In early January 2009, the first block Bitcoin Blockchain has been mined. The next newspaper title was hard-coded in the block.
"The Times 03 / Jan / 2009 The Chancellor is about to launch her second rescue plan for banks.
This title provided a timestamp for the first block of Bitcoin, just as when the hostages present the daily newspaper in videos taken hostage to show that they were still alive after a certain date.
The Bitcoin blockchain began by using the power of a newspaper to say with certainty: "This event happened after this moment in time ".
But this diary-inspired technique is not enough to fully timestamp an event or transaction. You must also be able to prove otherwise, that is, "this event occurred before this moment in time ".
In addition, if it is a financial transaction or the creation of a digital record, you must also prove that the underlying data have not changed at any time since the occurrence of the original event (immutability).
You do not need to use the timestamp of a transaction if you can change the details later.
Many blockchains try to do this on a large scale, especially those allowed. That is, blockchains are designed to guarantee the following three properties of a transaction:
- A transaction took place after a moment,
- A transaction took place before a moment,
- The details of the transaction have not changed since the transaction (immutability).
We have just seen how a humble diary can provide the first property. If a transaction contains the paper title of a given day, it must have occurred after printing that paper.
But can a newspaper provide properties 2 and 3?
In November 2018, AWS launched a new product during the re: Invent conference called QLDB (Quantum Ledger Database). This is an attempt to remove as many things as customers seem to want from a blockchain (company) solution, but to offer as a managed database centrally.
This may seem counterintuitive when one of the main pillars of blockchain technology is decentralization. But the decentralization of databases (distributed books) is not what the pioneers of the blockchain want. They want to decentralize power and trust, and allow confidentiality of data.
Distributed ledgers are very difficult to use and, in many cases of use, do not offer much value compared to well thought out centrally managed alternatives.
Is it possible to decentralize power and trust without distributing the general ledger?
in the start the QLDB video, what are they talking about verifiability (of a transaction) means (27:00). Basically, this is to prove that a general ledger transaction occurred between two instants and is immutable. That's exactly the three properties we listed above.
The video of the QLDB provides an example of a case where a car was involved in a crime on August 2nd but that it was sold from Alice to Bob on August 1st or 3rd. The question is:
Is the database "sufficiently immutable" to say when the car was really sold?
If the transaction had been stored in a traditional database, the database administrator (who, let's imagine for this example, is in cahoots with Bob) would have simply changed the date column of the transaction from the database. August 1 to 3, and help convict Alice of the crime.
In an AWS Quantum book, this is apparently no longer possible. It is designed so that no transaction can be changed after it is added to the general ledger.
This works by creating a "hash chain" of all transactions in the database (including their timestamps).
This means, because of the amazing properties of hash functionsWhen someone comes checking the ledger and knowing when the car has been sold, they can be sure that no one, not even those who are afraid of Bob, could have changed the database without that the change was written in the hash-chain.
What more does a business blockchain offer?
Where this differs from a blockchain or distributed ledger solution is that it is always possible for the car selling company that controls the ledger to act fraudulently.
Because if the car sales company really wanted to change the book in favor of Bob, it can create a brand new book and a new hash chain from all the transactions that took place in their book, but with a fit of those of Alice and Bob. transaction.
Because the ledger is private and the timestamps are only database strings, the listener has no way of knowing exactly when certain transactions have been added to the general ledger. (Or even if the big book he's looking at is authentic at all!)
Ie the Quantum book checks property 3, that of immutability, but not properties 1 and 2, those of the timestamp.
A whole chain of transactions claiming to cover several months of car sales could have been created before breakfast on the day of the trial.
On the other hand, with a blockchain solution, the ledger is distributed and transaction timestamps are set in time (as long as there is an honest node on the network). Therefore, such rewinding, rewriting or fraudulent time stamping would be noticed by the other members of the network.
But blockchains are really hard to implement. Is there a way to make sure that the company with the car sales ledger can not play with timestamps but can do you still have a centrally managed big book?
Back to the newspaper!
Here is a solution again using the humble newspaper.
And if … the car sales company takes the last word of the day in his book Quantum and divides it with the morning title in The Times. The company then sends it to the Times for printing in the new "Daily Hashes" page.
Placing such a hash in the Times would satisfy the three properties:
- The morning title is in the hash, so any transaction that contributed to this hash value must have occurred. after The newspaper of today has been published.
- The hash value appears in the next day's log, so any transaction that contributed to this hash value must have occurred. before the hash appeared in the next day's newspaper.
- Since finding two chains that give the same hash is impossibleOnce a hash is in the paper, it is impossible to change the data that created the hash, so any transaction that contributed to this hash value is unchangeable.
The Daily Hash page can be placed in the center of the paper, next to the deepest pages of the sports section. It would not be a good read, but it could help to effectively audit companies in which we place a lot of trust.
In fact, a company called Bail offers such a service, but it's just that: a service. And if it was mandatory for the banks and other institutions in which we are very confident to publish a daily hash of their book and have it printed in the Times?
Newspapers and blockchains can provide the three key properties listed above.
But the blockchain on paper is so much simpler. No sharding, bifurcation, 51% attacks, Byzantine generals, tokens, cryptographic markets, gas, secret keys, distributed ledgers, privacy issues, etc. To name just a few!