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blockchains and distributed apps
a detailed primer on the world’s most overhyped technology
by: John Feminella
at: Craft
in: Budapest, Hungary
on: May 10th, 2018
JOHN FEMINELLA
Pivotal
http://pivotal.io
http://jxf.me · @jxxf
http://jxf.me · @jxxf
Should I use a blockchain for my app?
Probably not.
in the beginning
http://jxf.me · @jxxf
http://jxf.me · @jxxf
"A purely peer-to-peer version of electronic cash would allow
online payments to be sent directly from one party to another
without going through a financial institution. Digital signatures
provide part of the solution, but the main benefits are lost if a
trusted third party is still required to prevent double-spending.
We propose a solution to the double-spending problem using a peer-
to-peer network. The network timestamps transactions by hashing
them into an ongoing chain of hash-based proof-of-work, forming a
record that cannot be changed without redoing the proof-of-work.
The longest chain not only serves as proof of the sequence of
events witnessed, but proof that it came from the largest pool of
CPU power. As long as a majority of CPU power is controlled by
nodes that are not cooperating to attack the network, they'll
generate the longest chain and outpace attackers."
http://jxf.me · @jxxf
"A purely peer-to-peer version of electronic cash would allow
online payments to be sent directly from one party to another
without going through a financial institution. Digital signatures
provide part of the solution, but the main benefits are lost if a
trusted third party is still required to prevent double-spending.
We propose a solution to the double-spending problem using a peer-
to-peer network. The network timestamps transactions by hashing
them into an ongoing chain of hash-based proof-of-work, forming a
record that cannot be changed without redoing the proof-of-work.
The longest chain not only serves as proof of the sequence of
events witnessed, but proof that it came from the largest pool of
CPU power. As long as a majority of CPU power is controlled by
nodes that are not cooperating to attack the network, they'll
generate the longest chain and outpace attackers."
http://jxf.me · @jxxf
"A purely peer-to-peer version of electronic cash would allow
online payments to be sent directly from one party to another
without going through a financial institution. Digital signatures
provide part of the solution, but the main benefits are lost if a
trusted third party is still required to prevent double-spending.
We propose a solution to the double-spending problem using a peer-
to-peer network. The network timestamps transactions by hashing
them into an ongoing chain of hash-based proof-of-work, forming a
record that cannot be changed without redoing the proof-of-work.
The longest chain not only serves as proof of the sequence of
events witnessed, but proof that it came from the largest pool of
CPU power. As long as a majority of CPU power is controlled by
nodes that are not cooperating to attack the network, they'll
generate the longest chain and outpace attackers."
http://jxf.me · @jxxf
"A purely peer-to-peer version of electronic cash would allow
online payments to be sent directly from one party to another
without going through a financial institution. Digital signatures
provide part of the solution, but the main benefits are lost if a
trusted third party is still required to prevent double-spending.
We propose a solution to the double-spending problem using a peer-
to-peer network. The network timestamps transactions by hashing
them into an ongoing chain of hash-based proof-of-work, forming a
record that cannot be changed without redoing the proof-of-work.
The longest chain not only serves as proof of the sequence of
events witnessed, but proof that it came from the largest pool of
CPU power. As long as a majority of CPU power is controlled by
nodes that are not cooperating to attack the network, they'll
generate the longest chain and outpace attackers."
http://jxf.me · @jxxf
"A purely peer-to-peer version of electronic cash would allow
online payments to be sent directly from one party to another
without going through a financial institution. Digital signatures
provide part of the solution, but the main benefits are lost if a
trusted third party is still required to prevent double-spending.
We propose a solution to the double-spending problem using a peer-
to-peer network. The network timestamps transactions by hashing
them into an ongoing chain of hash-based proof-of-work, forming a
record that cannot be changed without redoing the proof-of-work.
The longest chain not only serves as proof of the sequence of
events witnessed, but proof that it came from the largest pool of
CPU power. As long as a majority of CPU power is controlled by
nodes that are not cooperating to attack the network, they'll
generate the longest chain and outpace attackers."
http://jxf.me · @jxxf
"A purely peer-to-peer version of electronic cash would allow
online payments to be sent directly from one party to another
without going through a financial institution. Digital signatures
provide part of the solution, but the main benefits are lost if a
trusted third party is still required to prevent double-spending.
