Forks On The Road

A Look At New Technologies Through The Lens of The Blockchain

Consistency is hard work. Particularly, when the future has many forks on the road. A fork is a metaphor for a life changing choice. The Blockchain will witness many such forks on it’s road to global, mainstream adoption. For instance, the scalability challenge has developers scrambling to develop alternate ways of achieving consensus. These include sharding, using Proof of Stake instead of Proof of Work, off-chain transactions etc. Take one step further and a whole new challenge appears on the horizon. Think quantum computing and it’s effect on rendering many of the cryptographic algorithms practically useless. These are foreseen challenges. There could be other unknown unknowns further down the road. This article looks at some of the challenges the Blockchain faces today and will likely face in the future. No matter what the future looks like, it is going to be a very interesting and perhaps life changing journey.

Setting The Stage

The biggest threats to nascent technologies are newer technologies that force these new technologies to adapt or risk obsolescence. Take the case of Virtual Reality (VR) as a technology. VR has come a long way from being the stuff of science fiction to its entry into the living rooms of millions of homes. However, it’s greater adoption is hindered by the fact that it requires a headset on the head at all times which can cause motion sickness due to prolonged exposure. Augmented Reality (AR) is trying to be another alternative but it’s not immersive. It simply overlays digital world on the real world. The least obtrusive, then, would be to put a chip in the brain but the thought of an implant can send shivers down the spines of many. However, the thing to remember is that we live in a world where.

Our ultimate quest is to recreate the universe as we see it in human terms. Call it the madness of a scientist or the noblest of pursuits, that is how we roll.

The Story So Far

In an earlier story I wrote on Bitcoin, I explained the phenomenal acceptance of Bitcoin since the origin of the cryptographic currency in 2008 to it’s global footprint today. What makes Bitcoin truly unique is the way it came into being. Many revolutionary technologies originate in the military or in the private sector. Bitcoin, in a way, originated completely on the internet due to the efforts of many developers (some known, others like Satoshi Nakamoto unknown still) and enthusiasts across the world. This is long distance collaboration at its best. Increasingly, there seems to be a decentralization in the process of creating new technologies. People across the world, powered by democratized tools of development, can collaborate and create new applications with exponential impact. Another example is the Ethereum Blockchain. While the Ethereum Foundation (Stiftung Ethereum) is based in Zug, Switzerland and plays a central role in the development of the Ethereum Blockchain, developers creating applications for the Blockchain are spread across the globe. Even the Ethereum miners are spread all over the world. The Blockchain therefore represents a paradigm shift in developing fault tolerant technologies.

Founded by Joe Lubin in 2015, Consensys is developing a plethora of software services and applications ranging from GroupGnosis which is a prediction market platform to Ujo music platform which creates a platform that uses blockchain technology to create a transparent and decentralized database of rights and rights owners, automating royalty payments using smart contracts and cryptocurrency (source: Ujo music). In fact, Imogen Heap used the Ujo music platform to release her single Tiny Human. Consensys has 900+ employees today and 48 spokes that create applications for the Ethereum Blockchain. Many other startups such as Augur, Etherea, KYC-Chain, Wei-Fund are helping create Internet 2.0.

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However, it is not always smooth sailing. In fact, it is anything but smooth sailing. Despite a lot of investment flowing into the Blockchain, it is still far away from mainstream adoption.

Vitalik Buterin, the founder of Ethereum, coined a major issue as the ‘Scalability Trilemma’ i.e. developing a Blockchain that offers scalability, decentralization and security, without compromising either one. Naturally, the Blockchain world has moved away from the famous ‘increase the block size’ vs ‘move to a different consensus mechanism’ debate. The Blockchain community implemented SegWit (Segregated Witness) which increases the Bitcoin’s block size limit by eliminating signature component within a block and allows the implementation of the second-layer solutions for further improvement.

Bitcoin Blockchain is banking on the Lightning Network (the second layer solution) which is a network that sits on top of the main Bitcoin Blockchain which can handle a lot of transactions and only post the net result to the main Bitcoin Blockchain.

The Ethereum community is also contemplating different ways of overcoming scalability including moving to a Proof of Stake consensus mechanism and Sharding. Sharding involves breaking the Blockchain into many ‘shards’. Each shard processes a specific set of transactions in effect creating parallel processors within the Ethereum Virtual Machine.

Another factor to consider is centralization of computing power.Bitcoin works on a Proof of Work consensus mechanism which makes it computationally impossible to control the Bitcoin Blockchain unless you have more than 51% of the computing power. Jihan Wu, the founder of Bitmain and another miner effectively control about 40% of the computing power. If they collude with other players to breach the 51% mark, it could be mean centralizing the computing power and controlling the Bitcoin Blockchain considering most of the Bitcoin mines are in China.

