Nasdaq’s Blockchain-Based Securities Platform Records First Transaction | Hacker News Reader

Nasdaq’s Blockchain-Based Securities Platform Records First Transaction

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38 pointsjackgavigan41 comments

This is not my field, but I'm trying to understand crypto-currency econ here so please clue me in:

So if the only reason for mining in currency blockchains is the incentive to earn, what would be the incentive for a private blockchain network that didn't incorporate a currency? Could it be that their incentive is the reduced cost (in fiat money) of doing business? So that they could in effect voluntarily do the verification part of mining without the need for currency incentives?

I would imagine that it shouldn't be too difficult to set up enough adversarial but voluntary mining parties in a huge financial system such as the US financial system to bring a collective sense of safety to that closed blockchain no?

Public blockchains use mining as a means to decide who gets to add the next block. That is all it is good for. That is useful in public chains because 1 entity adding multiple blocks in a row basically gives them control of the history.

In a private chain where you know all the participants this doesn't matter since there are easier ways to decide who gets to go next(ie. round robin). So no mining is needed for a private chain and it is no less secure(probably even more secure than most public chains due to the cheapness of 51% attacks )

Thank you.

how does this differ from say using git, with access controls, where each commit is a transaction.

to me blockchain implies proof of work.

This confuses me. What is the point of a blockchain without proof of work and a vast 'mining' network to provide security? Without that it boils down to something akin to git.

I would love to know more about how their implementation works.

Something akin to git is far better than the existing banking system, although the proponents of "private blockchains" don't seem to be very clear on their threat models.

You can use sidechains and get all the mining proof of work of bitcoin without using the main chain. I'm not sure if that's what they're using however.

It allows you to have an immutable distributed database with known entry ordering that can be shared between multiple parties.

if its between trusted parties... why not just use git. I dont understand where the innovation is. they seem to have remove the one truly unique feature of bitcoin but continue to call it a blockchain.

The part you're missing is that it doesn't matter if you understand or even if there is innovation. Why not use git? Because it's not designed for these use cases and it doesn't handle a few of the required features. Seriously the fact that you are asking this says a lot about either your knowledge or honesty of your argument.

The vast mining network is required to prevent a malicious party from double spending. If all the nodes are trusted then you can just assume nodes will not perform fraudulent bahviour

They don't even have to be trusted just known. The mining is to distribute 'fairly' who can create the next block. If you know all the participants round robin works just as well.

is being able to trust the network even with malicious actors not the whole purpose of the blockchain?

Does anyone know what technology they are using for their private distributed ledger? I heard a rumour that it was based on SharePoint - not sure if this was a joke, but wouldn't be surprised if it were true. As per some of the other comments, a private distributed ledger doesn't need to use the innovations of the public blockchain and so could use pretty much any data datastore.

Looks like it is bitcoin after all.[1] Related [2]

[1] https://coincenter.org/2015/05/wall-street-is-using-bitcoin-...

[2] http://www.nasdaq.com/article/is-a-blockchain-without-bitcoi...

What makes you say that? This article doesn't say that and last I heard they said they weren't using Bitcoin.

See article [1] in the parent comment.

It came out later that everyone just assumed they were using Bitcoin because they were using OAP. I can't find the source at the moment but I'm pretty sure someone from Chain or Nasdaq mentioned that they weren't using Bitcoin at 20/20. Unfortunately all I can find in /r/bitcoin is people confirming they aren't and not the source.

I guess I can't say for sure independent of the articles I've found which say such at best, and are vague at worst, but it seems the company they are partnering with, Chain[1] is pretty committed to building on top of bitcoin's blockchain.[2]

[1] http://chain.com/

[2] http://blog.chain.com/post/99177371581/bitcoins-killer-apps

The proliferation of "blockchain-backed technologies" is one fad that I really do not like. It makes me want to sell my Bitcoin, in fact. There is some vague feeling that this trend is just going to result in a collapse and loss for everyone.

Do they intend to keep the blockchain private ? I mean, at some point, someone will break into their private network (partners come and go...) and get a copy of the blockchain... Maybe even add a block on top of it.