We propose a solution to the double-spending problem using a peer-
to-peer network. The network timestamps transactions by hashing
them into an ongoing chain of hash-based proof-of-work, forming a
record that cannot be changed without redoing the proof-of-work.
The longest chain not only serves as proof of the sequence of
events witnessed, but proof that it came from the largest pool of
CPU power. As long as a majority of CPU power is controlled by
nodes that are not cooperating to attack the network, they'll
generate the longest chain and outpace attackers."
before money
http://jxf.me · @jxxf
0
http://jxf.me · @jxxf
$
a transaction
http://jxf.me · @jxxf
http://jxf.me · @jxxf
Alice
http://jxf.me · @jxxf
🍰⋯
http://jxf.me · @jxxf
🍰?
Bob
http://jxf.me · @jxxf
🍰? ⌚?
http://jxf.me · @jxxf
🍰? ⌚?
http://jxf.me · @jxxf
🍰? ⌚?
http://jxf.me · @jxxf
😃 😃
✓
a failed transaction
http://jxf.me · @jxxf
http://jxf.me · @jxxf
🍰? ⌚?
http://jxf.me · @jxxf
🍰? ⌚?
http://jxf.me · @jxxf
🍰? ⌚?
✗
fixing a failed transaction
http://jxf.me · @jxxf
http://jxf.me · @jxxf
🍰? ⌚?🐌?
http://jxf.me · @jxxf
😃 😃😃
“double coincidence of wants”
http://jxf.me · @jxxf
http://jxf.me · @jxxf
🍰?
http://jxf.me · @jxxf
🍰? ✗
✗
✗
✓
money
http://jxf.me · @jxxf
1
http://jxf.me · @jxxf
// money.ts
class Money {
amount: number
currency: string
}
what’s not money?
http://jxf.me · @jxxf
http://jxf.me · @jxxf
http://jxf.me · @jxxf
{ ? }
http://jxf.me · @jxxf
disintermediation?
fungibility?
resiliency?
measurable?
debt instrument?
http://jxf.me · @jxxf
disintermediation?
fungibility?
resiliency?
measurable?
debt instrument?
http://jxf.me · @jxxf
disintermediation?
fungibility?
resiliency?
measurable?
debt instrument?
http://jxf.me · @jxxf
disintermediation?
fungibility?
resiliency?
measurable?
debt instrument?
http://jxf.me · @jxxf
disintermediation?
fungibility?
resiliency?
measurable?
debt instrument?
http://jxf.me · @jxxf
poor disintermediation
poor fungibility
low resiliency
not easily measurable
not a debt instrument
can we do better?
http://jxf.me · @jxxf
fiat currency advocates think so
http://jxf.me · @jxxf
http://jxf.me · @jxxf
fiat:
“it shall be”
http://jxf.me · @jxxf
http://jxf.me · @jxxf
disintermediation!
fungibility!
resiliency!
measurable!
debt instrument!
transactions with money
http://jxf.me · @jxxf
http://jxf.me · @jxxf
🍰? ⌚/$?
http://jxf.me · @jxxf
🍰? ⌚/$?
http://jxf.me · @jxxf
😃 😃
✓
but money requires trust
http://jxf.me · @jxxf
http://jxf.me · @jxxf
http://jxf.me · @jxxf
http://jxf.me · @jxxf
?
a recipe for money
http://jxf.me · @jxxf
http://jxf.me · @jxxf
trust rules history
making fiat currency
http://jxf.me · @jxxf
http://jxf.me · @jxxf
trust rules history
http://jxf.me · @jxxf
trust rules history
http://jxf.me · @jxxf
trust rules history
http://jxf.me · @jxxf
trust rules
+ +
history
http://jxf.me · @jxxf
these details are abstracted from users
can we do better?
