Private Chains and the Future of BitShares

[ingenesist]

I thought the blockchain scheme would be the same as with operative systems. At the beginning every company wanted to build their own. They wanted to have THE operating system. However they were all very different. They weren't standardized and that didn't make any sense. That's when Unix was created if I'm not mistaken. Some kind of standard OS where everyone could work and develop stuff. I thought every major company would commit the exact same mistake. However this worries me https://bitsharestalk.org/index.php/topic,18454.0.html I thought we would have more time to develop and be the one open source and distributed protocol out there where financial institutions would gather around. But they apparently learned from the past and are already starting to build a standard model.

Wow, we've been working with r3cev for a while now.  Their idea is to use Curiosumé as a proxy layer for identification.  I'll dig into this a bit more....

[Akado]

I thought the blockchain scheme would be the same as with operative systems. At the beginning every company wanted to build their own. They wanted to have THE operating system. However they were all very different. They weren't standardized and that didn't make any sense. That's when Unix was created if I'm not mistaken. Some kind of standard OS where everyone could work and develop stuff. I thought every major company would commit the exact same mistake. However this worries me https://bitsharestalk.org/index.php/topic,18454.0.html I thought we would have more time to develop and be the one open source and distributed protocol out there where financial institutions would gather around. But they apparently learned from the past and are already starting to build a standard model.

[ingenesist]

Wouldn't a project like Intrinsic (INT?) be considered private? 
And regarding that, I have felt precisely how you have felt for quite some time but at the same time feel like over time have been taught by some people on this very forum the power of having centralized blockchains because despite the privatization, it enables a level of auditability and transparency that can be seen as a great improvement upon the status quo.  However, noone can deny the scariness of blockchain tech and other semi-autonomous entities has some nasty potential too :/

P.S.  I love how you use the analogies with Craigslist and Wikipedia.  Those certainly are powerful and have many parallels with the concept of curiosome

Wikipedia and Craigslist are centralized, however, they depend on decentralized community incentives.  If the Wikipedia editors become corrupt, the entity dies.  Craigslist depends on community vetting (proximity) to avoid commercial regulation.  So in a way, this is decentralized. 

I agree with Bytemaster that mathematical purity is not necessarily required, except if you want to transact over long distances with intangible products such as derivatives. Securing a node mathematically is static, not dynamic.  The problem is nothing economic happens under those conditions; nothing is actually created because nothing is actually changed, human productivity is not impacted in any way.  Keep in mind that computer code is a form of derivative because it's value is derived from the value of the intrinsic thing that the code is trying to accomplish.  If need to secure the intrinsic node first.  That is where the action is.  Everything else is poetry.   

[fuzzy]

Everything that was once great about the Internet has gone private. I remember the dawn of the Internet was awesome. All the big companies were in trouble because their customers were "vanishing into thin air".  Then came the Gurus who told them where everyone was hiding and that shit got snuffed out really quick by big money.  Today, every banking and insurance board meeting starts with the words "How can we get rid of our agents".  To give them private BC tech would be to consolidate power to an unprecedented degree of concentration even by today's obscenities.  I'm not quite convinced that we ought to do that.

Two of the biggest and most disruptive Internet institutions are Wikipedia and Craigslist.  Craigslist literally collapsed newspapers by taking away profitable classified ads.  Craigslist is secure by a public ledger (everyone can see what is being sold), and proximity (if you do dirty deals, I know where you live) and anonymity until point of transaction (I can price and comparison shop without exposing myself to big data). Wikipedia has created a commons ontology that defines term and connects them with tags in a knowledge graph - corporations and educational institutions must now index their silo to the commons (wikipedia) instead of the other way around. I believe that there is a huge opportunity to mine the Wikipedia knowledge graph more.   

Admittedly, we are also talking about Curiosumé with banks and insurance interests through the The Ingenesist Project.  Blockchain tech is severely constrained by financial regulatory restrictions such as KYC (Know Your Customer), International Crime Bureaus, T-rist finance tracking, Illegal substance and contraband tracking, FCPA, etc.  We are proposing a Curiosumé layer where instead of projecting one's self, people project a proxy of one's self thereby remaining anonymous until the point of transaction.  Then a great deal of scenario testing, analytics, and communication can happen in the extralegal sector.  If properly matched, a consultant can advice a client and if neither knows the identity of the other, then no law is broken. Everyone can see what is being bought or sold on a public ledger, and when the deal appears to be viable,  then the parties engage at the regulatory level or in their own private blockchain.   