This is a serious security flaw.

I doubt it, and it wouldn't matter if someone got a copy because it would likely be hard to understand without their software to convert the refs in the transactions with actual data.

What makes you think they would accept some block added by an unapproved entity? And what would it matter if they did if the block didn't contain valid transactions it would be rejected and if it did include valid transactions than it would be no different from any other block on the chain. The ability to add A block doesn't matter in blockchains. The ability to create a longer chain that is accepted does and it's quite easy to avoid that possibility in private chains.

It isn't a security flaw at all.

1) ah, security by obscurity 2) ah, security by credentials

completely the opposite approaches to bitcoin itself.

1) I didn't imply that at all. Secrecy by obscurity maybe but it's not part of the security model.

2) who cares except Bitcoin owners? Bitcoin isn't the be all of blockchains and it isn't suitable for all problems. You say security by credentials like it's flawed too which is just you grasping for something to say.

I think there is nothing at all wrong with more conventional security strategies, like credentials, and sure, obscurity can be a useful tactic.

All I am saying is: what is super special about the BTC blockchain, is that it doesnt rely on those at all, it doesnt need those things, because it has the magical property of security by Proof Of Work.

Removing that and still talking about a Block Chain like its a special thing, makes no sense to me.

Anyways this is all conjecture, its not even clear what they are doing in there. Would love to hear details.

And all I'm saying is it doesn't matter how Bitcoin does it. The problems being solved are different. Bitcoin has to use a stupidly inefficient method of selecting who adds the next block because the participants aren't known. That's it. The proof of work waste adds nothing else to the security of the system except when you don't know the participants. So if you don't have to do that then proof of work adds nothing. You're hung up on proof of work but it seriously sounds like you're over estimating how important it is to the process. The block chain itself has nothing to do with proof of work. Remove proof of work and you have a blockchain. PoW is only for deciding who adds blocks.

From an earlier article[1],

”It’s not a 24/7 market, there’s no peer-to-peer transactions right now.”

So without any P2P ability, is there any value to having a single-server private chain?

[1] http://www.coindesk.com/hands-on-with-linq-nasdaqs-private-m...

As a stepping stone to a peer-to-peer service.

Who is doing the mining/securing if they aren't using Bitcoin?

You don't need mining for private chains.

So, what, they're glorified Merkle trees?

Yes, as it turns out, cryptographically timestamped ordering of cryptographically signed individual transactions is a useful thing for trading markets.

so, basically git

...but with a network protocol, peer discovery/exchange, record gossip, and defined strict data format for the contents of commits; but basically yes.

Blockchains aren't any fundamentally new underlying technology, they're just existing technology bolted together in a new way that enables new applications. DHT and BitTorrent are similar in that regard.

Private blockchain == glorified database.

Public blockchain == glorified database too. What's your point?

The point is that a private blockchain would lose the one thing that a public blockchain is good for:

Allowing a distributed network of untrusted peers to cooperate to come to consensus on how to update the glorified database.

If your peers are trusted, or can put behind an authenticated, authorising gateway, you don't need a blockchain - you can just use a normal database.

A private blockchain allows a distributed network of arms-length peers to cooperate to come to cryptographically-verifiable consensus about who traded what and in what order - a settlement network.

A traditional centralized database doesn't easily allow irrefutability. A blockchain allows one to do this with low trust, as all of the data integrity comes from crypto.

Think of it as a database with signed tx records, and countersigned with timestamps for ordering. Any participant can assess the valid state of the world, without all of the hairy distributed database timestamping/integrity issues we all know so well.

thats just git with access controls

> If your peers are trusted

Trust is never a boolean thing - and always a liability.

If your peers are trusted you could do that. Or if you can agree on a central authority you could do that.

But you are confusing trusted with known. I don't have to trust any given party in a private chain. I just have to trust the network. It's not difficult to come up with a private chain design that makes it very difficult for a malicious party to negatively impact. And you'd still have the immutability, known ordering and decentralisation amongst participants.

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