I attended a presentation hosted by the BCS, and given by Ron Ballard, based on his article in IT Now, “Blockchain: the facts and the fiction”. What he said inspired some thoughts and reminded me of others, some of which I have previously published on my blog. I wrote an article, called Learnings of Bitcoin, which was meant to be a spoof on the Borat film title and posted it on my linkedin blog, The article looks at the tight coupling of Bitcoin, and its consensus mechanism, the proof of work, together with its costs and vulnerabilities. It examines the goal of eliminating trust authorities and its questionable ability to meet the necessary roles of money as a means of exchange and a store of wealth. In the comment pushing it, I say, “This might be a bit basic for some, but you can’t have a coinless immutable blockchain, at least not one based on ‘proof of work’.”, at which point you need to consider if there are better data storage platforms for your use case.
Ballard is an anti-bitcoin polemicist and his anti-slide is comprehensive, although it misses the asynchronicity; I am less clear about his assertion that relational databases are good enough. Stonebraker in his paper, “The End of an Architectural Era (It’s Time for a Complete Rewrite) § 6.[12]” identifies five use cases where relational databases are sub-optimal including stream/feed processing and also states that SQL is not suitable for all data retrieval problems. I would add that an SQL database is not immutable, and most implementations do not come with a “four-eyes” super-user implementation; much effort needs to be invested in controlling the activities of these super-users, especially to implement the “developers can’t run code, and operators can’t change code” rule.
If the only use of Bitcoin, is paying for the electricity to keep it secure, exchanges become necessary. There’s something on how is Bitcoin valued by the market, but I haven’t found it yet also marginal utility theory requires two commodities; I wonder what the alternative to the crypto-currencies is and how liquid the exchange mechanisms are? Also are we trusting the exchanges? If so, the solution is not trustless! (I mean the alternative is cash since it’s the only way we measure energy and like cycles, electricity can’t be stored.
Some have suggested that the language used such as mining, is designed to suggest that the Bitcoin is similar and as safe as Gold, which isn’t! The use of the word ‘nonce’ which in IT security field means ‘number used once’, and is part of the chain design to my mind disguises the role of this field. It is only used once, but it is the output of the proof of work.
Ballard challenged his audience to find a good use case, and to my mind the proof of work and its costs make it hard, but I wonder if either trade confirmations or P2P name resolution are potential use cases, certainly bitcoin have had to solve the later and has inspired the namecoin project. There may be better ways to do both, but doesn’t look like anyone else is working on it.
The presentation was published on youtube here …