Challenges such as scalability are only the starting point in the evolution of the Blockchain.

Dealing With Quantum Computers

People always say Blockchain is reshaping the technology landscape. The truth is a little different:

There is a technological arms race between the US and China to build the world’s most powerful supercomputer. The IBM built Summit supercomputer has beaten China’s competitor the Sunway Taihu Light. On the other hand, the Blockchain has also witnessed an exponential increase in computing power along with the resultant electricity consumption and pollution.

At the beginning, Blockchain miners used Graphics Processing Units (GPU’s) to process transactions. After GPU’s were found insufficient, Field Programmable Gate Arrays which were essentially Integrated Circuits that could be programmed to perform specific applications after manufacture. FPGA’s were succeeded by Application Specific Integrated Circuits (ASIC’s) that were manufactured for a particular purpose. In this case, for example, for Bitcoin mining. This tremendous amount of computing power is required because Bitcoin and Ethereum operate on a Proof of Work method which means every node processes every transaction. Also, the processing becomes progressively harder as the consensus algorithm is designed to maintain asymmetry i.e. it will always present a problem that is more difficult for the virtual machine (computer network) to solve. One of the ways to beat this problem is to use Quantum computing. In classical computing, data can be stored in binary terms i.e. either a 0 or a 1.

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http://servicewordpress.com/quantum-cryptography-what-is-it/

Quantum computing utilizes a Qubit which includes not only bits like 0 or 1 but also a superposition of the two. In simple terms, storage increases exponentially and the computers are much faster especially when dealing with Prime numbers. Most of cryptography is based on prime numbers rendering it vulnerable to quantum computing or quantum hacking. The problem with existing cryptography is that it relies on one of the three computations i.e. integer factorization problem, the discrete logarithm problem or the elliptic-curve discrete logarithm problem. A quantum computer can easily crack existing public key cryptography using Shor’s algorithm. As a result a plethora of new technologies such as Block DAG (Directed Acyclic Graph), Quantum Cryptography , the Quantum Resistant Ledger and Zero Knowledge Proof systems such as ZK-STARKS have aroused a lot of interest.

Even before the mainstream adoption of quantum computing, the Blockchain world has embarked on an adversarial path to combat future disruptors.

Private Blockchain and Central Bank Crypto currencies

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americanbanker.com

Bloomberg, recently published an article on the pitfalls of being an early Blockchain adopter. This is because there is no common protocol and also because Blockchains are being built to scale as you read this article.With the growth of Blockchain, many consortiums (partnerships) were forged between different players. The Enterprise Ethereum Alliance is one such consortium. The IBM Hyperledger is another project.IBM and Microsoft have spearheaded the development of the Blockchain because they see a lot of demand for the technology amongst corporates i.e. those companies bold enough to try out a nascent technology.

Central Banks around the world are also curious to see how Blockchains evolve so that Central Bank Cryptocurrencies become an integral part of the monetary system unless of course quantum computing heralds a completely new paradigm. Venezuela has, for instance, experimented with a “petro” crypocurrency already and many other countries have contemplated toying with the idea. The purpose of writing this article is to look at the multidimensional nature of a technology’s evolution. Not only are other technologies vital to the evolution of the Blockchain but geopolitics also plays an equally important role in making the future seem almost unpredictable.

Half Truths

I used Blockchain as an example of a technology to explain a broader point which is the complexity underlying any exponential technology. Often times, as Richard Feynman observed, publicity in the media also known as “hype” precedes actual ground reality until nature catches up. Blockchains are a way to “decentralize trust” ie a way for us to trust absolute strangers on the Internet using cryptography. Imagine the real world and what it would take to establish trust with a stranger. Then again, that trust can be broken. A fundamental pursuit of becoming one up on nature has impossible challenges with the pursuit itself being an impossibility. However, that doesn’t deter us as human beings.

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memeshappen.com

The problem with a lot of technologies i.e. the Blockchain, Artificial Intelligence (AI), Quantum Computing, CRISPR gene editing is our incomplete knowledge of the worlds these technologies seek to mimic. While a lot of billionaires have moved beyond lusting for power to lusting for immortality, a fundamental flaw that plagues all technological development is the pursuit of being first among equals with our creator. We are not satisfied with being equal with the mysterious power that created our universe. We want to understand the mysteries that surround us and then go one step further. We want to go where no power, known or unknown, has ever gone before. Perhaps, the road to truth passes through a lot of half truths. This pursuit may be our greatest triumph but it could also be our undoing as a species.

Writer @ The Intersection of Finance, Tech & Humanity. Stories of a Global Language: “Money”. Contributor @ Startup Grind, HackerNoon, HBR. Twitter@akothari_mba

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