[seibelj]

Blockchain is very applicable to industries where middlemen extract large value by being intermediaries between competing parties.

As an example, in telecom there is the issue of settlement. Every phone call generates a Call Data Record (CDR) that has information about who called who, call length, etc. This is critical because every telco negotiates individual rates for voice, SMS, data roaming, etc. between every other carrier on earth (although often you negotiate with one company that provides a package rate for multiple telcos). Your "unlimited" plan obfuscates the fact that how you use your plan, what carriers the people you call are on, where you use data, reflect different levels of profitability for you as a customer.

Large companies like Amdocs[0] make billions of dollars handling settlement for telcos. Every month, a carrier has to "settle" all of their CDR's with every other carrier. Issues get sorted out because CDR's never match perfectly, and then carriers pay each other to balance out based on their contractual obligations.

A blockchain solution that all telcos agreed on would guarantee data correctness (CDR's all look alike), allow instant settlement and payment (settlement happens once a month), and eliminate the middlemen like Amdocs, Synchronoss, etc. in regards to settlement.

Obviously this is a tough problem to crack, and you'd need to get the telcos on board, but I am explaining this as an example where blockchain could provide real value.

Indeed, Maersk, the largest shipping conglomerate, is going to release a blockchain solution to move the international shipping industry away from paper and to a unified system.[1] Maersk is in a unique position to do this because they are the largest player, and most other companies just follow what they do, but I mention this as an example where blockchain can help competing companies interact more efficiently.

[0] https://www.amdocs.com/

[1] https://www.economist.com/briefing/2018/04/26/the-global-log...

[pphysch]

Going from "paper" directly to blockchain, with not a peep about traditional databases.

Surely the executive is just using blockchain as a buzzword for database.

[sixdimensional]

Believe me, I empathize with your comment.

However, I think maybe you're missing one thing that is being proposed as a real thing - and that is, that blockchain has become like a distributed database - I mean, there are people proposing that they can be considered as the same kind of technology, or blockchain tech can be seen as an evolution supporting database technology.

I am still on the fence if I completely believe it, which is probably why I won't get rich building blockchain-based database technology or implementing it. But I think it is a valid consideration and we as technologists should look into what this model (blockchain as a kind of database technology) really represents.

It's another arrow in the architect's quiver, perhaps.

[wmf]

The comment you replied to mentioned that "Large companies ... make billions of dollars handling [databases] for $companies." Central databases have become excuses to erect toll booths that blockchain may eliminate.

[pphysch]

So why doesn't $company roll their own database? Why go the extra mile and roll out an infamously-inefficient blockchain?

It's a lot of work, that's why.

[masklinn]

Because $company is only one of a number of competitors and none of them is going to let one of them handle the pot.

And because there's distribution but also only a small number of semi-trusted peers, a "blockchain" would be efficient as it wouldn't have to be a proof of work, it would only need to be a signed "public" ledger (public in the sense that all companies can access and add to it). Don't think bitcoin, think a git repo with a bunch of committer signing all their commits.

[wmf]

This stuff is being proposed for data that needs consensus between multiple companies, so each company can't have their own.

[foepys]

If you don't trust your business partner, don't do business with them. If there are problems, contracts and courts decide what to do. There is no need for blockchain.

[zeroxfe]

This is not how the real world works.

When you have large industries with thousands of peering organizations all over the world, you can't just "trust" -- there is, in fact, no metric for trust and no ability to measure trust. That's why the middlemen exist.

This is especially true in finance, healthcare, and other industries where blockchains are being used.

[diroussel]

How do you make a traditional database immutable? Who controls writes and updates? Well it’s a matter of consensus.

[pards]

Blockchains are not immutable - the DAO hack and subsequent hard-fork proved that to the tune of millions of dollars.

[zeroxfe]

That was a fork, not a mutation of the database. You can still today go back and see the history play out in the different chains.

[pphysch]

Who determines if competing companies are entering authentic data into the communal blockchain? How do you address a consensus attack in an aggressively competitive industry with relatively few players?

Immutable garbage is still garbage.

Databases are perfectly compatible with any variety of authentication layers.

[thisisit]

You are describing a Master Data Management(MDM) system. Also referred to as "single source of truth" in a data oriented system. The data in a MDM is homogeneous. The most important requisite for MDM's effectiveness that every downstream system needs to get data from MDM. No system should generate it's own data.

While those are general rule in practice, it is a difficult task to pull off. The problem is not technical but rather due to people. There are tons of department in a company. And every time an input is made things change a little. It's due to human mistakes, software restrictions and lot more.

I haven't worked in teleco but here's an example on what goes wrong when data is recorded. Marketing will send out flyers to say 100 people. One of them is named ABC XYZ. This person is interested in a phone line from say AT&T.

When sales of AT&T take this up due to some problem, the name is recorded as ABC-XYZ ie with a hyphen. Now this data is human readable but doesn't make sense to a computer. So, when it comes to tallying up marketing and sales it doesn't work.

Now things get worse when a connection has been sold, the address field in sales might be smaller compared to a full fledged customer system. So, sales says address is "XYZ Street" whereas customer system says "SSS Boulervad, XYZ Street". And then this snowballs further.

To resolve this many companies try to implement a UCM - Unified Customer Management systems, a branch of MDM. But then there are people's ego, money considerations etc come in the way. So companies don't bother with it and go with settlement vendors.

Now, this is a similar situation when it comes to CDR. Different equipment means different sets of data, that's why they need a settlement company.

So, the problem is not a simple - middlemen eating money. There are lot of things going on.

[Joeboy]

> CDR's never match perfectly

With a blockchain based system, what happens if two telcos send CDRs that don't match?

