Why Blockchain is a Revolution (ft. Emin Gün Sirer)

blockchain is an incredibly big topic everywhere around the globe right now it’s become one of these funny words in English that doesn’t even require an article you don’t talk about a blockchain or the blockchain just as you asked we talk about blockchain with capital B the only other word that I know that gets this treatment is the word God this is Emin Gün Sirer, a professor at Cornell University who’s currently visiting EPFL Sirer is one of the leading world experts in research on Blockchain but what is blockchain? it’s essentially a simple data structure where you have interlinked blocks that collect some data into a format that is immutable and totally ordered essentially it’s a set of nodes that agree on a particular sequence of transactions so basically Blockchain is just a record of information ordered in chronological manner you might think that this is really
simple which it is but it’s also foundational in fact ordering events in a chronological order that everyone agrees on has been a long-standing open problem in distributed computing as we discussed it in a previous video now suddenly we have the ability to execute some programs, some computation or some business process whatever it might be at a large number of nodes in tandem, in sync, and come to the same result, at the same conclusion this is then the foundational building block for a lot of exciting applications now just to give you an idea of how influential this may be it’s useful to first ponder what had to be done before the advent of Blockchain before Blockchains, the way people actually manage devices or manage data is they kept the data themselves and interacted with other people who kept a copy of the data you and I for example, if we were to trade stocks I would make a mark in my system I’d send a message to you saying I would like to trade it X for Y you would make a mark on your system and you would say ok to me and at the end of the day we have some marks on our respective systems typically when signing a contract, you would print two copies of it and give one copy to each of the party involved of course banks that deal with millions of contracts cannot have such a slow procedure so they designed a digitized version of it this sounds like an okay idea it sounds like we get to the same issue if the two of us engaged in some transaction and we have some record of what happened but that’s not sufficient it turns out Why so? because my markings might be different than yours for a beginner it means that I might disagree with you on small details for whatever reason due to software faults or different logic we might have recorded slightly different things and suddenly we might find ourselves in very different worlds I believe I read this and transacted that way you believe that you gave me some other data and you disagree on how we transacted one of these things can happen now we have a disagreement and disagreement are a major part of the business of banks a lot of financial technology companies have enormous resources dedicated to our reconciliation which is the process of making these machines actually reconcile their records what I think of as trade X is trade Y on your system but they are the same trade, aren’t they? this is the question they ask at the end of each day and reconciliation is both extremely
tedious hugely time-consuming and immensely costly when I was a kid I had a cousin who worked at a bank I’m sure there are many people listening who have relatives who work at banks and so forth and there, at the end of the day, if there is any discrepancy in the books even if it’s one cent she could not come home the reason for this is actually quite simple that one cent discrepancy could be stemming from a million dollar discrepancy that is being offset by another million dollars and one cents discrepancy and in the end you only see it as one cent but it might be hiding a two million dollar problem of some kind so they had to make sure that the books were actually proper Tiny mistakes can have major impacts when dealing with such amounts of money and so it’s essential that we reconcile
and it’s non-trivial to reconcile I recently visited Bank of America it’s this is as big as wide as in New York City block so imagine how wide that is it’s fairly big about 100 meters or so by 100 meters two floors of Bank of America is dedicated to reconciliation it’s a lot of human power just for the simple task of making sure that what I think of as something is the same as what you think of as something else now this is just to due to mistakes either human-made mistakes or computational glitches but evidently classical contracting poses many more problems the second problem is in more contentious settings where I don’t fully trust you and I can’t fully audit you and you tend to be, let’s say, a bit more aggressive and maybe more profit oriented and/or think that you can get away with it you can actually lie to me about what’s happened so this is really really problematic where I I will engage in transactions with you but then at the end of the day when I come to try to hold you accountable you say well that never happened if you hold your own data, you’ve got your own Oracle database or whatever you can rewrite the past any which way you like I have no recourse when you are to try to do this to me in business this can lead to real big problems of course they may be big problems afterwards but as well given that contracting heavily relies on trust this also makes it harder to agree on a contract beforehand which evidently hinders business opportunities in many business settings maybe this won’t happen because the participants are mostly honest 99.99% of the time but then the remaining percent of the time they can cause great ripple effects but that’s not all then of course there is the final problem, which is you as an institution, you are honest but there might be insider attacks there might be elements you don’t control about the database there might be software errors that cause your system to diverge from mine that will create also all sorts of issues let’s give an example every defense force in the nation and in any nation keeps track of every single piece of ammunition you want to make sure that as you push a bullet into a chamber that bullet has always been in your possession if it’s ever mixed with any other bullets
