I'm seeing lots of discussions and press releases about intentions to regulate blockchain dissociated from cryptocurrency with intention to apply it as a validation network to industry, banks and government.
Assuming that we are not on a solar powergrid, my question is:
If there is no currency involved, who would join a mining pool and spend 1365W/h (actual Antminer S9i power consumption) to validate blocks for free?
I read an interview with the president of Federation of Industries of the State of SΓ£o Paulo (In a raw translation) saying:
"[...] With an eye on the impact this technology will have on the entire industry chain, which can reduce costs, waste and bureaucratic processes, as well as increase productivity [...]"
What is the point to save X money with papers and bureaucracy and spend X*10^3 with electricity?
Top comments (7)
A blockchain is not the same as a proof-of-work consensus algorithm.
Proof of work consensus is what requires high amounts of electricity. It is used to ensure that making changes to a datastructure is expensive (more or less).
Blockchain is pretty much a stack where cryptography ensures that only push and pop operations result in valid states.
Together, the two ensure that past operations cannot be easily edited, as it would require popping a bunch of value and then expensively pushing values back (as the longest chain is considered 'the truth', you need to push values back faster than everyone else).
There are alternatives to proof of work though, such as proof of stake and proof of burn. If the network is (partially) trusted, you don't need to incur artificial expenses at all, look at the consensus protocols for ripple and stellar for instance.
I'm not familiar with how people expect blockchains to reduce bureaucracy though.
Got it!
You guys are awesome! I really appreciate your high quality answers.
Well, if Blockchain can be implemented without proof-of-work/stake then they doesn't even have to use blockchain at first place, they can just develop their own secured chain of blocks right?! --assuming they can decentralize it somehow
Please correct me if I'm wrong, what I understand reading was that secured blocks where being developed since 1991, what I still not getting is why companies are suddenly popping interest so late. Almost a 17 years gap, was is just a mater of effort to develop or a major issue that couldn't be solved before?
I'm not familiar with the secured blocks research you mentioned, so I can't really comment on that.
As to the current interest in blockchains, I expect it is mostly due to the popularity of bitcoin. Something similar happened with second life. Managers who make investment decisions are not necessarily tech-savvy enough to make a personal evaluation of new technology, so they essentially have only market trends to go by. I expect we are currently experiencing some hype, some criminal abuse and some genuine use-cases, although it is difficult to say how much each factor is contributing.
I would say approaches such as proof-of-stake and proof-of-burn are things developed as 'their own secured chain of blocks'. I may not have been clear on this, but costs incurred by both methods only exist in the blockchain, they have negligible electric costs.
Wow, this is a really brief and clear explanation!
Presumably if the blockchain were to be for the purpose of a more trustworthy database, there would be stakeholders involved willing to do the work. Probably a matter of use caseβand possibly regulation. π
Good point!
The idea of a blockchain itself is not that interesting of a concept. It's basically just a big list of data that can be added to, but can't be edited. The interesting part is how things get added. Specifically how can we trust that something getting added is correct. That's where proof-of-work/stake comes in. So in environments where you can't trust the other members of a network, proof-of-work is an attempt to mitigate the lack of trust. Instead of having a password or permissions to add items to the list, you have a method that shows a person didn't just make something up, like mining in Bitcoin.