreas Antonopoulos. You can read the full chapter here. Antonopoulos will be speaking at our upcoming event Bitcoin & the Blockchain, January 27, 2015, in San Francisco. Find out more about the event and reserve your spot here.The blockchain data structure is an ordered back-linked list of blocks of transactions. The blockchain can be stored as a flat file, or in a simple database. The bitcoin core client stores the blockchain metadata using Google’s LevelDB database. Blocks are linked “back,” each referring to the previous block in the chain. The blockchain is often visualized as a vertical stack, with blocks layered on top of each other and the first block serving as the foundation of the stack. The visualization of blocks stacked on top of each other results in the use of terms like “height” to refer to the distance from the first block, and “top” or “tip” to refer to the most recently added block.
Each block within the blockchain is identified by a hash, generated using the SHA256 cryptographic hash algorithm on the header of the block. Each block also references a previous block, known as the parent block, through the “previous block hash” field in the block header. In other words, each block contains the hash of its parent inside its own header. The sequence of hashes linking each block to its parent creates a chain going back all the way to the first block ever created, known as the genesis block. Read more…
Behind the scenes, there's a lot more to bitcoin and blockchain than first meets the eye.
Editor’s note: this is an excerpt from Chapter 1 of our recently released book Mastering Bitcoin, by Andreas Antonopoulos. You can read the full chapter here. Antonopoulos will be speaking at our upcoming event Bitcoin & the Blockchain, January 27, 2015, in San Francisco. Find out more about the event and reserve your spot here.Bitcoin is a collection of concepts and technologies that form the basis of a digital money ecosystem. Units of currency called bitcoins are used to store and transmit value among participants in the bitcoin network. Bitcoin users communicate with each other using the bitcoin protocol, primarily via the Internet; although, other transport networks can also be used. The bitcoin protocol stack, available as open source software, can be run on a wide range of computing devices, including laptops and smartphones, making the technology easily accessible.
Users can transfer bitcoin over the network to do just about anything that can be done with conventional currencies, such as buy and sell goods, send money to people or organizations, or extend credit. Bitcoin technology includes features that are based on encryption and digital signatures to ensure the security of the bitcoin network. Bitcoins can be purchased, sold, and exchanged for other currencies at specialized currency exchanges. Bitcoin, in a sense, is the perfect form of money for the Internet because it is fast, secure, and borderless. Read more…