Scholars Keep Records: Blockchains As a Natural Step Towards Better Record Keeping May 15, 2018 NFAIS Blockchain Conference Prof. Christopher E. Wilmer Managing Editor of Ledger University of Pittsburgh
Scholars Keep Records 2 Civilization’s Greatest Inventions: Fire Wheel Bronze Tools Electricity Computer Writing Proto-Writing 3000 BC 6000 BC
Scholars Keep Records 3 • Earliest form of record keeping • Combination of two inventions: 1. The idea of recording thoughts onto a physical medium 2. Discovery of a suitable physical medium Proto-Writing • Ever scrambled to find a pen and paper to 6000 BC write down an idea before you forgot? • Imagine being in a cave 10,000 years ago… • … Scratch rocks together? Markings in sand? • Discovery that wet clay & reed sticks works was pretty clever! • Method of recording as important as the idea of recording itself!
Scholars Keep Records 4 Evolution of Record Keeping Clay Tablets Paper Printing Press ? Computer
Scholars Keep Records 5 Digital Records vs. Paper Records • Paper records are not as easily corrupted • Easier to tell when paper records have been tampered with • Authenticity of digital records much bigger problem than it was with paper (fake passport vs. fake scanned image of a passport) Printing Press • Digital records can be instantly deleted at a push of a button… takes more effort to Computer destroy paper records!
Scholars Keep Records 6 Evolution of Record Keeping Clay Tablets Paper Printing Press ? Computer
Scholars Keep Records 7 Evolution of Record Keeping Clay Tablets Paper Printing Press Blockchain? Computer
Scholars Keep Records 8 Meanwhile, Academia is Stuck in the 17 th Century… • When Galileo discovered what the surface of the moon looked like in the 1600’s… he rushed to the printing press to tell everyone! • What would Galileo have done today? • He would have tweeted it. • (or post on a personal blog) • Slow process of going to a publisher Printing Press and waiting for your results to print was the only way to disseminate science back then! • Why do academics today still follow the printing press model? Why are our results laid out in “pages” in a virtual “book”? • Peer review? Our peers can read our tweets Galileo’s Drawing of and review our blog posts. the Moon
Scholars Keep Records 9 Meanwhile, Academia is Stuck in the 17 th Century… • Publishers do provide a necessary service in science today: timestamping. • Anybody can claim on a personal website that they discovered something five years ago, even if it was only discovered five days ago • Publishers act as trusted referees when there is a dispute over who was first to make a discovery Printing Press Blockchain? • Perhaps a point of intersection between academic scholars and blockchain technology? • Authentic, indisputable records of discovery
Scholars Keep Records 10 What is “Blockchain Technology”?
Scholars Keep Records 11 Blockchains are a new kind of data storage technology with several unique features: 1. Extremely robust & reliable (no central point of failure, massively redundant) 2. Tamper-proof / immutable (no ability to erase information) Blockchain technology is an exciting area: Rapidly growing interest around the world, because it can potentially dramatically improve storage and tracking of: • Health records • International borders • Social security information • Stocks/bonds/debts • Land titles • Money… (i.e., Bitcoin) • Intellectual property/patents
Scholars Keep Records 12 A Brief History of Blockchain Technology • “Blockchain” emerged from “Bitcoin” • Why and how was Bitcoin invented?
Scholars Keep Records 13 • In the early 1990s, Internet pioneers saw a future of online shopping! (which back then was widely considered ridiculous) “Then there's cyberbusiness. We're promised instant catalog shopping — just point and click for great deals. We'll order airline tickets over the network, make restaurant reservations and negotiate sales contracts. Stores will become obsolete. So how come my local mall does more business in an afternoon than the entire Internet handles in a month? Even if there were a trustworthy way to send money over the Internet — which there isn't — the network is missing a most essential ingredient of capitalism: salespeople .”
