Читать книгу The Truth Machine: The Blockchain and the Future of Everything - Paul Vigna, Michael Casey J. - Страница 11

Three

THE PLUMBING AND THE POLITICS

Building a decentralized economic system for a network of independent, anonymous computer owners in which everyone will work in the interests of the group poses a daunting technical challenge. It’s also a major political challenge. Herding cats comes to mind. It turns out that building a network outside the traditional political system requires a lot of political decisions.

Success for a decentralized cryptocurrency or blockchain network comes down to designing the right rule set—the software protocol—by which participants interact with each other. Satoshi Nakamoto’s Bitcoin breakthrough gave us the first working example of how to achieve this even when large amounts of money, business secrets, and other matters of value are at stake. But as the community of Bitcoin’s users and computer owners has grown and changed, and as newcomers have demanded new functions and more powerful applications, there’s been constant pressure to upgrade and change the protocol to facilitate those needs. The problem is that in a truly decentralized, open-source system where no one is in charge, it’s extremely difficult to get all those people with their far-flung disparate interests to agree on what changes to make.

There are probably several thousand extremely bright programmers and entrepreneurs trying to make this software take off. In some ways, they’re like the Founding Fathers in the United States: they’ve come across something new and intriguing that could change the world, if they could only configure it properly. “All men are created equal” did not just explode, sui generis, on the colonial landscape in July 1776. It was the synthesis of a classical-liberal school of thought that had been developing for decades—and still is, for that matter. The techno-philosophers of the blockchain movement are grappling with myriad iterations of an idea. They just have to find the best ones.

The Cypherpunks’ Holy Grail

The starting point for understanding how blockchains work, as well as the technical and political debates they engender, is the first working blockchain: the Bitcoin blockchain. Bitcoin put the objective of pure, permissionless decentralization front and center. In guiding a community of autonomous users to reach agreement on transaction histories, it showed that software controlled by no individual or corporation could now supplant the “trusted third-party” role that institutional intermediaries such as banks have traditionally played in confirming our financial records. If society is to define a sensible path for adopting, or not, this highly disruptive technology, we must first understand what Bitcoin is and why it matters. So, we’re going to peer under its hood.

Before we do that, however, let’s start with this generic definition of a blockchain: a distributed, append-only ledger of provably signed, sequentially linked, and cryptographically secured transactions that’s replicated across a network of computer nodes, with ongoing updates determined by a software-driven consensus.

What does that mouthful actually mean? Well, let’s break down its key words:

1 “distributed”: the ledger does not reside in one place but in many, with each bookkeeping node independently responsible for up-dating it in coordination with the others. Once one bookkeeper (in this case, a computer) updates the ledger, along with some proof that its work was sound, all others simultaneously upgrade their own versions with that same update. What emerges is a constantly updated, commonly agreed record of truth with no centralized master copy.

2 “append-only”: information can only be added, not removed. This is important because it means no one can go back and doctor the record. What’s been agreed upon as the truth is the truth. There is no room for debate.

3 “provably signed”: blockchains use the public key infrastructure encryption methodology for sharing and controlling information. With PKI, as it’s known, users control two separate but mathematically linked strings of numbers and letters, or “keys.” One is a secret “private key” that only they know, and the other is a public key, visible to all, that’s associated with some form of valuable information. In Bitcoin, that information refers to an amount of bitcoin currency. When the user “signs” their public key with their private key, that action mathematically proves to outsiders that the user has control of the underlying information and can then assign, or send it, to another person’s public key. In Bitcoin’s case, that’s the process by which a person sends currency from their “address” (their public key) to another. (Though it’s not a perfect analogy, you can think of your private key as a secret password or PIN to manage your money and your address as an account.)

4 “sequentially linked and cryptographically secured”: some other tools from the science of cryptography are used to represent entries into the ledger in a way that links them, with a series of unbreakable mathematical locks, into a fully verifiable sequence. This forms a never-ending, chronological series of blocks, or batches of transaction data, whose integrity is protected by cryptography. This structure provides an unfathomably high probability of confidence that nothing in the ledger has been altered from its agreed-upon state.

5 “replicated”: the ledger is copied across participating nodes (as per the distributed pattern described in 1 above).

6 “software-driven consensus”: a program that all the computers run independently sets certain requirements and incentives for them to behave in a way that systematically guides them to reach agreement on which transactions should or shouldn’t be included in each updated version of the replicated ledger. “Consensus” is a key word in blockchain design, as it describes the process by which each participant’s independently managed copy of the ledger is harmonized with everyone else’s in keeping with a commonly agreed version of the truth. It typically boils down to how to get a majority to agree on updates.

Not so complicated, right? Well, if you’re still struggling to understand, never fear, we’ll dig deeper.

