I Learned What Blockchain Is So You Won’t Have To

By Krissy Eliot

Blockchain is all the rage right now, but most people don’t know what it is. Sure, we get that it’s somehow revolutionary, but it’s mostly strange and confusing—much like watching a Lars Von Trier movie or eating a Japanese water cake.

In a desperate attempt to understand this illusive and en vogue tech, I went to Eureka!, a monthly science and comedy show in San Francisco that demystifies science by pairing the wisdom of experts with the wit of local comedians. This month, the subject was blockchain, and the guest of honor was UC Berkeley grad Brian Behlendorf. He’s executive director of the open source block chain company Hyperledger; a developer of Apache, the most popular web server software on the net; and a man who ironically hasn’t updated his personal website in 10 years.

“You have such a career in technology, but with your website, you’re just like—EFF it,” says comedian Kevin Whittinghill, who cofounded Eureka! with self-proclaimed polymath and co-host Allen Saakyan, seated beside him. Whittinghill gestures to a blown-up image of Behlendorf’s site on a screen behind them. A true ghost of 90s past, the site boasts a black background and hard-to-read navy text—with a photo of a young Behlendorf smiling in his t-shirt and ponytail. “The cargo shorts, man!” said comic Torio Van Grol as he pointed to the photo. Behlendorf and the audience roared with laughter.

“So what is blockchain?” asked Saakyan—the moment we’d all been waiting for.

“You can think about it like a new kind of database, a database that is decentralized, that’s shared,” Behlendorf said. The database, he explained, acts as an inalterable record of combined transactions online—a ledger that keeps track of when anything of value is exchanged, like cryptocurrency (e.g. bitcoin), contracts, records, pharmaceutical pills, and digital rights for the music industry.

Why is an inalterable ledger important? Because, explained Behlendorf, it creates a permanent record of a  valuable exchange between two people, like a bitcoin transfer, so neither party can make false claims of an exchange. Also, in theory, the shared nature of blockchain makes it un-hackable—in part because there’s no central storage that can be tampered with, and also because there’s no central authority controlling the information exchange.

Basically, blockchain keeps people honest about how they’re using money or exchanging things of value.

“People are excited about a world that is more accountable, more auditable, more fair,” he said. “The reason we don’t do it centralized is we don’t like somebody playing god in the center of our markets.”

To verify the transactions in blockchain, users known as “miners” use computers to solve complex mathematical problems and when they do, they earn a cryptocurrency reward like Bitcoin, or one of the newer currencies like Ether, Lite Coin, Ripple, PotCoin, or even TrumpCoin. (Yes—weed and Donald Trump themed digital money are a thing. People even tried to make a Kanye West inspired CoinyeCoin, but West sued for trademark infringement.)

The hot topic in mining right now isn’t actually the absurd coin names, but rather, the impressive amount of computer processing power required to do the said mining.

Whittinghill asked audience members to guess how much energy, in Kilowatt-hours, a bitcoin transaction uses. “One?” someone guessed. “Not even close,” Behlendorf said. “20?” another said. “Nope,” he replied. “70?” a man shouted. “Close enough. Eureka!” he said, revealing the answer of 77 KWH, which translates to the average amount of energy one household consumes in a week.

This energy use has sparked concerns from critics of blockchain, said Behlendorf, who worry that energy growth rates will become completely unsustainable. Some claim that Bitcoin mining already uses more electricity in a year than all of Ireland, and that it could “drag global energy markets into the abyss.” Of course, the actual amount of energy used by blockchain is hard to predict, considering that the mining of cryptocurrency is a secretive global industry. Any doomsday numbers you run into at this point are purely educated guesses.

“There’s lots of debate about whether it’s worth the energy,” Behlendorf said. “But there are a lot of people in the community trying to reduce the amount of energy used.” Like those who propose blockchain be used to trade solar power to offset the energy suck—and others who suggest a transition to an eco-friendlier power source like HydroMiner, which uses renewable hydroelectric power instead.

Behlendorf didn’t seem too worried about it, noting that the technology is still being perfected; it was only invented ten years ago by the mysterious person or group of people known as Satoshi Nakamoto—a pseudonym that comic Andrew Orolfo said sounds like “a dope, [electronic dance music] name.” The crowd laughed. “Like, ‘I did molly and listened to Satoshi,’” he joked.

When asked if there was any way of possibly tracking Nakamoto down, Behlendorf said that they could be easily traced if they decided to spend the exorbitant amount of bitcoin they’ve no doubt acquired over the years. Nakamoto’s invention would force them to be held accountable for any purchase.

“Anybody who has that kind of money, like Satoshi, if they decided to spend it, lights would go off and they’d be identified because they’d have to use their personal key,” Behlendorf said. “One thing the Department of Justice loves about the Bitcoin ledger is its traceability. Whole visions of the DOJ are using it to track crime networks, to get files back from malware.”

