[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.

[Joeboy]

I wasn't saying you don't know because you're ignorant about the telecoms industry. I think you don't know how to algorithmically resolve a conflict between two adversaries who assert significantly different versions of history, because nobody knows how to do that. I don't have your telecoms insider knowledge, but I feel fairly confident I know what would happen if a telco was suspected of inexcusable misreporting: people would check the data, have meetings and decide what they wanted to do about it. Maybe there's scope for automation of a bunch of deterministic stuff that would happen before it got to that point, but the actual resolution of actual conflict has to be a human process.

[zeroxfe]

> I wasn't saying you don't know because you're ignorant about the telecoms industry. I think you don't know how to algorithmically resolve a conflict between two adversaries who assert significantly different versions of history, because nobody knows how to do that.

Yes, this is why they negotiate this stuff before the fact. Switches see different things all the time, especially when there are bugs, outages, or misconfigurations.

The lawyers come in when there is actual conflict, e.g., when fraud is suspected, or anything outside the terms of what was already negotiated.

The value of a blockchain here is that these rules (the prenegotiated ones) can be executed by verifiable smart contracts, instead of trusting a third party like Amdocs. If there is a real conflict, there will still be lawyers involved, but with the added advantage of an immutable public (to the federation) log. The bonus (which is yet to be proven) is that costs will be driven down significantly without the middleman.

[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.