or smart contracts when you shouldn't use blockchains · in fact, the original bitcoin...
TRANSCRIPT
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When You Shouldn't Use Blockchains– or Smart Contracts
axel simon, Office of the CTO
OpenFintech Forum2018-10-11
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Presentation agenda
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RED HAT OFFICE OF THE CTO – AXEL SIMON3
- What are blockchains? (and what are they useful for?)
- Are we getting overexcited here?- When not to use a blockchain- What are smart contracts? (and what are they useful for?)
- What to think about when considering smart contracts
- What about trust?
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What blockchains are(an attempt at a definition)
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RED HAT OFFICE OF THE CTO – AXEL SIMON5
A blockchain is a
- distributed- replicated- peer-to-peer network of- databases allowing- multiple non-trusting parties- to transact without a trusted 3rd party intermediary and- maintains an immutable record of time sequence records.
BLOCKCHAIN: THE NEW SOLUTION(TO ALL YOUR PROBLEMS)
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RED HAT OFFICE OF THE CTO – AXEL SIMON6
- A hyped-up concept, with some real properties.
- Blockchains (for different uses) rather than blockchain (one to rule them all).
- Ecosystem mostly open source.
BLOCKCHAINS:THE INTERNET OF VALUE?
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What are they useful for
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RED HAT OFFICE OF THE CTO – AXEL SIMON8
Replace a (fallible) authority with a distributed system where every participant reaches agreement regarding "the truth" and no one can take control.
Distributed authority & consensus mechanisms.
HOW ARE THEY USEFULREPLACING A (FALLIBLE) AUTHORITY
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RED HAT OFFICE OF THE CTO
HOW ARE THEY USEFULA COMMON RAIL
Blockchains can also be envisioned as a common information rail (or a message bus) that connects various entities.
Each organisation latches onto the rail and follows it.
This idea is at the heart of most of the powerful BC use cases: reconciliation with a single entity(the blockchain, the rail, the message bus)rather than a multitude of different ones with their own approaches, protocols and quirks.
Another common rail: the Sky-Line in BioShock Infinite
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RED HAT OFFICE OF THE CTO – AXEL SIMON10
Immutable series of time-stamped events.
Great for traceability.
Useful for logistics, healthcare (one patient record easily shared), financial transactions, etc.
HOW ARE THEY USEFULTRACEABILITY
CC Twentyfour Students
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Things to keep in mind about blockchains
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RED HAT OFFICE OF THE CTO – AXEL SIMON12
Fundamentally, blockchains are peer-to-peer networks: this has consequences (good & bad).
Everyone has a copy of the data.
THINGS TO KEEP IN MINDA FEW (INTERESTING, DESIRABLE) CHARACTERISTICS
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A solution looking for a problem?
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RED HAT OFFICE OF THE CTO – AXEL SIMON14
Blockchains are not a silver bullet.
A SOLUTION LOOKING FOR A PROBLEM?
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What’s pushing for adoption?(and are we getting overexcited?)
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RED HAT OFFICE OF THE CTO – AXEL SIMON16
• Any application with multiple users which stores data can be a blockchain-enabled application!
ADOPTION DRIVERSNOT ALL DESIRABLE
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RED HAT OFFICE OF THE CTO – AXEL SIMON17
• Any application with multiple users which stores data can be a blockchain-enabled application!
• Conferences and “gurus” saying “embrace blockchain now, or go out of business within six months”
ADOPTION DRIVERSNOT ALL DESIRABLE
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RED HAT OFFICE OF THE CTO – AXEL SIMON18
• Any application with multiple users which stores data can be a blockchain-enabled application!
• Conferences and “gurus” saying “embrace blockchain now, or go out of business within six months”
• The tech is hard to understand, those who do tend to be techies(and don’t necessarily care about business impact)
ADOPTION DRIVERSNOT ALL DESIRABLE
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If you only remember one thing:
before you ask “which?”, ask “why?”
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Reasons not to deploy a blockchain
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RED HAT OFFICE OF THE CTO – AXEL SIMON21
● when ○ it's just you: no group/multiple (dis/mistrustful) entities, no consensus, no point○
WHEN TO SAY NOIT’S EASIER THAN IT SEEMS
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RED HAT OFFICE OF THE CTO – AXEL SIMON22
● when ○ it's just you: no group/multiple (dis/mistrustful) entities, no consensus, no point○ it's a group, with a central/third-party authority, but it's doing its job fine.
