Blockchains go mainstream…

 

I read an article a while back on Finland’s use of blockchain technology to provide bank accounts and identity services to immigrants (see  MIT TechReview article about Finland).

Blockchains were originally invented as a way of supporting financial transactions outside the current, government monitored, financial marketplace. With Finland’s experiment, the government is starting to use blockchains to support the unbanked and monitoring their financial activity – go figure.

Debit cards on blockchain

Finland’s using a Helsinki based startup MONI, to assign a MONI card, essentially a prepaid MasterCard, to all immigrants. An immigrant can use their MONI card to pay for anything online or in real life, use it as a direct deposit account or to receive and track the use of government assistance.

Underlying the MONI card is public blockchain technology. That is MONI  is not using normal credit card services to support it’s bank accounts, MONI money transfers are done through the use of public blockchains.

MONI accounts are essentially (crypto currency) wallets but used as a debit card. The user merely enters a series of numbers into web forms or uses their MONI card at a credit card terminals throughout Europe. Transferring money between MONI users anywhere in the World is also free and instantaneous.

Finland also sees an immutable record of all immigrant financial transactions,  that can be monitored to track immigrant (financial) integration into the country.

MONI is intending to make this service more broadly available. A MONI card account costs €2/month and MONI take’s a small cut out of each monetary transaction.

IDs on blockchain

I read another article the other day “Microsoft to implement blockchain-based ID system” in CoinTelegraph about using blockchains as a universal digital ID.

India has over the last decade, implemented a digital government ID using biometrics (see Aadhaar wikipedia article). Other countries have been moving to e-government where use of government services is implemented over the Internet (see EU article on eGovernment in Lithuania). Such eGovernment services depend on a digitized population registry.

Although it’s unclear whether Aadhaar and Lithuania make use of blockchain technology for their ID services, Microsoft’s definitely looking to blockchains to provide unique accounts/digital IDs to it’s population of users.

User signon’s has been a prevalent problem of the web for years. Each and every web and mobile App requires a person to signon to personalize their App. Nowadays, many Apps support using Google ID or Facebook ID for a single signon and there are other technologies being offered that provide similar services. Using a blockchain ID could easily support a single signon service.

The blockchain ID (wallet) public key could easily be used to encrypt an authentication transaction, identifying the App and the user. This authentication transaction would be processed by the blockchain digital ID service would use the private key to decrypt the transaction and use a backend ID App repository for the user to check to see that the user loging in, is the person that opened the account, acting as a sort of “proof of who you are”

Storage on blockchain

Filecoin and StorJ are storage providers that use blockchain services to allow others to use your local (or networked) storage to provide storage to the world.

A while back I had written about (free) peer to peer storage and compute services  (see my Free P2P cloud storage … post). But the problem was how do people benefit from hosting the P2P storage or compute. Filecoin and Storj solved this by paying in cryptocurrencies for storage hosted on your hardware.

Filecoin offers a storage auction and hosting service that anyone worldwide can log into and use. The data stored is encrypted end-to-end so that no one can see what’s being stored and the data is also erasure coded so that it  is protected and accessible even with having one or more hosting sites be offline.

Filecoin uses “proofs of storage“, “proofs of space”, “proofs of data possession“, and “proofs of retrievability” as a way to guarantee their storage service works properly. They also use chained “proofs of replication” as “proofs of spacetime” as service validation checks. Proofs of Replication are a way of insuring that storage providers are not deduplicating data copies and charging for non-deduped storage. (See Filecoin’s Proof of Replication paper for more info).

Storj looks somewhat similar to Filecoin, but without as much sophistication behind it.

Compute on blockchain

Ethereum was invented to support smart contracts that run on blockchain technology. IBM’s HyperLegder OpenLedger project (see our GreyBeardsOnStorga Podcast and RayOnStorage post on Hyperledger) is another example.

Smart contracts are essentially applications that run in a blockchains virtualized environment. Blockchain services are used to run an application and validate that’s it’s run only once. In some cases smart contracts use  external oracles to query as a way to verify something or some action has occurred outside the blockchain. Other oracles can be entirely digital entities that check on a particular commodity price, weather pattern, account value, etc. The oracle becomes a critical step in determining the go no go status of a smartcontract.

Advertisements vs. crypto mining

Salon, a news providing website, offers readers an option to see advertisements or to allow Salon to use their computer (browser) to mine crypto coins. (See Salon offers… article in CoinDesk).

I believe this offer is made when the website detects a viewer is using  ad blockers.

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Tthe trend is clear, people, organizations and even governments are looking at blockchain technology to provide basic and advanced services around the world.

If anyone would is interested in providing a pre-paid Visa card via blockchains, please contact me. I’d like to help.

Now if I could just find my GPU’s at a decent price somewhere…

Speaking of advertising… RayOnStorage doesn’t use advertising. But blogging like this takes time and money. If anyone’s interested in helping fund this blog, please consider sending some BTC our way, even 0.0001 BTC would help.

