But how are the tokens distributed? Mining is really why bitcoin is revolutionary, not the blockchain. In fact, "blockchain" is not even mentioned in Satoshi's paper. So I don't understand all the hype around this term. Banks using their own blockchain simply means they have a data-structure that resembles blocks linked together similar to a linked list. What matters is how the consensus is kept for the chain and that is done using PoW mining.
There's a lot of great innovations in Bitcoin. One of the primary reasons why it's exciting, is that it's the first widely deployed BFT ledger. Tendermint uses a different BFT algorithm that doesn't use mining.
A lot of people say that blockchains aren't blockchains without PoW. It's not surprising that people are saying this... there's been a ton of phony consensus algorithms that purport to not use PoW mining. Tendermint is different.
What exactly is BFT? Proof-of-stake doesn't reach consensus (https://download.wpsoftware.net/bitcoin/pos.pdf) and it's unclear what this Tendermint is using? Do you have any data to back your claims up?
A consensus algorithm is one that ensures that multiple independent actors come to agreement about anything. In a blockchain, multiple independent miners or validators need to come to agreement about which blocks have been committed.
A fault-tolerant consensus algorithm is a consensus algorithm that can tolerate failure of any nodes (e.g. miners or validators). By failure, I'm referring to fail-stop failures, where a miner or validator crashes or goes offline. The key metric for fault-tolerant consensus algorithms is the threshold for how many failures the system can tolerate. For example, Raft is a fault-tolerant consensus algorithm can tolerate up to 49.99% of node failures.
A Byzantine fault-tolerant consensus algorithm is a fault-tolerant consensus algorithm that can tolerate not just fail-stop failures, but arbitrary failures. For example, one or more nodes that get hacked by a malicious hacker might be coordinated to subvert consensus from within. Bitcoin is exciting because it can tolerate such attacks from within (e.g. any miner) to a significant degree. Tendermint is similar, except it doesn't require significant energy expenditure for its security.
Proof-of-Stake was a family of early consensus algorithms from cryptocurrency projects that don't use PoW mining. A lot of them are terrible and suffered from the "nothing at stake" problem. For a while, the Tendermint project had been using collateral bonds to ensure that there is actually "something at stake". But Tendermit is more general than that. You can have stake with collateral posted on-or-off-chain, or, you don't need to use collateral at all. It all depends on what you're trying to build.
If you want a standalone cryptocurrency blockchain, you'll want in-chain collateral with bond deposits. But different blockchains have different requirements, so posting collateral to put something at stake may not be one of them.
Personally I think we should just avoid the term "proof of stake".
Actually, we wrote the Ethereum virtual machine implementation that they're using. We're moving away from the EVM though, because the TMSP architecture allows for easier native-application development.
I think you have it exactly backwards. The blockchain ledger applies to anything you want to trade/communicate with traceability. Some people trade bitcoin that way, and that was a good demonstration vehicle. But blockchain can be applied to anything, not just crypto-currencies. Why not chain-of-title for real estate? Now there is the poster child for a highly manual system based on shuffling and signing very large stacks of paper.
Probably transaction fees? There's no reason a blockchain must be self-funded through proof-of-work mining.
To my understanding, the expected future state of Bitcoin is that the role currently filled by miners will be replaced by transaction processors who take a fee to do the work.
It's not about the mining!!!! Block chain is about having an immutable, non-repudiatable transaction record.
Block chain is a wheel.... guess what, wheels have uses far beyond the Pharaoh's war chariots. Like, you know, bicycles and automobiles. Stop conflating block chain and crypto-currency.
Bitcoin is a bearer asset. If you have the private keys, you can spend the Bitcoin. Blockchain based digital assets require a middleman to confer ownership of a physical asset based on what's on the blockchain. This creates all sorts of problems. What if a physical asset is registered on two blockchains? How do you deal with all the regulatory and compliance issues related to the transfer of that asset? What if your transfer ownership of an asset is valid on the blockchain, but illegal in your jurisdiction?
You can't just blockchain all the things and expect all the costs that are part of the current system to disappear.
Call to arms: while big guys are doing proprietary systems, I invite to contribute to Scorex, modular blockchain framework under CC0 license: https://github.com/ScorexProject/Scorex-Lagonaki . Maillist is https://groups.io/g/scorex-dev, we'll start discussions there on 2 more members. Testnet is alive, plans for few experimental modules are exist.
This project is a massive scam. These non-work based systems aren't blockchains. They're just (bad) message passing systems. When this blockchain hype-cycle ends, I'm hoping there's some accountability here (though there probably won't be)
I find it's helpful to mentally replace "blockchain-based" with "experimental database" when reading these press releases (which is all this story is, really).
The first question I have is always "Oh? And why was your old database not working? And why do you think this one will work better?" Not a question answered by this article (and for good reason; of all the many issues currently facing bond trading, it's hard to see how a decentralised ledger solves any of them).
Consider a Credit Default Swap: where you promise to pay the interest on a Bond in the case said Bond defaults. Currently, humans enforce this promise. If a bond defaults, some human notices (probably by telephone) and then they run to the bank and start writing checks.
But what if you wrote an Etherium contract to automatically enforce the agreement? And then the trust in the Etherium blockchain to enforce the contract allows you to tie real money transactions to the whole process? Look ma, no more humans!
Actual CDSs are quite a bit more complicated than that. They pay out in the case of very specifically defined credit events, and it's not uncommonly a difficult question to decide whether a credit event has occurred.