This is how I believe we should approach the problem.  This can be reduced to the following strategy Curiosumé + Blockchain = Intrinsic Coin

Wouldn't a project like Intrinsic (INT?) be considered private? 
And regarding that, I have felt precisely how you have felt for quite some time but at the same time feel like over time have been taught by some people on this very forum the power of having centralized blockchains because despite the privatization, it enables a level of auditability and transparency that can be seen as a great improvement upon the status quo.  However, noone can deny the scariness of blockchain tech and other semi-autonomous entities has some nasty potential too :/

P.S.  I love how you use the analogies with Craigslist and Wikipedia.  Those certainly are powerful and have many parallels with the concept of curiosome

[ingenesist]

Everything that was once great about the Internet has gone private. I remember the dawn of the Internet was awesome. All the big companies were in trouble because their customers were "vanishing into thin air".  Then came the Gurus who told them where everyone was hiding and that shit got snuffed out really quick by big money.  Today, every banking and insurance board meeting starts with the words "How can we get rid of our agents".  To give them private BC tech would be to consolidate power to an unprecedented degree of concentration even by today's obscenities.  I'm not quite convinced that we ought to do that.

Two of the biggest and most disruptive Internet institutions are Wikipedia and Craigslist.  Craigslist literally collapsed newspapers by taking away profitable classified ads.  Craigslist is secure by a public ledger (everyone can see what is being sold), and proximity (if you do dirty deals, I know where you live) and anonymity until point of transaction (I can price and comparison shop without exposing myself to big data). Wikipedia has created a commons ontology that defines term and connects them with tags in a knowledge graph - corporations and educational institutions must now index their silo to the commons (wikipedia) instead of the other way around. I believe that there is a huge opportunity to mine the Wikipedia knowledge graph more.   

Admittedly, we are also talking about Curiosumé with banks and insurance interests through the The Ingenesist Project.  Blockchain tech is severely constrained by financial regulatory restrictions such as KYC (Know Your Customer), International Crime Bureaus, T-rist finance tracking, Illegal substance and contraband tracking, FCPA, etc.  We are proposing a Curiosumé layer where instead of projecting one's self, people project a proxy of one's self thereby remaining anonymous until the point of transaction.  Then a great deal of scenario testing, analytics, and communication can happen in the extralegal sector.  If properly matched, a consultant can advice a client and if neither knows the identity of the other, then no law is broken. Everyone can see what is being bought or sold on a public ledger, and when the deal appears to be viable,  then the parties engage at the regulatory level or in their own private blockchain.   

This is how I believe we should approach the problem.  This can be reduced to the following strategy Curiosumé + Blockchain = Intrinsic Coin

[Akado]

Might be of interest
http://enigma.media.mit.edu/#
http://enigma.media.mit.edu/enigma_full.pdf

2    Enigma
Enigma is a decentralized computation platform with guaranteed privacy.   Our goal is to enable
developers  to  build  ’privacy  by  design’,  end-to-end  decentralized  applications,  without  a  trusted
third party.
Enigma is private.  Using secure multi-party computation (sMPC orMPC), data queries are com-
puted in a distributed way, without a trusted third party.  Data is split between different nodes, and
they compute functions together without leaking information to other nodes. Specifically, no single
party ever has access to data in its entirety; instead, every party has a meaningless (i.e., seemingly
random) piece of it.
Enigma is scalable
. Unlike blockchains, computations and data storage are not replicated by every node in the network. Only a small subset perform each computation over different parts of the data. The decreased redundancy in storage and computations enables more demanding computations. The key new utility Enigma brings to the table is the ability to run computations on data, without having access to the raw data itself.  For example, a group of people can provide access to their salary, and together compute the average wage of the group.  Each participant learns their relative
position in the group, but learns nothing about other members’ salaries.  It should be made clear that this is only a motivating example.  In practice, any program can be securely evaluated while
maintaining the inputs a secret.
Today, sharing data is an irreversible process; once it is sent, there is no way to take it back or limit
how it is used. Allowing access to data for secure computations is reversible and controllable, since
no one but the original data owner(s) ever see the raw data.  This presents a fundamental change in
current approaches to data analysis.
3    Design overview
Enigma is designed to connect to an existing blockchain and off-load private and intensive compu-
tations to an off-chain network.  All transactions are facilitated by the blockchain, which enforces
access-control based on digital signatures and programmable permissions. Code is executed both on the blockchain (public parts) and on Enigma (private or computationally intensive parts).  Enigma’s execution ensures both privacy and correctness , whereas a blockchain alone can only ensure the latter. Proofs of correct execution are stored on the blockchain and can be audited.  We supply a scripting language for designing end-to-end decentralized applications using private contracts , which are a more powerful variation of smart contracts that can handle private information (i.e., their state is not strictly public). The scripting language is also turing-complete, but this is not as important as its scalability.  Code execution in blockchains is decentralized but not distributed, so every node redundantly executes the same code and maintains the same public state.  In enigma, the computational work is efficiently distributed  across  the  network.   An  interpreter  breaks  down  the  execution  of  a  private  contract,
as is illustrated in Figure 1,  resulting in improved run-time,  while maintaining both privacy and verifiability