[zeroxfe]

Typically a conflict-resolution mechanism will be built into the consensus mechanism, with the rules set by the peers.

But there will always be transparency (even the bad CDRs will be logged) and accountability (you know who said what, so the incentive for fraud is significantly decreased.)

[TylerE]

But if all the telcos have to agree anyway, why not just use a centralized db with cryptographic signatures?

[abtinf]

A key element of blockchain is the associated business logic (smart contracts). You need an immutable ledger and you need agreed upon business logic.

You have your choice of consensus algorithms. Most of the time when people say blockchain, they mean the public networks like bitcoin or ethereum. But if you move to a private, permissioned network model, you can use consensus algorithms that don’t need mining and have very high transaction speeds. This is the approach taken by IBM Blockchain (via the Linux Foundation’s open source hyperledger fabric project) and a few others.

[Joeboy]

So eg. if telco A says a call was 8 minutes long and telco B says it was 15 minutes - what kind of smart contract / business logic decides how long the call was?

[abtinf]

Resolving these issues can happen in several ways.

Since all participants are operating with the same data store, you can flag these conflicts in real time. You might even have individual transactions to mark start and end times, such that conflicts like this become impossible.

You might escalate to human resolution. IBM Global Finance implemented a blockchain system for thousands of its business partners in order to help resolve invoicing and payment issues. By having a trusted single source of truth, the dispute resolution process was dramatically accelerated. I don’t recall the exact numbers, but they went from something like 90 days average resolution time to just 1-3 days. This resulted in reducing working capital needs by about ~$100m, thus saving a few million dollars per year just in interest charges.

[Joeboy]

I can see the benefit of real time operation, and I can see the benefit of using a single, standardized invoicing / payment system. I don't understand why you need a blockchain for any of that.

[abtinf]

In scenarios where there exists a trusted central party, blockchain is not an applicable solution. Transitioning from such a centralized system to blockchain would require substantial investment for hypothetical gains.

However there are many scenarios where it would be infeasible to have a central party. A farmer grows an organic coffee bean in one country and it needs to get to a coffee shop in another country. There are multiple parties and industries involved: the farmer's supplier, the organic certification authorities, the trucking companies that transport the product between farmer/roaster/port/coffee shop, the foreign customs agency, the ocean shipping company, the numerous insurance companies involved, the domestic customs agency, the wholesale distributors, the coffee shops. Throw in the IoT sensors for measuring watering, pesticide use, transport climate, storage climate, and so on that report to the blockchain (which records out-of-tolerance conditions).

Let's say the consumer wants proof the product is organic, how would you do it? What if the beans arrive spoiled, who is responsible? How about if there is an accident, which of the insurance companies is responsible? Who do they pay? What if an outbreak of disease results from the coffee, how would you find the culprit?

The thing is, the world today works. We have records on paper, databases, and huge numbers of people involved in figuring out those questions (though some questions and business models are effectively impossible, like "What if the farmer wants to set the price for a cup of coffee, instead of selling to distributors, how would they do that?").

But these people don't talk to each other. What if there was a trusted business/industrial network of databases that could be integrated into business operations? What new business models, efficiencies, and products would that system enable? That is the promise of blockchain. Bitcoin and cryptocurrencies are silly toys by comparison.

Blockchain is in its infancy. By analogy, if blockchain were the internet, it would be at the stage of dialing into your local BBS by using an acoustic coupler. It is hard to imagine what the world will look like in 30-40 years when industrial/business uses of blockchain are advanced and pervasive.

[zeroxfe]

That's conflict-resolution logic, and up to the peers to decide a priori (they will likely already have this, since it is not an uncommon scenario.)

The value here (in addition to decentralized validation and consensus) is also in transparency and accountability, which disincentivizes fraud.

[Joeboy]

> That's conflict-resolution logic, and up to the peers to decide a priori (they will likely already have this, since it is not an uncommon scenario.)

Or you could just say you don't know?

[zeroxfe]

> Or you could just say you don't know?

Ugh, there's really no need for that! I actually worked in telecom for years, including integrating cellular network gear with third-party billing and settlement systems (like Amdocs.)

Billing is hugely complicated and the third party systems cost in the millions of dollars in licensing and maintenance fees. They include thousands of rules to deal with the variety of scenarios (especially in conflict-resolution) that play out when peers settle with each other. The peers themselves work out large and complex legal contracts before they're encoded into these systems.

[pphysch]

How is a private blockchain functionally different from the average database?

[TylerE]

IBM can charge 8-figure consulting fees instead of 7.

[abtinf]

The database is distributed among independent nodes.

Each participant has their own copy of the immutable ledger and world state.

Entries are cryptographically signed.

All interactions run through smart contracts (you can’t just insert/update).

You can form channels to engage in private transactions between a subset of the network, without divulging the existence of the transaction to the full network.

[Angostura]

Because then you have to decide who you are going to trust to run the database.

[root_axis]

That's not really a hard problem though, .e.g. git and github; any changes made on the host are easily and immediately detectable and verifiable, no block chain necessary.

[root_axis]

So I am assuming there is no proof of work involved in this system, correct? If so then it sort of escapes the normal criticisms of blockchain tech (extremely slow and expensive to run)

[what-the-grump]

They are going to end up with a big database.

Also, let me know when we can fire our ops (finanace) and make billions more. Hope you guys appreciate how huge this would be, billions are spent daily to recon trades and positions. You mean to tell me some guy already figured it all out and all we have to do is write a wee bit of code.

Next we are going to get the Hasidic Jews on 5th ave to start using spreadsheets instead of little notebooks so they can price fix diamonds and settings faster.