It was Bitcoin that first caught the attention of IBM researchers

March 8, 2017 10:26 AM

What uses could the Bitcoin-style blockchain have beyond digital currency? How about tracking supply chains?
posted by Chrysostom (19 comments total)

What uses could the Bitcoin-style blockchain have beyond digital currency?

Increasingly elaborate scams and astonishingly foolish ventures like the DAO?
posted by Sangermaine at 10:36 AM on March 8, 2017 [7 favorites]

But blockchain champions like to compare it to the significance of the internet, which provided a universal computing language for communicating seamlessly among networks.

That's, uh, quite a statement, NYT Business Section. I have the XSD for an arcane partner we're trying to integrate with sitting in front of me--maybe you could let it know about this universal language?

Snark aside, I'm deeply skeptical that this has any practical implication. Blockchain currencies took off because neckbeards love the idea of financial transactions that the dirty gub'mint can't get its greasy fingers on. Absent the need for transactional anonymity and widespread shared recordkeeping, all you do by making your tracking system into a blockchain is introduce a strong motive to attack one of the few ledgers. There is literally no advantage to this that isn't conferred by some other classical recordkeeping system with strong crypto.
posted by Mayor West at 10:55 AM on March 8, 2017 [8 favorites]

I could see a use for a blockchain-based ledger in some businesses, mainly where there are external entities acting as an agent. It could help some of the record keeping and reconciliation issues, which can be an absolute nightmare if the partner is lackadaisical. (Sometimes replacing them isn't really an option for whatever reason, so technical solutions can be desirable)
posted by wierdo at 11:05 AM on March 8, 2017

If you had asked me if the blockchain had any future like a year ago I would tell you to shut your dirty Javascript ass-kissing mouth, that enterprise AI Cloud was the future.

Today?

I'm pretty stoked about the blockchain as the Chief Evangelist at a startup that develops an AI Centric Enterprise Blockchain Platform for the adult entertainment industry. It's actually anti-fragile and can run on everything from mobile devices to pacemakers thanks to its robust hyperconvergence capabilities. We're speaking about our upcoming Internet of Tits network at the next DEMO:DistruptBeat day if you're interested.
posted by Foci for Analysis at 11:08 AM on March 8, 2017 [21 favorites]

I like the idea that towns and other social arrangements could have their own cryptocurrencies. There have been local currencies here and there for a long time, but a blockchain system could make them easier to implement. This could be useful for small communities that are cash-poor but have barterable goods or labor. Somewhere between an informal gifting/potlatch arrangement and a full-blown parallel currency.
posted by overeducated_alligator at 11:15 AM on March 8, 2017

Since America seems dead-set on marching straight back to the Gilded Age but with smartphones, maybe companies could exclusively pay their employees in their own corporate cryptocurrencies, which are only accepted at the company store.
posted by Sangermaine at 11:21 AM on March 8, 2017 [9 favorites]

The dstibuted aspect is interesting though. So many of the recent, hyped technologies require being centralized. Read that as benevolent dictator at best.
posted by Strange_Robinson at 11:25 AM on March 8, 2017

I'm even more skeptical of generic blockchain hype than I am about Bitcoin itself.

For all of its issues and flaws, Bitcoin is pretty close to a local optimum in the design space. What makes it interesting is that it's robust to a lot of different kinds of attacks, and it only manages that through some pretty careful design choices and incentive structures.

If you try to modify it substantially -- say, by trying to replace the mining process with something less wasteful -- you typically end up with a system that has a lot of Bitcoin's downsides and few of its strengths. Slapping the "blockchain" label on it doesn't change the technical realities.
posted by teraflop at 11:42 AM on March 8, 2017 [1 favorite]

OK. So what's cool about this is that all of these disparate record keeping systems no longer have to be able to integrate with each other on the supply chain to do lookups automatically.

So let's say peanut butter. Making the peanut butter you have a grower, a processor, and a seller.