[jsidhu]

i guessthe real issue is allowing privitization of apps and data. So real issue is that you cant have private apps+data on bitshares with public ones (or can you?) . Apps i mean smart contracts.

With this approach it will allow for public and private apps to coexist and can communicate via ACCT.

If you can have dapps that can be private on bitshares then no need for other chains I guess.

What would be even more powerful is the ability to have a structured programming model (software manufacturing) with the ability to create apps running on a blockchain with crosschain payments via ACCT.

[phillyguy]

I remember BM saying on a mumble that ACCT were more of a technological curiosity than anything else - iirc they are not practical or efficient enough?

Maybe because operating on the BTS network can achieve the same thing? Nice post OP.

[Akado]

Yea, that would be pretty nuts.  Companies would even pay their employees by integrating them into the private chain, which then integrates into the global dex.  The employee could choose to be paid in whatever they want I guess.  Only thing is finding a framework to make sure the delegate nodes are incentivized.  This is why having the best consensus mechanism + best platform for a global decentralized exchange matters far more than "turing complete transactions".

Well, nodes from the main chain would have the same incentives as they already have I guess (like BitShares or Bitcoin), while nodes from other chains would be set by the chain owners itself. The incentive for keeping their chain is to have a functioning chain itself, no need for other kind of reward. If someone wants a private chain they must be the chain's own miners right? Otherwise it isn't private. And if there are no one to maintain the chain, the chain doesn't work, meaning the owner of the private chain must maintain it himself.

CNX, if you're seeing this: I don't know if you can't talk strictly about anything regarding that matter, but did the bank who is in contact with CNX mentioned anything about a Private Chain? Do you think that could be a starting point for this? (again, if feasible)

Tried to come up with something lol. The links between applications and private chains are whatever operations they would perform with each other, with whatever permissions they decide. Note: messed up the red link between the green apps, it was supposed to be green, not red. Same with the green link between the blue apps

[r0ach]

Yea, that would be pretty nuts.  Companies would even pay their employees by integrating them into the private chain, which then integrates into the global dex.  The employee could choose to be paid in whatever they want I guess.  Only thing is finding a framework to make sure the delegate nodes are incentivized.  This is why having the best consensus mechanism + best platform for a global decentralized exchange matters far more than "turing complete transactions".

[Akado]

Multichain claims to produce those private chains on top of Bitcoin (if I interpreted it right) so I was assuming it could be done. After research I found they used Bitcoin protocol but block time is 10s. So I assume they're just using the protocol but on a new chain?
Edit: they will fork Bitcoin http://www.slideshare.net/coinspark/multichain-private-multicurrency-blockchain-platform

Well, the point is, as long as we could connect multiple chains, which they claim to do (we also have Atomic Transfers?), it should be feasible I guess.. Would like the input of more experienced people who could shed some light.

This seems to be the most logical next step.

1.0 cryptocurrencies - Bitcoin
2.0 cryptocurrencies - Easier Consensus through voting, Market features: Decentralized Exchanges, Stable Cryptocurrencies, etc

would this be something like 3.0 cryptocurrencies? - "Interblockchain" communications? Connection between multiple blockchains. Allows for Private ones with enhanced privacy and potential for businesses.