Also: when the process is a single/few step(s), not multiple steps.
●
WHEN TO SAY NOIT’S EASIER THAN IT SEEMS
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RED HAT OFFICE OF THE CTO – AXEL SIMON23
● when ○ it's just you: no group/multiple (dis/mistrustful) entities, no consensus, no point○ it's a group, with a central/third-party authority, but it's doing its job fine.
Also: when the process is a single/few step(s), not multiple steps.
● when using a centralised database works fine○ think “where is the data” (location), not “who owns or controls it” (authority)○ in some cases, consensus (not control) about updating it is enough
●
WHEN TO SAY NOIT’S EASIER THAN IT SEEMS
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RED HAT OFFICE OF THE CTO – AXEL SIMON24
● when ○ it's just you: no group/multiple (dis/mistrustful) entities, no consensus, no point○ it's a group, with a central/third-party authority, but it's doing its job fine.
Also: when the process is a single/few step(s), not multiple steps.
● when using a centralised database works fine○ think “where is the data” (location), not “who owns or controls it” (authority)○ in some cases, consensus (not control) about updating it is enough
● when you're the only one who benefits and it will just be costly / painful to others: you'll never really convince them
WHEN TO SAY NOIT’S EASIER THAN IT SEEMS
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RED HAT OFFICE OF THE CTO – AXEL SIMON25
- Privacy by design: if you are going to store personal information, think twice.
- GDPR compliance team will thank you
WHEN TO SAY NOOR AT LEAST THINK LONG AND HARD
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Things to keep in mind with smart contracts
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RED HAT OFFICE OF THE CTO – AXEL SIMON27
You are probably thinking of contracts like this:
Think programs.
The programs are sent to the blockchain network.
They are executed by blockchain nodes.
“SMART” “CONTRACTS”NEITHER REALLY ONE OR THE OTHER
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RED HAT OFFICE OF THE CTO – AXEL SIMON28
Smart contracts on multiple nodes, lots of complex interesting legal problems:- legal validity of code- responsibility (initiator? executor? third-parties?)- jurisdictional (where is the program actually running?)- oracles
- timely?- trustworthy? (assumed)- reachable?
“SMART” “CONTRACTS”LOTS OF NEW PROBLEMS TO CONSIDER
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RED HAT OFFICE OF THE CTO – AXEL SIMON29
Smart contracts on multiple nodes:- how do you keep them updated?
Lots of complex computer problems lie here:- atomicity- race conditions- secure multi party computation (not exactly solved)
Smart contracts on single nodes:- SPOF, central authority?
“SMART” “CONTRACTS”EVEN MORE PROBLEMS TO CONSIDER
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RED HAT OFFICE OF THE CTO – AXEL SIMON30
Not saying “don’t”.
Saying: think about “why” and “how”.
“SMART” “CONTRACTS”JUST REMEMBER THIS
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A note about trust
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RED HAT OFFICE OF THE CTO – AXEL SIMON32
Trust is not a commodity.In fact, the original bitcoin whitepaper talks about “trustless”¹.
Trust is a human value.It's fickle and dependent on a multitude of factors (context, time, goals, people) of which technical solutions are only a part.
TRUST
1. It’s not about zero trust, it’s about choosing who you trust.
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FIN
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THANK YOUplus.google.com/+RedHat
linkedin.com/company/red-hat
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facebook.com/redhatinc
twitter.com/RedHatNews
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Backup slides
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RED HAT OFFICE OF THE CTO
SOME HELPFUL CONCEPTS“ISN’T IT JUST A DATABASE?”
One can follow the following conceptual path:
1. Centralised database2. Replicated database3. Distributed database
(Up to now, all under the control of one entity.)
4. Distributed ledger / blockchains(Under the control of multiple entities)
https://medium.com/@sbmeunier/blockchain-technology-a-very-special-kind-of-distributed-database-e63d00781118
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RED HAT OFFICE OF THE CTO
SOME HELPFUL CONCEPTSHORIZONTAL & VERTICAL
Horizontal component● Data is distributed horizontally: every node in the network has a full* copy of the data
Vertical component● Data is ordered chronologically, in a series of blocks, each connected (and cryptographically linked) to the
previous
* Some argue that only sending some of the data to some of the nodes is a superior model