The peanut farmer generates a load of peanuts. The farmer slaps a lot number on it, signs it, sends it to the ledger and the ledger signs it and writes it to the block chain. Once the load of peanuts arrives the processor signs an acknowledgement and sends it to the ledger. Then the peanut processor turns it into butter. They have a package of peanut butter and slap a lot on it. They get the lot number of the batch, and the lot numbers of the peanut farmer they used, sign it and send it to the ledger. The ledger then signs that and writes it to the block chain. They bundle up all the lot numbers of peanut butter they use for the shipment, send it to the store. The store sends its acknowledgement, etc.

Now a few of the jars from a farmer are contaminated with Salmonella. Mr USDA walks in, pulls up the block chain, knows the lot numbers, the farmers that have been involved, and can immediately send out an alert to all the other supermarkets who have jars with the same processor number or farmer shipment involved.

Another example, let's say you're shipping out widgets. If everyone in the supply chain is on the block chain you can trace back through the smelter to the mine where the metal for your widget is pulled from. This can assist in compliance and stomping out conflict minerals.

Of course, all of this requires secure cryptographic devices to do the signing. Honestly, we've had a crypto device in everyone's pockets that nobody has been able to pull the AES key out of (the iPhone) so this doesn't seem so far fetched.

The other thing is that the blockchain is fixed. You can correct errors but only by saying, on the record, "oops I fucked up, this is the right data". If someone tries to do something bad they can trace that back through the blockchain and immediately know who did it.

I mean it's an interesting concept. It takes a whole heap of B2B integration shit out of the supply chain, replacing it with a fairly easy to use/integrate concept which can still provide all the relevant data you want.
posted by Talez at 11:53 AM on March 8, 2017 [9 favorites]

I know that my colleagues in systems architecture are cautiously interested in blockchain for digital identity management, but I haven't tried to figure out what that means, exactly... when they geek out it mostly comes across as Peanuts trombone voice to me :)
posted by sevenyearlurk at 12:05 PM on March 8, 2017

Combining it with an RFID reader you can do some really magical things too.

So the peanut processor knows which lots they're supposed to be getting because it's all in the blockchain. So as the shipment comes off the truck the RFID scanner compares the lot numbers of the incoming lots (I know, a peanut processor will usually have a dumptruck, not discrete lots but bear with me here) and raise the red flag if something is missing or something is different to what's expected. So if someone tries to short change the shipment en route there's no confusion. They know what it left with, they know something is not there, ask the driver whether he's selling peanuts off the back of their truck.
posted by Talez at 12:14 PM on March 8, 2017

Blockchain currencies took off because neckbeards love the idea of financial transactions that the dirty gub'mint can't get its greasy fingers on.

This is quite the first-world way to look at it. Bitcoin is being used in places like South America, illegally, to act as a value store for poor folks who are having all of the value of their money inflated away by their corrupt government.

When it becomes a tool to protect the individual against the "dirty gub'mint" because let's be real here: many governments in this world are corrupt and oppressive in a way that first world citizens are dismissive of, like the quote above. Laughing at the Right in the US, for instance, talking about the "dirty gub'mint" when talking about a worldwide technology that impacts many actually terrible governments with fiat currencies seems myopic to me.

It's extremely narrow-minded to assume that those that might want to use Bitcoin worldwide would only do so for nefarious or greedy reasons. Some do it to keep food on their tables because they live under actually oppressive regimes and do not have the luxury of being a citizen of a Western liberal democracy.
posted by unknownmosquito at 12:17 PM on March 8, 2017 [5 favorites]

I've seen it mentioned in the context of (academic/training) credentials.
posted by idb at 12:25 PM on March 8, 2017

Mr USDA walks in

Not for much longer!
posted by Sangermaine at 12:49 PM on March 8, 2017 [1 favorite]

Since America seems dead-set on marching straight back to the Gilded Age but with smartphones, maybe companies could exclusively pay their employees in their own corporate cryptocurrencies, which are only accepted at the company store.

