Editor’s note: This article comes from Blue Fox Notes (ID: lanhubiji), author: Nick Szabo (the creator of the smart contract concept, one of the pioneers of the blockchain), the article comes from nakamotoinstitute, and is published by the “Blue Fox Notes” public account Translated by the group Li Xihe, reproduced by Odaily with authorization.
Foreword: Blockchain further promotes the scalability of society on the basis of the Internet. To put it bluntly, it is to realize the connection of more people and larger scale. In the past, information was connected, but now value is connected. Through the matching of information and the minimization of trust, the scalability of human society is finally realized.
Continuing from the previous article secondary title》
Social Scalability of Cybersecurity
Long ago we used clay, then paper, and today we use programs, protocols, and data networks running on computers to carry out our business transactions. While this change greatly improved pairing and information flow, it also came at a price: increased vulnerability to harmful behavior.
As the network grows, more people participate without understanding each others habits and behavioral constraints. Security through root trust access control is designed for small offices such as Bell Labs, where workers know each other and their income and expenses can be managed using paper as a medium , is not managed by computer; and as the size of the office grows, this method is no longer suitable and replaced by more efficient security mechanisms, because the boundaries between different departments of a company are intertwined, and it is more valuable and Centralized resources (such as money) will be stored and activated by computers.
The more emails a person receives from strangers, the more vulnerable they are to phishing attacks or accompanying malware, so traditional computer security is not socially scalable. As I describe in The Dawn of Trusted Computing:
When we use our smartphones or laptops over a cellular network or the Internet, the other end of the interface usually runs on another separate computer, such as a web server. Usually all of these machines are designed to be controlled by a single person or a group of people who trust each other in a hierarchy. From the perspective of a remote network application user, this architecture is based on complete trust in an unknown root (root) administrator, who can control everything on the server: read, write, change, delete or block at will any data.
Even data sent encrypted will eventually be decrypted and stored in such an architecture. In this existing web service that we trust, we are completely at the mercy of those who can control the server, such as insiders and hackers, and we can only hope that they can faithfully execute our requests and ensure the safety of our payments. etc. If someone on the server end wants to ignore or tamper with your instructions, there is no reliable security to stop them, only expensive human institutions bounded by national boundaries.
secondary title
Blockchain and Cryptocurrencies
Scalable markets and prices require scalable currencies. A scalable currency requires scalable security so that it can be used by a larger number of diverse users without fear of counterfeiting, inflation, and theft.
In 2009, an individual or group named Satoshi Nakamoto brought Bitcoin to the network. Satoshi Nakamotos breakthrough in currency is: to provide a currency with social scalability through trust minimization: to reduce the vulnerability of users when facing counterparties and third parties.
Compared with the traditional network where the calculation is cheap but the system is expensive, Satoshi Nakamoto has achieved a significant improvement in social scalability by using an automated system that is computationally expensive but highly secure. In this system, a group of trusted intermediaries replaces a single fully trusted intermediary.
Financial control through computational intensification: Blockchains are like armies of robots, with individual entities checking each others work.
When we can ensure the most important functions of financial networks through computer science instead of traditional accountants, administrators, investigators, police, lawyers, etc., we move from a system that is manual, local, and less secure, to An automated, global and more secure system.
If implemented correctly on public blockchains, cryptocurrencies could replace vast numbers of traditional banking institutions with vast numbers of computers. These blockchain computers allow us to put the most critical parts of our online protocol into a much more reliable network, so we will be able to conduct trust transactions on a global network that we never dared before.
The most valuable features of blockchain technology, especially Bitcoin, are:
· Separated from existing institutions
· Ability to operate seamlessly across borders
This stems from the fact that blockchain can achieve high levels of security and reliability without human intervention. Without this high level of security, blockchain is just a distributed database technology that wastes computing resources and remains subject to local institutions, dependent on their integrity.
