The Next Radical Internet Transformation: How Blockchain Technology is Transforming Business, Governments, Computing, and Security Models

Title: The Next Radical Internet Transformation: How Blockchain Technology is Transforming Business, Governments, Computing, and Security Models
Date: Friday, April 07, 2017
Time: 12:00 PM Eastern Daylight Time
Duration: 1 hour

SPEAKER
Mark Mueller-Eberstein
CEO & Founder at Adgetec Corporation, Adjunct Professor at Rutgers University, Senior Research Fellow at QIIR

MODERATOR
Toufi Saliba
CEO, PrivacyShell and Chair of the ACM PB Conference Committee

RESOURCES
On-Demand Link to Webinar
Mark Mueller-Eberstein’s Blog
DAO
How to time-stamp a digital document
Hyper Ledger
Ledger Wallet
Mootipass
Satoshi Nakamoto - Bitcoin
Big Idea Series: Will Blockchain be to Transactions what “Web” was to Communication?
What is Blockchain?
Is Blockchain another Technology Tidal Wave?
Bitcoins Maybe; Blockchains Likely

ACM Learning Center Online Books and Courses
Books:
Applied Cryptography
Bitcoin for Dummies
Bitcoin for the Befuddled
Blockchain
Cryptography
Understanding Bitcoin

Skillsoft Courses and Videos:
Bitcoin Technology Fundamentals
Essentials of Blockchain Series
Introduction to Digital Currency
The Basics of Blockchain
Working with Bitcoin

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how will we be notified when the replay is available?

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Hi, Leon. The recording should be available in about an hour. You’ll also get an email notice within the next day. You can always access it through the same link with which you reigstered:

http://event.on24.com/wcc/r/1362212/98AEA8E0DCC6E79EB5FE3BC485B335A5

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Attendee Question: Are blockchains like Bitcoin environmentally friendly?

Answer (Mark Mueller-Eberstein): In general “yes.” It depends a) what you compare it to(e.g., transitional transaction mechanisms; driving to a bank teller or escrow office…) and b) how the power is generated. For Bitcoin, most mining facilities are near hydropower stations using cheap / excess / free electricity today.

Attendee Question: Proof-of-work blockchains bear close similarity to byzantine consensus, a widely studied problem in distributed algorithms. Shouldn’t we be evaluate more closely the trade-offs between proof-of-work and traditional BFT? (see for example this paper: https://link.springer.com/chapter/10.1007/978-3-319-39028-4_9).

Answer (Toufi Saliba): PoW used in Bitcoin was necessary, although not sufficient. As you know, other elements were crucial in the design. The necessity is for entire system to rely on a universal method, i.e. burning energy that is needed for the node to have vote in the system. Assuming the effort involved for the hashcash as part of the PoW is not subject to manipulation or algorithmically resolvable by some parties in the system but not all parties. This assumption will not live forever, in fact some folks (ASICBOOST) exploited [it] back in 2014 and filed for a patent on a design that can reduce the amount of energy needed and therefore have significant advantage if utilized by some of the nodes not all of them.

Attendee Question: You mention the 51% attack, are you aware of 25% attacks and partition attacks?

Answer (Toufi Saliba): Yes, depending on the blockchain, a successful sybil attack needs 51% for Bitcoin Blockchain. Some blockchains, 25% can render them unusable, especially centralized ones and permissioned ones because their security is often not too strong to allow permissionless like Bitcoin.

Attendee Question: How [is] blockchain technology useful in the domain of Education? In building universities of digital age?

Answer (Toufi Saliba): When compared historically, I’d like to think of the current blockchain revolution to be more like the FTP and not the HTTP. Eventually the equivalent of HTTP will come to life and will become inevitable in revolutionizing everything around. By everything, we mean everything digital.

Attendee Question: What are the security vulnerabilities of blockchain?

Answer (Toufi Saliba): Blockchains in general are designed with security first. Almost all known blockchains today have the same DNA of Bitcoin with minor changes, or mutation. Often those changes reduce the security of the blockchain. However, most blockchains are open in the wilderness of the internet and are subject to all kinds of attacks on a regular basis. Quick rule of thumb, if they survive the wilderness they are likely immune to the attacks they were subjected to.

Attendee Question: What is the best university to study blockchain technology for a PhD student?

Answer (Toufi Saliba): Not sure “best” is easy to answer…the following universities have good programs and are certainly influential in the space, especially from the research perspective. To my knowledge, MIT, Cornell, Stanford, Berkeley, UIUC, Technion, Waterloo, UofT, Maryland.

Attendee Question: Email still has no generally accepted cover, analogous to a normal letter. Don’t we make ourselves vulnerable by continuing without being safe. Should we want to?

Answer (Toufi Saliba): Very good point. One of our portfolio startups have a solution using the Blockchain to secure any email regardless of the provider. Check them out FinaSafe.com - Althrough the tech is super sound, they aren’t doing well from the business perspective. Things could change. Startups with good products fail when other components aren’t aligned.

