The Types Of Blockchains
The Rise & Rise Of Bitcoin
8 years in numbers
The Secret Of Bitcoin's Success (?)
Is not :-
The ability of an institution (a relationship , shared endeavour etc) in which
Technology and Social Scalablity
The social scalability of an institutional technology depends on :-
Estimating Social Scalability
The more an institution depends on local laws, customs, or language, the less socially scalable it is.
The Dunbar Number
Without the technological innovations of the past, participations in shared human endeavours would usually be limited to 150 people - the “Dunbar” number.
Overcoming The Dunbar Number
Whereas the main social scalability benefit of the Internet has been matchmaking, the predominant direct social scalability benefit of blockchains is trust minimisation
Money & Markets
Markets benefit the participants in a particular trade by
Money and markets involve
Social Scalability Of Network Security
Scalable markets and prices require scalable money. Scalable money requires scalable security, so that a greater number and variety of people can use the currency without losing its integrity against forgery, inflation, and theft.
Blockchains substitute computationally expensive but automated security for computationally cheap but institutionally expensive traditional security,
A set of partially trusted intermediaries replaces a single and fully trusted intermediary.
Elements Of A Blockchain
Types Of Blockchains
Participants in a blockchain
Types of blockchains
Anyone has the ability to read, write, and verify data on the blockchain. i.e. anyone can be a node.
Values anonymity, immutability and transparency over efficiency.
Extremely secure but slow and wasteful.
Most appropriate when a network needs to be decentralised.
eg:- Bitcoin, Ethereum
A single entity (company, organisation etc) can write and verify transactions.
Read access is provided as per the company's discretion.
Values efficiency over anonymity, immutability and transparency.
Appropriate to traditional business and governance models.
eg:- Blockstack, Multichain
A hybrid between the ‘low-trust’ provided by public blockchains and the ‘single highly-trusted entity’ model of private blockchains.
A few predetermined nodes can write and verify transactions.
They value immutability and efficiency over anonymity and transparency.
eg:- Ripple, Hyperledger Fabric
Vitalik Buterin - “The idea that there is “one true way” to be blockchaining is completely wrong headed, and both categories have their own advantages and disadvantages
Blockchains vs Distributed Ledger Systems
It's a blockchain if it has :-
The transactional data whose integrity is protected by a blockchain should be replicated in a way which is as tolerant to worst-case malicious problems and actors as possible.
Food For Thought
Blockchains do not guarantee truth. They just preserve truth and lies from later alteration.
Even public blockchains don't entirely solve the trust problem.