whose origin you don’t know it can explode we do this we leave behind ammo for the enemy to take and fire at us so that it actually explodes on them this is crucial it’s very trivial for somebody within your own infrastructure to tamper with the data and to leave you now with some record with some state where you think that this thing has always been in your possession but what they really did is they lied and they cut some records from the record and are misleading you the thing is that we rely more and more on digitized databases whether it is a matter of financial transactions
administrative records or regulated goods but digitized databases are usually controlled by private entities and they may be purged or hacked databases are fragile databases that only record the current state of the world which is the default database situation that we have are incredibly incredibly dangerous Blockchains allow both parties to have reassurance on a common shared prefix of history of the world now it’s important to stress the fact that the Blockchain technology is still very young there’s probably a lot more to come so overall where are we with Blockchains I think we’re at the beginning of a very exciting journey we’re just in the early days the entire concept of Blockchains and cryptocurrencies came to be with the appearance of Bitcoin on the scene there was much work before lots and lots of academic work that built into them that’s all true but they really came all the public consciousness then true it’s been nine years in that nine years we’ve covered a lot of ground and lots and lots of exciting applications and different versions have been developed but we’re just beginning to understand the impact of chains and ordering and even smart contracts on business processes right now in fact Professor Sirer believes that Blockchain may be one of the greatest game changers in History looking back we can see that one of the main things that changed the face of civilization on earth was written laws that completely transformed how societies conduct their affairs another big high point was corporations the virtual entities that have their own responsibilities and their own rights that shielded people in them from liabilities and allow them to to work towards a
common goal this really transformed society it allowed certain civilizations to leapfrog ahead of others and in that vein what we’re seeing with smart contracts is this ability to write executable code preordained deterministic and completely independent of human meddling executing and directing money flows this is a fascinating concept its ramifications, I’m not even sure, but I know that they are significant because I can disintermediate many kinds of business processes lots and lots of businesses are essentially middlemen they connect people from one end to another set of people on another end in doing so, they carry risks of the middleman misbehaving it’s trivial to take that middleman out it’s trivial to write contracts that will take money in divide it according to a preset schedule they’ll send it out accordingly it’s similarly trivial to to devise voting mechanisms that are insurmountable that they will actually always work and the following people will have the following rights and it’s ordained as in the equivalent of stone if you will but on the Blockchain and every participant can then have full confidence in how this process will work forever after and this really will transform society I believe it’s going to change the way we view businesses it’s going to change the way we demand transparency from businesses and it’s going to allow us to encode new exciting rich policies for how we govern our lives into a blockchain that allows us to carry them out with full confidence what that really means remains to be seen but I think it’s going to make us all happier and will carry us into a better and more transparent future so after a Bitcoin was invented the idea of blockchain was abstracted away and tried to be separated from Bitcoin and people have tried to use it for other applications blockchain technology as we have it today is not entirely suitable for EMR usage

5 thoughts on “Why Blockchain is a Revolution (ft. Emin Gün Sirer)”

  1. Immutability is a great strength but it has caveat, sometime it is important to be able to erase something. Example, how do you mange the famous right to be forgotten (droit à l'oubli en français) in a Blockchain world. Also public ledger based on Blockchain are risky, nothing is really 100% secure and if someone find a vulnerability, potentially all the data could become accessible to everyone, making the Blockchain a big concern for privacy.

  2. Thank you for the video, was really interresting,
    I let a link of a youtube channel of an "blockchain expert" (Andreas M. Antonopoulos) witch is really instructive, if you want to lear more about the future and the implication of the blockchain look some of his videos : https://www.youtube.com/user/aantonop

  3. But aren’t people who can’t read the open source code trusting the reputation of those who have studied and affirmed the code? And will those who have affirmed the code be sufficiently distant to avoid becoming a captive interested party? Can you trust doctors prescribed brand of medicine as best if they also partake in free events given by pharmaceutical companies?

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