Attendee Question: What is blockchain, technically?

Answer (Toufi Saliba): There are books on that and many web refferences if you search Google. In one statement: Blockchains are hash trees (often merkle trees) of smart contracts activated by digital signatures and are daizy chained through a similar time intervals to incorporate every single historic element to render them immutable and irrefutable.

Attendee Question: I heard that the blockchain technologies can handle only 7 transactions per second. Is it true?

Answer (Toufi Saliba): It is true, and that’s the first successful blockchain, Bitcoin. All other blockchains share the same DNA, they are a variation of bitcoin with some enhancement. [They] still have Replicated Ledger Technology (not distributed) but they are decentralized, which is the first time on earth we have an organism that can live by its own rules without human intervention. The only blockchain I know of that is being developed by utilizing tested components from existing blockchains is called Toda Protocol. Fully distributed Ledgerless Blockchain. Through some simulations we got last year a throughput of 3M/tx per second at the low when deployed to 2 billion devices, such as smartphones. Happy to elaborate if you are interested to learn more.

Attendee Question: Is blockchain size/bloat a problem? At >80 GB, the BTC blockchain is outpacing the “trivial storage” threshold. What are your thoughts on the centralizing influence of high blockchain sizes?

Answer (Toufi Saliba): Huge problem. But I would rephrase it. It isn’t the size. If it was distributed throughout the network then it’d be fine even with some replication of factor, say 32. But currently blockchains are 100% replicated throughout miners. Beyond friction that this represents, miners can be controlled by smaller group of people, especially when they need special hardware as in PoW blockchains like Bitcoin. Keep in mind, Bitcoin was much purer, it took years of exploitation to get us of where we are now.

Audience Comment: “Permit me to control the currency of a nation and I care not who makes its laws.
– Baron von Rothschild”

Toufi: Wow, super powerful! Thanks for that quote

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Attendee Question: Is a monetary value of the asset also being created by the owner?

Answer (Toufi Saliba): Depends on the blockchain, but at the end of the day, the value is what people are willing to buy it for and it increases as you increase the demand while supply is scarce.

Attendee Question: In the 1990s Bellcore published and then implemented “How to Time-Stamp a Digital Document” using block chains. What has changed in the past 2 dozen years?

Answer (Toufi Saliba): Interesting. I didn’t know that about Bellcore. Will check them out. I didn’t know they had “block chains” then. The term blockchain was 2 words in Satoshi Nakamoto’s paper as in “block chains” and became one word throughout the evolution of usage etc. In the 2008 paper, they did not intend for the 2 words to be merged.

Attendee Question: How does blockchain prevent history modification?

Answer (Toufi Saliba): Historic events, i.e., smart contracts (like transactions) are hashed and concat-hash through temporal coupling in an algorithm that builds up the Merkle Tree, then it’s daisy chained through future Merkle trees, i.e., hash of previous block or Merkle root is added to existing and then together into the future block, etc. If you change a single value in the past, the entire present values will change, let alone that the computation needed to PoW or whatever consensus mechanism you use is very hard to replicate.

Attendee Question: Does the picture example really work? What prevents anyone from creating a copy of the picture outside of the blockchain? If the picture has any value outside the blockchain, it will retain this value whether or not it’s part of the blockchain.

Answer (Toufi Saliba): Well, if you take the cryptographic hash of the picture and insert it into the current block, it becomes as immutable as the entire system. Historic events, i.e., smart contracts (like transactions) are hashed and concat-hash through temporal coupling in an algorithm that builds up the Merkle Tree, then its daisy chained through future merkle trees, i.e. hash of pervious block or merklroot is added to existing and then together into the future block, etc. If you change a single value in the past, the entire present values will change, let alone that the computation needed to PoW or whatever consensus mechanism you use is very hard to replicate. However Pictures, even if you simply modify the color in [a way] unnoticeable to the human eye or even if you put one extra pixel, the entire hash will change. So not only the hash is very hard to create a collision (almost impossible), [but also] inserting it in the history of the blockchain becomes more challenging.

Attendee Question: Bittorrent technology is almost / effectively outlawed because governments / legislators can’t control it. What would make blockchain different?

Answer (Toufi Saliba): Bittorent is a fabulous technology. From a Science perspective nuclear energy is fabulous as well and can either be used to destroy the planet or help build it. Albert Einstein, Bram Cohen and Satoshi Nakamoto did not intend for harm. So if governments find one issue somewhere from wrong utilization, banning is currently questionable.

Attendee Question: At the rise of the internet, things moved slowly for a while, then really took off. Just with respect to hiring, by 1998/99, salaries rose markedly and there was a perceived shortage of qualified applicants for positions.

Answer (Toufi Saliba): Interesting, I’d like to think more of the Blockchain now as 1988/1989 due to similar market penetration in volume with FTP and not HTTP.