Scaling up Ethereum
The article “Scaling up Ethereum”, popular amongst investors, has two examples: Identity and Provenance. The following amends its cursory, news-like description.
- Identity
The current identity models largely depend on the verifier. For example, “Login with Facebook”, where Facebook is the verifier. The verifier carries security risk and unfair advantage, all because the Internet doesn’t have identity-verifying capacity built-in. Blockchain has it built-in, evident by the ability to identify the rightful owner of a Bitcoin to transfer it.
Currently, Bitcoin blockchain ID verification is without attestation — similar to Facebook; it proves that one can use the account, but doesn’t attest to who the person is. Eventually, attestations will be available to the blockchain — there is no technical reason why it can’t. When that happens, blockchain can serve as an identity layer for the Internet. This would have profound changes to the way people transact and use the Internet:
- nobody would need to do the silly things like uploading a photo of driver’s licence.
- A lady’s forum, for example, can be sure that all members are women without physically IDing them or knowing their driver licence.
- The KYC industry can be replaced by automatic identity protocols.
- Remote identity proving will eliminate the last reason people physically visit any bank branch.
Bitcoin, Ethereum, Litecoin are all capable of being developed to serve that purpose.
2. Provenance
Provenance was not solved in the past because it was not known to be possible for many mutually distrusting vendors in an industry to maintain a database collaboratively. The industries, however, were misinformed. Such technology existed before blockchain. They just didn’t see an example of it at work. Bitcoin uses a conceptually similar but substantially different technology†. Its success, however, instilled the confidence that such collaboration can work. Given that the technology proceeds Bitcoin, inventors of ‘blockchain provenance’ can start from reading the quaint books of Professor Lamport instead of being glued to Satoshi’s whitepaper.
There is, however, a true blockchain use-case related to provenance — proof of ownership. Suppose the title of a case of young Bordeaux was traded on the market while the actual wine is well preserved in a facility, the consumer of the wine can redeem the bottles with the ownership he traded from the blockchain, without a 3rd party overseeing the trade operations and issuing title deeds. If the product is a smart product (e.g. smart-car), it can even recognise its new owner.
Finally, on scaling up Ethereum the topic itself: when a popular use-case is found and adopted, Ethereum will soon hit a bandwidth limit, since blockchain operates on extremely narrow bandwidths compare to the Internet. It is left to be questioned whether a method to increase bandwidth will mature first, or a use-case will mature first. The article seems to be only concerned with use-cases, and not the technical scalability. There is no doubt of the prominent future of blockchain, but a wiser guy would want to know the path to get there: it helps timing investments.
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† The technology provenance use-case need is called “Byzantine fault-tolerant consensus” and it was solved before Bitcoin. The technology behind Bitcoin can be roughly described as “Byzantine fault-tolerant consensus with open membership” or “Byzantine fault-tolerant consensus without identity”, which is a different problem. They both belong to the school of consensus algorithms.