This could be the next race in the cryptocurrency universe. People are already starting to work on this. As I mentioned in the original post, I expect some kind of nucleus of blockchains to run on top of a protocol which permits interoperability. BitShares for Financial Institutions, Music for Entertainment Companies, etc Multichain is already working on this and it's just a matter of time to see more people realize this. Sooner or later we will need some kind of protocol which allows communication between multiple blockchains. It's known some important institutions want privacy on their chains so we have all the facts here.
I say multiple nucleus because it seems difficult to have a single protocol to have everything running on top of it. Each protocol might have different features. I foresee one for Financial Institutions, one for Entertainment and one for Data and Storage, which could even run beneath the ones I mentioned.

[phillyguy]

From 30,000 feet, this seems like a great analogy. Easy to comprehend and see the value for multiple parties. Whether it's technically feasible or not, I have no clue :-).

[Akado]

Lately we've been hearing a lot about Private Blockchains and it seems it's the theme right now. Financial Institutions want to use blockchain technology it can save them time and money. It's the most logical thing to do. However, they don't want to abdicate their power and privacy. This can create some kind of a dilemma for some of us. The first blockchain ever made was designed to be public and fully transparent. Could someone like a Private Blockchain even be called a blockchain? Or is it something else? Well, I say we will have to manage both.

Well, how could we do this? At first, it's hard to imagine a world where everything is fragmented. If each company had their own blockchain that could be a mess. However, we only need a way for them to communicate. Ideally we should have the lowest level of the protocol to be public and transparent but also a way for businesses to develop their own private networks on top of it. The easiest way I came up with to explain this to everyone is: See BitShares as the Internet and Private Blockchains as Intranets.

Everyone can navigate through the Internet - Anyone can use BitShares
However you need permissions to access a specific Intranet - Permission Based (Private) Blockchains

I think that analogy would suffice. Another one is kinda like how computer networks work

Each layer has it's own protocols. Each layer uses the one beneath to work properly and provides a service for the one above. Each layer gets into something more specific until you reach the application layer. We could see this as some kind of Blockchain Privacy Layers. At the base you would get the BitShares chain, which everyone can use, but as you go higher, chains get more and more private (see difference between Intranet and Extranet).

This would mean we could support Financial Institutions who wanted their own private ledger. They would get to keep their privacy and power on their chain and we would have more volume, more transactions, more profitability. Just random stuff of the top of my head that could be used to monetize this:

• stupid proof client where with one simple click you would create your own chain. by doing so you would also have to pay some kind of fee just like you do now for a UIA or become a delegate
  
• part of the fees generated by that chain would then be used to buy and burn BTS,
  
• tokens on that chain would need to be collaterized by BTS
  

This also seems to me that the future of BitShares would have a higher success rate if instead of targeting new DACs would target this Private Blockchains. At the end, every Institution using their own private chain would be using BitShares. In my opinion, this would need to be the next step we should take if we want to grow.

The thing about DACs and not having a chain to rule them all is, if Financial Institutions want to use BitShares (more specifically the Graphene Toolkit), BitShares' stakeholders will gain nothing from this as these chains would be designed to be private, meaning there would be no sense at all in Sharedropping on BitShares. Zero incentives at all. All they want is the toolkit. This would bring us back to the same old conversation about CNX gaining from the toolkit which was originally supported by AGS owners but I don't want to get into that. This is merely my vision of the future and how both - BItShares' shareholders and CNX - could benefit from this. They would still require a licence to build a private chain network on top of BitShares. If this is possible I would suggest for BitShares to adopt this as a business model if it is aiming to grow big.
Note: This doesn't necessarily mean we would have one chain to rule them all. We would have multiple chains, but each would grow to a huge network with private chains. BitShares for Financial Institutions, Music Chain for Music, Video, Media and overall Entertainment Industry, etc

All of this, assuming this is feasible. I'm only assuming so based on MultiChain and other random stuff and projects I have read, which aim to build Privatised Chains on top of Bitcoin. For reference:
MultiChain is an open source distributed database for financial transactions. It builds on the technology that powers bitcoin to enable private blockchains with managed permissions. MultiChain is optimized to help financial institutions and service providers accelerate their exploration of blockchain technology.

https://forum.ripple.com/viewtopic.php?f=1&t=15635
https://blog.ethereum.org/2015/08/07/on-public-and-private-blockchains/
http://www.multichain.com/

tldr:

• BitShares the layer-base of a big protocol
• Private Chains on top of BitShares to increase profitability
• BitShares shareholders and Financial Institutions who want privacy and power over their ledger, would both benefit.
• This was a random thought so I don't even know if it's feasible or makes any sense at all in a blockchain technology context.

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