Since the mid-20th century, computing power has increased by many orders of magnitude, but humans still use the same brain. This creates the possibility to overcome the limits of human beings. With computer capabilities, including in the field of security, computers can be used to their best advantage, and human brains can also do what they do best. Now some institutions still rely solely on the ability of the human brain, and the corresponding result is that people do not have more computing power to further expand the organization, because the computing power of the human brain will not increase. But there is still great potential to improve social scalability by replacing some of the functions of humans with computers. (Note: This argument depends on the slope of the human ability line, not the absolute position. The absolute position shown in the graph is arbitrary and depends on our measure of human computation).
A new centralized financial entity, a trusted third party without a mechanism similar to the human blockchain in traditional finance, has a great risk of becoming the next Mt.Gox; there is no administrative agency to support it will not be a trusted third party.
Computers and networks are cheap. The additional resources required to scale these computing resources are also inexpensive. Reliably and safely extending the traditional institutions of humanity would require adding more accountants, lawyers, regulators, police, etc., with ever-increasing bureaucracy, risk, and stress. Lawyers are expensive and administrative overhead is unimaginably high. Computer science has a much better way of keeping money safe than traditional accountants, police officers and lawyers.
In computer science, there is a fundamental balance between security and performance. Bitcoins automated integrity comes at the expense of performance and resources. No one has yet been able to greatly improve the scalability of Bitcoins blockchain computing performance, such as its transaction throughput, without sacrificing security.
It is likely that such a dramatic improvement is not possible with Bitcoins blockchain; this may just be an unavoidable trade-off. Compared with existing financial IT, Satoshi Nakamoto made a radical trade-off, choosing to sacrifice performance for security. This seemingly wasteful mining process is the most obvious of these trade-offs, but Bitcoin makes other trade-offs as well.
For example, it requires a high degree of redundancy in information transmission. Mathematically provable integrity requirements are broadcast in all nodes. Bitcoin cannot do this without achieving a high degree of information redundancy. So a 1MB block consumes far more resources than a 1MB web page, since it must be transmitted, processed, and stored with high redundancy for automated integrity.
These necessary trade-offs, that is, sacrificing performance to achieve the security necessary to achieve independent, seamless, global, and automatic integrity, mean that it is impossible for Bitcoins blockchain to achieve Visas TPS and maintain Its automatic integrity, and this automatic integrity is the obvious advantage of Bitcoin over the traditional financial system.
Instead, a peripheral payment system with less demanding trust-minimization requirements (such as the Lightning Network, etc.) will be used to process larger but lower-value Bitcoin-denominated transactions, and use the Bitcoin blockchain for periodic settlement.
Bitcoin can only support lower transaction rates than Visa or PayPal, but it can be used to process more important transactions due to its stronger automated security mechanisms. Anyone with a decent internet connection and a smartphone can pay a transaction fee of $0.20-$2 -- far less than existing remittance fees -- to transact with bitcoin anywhere in the world. And small transactions with lower fees will need to be carried out on Bitcoins peripheral transaction network.
As for small amounts of bitcoin, its not impossible to pay for retail with bitcoin, just like you would pay with fiat - like a bitcoin-denominated debit or credit card, and have the refunds that traditional fiat credit or debit cards have Or processing power per second.
There are other clever ways to conduct retail transactions, such as off-chain transactions of micropayments, and periodically packaged into the Bitcoin blockchain. And as Bitcoin usage grows, this blockchain will evolve into a high-value settlement layer, and we will see peripheral networks being used for small retail transactions of Bitcoin.
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Ralph Merkle: Pioneer of public key cryptography and inventor of hierarchical hash tree structures (Merkle trees)
By design, currencies need security to achieve social scalability. For example: it is very difficult for any participant or intermediary to counterfeit currency (thus diluting the supply and causing unintended inflation). Gold can hold its value anywhere in the world, and it is immune to hyperinflation because its value is not dependent on a central authority.
Bitcoin does both very well, and it also works online, allowing someone in Albania to pay someone in Zimbabwe with Bitcoin, with minimal trust and without sending The middlemen pay commissions for anything resembling monopoly profits.
