The world's strongest anchor point: rediscovering the Bitcoin system

1. Translator’s Preface:

The title image is borrowed from Wanxiang Vice Chairman: Xiao Feng. Mr. Xiao’s speech materials contain blockchain components, but who will become the blockchain in the era of value Internet? This choice is critical for an enterprise. Although future history will always make a choice, let’s still take a look at this article.

2. Blockchain is introduced into the mainstream

Different from the perception of Bitcoin as a currency, its underlying Blockchain technology has been accepted by famous companies, banks, and even governments. A whole new industry is emerging based on this technology, which allows multiple organizations to reach a consensus on the consistency of the database without a trusted third party.

However, most of this Blockchain industry does not actually use Bitcoin's Blockchain. Instead, some startups are constructing various Blockchains, or borrowing Blockchain's proven shared ledger technology. There is a simple reason for this strategy: Bitcoin's system architecture limits its scope of use.

However, some properties of Bitcoin's Blockchain are unmatched: it is by far the most secure, open, decentralized ledger. That's why a new wave of Blockchain startups, including Factom, Tierion, and DocSign, are looking to build a bridge to allow business applications to integrate with the Bitcoin system. They use Bitcoin as an anchoring technology to protect other chains and data layers.

3. Limitations and Security

Peter Kirby, CEO of Factom, a startup that is building a data layer on top of bitcoin and is working with the Honduran government on a land registry, explained in an interview with Bitcoin Magazine that there are some circumstances where avoiding the bitcoin blockchain makes sense.

"You won't see a lot of very advanced things built on top of Bitcoin because Bitcoin has some major limitations," Kirby said. "Obviously, there's a speed limit: you need to wait 10 minutes for a transaction to clear, sometimes 30 minutes, maybe 60 minutes. But you don't always have an hour to wait for your application to finish executing. In addition, there's a cost issue. If the value of Bitcoin goes up, that means all the costs change. Finally, the most important one, there's a capacity issue. Bitcoin can't handle more than seven transactions per second." "Translator's note: This is the capacity issue encountered as of December 2015. The community is now trying to solve the problem with BIP100 or BIP101. Based on the translator's 18 years of experience in IT and Internet hardware equipment, capacity and speed issues are not a problem, and Moore's Law will work. "

However, this does not mean that Bitcoin's Blockchain is useless, Kirby stressed. To date, one feature of Bitcoin's Blockchain has been impossible to replicate: its unique and proprietary security features. Bitcoin's permanence relies on bookkeeping computing power to ensure that the entire system is not vulnerable to 51 % attacks. In other words, it uses computing power to prevent anyone from " changing the past . "

Moreover, over the past six years, Bitcoin has gathered record hashing power.

Bitcoin is an amazing network with a lot of computing power - about 500 Phash per second," Bryant continued. "If you think of the Blockchain as a brick stacker: you put your own information on the top of the wall like a wall, and the Bitcoin system will continue to stack 100,000 times more bricks. For every brick that any other Blockchain stacks, Bitcoin stacks more than a ton of bricks."

4. Anchor Point

For the Bitcoin Blockchain, its unique security value has been formed: anchor points. Instead of transmitting and processing all information on the Bitcoin block , newer Blockchains and other data layers can do most of the work on their own chains or ledgers, and then easily take advantage of Bitcoin's security, of course, without having to put a lot of information into the system .

By using a hashing algorithm called a Merkle tree, data – any type of data – can be encrypted and compressed into a seemingly random string of numbers called a hash value. The hash value can be much shorter than the original data, but it is impossible to crack and will be considered useless by anyone without the original data. However, anyone with the original data can decrypt it with the same exact method. If two hash values ​​prove to be the same, it must prove that the same data was used to generate the original hash value.

By performing a continuous hashing algorithm on the hash values ​​attached to the Merkle tree, a new hash value is formed, called a Merkle root. In this way, hundreds of blocks of data can be compressed into a Merkle root. Under the magic of cryptography, anyone who has any original data can use the Merkle root to check whether the original data is part of the Merkle tree.

Philips is experimenting with using the Merkle tree Bitcoin’s Blockchain. The electronics and healthcare giant has partnered with Bitcoin startup Tierion to allow users to create verifiable records of any data, files or corporate processes on the Bitcoin Blockchain.

Elaborating on the details of the approach, Tierion CEO Wayne Vaughan told Bitcoin Magazine:

“Tierion can anchor millions of records to the Blockchain, even though the Bitcoin system can only process 7 transactions per second. Every 10 minutes, we attach the records we receive to the Merkle tree and then put the corresponding Merkle root on a Bitcoin transaction. Tierion uses this information to generate a Blockchain receipt for each record. Anyone with a Blockchain receipt can verify the contents and timestamp of the corresponding record without even knowing Tierion. They only check the Bitcoin Blockchain.”

Explaining why this might be useful, Vaughan said:

Imagine you are a manufacturer with a complex procurement process. By connecting your existing procurement system to Tierion, or other tools that anchor data to the Bitcoin Blockchain, you will be able to timestamp and verify the content of each purchase order and approval. This allows you to create a procurement system that can span multiple partners with a verifiable, auditable trail."

This strategy is even being adopted by traditional payment systems. Visa recently announced a partnership with DocuSign to issue contracts using both Visa’s existing payment facilities and the Bitcoin Blockchain.

In our DocuSign/Visa connected car example, we generate the transaction information and publish it to an open system, which provides a secure, tamper-proof container that is also timestamped,” said Tom Gonser, founder and chief strategy officer of DocuSign. “Then this container allows any application to access our transaction and process it, knowing it is authentic and trustworthy.”

5. The Future of Bitcoin 2.0

Therefore, these companies believe that "anchors" may well be the future of Bitcoin, a 2.0 technology. Bitcoin itself may never become a platform that records every stock transaction for us, or any data in the world. But it will develop into an important and secure base layer, on which more advanced solutions are built. The Bitcoin system will be rediscovered as a basic building block, just like the IP layer of the Internet itself.

“ TCP/IP is responsible for moving packets of data, HTTP is responsible for managing images and visualizations, and on top of that are more interesting and fancy application protocols like Flash and HTML5 ,” Kirby said. “ We think that blockchain technology will be built in the same way. The Bitcoin blockchain system is at the core, and on top of that is the data layer, and then applications like Storj and Ethereum that you can write information to .”

He added, “Typically, the banking and financial world is always concerned about the Bitcoin system, and they always come up with reasons why Bitcoin is not perfect. But it doesn’t need to be perfect, it just needs to be there. ”

Vaughan agreed.

"There has never been anything like this in the world , " he said. " The Bitcoin blockchain provides an engine for global consensus, a data engine for verifying global information. I think people are just beginning to realize its potential."

Original article address: https://bitcoinmagazine.com/articles/sia-launches-decentralized-blockchain-based-storage-platform-similar-to-filecoin-and-storj-1449082814

Original author: Aaron van Wirdum

Compiler: Wang Liren

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Wang Liren, an IT enthusiast, has worked in the Internet software and hardware industry for 18 years. He is a programmer, network security and system engineer. He likes to study the history of IT and the game in the standardization process. He has a lot of gossip stories in the IT hardware industry in his stomach. He will write a book if he has the opportunity. Blockchain is a brand new information technology. If you don’t pay attention to financial technology, you can’t innovate and you will be eliminated by the times, because new technology usually brings ten times the competitive pressure and unprecedented dimensionality reduction attacks.