The current system requires 80% of the ISDA's Credit Derivatives Determinations Committees to vote that an event has occurred. You see to think a purely mechanical system would be better, but it's not obvious to me why this would be so. It would certainly be different.
> Look ma, no more humans!
Yes, but why is that good? Is the role of humans in the CDS process a problem? Why? A CDS is a contract between two parties; do you believe more automation in the process would benefit the seller, the buyer, both, or society at large? And how?
The main advantage of the blockchain would seem to be its distributed nature and it's ability to not need any central trusted authority. But in the cases of CDSs, we have a central trusted authority in the form of the ISDA.
Again, we come back to the issue of needing to begin by defining the problem we're trying to solve, and then demonstrate how a blockchain could solve it. What problem with the existing system are you trying to solve?
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[ 0.27 ms ] story [ 81.2 ms ] threadhttps://github.com/tendermint/tendermint/wiki/Byzantine-Cons...
There's a lot of great innovations in Bitcoin. One of the primary reasons why it's exciting, is that it's the first widely deployed BFT ledger. Tendermint uses a different BFT algorithm that doesn't use mining.
Raft and Paxos aren't BFT, btw. As of 2012 there still weren't good implementations of PBFT/BFT middleware. http://cgi.di.uoa.gr/~mema/publications/middleware-2012.pdf . Tendermint is that middleware.
Here's a post on why Tendermint ledgers should be called blockchains:
https://news.ycombinator.com/item?id=10847136
A lot of people say that blockchains aren't blockchains without PoW. It's not surprising that people are saying this... there's been a ton of phony consensus algorithms that purport to not use PoW mining. Tendermint is different.
A fault-tolerant consensus algorithm is a consensus algorithm that can tolerate failure of any nodes (e.g. miners or validators). By failure, I'm referring to fail-stop failures, where a miner or validator crashes or goes offline. The key metric for fault-tolerant consensus algorithms is the threshold for how many failures the system can tolerate. For example, Raft is a fault-tolerant consensus algorithm can tolerate up to 49.99% of node failures.
A Byzantine fault-tolerant consensus algorithm is a fault-tolerant consensus algorithm that can tolerate not just fail-stop failures, but arbitrary failures. For example, one or more nodes that get hacked by a malicious hacker might be coordinated to subvert consensus from within. Bitcoin is exciting because it can tolerate such attacks from within (e.g. any miner) to a significant degree. Tendermint is similar, except it doesn't require significant energy expenditure for its security.
Proof-of-Stake was a family of early consensus algorithms from cryptocurrency projects that don't use PoW mining. A lot of them are terrible and suffered from the "nothing at stake" problem. For a while, the Tendermint project had been using collateral bonds to ensure that there is actually "something at stake". But Tendermit is more general than that. You can have stake with collateral posted on-or-off-chain, or, you don't need to use collateral at all. It all depends on what you're trying to build.
If you want a standalone cryptocurrency blockchain, you'll want in-chain collateral with bond deposits. But different blockchains have different requirements, so posting collateral to put something at stake may not be one of them.
Personally I think we should just avoid the term "proof of stake".
See ErisIndustries using Tendermint for ErisDB: https://github.com/eris-ltd/eris-db/blob/master/erisdb/serve...
Actually, we wrote the Ethereum virtual machine implementation that they're using. We're moving away from the EVM though, because the TMSP architecture allows for easier native-application development.
http://github.com/tendermint/tmsp
If you want proof on the security of the Tendermint consensus algorithm, it's in the Github wiki.
To my understanding, the expected future state of Bitcoin is that the role currently filled by miners will be replaced by transaction processors who take a fee to do the work.
Block chain is a wheel.... guess what, wheels have uses far beyond the Pharaoh's war chariots. Like, you know, bicycles and automobiles. Stop conflating block chain and crypto-currency.
You can't just blockchain all the things and expect all the costs that are part of the current system to disappear.
http://www.economist.com/news/leaders/21677198-technology-be...
The first question I have is always "Oh? And why was your old database not working? And why do you think this one will work better?" Not a question answered by this article (and for good reason; of all the many issues currently facing bond trading, it's hard to see how a decentralised ledger solves any of them).
Consider a Credit Default Swap: where you promise to pay the interest on a Bond in the case said Bond defaults. Currently, humans enforce this promise. If a bond defaults, some human notices (probably by telephone) and then they run to the bank and start writing checks.
But what if you wrote an Etherium contract to automatically enforce the agreement? And then the trust in the Etherium blockchain to enforce the contract allows you to tie real money transactions to the whole process? Look ma, no more humans!
The current system requires 80% of the ISDA's Credit Derivatives Determinations Committees to vote that an event has occurred. You see to think a purely mechanical system would be better, but it's not obvious to me why this would be so. It would certainly be different.
> Look ma, no more humans!
Yes, but why is that good? Is the role of humans in the CDS process a problem? Why? A CDS is a contract between two parties; do you believe more automation in the process would benefit the seller, the buyer, both, or society at large? And how?
The main advantage of the blockchain would seem to be its distributed nature and it's ability to not need any central trusted authority. But in the cases of CDSs, we have a central trusted authority in the form of the ISDA.
Again, we come back to the issue of needing to begin by defining the problem we're trying to solve, and then demonstrate how a blockchain could solve it. What problem with the existing system are you trying to solve?