Scholars Keep Records 14 A Brief History of Blockchain Technology • Using credit cards to pay for things online was, at the time, seen as insane (it still is insane, and leads to one disaster after another) • In a credit card transaction you give a merchant the exact information that merchant would need to make purchases on your behalf… Hello Jane! Sure. I’d like to buy a That’s $5 toothbrush OK. Here’s my online bank password. Just promise not to take more than $5 OK? Promise.
Scholars Keep Records 15 A Brief History of Blockchain Technology • Using credit cards to pay for things online was, at the time, seen as insane (it still is insane, and leads to one disaster after another) • In a credit card transaction you give a merchant the exact information that merchant would need to make purchases on your behalf… Hello anonymous Internet merchant! Sure. I’d like to buy a That’s $5 toothbrush OK. Here’s my online bank password. Just promise not to take more than $5 OK? Promise.
Scholars Keep Records 16 A Brief History of Blockchain Technology • Using credit cards to pay for things online was, at the time, seen as insane (it still is insane, and leads to one disaster after another) • In a credit card transaction you give a merchant the exact information that merchant would need to make purchases on your behalf… To do so with anonymous online merchants seemed doubly crazy o • Significant investment in the 1990s in alternative approaches from major companies, like Microsoft • DigiCash, led by Berkeley PhD David Chaum, was a pioneer You buy “e - cash” from the DigiCash company o Spend e-cash online. Very secure transactions. o (Much like PayPal today) DigiCash kept track (on a central controlled ledger) o who owned how much e-cash
Scholars Keep Records 17 A Brief History of Blockchain Technology • DigiCash faced major obstacles Needed quick adoption (it was a startup) but consumers were slow to o adopt, and DigiCash had not earned their trust yet Needed permission from many financial regulatory agencies o The mere perception that DigiCash might go under, meant that people o were reluctant to use its technology (central point of failure problem) All competitors faced similar problems. Some founders of e-cash-like • technologies even went to jail for (perhaps inadvertently) violating anti- money laundering laws (e.g., “e - gold”) All “e - money” startups/projects fizzled out by the late 1990s. • Visa/Mastercard more-or-less figured out online payments and the idea faded for ~10 years…
Scholars Keep Records 18 A Brief History of Blockchain Technology • In 2008 a paper was published to a cryptography mailing list:
Scholars Keep Records 19 A Brief History of Blockchain Technology • Avoided pitfalls of DigiCash and other prior attempts because it was decentralized and… not a company! • Just a set of rules that anyone can follow “Hockey is just a collection of rules that describe a particular sport. Nobody owns the rules of hockey, and if anybody wants to change the rules, they can do so as long as they don’t mind playing by themselves. It is possible for the rules of hockey to change, but only if everyone agrees to the new rules. Bitcoin is the same way.” - Yuri Takhteyev, researcher at the University of Toronto
Scholars Keep Records 20 A Brief History of Blockchain Technology • March 2010, first Bitcoin transaction, 2 pizzas for 10,000 bitcoins
Scholars Keep Records 21 A Brief History of Blockchain Technology • Mt.Gox, one of the first Bitcoin currency exchanges
Scholars Keep Records 22 A Brief History of Blockchain Technology • Today a bitcoin trades at over $10,000 each (you have to add BTC and BCH) • Total market value of cryptocurrencies in circulation, over $400 billion
Scholars Keep Records 23 A Brief History of Blockchain Technology • In 2013-2014, the term “blockchain technology” came into common use, referring in a fuzzy way to the common enabling protocol that allowed Bitcoin and all of the subsequent variations to work • Today it is an active area of research and innovation
Scholars Keep Records 24 Bitcoin-Blockchain connection • What is the connection between Bitcoin & Blockchain? • Bitcoin transactions are recorded on a distributed ledger called a Blockchain ? The same ledger can also store other data (Example: weather data on the Bitcoin blockchain)
Scholars Keep Records 25 Bitcoin-Blockchain connection • What is the connection between Bitcoin & Blockchain? • Bitcoin transactions recorded on a distributed ledger called a Blockchain Financial incentive keeps “voluntary” network of computers robust
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