Our BTC wallet address is:

1MqBbAvMo6QbCVD6ZwtbLaPxmcUZGj9Ghw

Photo Credit(s): Blockchain and the public sector on OpenGovAsia.com

Unleash your design teams with single signon on Unifilabs.com

Understanding the difference between P2P and Client-server networks on LinkedIN

Blockgeek’s guide to smart contracts

Ethereum enters the enterprise

Earth globe within a locked cage

Read an article the other day on NYT (Business Giants Announce Creation of … Ethereum).

In case you don’t know Ethereum is a open source, block chain solution that’s different than the software behind Bitcoin and IBM’s Hyperledger (for more on Hyperledger see our Blockchains at IBM post or our GreyBeardsOnStorage podcast with Donna Dillinger, IBM Fellow).

Blockchains are a software based, permanent ledger which can be used to record anything. Bitcoin, Ethereum and Hyperledger are all based on blockchains that provide similar digital information services with varying security, programability, consensus characteristics, etc.

Earth globe within a locked cageBlockchains represent an entirely new way of doing business in the digital world and have the potential to take over many financial services  and other contracting activities that are done today between organizations.

Blockchain services provide the decentralized recording of transactions into an immutable ledger.  The decentralized nature of blockchains makes it difficult (if not impossible) to game the system to record an invalid transaction.

Miners

Ethereum supports an Ethereum Virtual Machine (EVM) application which offers customers and users a more programmable blockchain. That is rather than just updating accounts with monetary transactions like Bitcoin does, one can implement specialized transaction processing for updating the immutable ledger. It’s this programability that allows for the creation of “smart contracts” which can be programmatically verified and executed.

MinerEthereum miner nodes are responsible for validating transactions and the state transition(s) that update the ledger. Transactions are grouped in blocks by miners.

Miners are responsible for validating the transaction block and performing a hard mathematical computation or proof of work (PoW) which goes along used to validate the block of transactions. Once the PoW computation is complete, the block is packaged up and the miner node updates its database (ledger) and communicates its result to all the other nodes on the network which updates their transaction ledgers as well. This constitutes one state transition of the Ethereum ledger.

Miners that validate Ethereum transactions get paid in Ethers, which are a form of currency throughout the Ethereum ecosystem.

Blockchain consensus

Ethereum ledger consensus is based on the miner nodes executing the PoW algorithm properly. The current Ethereal PoW algorithm is Ethash, which is an “ASIC resistant” algorithm. What this means is that standard GPUs and (less so) CPUs are already very well optimized to perform this algorithm and any potential ASIC designer, if they could do better, would make more money selling their design to GPU and CPU designers, than trying to game the system.

One problem with Bitcoin is that its PoW is more ASIC friendly, which has led some organizations to developing special purpose ASICs in an attempt to dominate Bitcoin mining. If they can dominate Bitcoin mining, this can  be used to game the Bitcoin consensus system and potentially implement invalid transactions.

Ethereum Accounts

Ethereum has two types of accounts:

  • Contract accounts that are controlled by the EVM application code, or
  • Externally owned accounts (EOA) that are controlled by a set of private keys and represent external agents (miner nodes, people, transaction generating entities)

Contract accounts really are code and data which constitute the EVM bytecode (application). Contract account bytecode is also stored on the Ethereum ledger (when deployed?) and are associated with an EOA that initiates the Contract account.

Contract functionality is written in Solidity, Serpent, Lisp Like Language (LLL) or other languages that can be compiled into EVM bytecode. Smart contracts use Ethereum Contract accounts to validate and execute contract actions.

Ethereum gas pricing

As EVMs contract accounts can consume arbitrary amounts of computation, bandwidth and storage to process transactions,   Ethereum uses a concept called “gas” to pay for their resource consumption.

When a contract account transaction is initiated, it identifies a gas price (in Ethers) and a maximum gas amount that it is willing to consume to process the transaction.

When a contract transaction takes place:

  • If the maximum gas amount is less than what the transaction consumes, then the transaction is executed and is applied to the ledger. Any left over or remaining gas Ethers is credited back to the EOA.
  • If the maximum gas amount is not enough to execute the transaction, then the transaction fails and no update occurs.

Enterprise Ethereum Alliance

What’s new to Ethereum is that Accenture, Bank of New York Mellon, BP, CreditSuisse, Intel, Microsoft, JP Morgan, UBS and many others have joined together to form the Enterprise Ethereum Alliance. The alliance intends to work to create a standard version of the Ethereum software that enterprise companies can use to manage smart contracts.

Microsoft has had a Azure Blockchain-as-a-Service online since 2015.  This was based on an earlier version of Ethereum called Project Bletchley.

Ethereum seems to be an alternative to IBM Hyperledger, which offers another enterprise class block chain for smart contracts. As enterprise class blockchains look like they will transform the way companies do business in the future, having multiple enterprise class blockchain solutions seems smart to many companies.

Comments?

Photo Credit(s): Miner by Mark Callahan; Gas prices by Corpsman.com; File: Ether pharmecie.jpg by Wikimedia