A key point to note here is that our generic blockchain definition doesn’t capture the magnitude of Nakamoto’s breakthrough. There are other elements to Bitcoin that, for all intents and purposes, achieved the Cypherpunks’ Holy Grail: a fully decentralized cryptocurrency that no single person, entity, or consortium of members anywhere could control.

The Bay Area–based Cypherpunk community, which fought hard to achieve decentralization for two decades before Bitcoin arrived, knew that any digital system of money would need a common ledger to keep track of everyone’s debits and credits. This was to ensure people weren’t “double-spending”—in effect, counterfeiting—their currency balances. But for the system to be fully decentralized, it had to allow anyone to participate in managing that ledger. It had to be “permissionless,” with a consensus system that no one party could influence. That way, no authorizing entity could block, retract, or decide what gets entered into the ledger, making it censorship resistant.

Before Bitcoin, all attempts to achieve this goal ran into an irresolvable dilemma: without a central authority affirming the identity of those validating the ledger, a fraudulent validator could secretly distort the consensus by creating multiple computing nodes under different aliases. (Think of all those fake Twitter aliases for a sense of how easy this is.) By replicating themselves, they could cast more than 50 percent of the votes and get their own false, “double-spent” transactions inserted into the shared record. This could be resolved by some authority identifying and authorizing each computer user, but that would just take things back to square one. It breached the Cypherpunks’ ideals of “permissionlessness” and censorship resistance.

Satoshi Nakamoto’s ingenious solution lay in a mix of carrot-and-stick incentives that encouraged those who were validating transactions to do so honestly. Any computer anywhere could participate in validation work, and, in fact, would be incentivized to do so with a lottery-like system of bitcoin rewards. These would be paid out every ten minutes, whenever one of those computers successfully added a new batch, or “block,” of freshly validated transactions to the blockchain ledger. (These computers are known as “miners,” because in seeking to win the ten-minute payout, they engage in a kind of computational treasure hunt for digital gold. At the time of writing, the ten-minute “block reward” was equal to 12.5 bitcoins—around $125,000—issued automatically by the decentralized software protocol to the winning miner. Miners also pick up transaction fees, which we’ll get into later.)

Now, since it’s a permissionless system, anyone could up their chance of winning the randomly assigned bitcoin reward lottery by adding more computing nodes to the network. So Nakamoto needed a non-centralized way to prevent a rogue miner from taking over more than 50 percent of the computing power. He achieved this by requiring every single competing computer to conduct an exercise called “proof of work”: a difficult mathematical puzzle that requires heavy computation to find just one number within a mountainous digital haystack of other numbers.

Proof of work is expensive, because it chews up both electricity and processing power. That means that if a miner wants to seize majority control of the consensus system by adding more computing power, they would have to spend a lot of money doing so. Because of features such as a “difficulty adjustment,” which makes the proof-of-work puzzle ever harder as overall network-wide computing power increases, Nakamoto’s proof-of-work system ensures that the costs of a so-called 51 percent attack grow exponentially as an attacker gets closer to that consensus-controlling threshold. Double-spending and fraud are not illegal in Bitcoin; in other words, they are just “taxed” to such a degree that it’s prohibitively expensive. At the time of writing, the GoBitcoin.io site was estimating that a 51 percent attack would require an outlay on hardware and electricity costs of $2.2 billion.

Over time, bitcoin mining has evolved into an industrial undertaking, with gigantic mining “farms” now dominating the network. Might those big players collude and undermine the ledger by combining resources? Perhaps, but there are also overwhelming disincentives for doing so. Among other considerations, a successful attack would significantly undermine the value of all the bitcoins the attacking miner owns. Either way, no one has managed to attack Bitcoin’s ledger in nine years. That unbroken record continues to reinforce belief in Bitcoin’s cost-and-incentive security system.

If we view the bitcoin currency from this angle—and not merely as it is popularly portrayed, as a strange new digital unit of value that some geeky guys think is a good alternative to dollars, euros, or yen—we can build a conceptual framework for understanding the wider implications of Satoshi’s invention. The currency, bitcoin (lowercase “b”), is first and foremost a store of value that rewards people for securing Bitcoin (uppercase “B”), the system. That, and not the hope that it will become an everyday medium of exchange, is its primary purpose. Without its existence as an incentive for computer owners to honestly validate exchanges of valuable information, Satoshi’s censorship-resistant distributed ledger simply wouldn’t work.

Of course, for this all to tie together, the miners must regard bitcoin currency as having value—they must believe they’ll be able to exchange it for other things of established value, be they goods and services or fiat currencies such as dollars. Fully exploring how they, and millions of others, came to conclude that bitcoins did have value requires a deeper dive into how human communities reach agreements on what constitutes a common medium of exchange, store of value, and unit of account—the three qualities of money. (For that dive, we again will shamelessly recommend The Age of Cryptocurrency.) What we can say is that, contrary to popular opinion, a currency need not be backed by anything, be it the commitment of a government or a fixed amount of commodity such as gold, only that it be sufficiently recognized as a useful means of measuring and clearing exchanges of value. This might seem counterintuitive because we tend to think of money as a physical thing that somehow contains value within the particular item—the paper note, or the gold coin. But in reality currencies only convey a symbolic tokenized value, one that’s derived solely from the collective will of society to commonly accept the token as a marker of that value. This same malleability of thinking can be applied to any token, so long as enough people accept it. That’s what happened to bitcoin.