Behlendorf  dropped plenty of other blockchain-related factoids during the show—like how Satoshi is also the smallest fraction of a bitcoin. He also mentioned that the highest price ever paid for pizza in bitcoin was 10,000 BTC, the equivalent of $165 million.

He also mentioned the arguably more ridiculous existence of CryptoKitties—digital cats you can buy with crypto-money. You can design, feed, and even breed them with other digital cats and sell them.

“There’s a whole CryptoKitties marketplace,” Behlendorf said. “There’ve been $12 million dollars in digital cat sales.”

“But you can’t pet it?” Whittinghill said. “Useless!”

“Not YET,” an audience member yelled out.

In addition to keeping track of money and records, blockchain could actually improve our overall health:  there are a number of organizations working with fishing fleets to set up a common ledger, said Behlendorf, a blockchain for catching fish that track the supply chains to make sure they’re selling what they say they’re selling.

According to Behlendorf, 33 percent of fish sold in markets and restaurants in the U.S. are mislabeled, with up to 90 percent of white tuna mislabeled. This isn’t just a problem because cheap fish like tilapia are being overpriced and sold as red snappers—but because fish like king mackerel, with a high mercury or escolar content that’s toxic in high amounts, are being sold as white tuna.

“They want to track the supply chain from the nets, with sensors on where the nets are, their weight, what’s caught in the net, and where it’s processed,” Behlendorf said.

Expounding on the technology’s potential, he imagined that someday consumers may be able to use blockchain to scan any item in a store and track exactly where it came from, protect medical information in accordance with HIPPA, and even use it as “a business model for investigative journalism—to catch people who perform fraud.”

At present, most of these ideas are hypothetical—much like the question posed to Behlendorf at the end of the show.

“If you were a millionaire, but could only spend your bitcoin on one top-selling black market item, what would it be?” asked Whittinghill, listing the possibilities of exotic animals, narcotics, plastic surgery, etc.

“Well, my wife loves horses and I have a two-year-old daughter who loves animals,” Behlendorf said. “I’m sure there’s some exotic hybrid out there I could get ahold of.”

Maybe a CryptoHorsey?

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Have you considered that most of this is just a bunch of Malarky? First, people can set up a database to track your fish without blockchain and that has been done by at least one company already. Secondly, the problem with most data is not it being altered after being put in the database, but garbage going in. Blockchain does *nothing* to solve this. In fact in most cases, because it is costly to make many copies of data, all the blockchain stores is a hash of the data to prove that it has not been altered; the various parties must still store the detailed data in their databases. The other thing that happens is the real blockchains end up having few replicas. People will use private blockchain for these applications, not because it is superior, but simply because it is what some consultant offers then and it sounds good. Likely in many cases it will be as good as or not much worse than the alternative.
Actually Jonathan, the blockchain verification process is also an auditing procedure. More than 50% of the network must agree on the blockchain contribution, and if so, it’s verified and is added. So, if someone says this fish is white tuna but no one else verifies it, it won’t be accepted by the blockchain, therefore not allowed to make it through the supply chain. The auditing process is what makes blockhain genius…you could even audit the process!
need more info
For any Cal alums, like me, who are trying to grasp this revolutionary technology (block chain has been rebranded to ‘distributed ledger technology or DLT’ — makes it ‘clearer’, no?) Blockchain will revolutionize lots of different fields - not only digital currencies, but also trade of goods & services, finance, voting, govt/school/legal/medical document verifications, smart grid electricity…. Here’s a very good explanation: https://www.youtube.com/watch?v=hYip_Vuv8J0 Attn: Fin techies, coders & programmers: WHY YOU SHOULDN’T VOLUNTEER YOUR SKILLS TO BUILD THE OPEN SOURCE LINUX / IBM ‘HYPERLEDGER’ BLOCKCHAIN One of the Linux Foundation’s board members was none other than the infamous bankster Blythe Masters, whose last ‘fabulous’ invention (credit default swaps) on Wall Street enabled the banksters (sin of usury, excessive greed, etc.) and Insurance/Investment/Mortgage hybrid lenders to bet and speculate obscenely out of control. And then we 99% ended up holding the bag after the 2008 Crash “Great Recession”. Financial inventions like credit default swaps made matters magnitudes worse. How many of us lost half of our retirement savings overnight? Then incredulously, hideously, NONE of those white collar FINANCIAL CRIMINALS in Wall Street’s casinos (Goldman Sachs, JPMorgan-Chase, Bank of America, Deutsche Bank, HSBC…..) saw any meaningful criminal sanctions nor penalties. I have a nagging feeling that the banksters and Big Blue IBM behind the Hyperledger project will use this ingenious blockchain invention against us some day. LET’S PROGRAM AWAY THE BANKSTER’S JOBS. p.s.: I recently found out that (guess who?) our fellow alum Eric Schmidt was one of the SatoshiN. group behind the bitcoin blockchain paper.

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