There are various definitions of blockchain out there, and almost all of them are general and vague descriptions inserted in a lot of marketing. I propose a definition that can be used to communicate with laymen. If it has blocks and chains then it is blockchain. And these chains should be Merkle trees or other cryptographic structures, which should have similar unforgeable functional integrity. And transactions or any data whose integrity is protected by the blockchain should be as resistant as possible to a worst-case scenario of up to 1/3 to 1/2 actors in the system trying to maliciously disrupt the system when replicated.
Bitcoin’s socially scalable security, based on computer science rather than police and lawyers, allows customers in Africa to provide seamless payments to suppliers in China. This is difficult to do with a private chain, which would require authentication, proof of authority, and public key infrastructure (PKI) sharing across jurisdictions.
For this reason, and for (hopefully rare) hard forks—a software upgrade that invalidates previous blocks—blockchains still need a human layer, and this layer is paramount in the face of hard fork politics. fragile.
The most successful blockchain to date is Bitcoin, which has managed to maintain its unalterable integrity through decentralized decision-making among experts in the field and its insistence on immutable properties. In Bitcoin, a hard fork is only justified for the most important and rare bugfixes and design optimizations that cannot be improved in other ways.
Under this management philosophy, audit or judicial decisions (such as changing an accounts balance or reversing a transaction) can never drive a hard fork, but should be managed by traditional management outside (or attached to) the system (For example: forcing a Bitcoin user to send a new transaction through a court trial to effectively undo the previous transaction, or confiscating specific public and private keys to achieve the purpose of confiscating specific account properties).
When we say that data is unforgeable or unalterable, we mean that it cannot be altered without detection after it has been committed to the blockchain. Contrary to some hype, it does not provide any assurance of the provenance of the data, nor the authenticity of the data, until it is uploaded to the blockchain. This requires additional protocols, often including expensive legacy controls.
Blockchain cannot guarantee the truth. They simply preserve the truth or lie and prevent subsequent alterations. It allows for subsequent security analysis of this data to detect lies with greater confidence. Whereas a typical computer is computationally etch-a-sketch, a blockchain is computationally like amber (transparent). Important data should be uploaded to the blockchain as early as possible. Ideally, it should be uploaded directly when the data is generated and cryptographically signed by the device that generated the data. This can maximize the advantages of the blockchain to ensure its integrity.
A hash tree containing four transactions (Tx0 to Tx3). Combined with correct replication and a blockchain that protects transactions by the proof-of-work algorithm, the hash tree can make data such as transactions unforgeable through consensus. In Bitcoin, the Merkle root hash is securely aggregated and used to verify that all transactions within a block have not been tampered with.
The secure asset title architecture I proposed in 1998 had hash trees and data replication to tolerate objectively arbitrary software errors or malicious behavior, but no blocks. It demonstrates my theory: you can protect the integrity of globally shared data and transactions, and design cryptocurrencies (bit gold) with this capability. It does not have the more efficient and computationally scalable blockchain ledger system of Bitcoin. Like private blockchains today, secure asset titles require nodes that can be differentiated and counted.
Considering that 51% attacks limit the security goals of public chains like Bitcoin and Ethereum, we do care that most miners with enough computing power can be identified to answer the question-Can someone persuade and coordinate 51% attack?
The security of the blockchain is limited by the potential for 51% attacks, and the governance of the blockchain is also affected by 51% attacks. Attackers certainly wouldnt call the attack an attack; instead they might call it enlightened governance or democracy in action. It is true that sometimes a soft fork is required to fix a bug or a software upgrade, and sometimes a hard fork is required.
Hard forks pose a greater threat to both Bitcoin security and continuity than soft forks. Therefore, although the blockchain is much better than other traditional network protocols in terms of trust minimization, it is still far from completely trustless. Miners are trustees who are partially trusted, and those who are not experts must also trust blockchain experts, just like ordinary people must rely on scientists in the field to understand any science. In addition, in the hard fork, the trading platform also has a lot of influence, because they can choose to use their trading power to support a certain party.
The public chain thus cannot completely sidestep the identity difficulty and solve a remaining important problem: identifying the identities of the most powerful miners at a higher wet or social level, where it may be more appropriate, rather than trying to put These brain-dependent concepts are codified into blockchain protocols, as PKI (Public Key Infrastructure) is a poor example of this.