More Age of Imperialism than just Gilded, but it turns out that Amazon pays many of its non-American members of Mechanical Turk in Amazon credit only, hence the existence of Purse.io to allow consumers to exchange their bitcoin with those workers for Amazon products. So it helps Turkers escape the company store, operating in an international, probably oversight-less, process that sounds like a potential opportunity for money laundering.
posted by Apocryphon at 12:52 PM on March 8, 2017

Y'all, blockchains are not the same thing as cryptocurrencies. The former is just a technology for maintaining a distributed ledger that is nominally resilient to a certain proportion of malicious actors attempting to modify its contents and is what the article is mostly centered on, the latter is what you came in here to get mad about (not wrongly, for the most part, but still). Because of the latter, the former has been hyped out of proportion, and like Mayor West I wonder if that hype is driving its application to a use case that might not be appropriate (namely a case where the ledger is distributed between a small group of participants), but, like, the most boring possible direction this thread could take is railing on BTC and neckbeard glibertarians or whatever.
posted by invitapriore at 1:28 PM on March 8, 2017 [4 favorites]

I could see a use for a blockchain-based ledger in some businesses, mainly where there are external entities acting as an agent.

Yeah, I think the key thing here is in a lot of the places it would be useful, you have to get people (especially governments) to accept blockchains-based documents as official records, and I' think they're really underselling how difficult that would be. If you only need one or two private entities to go along, sure, that's very doable, but expecting officials across a global supply chain to all just switch over easily seems foolhardy to me. They already have a process, and one that mostly seems to be working minimally acceptably, and you'll have to convince a whole bunch of local, state, national, and international agencies individually that there's a benefit from abandoning proven methods. Matt Levine talked about some of this a few days ago.

Plus, I think you might just be substituting customs officials not getting an app to work correctly for customs officials not having all the right paperwork instantly. It's not like technical problems cease to exist once we give everyone at the port authority a smartphone and barcode scanner or whatever. The other thing Matt pointed out that I think is a potential pitfall is that it can create an additional level of abstraction between the physical goods and the way they are tracked. Obviously that's already the case to a certain extent, but at the very least, potential mismatches between what the documentation says is in a shipping container and what actually is, whether by mistake or fraud, is not a problem that blockchains could solve, and it seems somewhat likely to me that having a blockchain would eventually lead to less inspection of the physical goods. I'm sure people are working on these concerns, and they're not dealbreakers, but I don't think it's an easy fix considering how complicated this stuff is.
posted by Copronymus at 2:27 PM on March 8, 2017 [2 favorites]

I don't really understand the appeal of blockchain over some trusted centralized record keeper here. Do people just think it'll be easier to get all parties to agree to blockchain than to trust some authority to keep accurate records? Is it worth the extra implementation hassle and mining costs? Mining is either wasteful or insecure. Most likely it'll be both for small networks.

If mining is wasteful, who will do it? Will people pay money into supply chain ledger networks to use bitcoin miners to validate their blockchain? Is that possible? Is that desirable?

Also, do companies want their supply chains to be fully public? Is there any way to use blockchain to create ledgers only trusted parties can see? If so, would they then be able to deploy RFID scanners with access to that ledger and still keep it private? Can untrusted miners mine for a private ledger?

Or is the idea to create some global supply chain ledger that eventually everyone hooks into? Will WalMart want to share their supply chain ledger with Coca Cola? Coca Cola share its supply chain with Pepsi? And how would you incentivize miners in this case?

In conclusion, blockchain is a land of contrasts.
posted by Bobicus at 6:09 PM on March 9, 2017

I don't really understand the appeal of blockchain over some trusted centralized record keeper here. Do people just think it'll be easier to get all parties to agree to blockchain than to trust some authority to keep accurate records?

I'm only familiar with one small corner of the supply chain world*, but I don't think those assumptions necessarily hold true everywhere. The fact of the matter is under current supply chain record-keeping there is a *lot* of leakage and fraud and cheating and lying and miscommunication and there is not necessarily any entity that all players are willing to trust. Especially when they are naturally incentivized to, essentially, cheat each other. That said, I'm not sure blockchain effectively addresses a lot of the avenues where that cheating happens - I did a bunch of reading this afternoon and tbh I still don't understand it well (does it rely on a reliable network connection?).

*possibly the least sophisticated corner
posted by R a c h e l at 1:24 PM on March 10, 2017 [1 favorite]