The structure of the ledger is also important for keeping Bitcoin secure. Nakamoto conceived of his as an ever-growing, unbroken chain of blocks, each representing a batch of transactions strung together and validated within a ten-minute bitcoin reward period. Hence the word that’s now on every CIO’s lips: “blockchain.” (Notably, the term “blockchain” never appeared in the original Bitcoin white paper—a good argument for why Bitcoin should have no exclusive claim to the term.)

Within each block period, every miner that’s engaged in the proof-of-work race for the next bitcoin reward is simultaneously gathering new incoming transactions and arranging them into their own new block. The details of each transaction—date, time, addresses of senders and recipients, the amounts sent, etc.—are captured and run through a special cryptographic algorithm to produce an alphanumeric string known as a hash. A hashing algorithm can convert any arbitrary amount of original source data into a single, fixed-length string of letters and numbers, providing a means of mathematically proving the existence of that underlying information. Anyone in possession of the transaction information can easily run it through the same hashing algorithm to confirm that whoever made the original hash must be in possession of the same data.

A key feature of hashes is that they are hypersensitive to changes in the underlying data. Here’s one we generated from the previous paragraph’s raw text by running it through the highly secure SHA-256 algorithm that Bitcoin uses:

63f48074e26b1dcd6ec26be74b35e49bd31a36f849033bdee4194b6be8505fd9

Now, note that when we simply remove the last period from that paragraph of text, the algorithm came back with a completely different alphanumeric string:

8f5967a42c6dc39757c2e6be4368c6c5f06647cc3c73d3aa2c0abdec3c6007a5

If you think about this in terms of someone trying to secretly change transaction data, you can see how this hypersensitivity is vital to the blockchain’s integrity. If anyone tries to introduce changes to existing transactions, other miners will clearly recognize that the new hash output doesn’t match what they have in their versions of the blockchain. So they will reject it.

Bitcoin also takes advantage of the fact that it’s possible to take two hashes, combine them, and produce a root hash that encapsulates the two separate data proofs. This process can be repeated ad infinitum, creating hashes of hashes of hashes in a hierarchical structure known as a Merkle Tree. This is how transactions within each block are bundled and cryptographically tied together.

Bitcoin then takes this linking function one step further. Through another cryptographic hashing function, the winning miner ties their newly created block to the previous one. This turns the entire blockchain into a never-ending, mathematically linked chain of hashed transactions that goes all the way back to the “Genesis” block of January 3, 2009. Make a change to a transaction from January 15, 2011, and the blockchain’s interlinked hash-based record of all the data recorded in the subsequent seven years will be completely altered. It’s a bit like how banks use exploding dye to protect banknotes: any thief who tries to spend the stolen money is immediately exposed.

This unbroken record of transactions provides the foundation that miners use to verify the legitimacy of the transactions contained in the winning miner’s new block. If a miner is satisfied with the contents of that block they will commit to connecting their next block to it if they are lucky enough to be the winner. If they’re unsatisfied, they would attach their new block to an earlier block whose contents they trust, leaving the suspicious one as an “orphan.” This decision-making forms the basis for Bitcoin’s consensus logic, which is based on a convention known as the “longest chain.” The idea is that if no miner has amassed more than 50 percent of total computing capacity, then mathematical probability will ensure that any attempt by a rogue minority to add a series of new ten-minute blocks to a previously rejected and orphaned one will soon fall behind the majority’s longer chain and will be abandoned. The caveat, of course, is that if bad actors do control more than 50 percent of the computing power they can produce the longest chain and so incorporate fraudulent transactions, which other miners will unwittingly treat as legitimate. Still, as we’ve explained, achieving that level of computing power is prohibitively expensive. It’s this combination of math and money that keeps Bitcoin secure.

These cobbled-together concepts comprise Satoshi Nakamoto’s breakthrough: a decentralized, censorship-resistant record of the past. If we acknowledge that all accounting systems are merely estimates—that it’s impossible to arrive at a perfect representation of reality—then this one, a system that collectively captures the shared opinions of a community with no central authority, results in the most objective representation of the truth yet devised.

In solving the double-spend problem, Bitcoin did something else important: it magically created the concept of a “digital asset.” Previously, anything digital was too easily replicated to be regarded as a distinct piece of property, which is why digital products such as music and movies are typically sold with licensing and access rights rather than ownership. By making it impossible to replicate something of value—in this case bitcoins—Bitcoin broke this conventional wisdom. It created digital scarcity