Total Blockchain Blocker Man

This essay is excellent. Just click the link.

Kai Stinchcombe argues

“blockchain is a … technology, not a metaphor”

here’s what blockchain-the-technology is: “Let’s create a very long sequence of small files — each one containing a hash of the previous file, some new data, and the answer to a difficult math problem — and divide up some money every hour among anyone willing to certify and store those files for us on their computers.”

Now, here’s what blockchain-the-metaphor is: “What if everyone keeps their records in a tamper-proof repository not owned by anyone?

He argues that blockchain technology does not eliminate the need for trusted intermediaries. He also argues that trust is good and that societies which rely on trust are better then ones which do without it.

I think he shouldn’t assume everyone knows what a hash is. It’s just a function (hash function) which maps from huge numbers to medium sized numbers (so not a one to one function). Also he shouldn’t assume I know what a smart contract is. It appears to be a program that actually transfers funds as soon as it is digitally signed rather than just telling people to pay other people.

There is an implicit challenge in the essay

There is no single person in existence who had a problem they wanted to solve, discovered that an available blockchain solution was the best way to solve it, and therefore became a blockchain enthusiast.

I am not a blockchain enthusiast & I want to try to meet this challenged here in this post. There is a strong hint here (sadly criminal but it doesn’t have to be).

Same with Silk Road, a cryptocurrency-driven online drug bazaar. The key to Silk Road wasn’t the bitcoins (that was just to evade government detection), it was the reputation scores that allowed people to trust criminals. And the reputation scores weren’t tracked on a tamper-proof blockchain, they were tracked by a trusted middleman!

So the challenge is how to have (relatively) trustworthy reputation scores without a trusted middleman ?

A problem with reputation scores (such as yelp reviews) is that they can be hacked with low ratings given by hostile people who haven’t really bought the good or service being reviewed.

There is (probably in use) a technology related to cryptocurrency blockchains which can eliminate this problem. One key part of say the bitcoin blockchain is the key or digital signifier each user has (meaning everyone who has ever owned bitcoin not just miners). This is just an application of the standard public code/private key system used for safe internet browsing (I just checked and I am at https://angrybear… using such a system). Each person A comes up with a function F_A which is very hard to invert and the inverse F_A_inverse. This serves as a digital signature. A tells the world F_A, then sends signed messages F_A_inverse(something comprehensible in say English o italiano). Only if it is really sent by A does F_A(the coded message) make any sense. Importantly it is very very hard to invert F_A knowing only F_A and hard but not so very hard to come up with new pairs of functions (F_A, F_A_inverse). This is standard technology absolutely key to e-commerce.

But it can be usefully combined with cryptocurrency as follows.

A writes (and encodes with F_inverse) an offer to pay B for some good or service, with payment when the good or service is delivered within some interval of time and is satisfactory, but really payment if the buyer doesn’t file a complaint within a slightly longer interval of time. To do this A must describe bitcoin belonging to A equal to the amount paid, possibly plus a penalty forfeited if A posts a complaint. B then sends a message (coded with F_B_inverse) accepting the offer. The pair of messages is is a draft transaction made of the offer and the acceptance. Then miners check that A really has the cryptocurrency (as they do with bitcoin etc), that the longer interval of time has passed and that A has not complained then put the transaction in a block. Now the cryptocurrency belongs to B. Or A can report that B failed to deliver on time or the good was no good. Then B doesn’t own the cryptocurrency. Also A doesn’t own the cryptocurrency. It belongs to the miner who creates who verifies that A made the offer, that A made the complaint, and that enough time had passed. adds the offer and complaint to a block and solves the proof of work math problem so that it is a valid block.

If B is cautious or paranoid, B can only accept the offer if it consists of A transfers so much to B and so much back to A only if A makes no complaint and the rest back to A even if A complains. So A reserves the right to make a complaint at a cost of giving some cryptocurrency to the miner when the complaint is recorded. Also (and finally I think) The buyer may demand (so written in the orignal offer) that the seller must post some cryptocurrency when accepting the offer, which cryptocurrency is forfeited if the buyer complains

Importantly, the offer and the complaint have the same signature (are mapped into apparent gibberish with the same F_A_inverse). The complaint is only recorded if the complainer pays, in this case to the miner not to B.

The remaining problem is that A and the miner might be the same person so the penalty is a transfer from A to A. But this requires A the malicious miner to solve the proof of work problem before anyone else.

I think this works.

A dishonest merchant might only fill orders from people who promise to pay such a large penalty to complain that they won’t complain even if the good never arrives. Fools will buy from such merchants. Technology can’t eliminate idiocy.

But the option to transfer the wealth to a third party miner means both shoddy goods and services and malicious negative reviews can be punished. The miner doesn’t have to be trusted by anyone as the mining oerations are verified by all other miners just so they can keep their blockchains up to date. The merchant B doesn’t have to worry about his or her reputation — the complaint is costly even if A is the only potential customer B will every have. A doesn’t have to worry about A’s reputation or to have a reputation for honesty. If no one trusts me, I promise to pay them or pay more to complain.

I think it works.

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