Five Open Problems for the Blockchain Computer | Summary and Q&A

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April 19, 2019
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Five Open Problems for the Blockchain Computer

TL;DR

Decentralized computing offers a new paradigm for computation that allows for trust, security, and innovation, with applications in various sectors.

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Questions & Answers

Q: What is the key difference between decentralized and centralized computing?

The main difference lies in the ownership and operation of the system. Decentralized systems are not owned or controlled by a single entity, while centralized systems are. Decentralized systems offer trust and security by allowing participants to verify and validate the system's operations.

Q: How does decentralized computing impact trust in applications?

In decentralized systems, trust is established through financial incentives, as participants are incentivized to act honestly due to the risk of losing their assets. This creates a trust fabric that can enhance the trustworthiness of applications.

Q: Can decentralized computing improve the scalability of computation and reduce costs?

Yes, decentralized computing can improve scalability by increasing the throughput of instructions processed, reducing the latency to finality, and lowering the cost per instruction. Innovations in messaging propagation and consensus algorithms are key to achieving these improvements.

Q: What types of applications could benefit from decentralized computing?

Applications where trust is a crucial factor, such as financial platforms, decentralized exchanges, and blockchain-based gaming, can greatly benefit from decentralized computing. However, it is worth noting that centralized systems still have their place in certain applications that do not rely heavily on trust.

Summary

In this video, the speaker discusses the reasons why talented individuals are leaving established companies to join crypto startups. They explore the concept of decentralization and how it offers a new paradigm for computation that enables trust and eliminates the need for centralized entities. The video also explores the challenges and potential solutions for distributed compute, distributed storage, and networking in the crypto space. The speaker emphasizes that while decentralized systems have their advantages, they may not completely replace centralized systems, and there will be applications where trust is the key differentiator.

Questions & Answers

Q: How does crypto offer a fundamentally new paradigm for computation?

Crypto offers a fundamentally new paradigm for computation by enabling trust through decentralization. Unlike centralized systems where trust is placed in individuals or companies, decentralized systems allow individuals to trust in the collective of people who contribute their computation and storage power. This new paradigm allows for the creation of applications that were previously impossible to build.

Q: Why does the metric of transactions per second not accurately measure scalability in crypto?

The metric of transactions per second does not accurately measure scalability in crypto because it focuses on the wrong aspect. Instead, it should focus on the metric of instructions per second, which measures how many instructions of computation can be processed in a given period of time. Other important metrics for scalability include the latency to finality (how long it takes for a computation to be considered final) and the cost per instruction.

Q: How can decentralized compute achieve greater throughput and lower latency to finality?

One of the ways to achieve greater throughput and lower latency to finality in decentralized compute is by improving the delay and propagation of messages in a distributed system. Startups like BlocksRoute are working on building advanced networking technology that facilitates faster propagation of messages between miners in a blockchain network. Additionally, advancements in consensus algorithms like proof of stake can also contribute to reducing latency and increasing throughput.

Q: How does proof of work contribute to the high costs and energy consumption of computation in cryptocurrencies like Bitcoin?

Proof of work is an expensive computational process that prevents any one person from monopolizing the ability to add blocks to the blockchain. To append a block to the blockchain, participants need to compute this expensive proof of work, which consumes a significant amount of energy. The high cost of proof of work is one of the factors that contribute to the high costs and energy consumption in cryptocurrencies like Bitcoin.

Q: What are the advantages of decentralized storage networks over centralized storage systems?

Decentralized storage networks provide a foundational building block for decentralized computation by eliminating the need for a central authority to control the storage. This allows for the development of applications that heavily rely on decentralized trust. While decentralized storage may not be more cost-effective for storing general files compared to centralized systems, it offers greater trust and privacy as there is no central entity that can be subpoenaed to access the stored files.

Q: How can we trust that people claiming to store files in decentralized storage networks are actually storing them?

Trusting that the people claiming to store files are actually doing so is a challenge in decentralized storage networks. However, cryptographic techniques like cryptographic proofs of retrievability are being developed to address this issue. These cryptographic proofs enable users to verify the storage of their files in a decentralized system, providing a means to catch pretenders who falsely claim to store files.

Q: What are the key challenges in decentralizing networking?

Decentralizing networking is a challenging problem that relies on achieving density and creating incentives for individuals to offer their networking hardware for decentralized communication. Projects are exploring approaches like incentivized mesh networking protocols, where individuals can earn cryptocurrency by setting up routers that provide connectivity within a decentralized network. However, decentralizing networking is still an area of ongoing research and development.

Q: What types of applications are expected to emerge on top of the blockchain computer?

It is difficult to predict the exact applications that will emerge on top of the blockchain computer. However, with the openness and shared ideas in the crypto space, there is potential for explosive and innovative applications. The combinatorial nature of open-source code sharing can lead to accelerated innovation and the creation of applications that were not previously possible. While it is challenging to predict the most impactful applications, the speaker believes that the decentralized world will offer significant opportunities for innovation.

Summary & Key Takeaways

  • Crypto startups are attracting smart and talented individuals due to the fundamentally new paradigm offered by decentralized computing.

  • Centralized systems, such as Google or Apple, provide reliable services but lack the trust and security offered by decentralized systems.

  • Decentralized computers offer trust and security by eliminating the need for centralized control and allowing participants to self-police.

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