So I think there are some private blockchains that can be considered true blockchains; and others that can only be regarded as distributed ledgers or shared databases or something. They are both nothing like public, authentication-less blockchains like Bitcoin and Ethereum, nor are they socially scalable.
The few listed below are all very similar in terms of authentication, they all require a set of securely authenticated (differentiable, countable) servers instead of a set of random anonymous miners like in the public chain. In other words, they require some much less socially scalable solution to the sybil (sockpuppet) attack problem:
· Private chain
A federated model of sidechains (even with previous promises and hopes, no one has figured out how to do sidechains without requiring a lesser degree of trust), sidechains may also be private chains, and are suitable because of their architecture It is very similar to external dependencies (such as PKI);
· Multi-signature-based schemes, even with blockchain-based smart contracts;
Threshold-based oracle architecture for transferring data off-chain to on-chain;
The main, but often not socially scalable, way to authenticate a group of servers is to use a PKI (Public Key Infrastructure) based on a trusted Certificate Authority (CA). To avoid problems with third-party security breaches, reliable certificate authorities must be very expensive, and labor-intensive bureaucracies often do their own thorough background checks or hire others to do them (like Dun or Bradstreet, etc.). Certificate authorities can be a single gatekeeper, presenting these permission systems. The public chain is automatic, secure and global, but identity verification is labor-intensive, insecure, and localized.
A PKI-enabled private blockchain is a good option for banks and other large corporations as they already have a mature and out-of-the-box PKI covering all employee partners and private servers for approving transactions. Bank PKI is relatively reliable.
We also have semi-reliable CAs for web servers, but theyre not common enough for web clients, even though people have been working on client certificates since the dawn of the Internet: advertisers, for example, would love to have a more secure alternative, Used in place of phone numbers and cookies to enable tracking of consumers identities. But not yet.
PKI can solve problems well for some important people and things. But for smaller entities, current options arent good enough. Its social scalability is limited by traditional identity management institutions.
Some important thefts in the broader Bitcoin ecosystem. Although Bitcoins own blockchain may be the most secure financial network in existence (in fact, Bitcoin must be more secure than traditional payment networks to achieve its low-cost governance and seamless cross-border capabilities), its peripheral services are still based on Older centralized web servers, so very insecure.
We need more socially scalable ways to compute nodes securely, or use another method that maximizes reliability against corruption and evaluates contributions to blockchain integrity. This is the crux of proof-of-work and broadcast-replication: greatly sacrificing computational scalability for social scalability. This is the wonderful trade-off that Satoshi Nakamoto made.
Summarize
Summarize
The rise of the Internet has seen a range of online institutions, including social networking, long tail retailing (such as Amazon, etc.), and a series of services that allow small buyers and sellers to do business (eBay, Uber, AirBnB, etc. etc.), these are just a series of initial attempts to use our new capabilities.
Due to the great improvement of information technology in recent years, the number and abundance of people who can participate in online organizations will no longer be objectively limited by computers and networks as in the past. In contrast, intellectual and institutional constraints are highlighted, such as our inability to redesign or develop systems sufficiently to take advantage of these technological advances.
These initial attempts were very centralized. Blockchain technology, the technology that guarantees data integrity through computer science rather than traditional “call the police” mechanisms, has so far enabled trust-minimized money — cryptocurrencies — and will allow us to Advances have been made in the financial sector, as well as in those areas where transactions rely primarily on online data.
Thats not to say that adapting our existing institutions to our new capabilities is easy, or that anything is difficult and unlikely to succeed in exceptional circumstances. Utopian scenarios are very popular in the blockchain community, but these are not viable options. Reverse engineering highly evolved traditional systems, or even trying to revive some old systems in new forms, is usually more effective than designing a set of macro game theory and other mechanisms from scratch.
The most important strategy has been demonstrated by Satoshi Nakamoto—sacrifice computing efficiency and scalability—consume more cheap computing resources—to reduce and better utilize the huge cost of human resources, while in modern systems (market , large corporations, governments, etc.) maintain relationships with strangers are costly.