http://jxf.me · @jxxf
http://jxf.me · @jxxf
"A purely peer-to-peer version of
electronic cash would allow online
payments to be sent directly from one
party to another without going through a
financial institution."
cryptocurrency advocates think so
http://jxf.me · @jxxf
🔒
http://jxf.me · @jxxf
trust rules history
🔒
http://jxf.me · @jxxf
trust rules history
𝐻 𝑡 ≡ ⋯
🔒
http://jxf.me · @jxxf
𝐻 𝑡 ≡ ⋯
🔒
0101 0010
1010 1110
0110 0101
1000 0011
trust rules history
http://jxf.me · @jxxf
0101 0010
1010 1110
0110 0101
1000 0011
𝐻 𝑡 ≡ ⋯
🔒
trust rules history
http://jxf.me · @jxxf
0101 0010
1010 1110
0110 0101
1000 0011
trust rules history
+ +𝐻 𝑡 ≡ ⋯
🔒
http://jxf.me · @jxxf
these details are abstracted from users (?)
🔒
http://jxf.me · @jxxf
each currency’s rules and history make it unique
0101 0010
1010 1110
0110 0101
1000 0011
rules history
+
http://jxf.me · @jxxf
blockchain as history is not very interesting
0101 0010
1010 1110
0110 0101
1000 0011
rules history
+
http://jxf.me · @jxxf
rules about how things work is what’s interesting
0101 0010
1010 1110
0110 0101
1000 0011
rules history
+
a very different kind of money
http://jxf.me · @jxxf
http://jxf.me · @jxxf
0101 0010
1010 1110
0110 0101
1000 0011
trust rules history
𝐻 𝑡 ≡ ⋯🔒
a very different kind of money
http://jxf.me · @jxxf
is it really money at all?
a very different kind of money
http://jxf.me · @jxxf
is it really money at all?
we’ll come back to this
let’s build a cryptocurrency
http://jxf.me · @jxxf
http://jxf.me · @jxxf
// money.ts
class Money {
amount: number
currency: string
}
ledgers
http://jxf.me · @jxxf
2
http://jxf.me · @jxxf
Alice
Bob
Carol
http://jxf.me · @jxxf
A
B
C
http://jxf.me · @jxxf
A
B
C
Alice paid Carol $15
http://jxf.me · @jxxf
A
B
C
Bob paid Alice $20
Bob paid Carol $30
shuffling cash is cumbersome
http://jxf.me · @jxxf
can we do better?
http://jxf.me · @jxxf
http://jxf.me · @jxxf
A
B
C
http://jxf.me · @jxxf
A
B
C
$
http://jxf.me · @jxxf
A
B
C
Ledger
http://jxf.me · @jxxf
our ledger
records our transactions
Ledger
Ledger
http://jxf.me · @jxxf
our ledger
doesn’t run out of room
http://jxf.me · @jxxf
Alice gets $100
Bob gets $100
Carol gets $100
(...)
Ledger
http://jxf.me · @jxxf
A
B
C
Alice paid Carol $15
http://jxf.me · @jxxf
our protocol
describes how we use the ledger
http://jxf.me · @jxxf
protocol:
1. anyone can add valid lines
http://jxf.me · @jxxf
Alice gets $100
Bob gets $100
Carol gets $100
Alice paid Carol $15
(...)Ledger
http://jxf.me · @jxxf
A
B
C
Alice paid Carol $15
Ledger
http://jxf.me · @jxxf
A
B
C
Bob paid Alice $20
Bob paid Carol $30
http://jxf.me · @jxxf
Alice gets $100
Bob gets $100
Carol gets $100
Alice paid Carol $15
Bob paid Alice $20
Bob paid Carol $30
http://jxf.me · @jxxf
A
B
C
Bob paid Alice $20
Bob paid Carol $30
Ledger
what about big transactions?
http://jxf.me · @jxxf
http://jxf.me · @jxxf
A
B
C
Alice paid Carol $1,500
Ledger
http://jxf.me · @jxxf
A
B
C
Ledger
Alice paid Carol $1,500
overspending!
http://jxf.me · @jxxf
protocol:
1. anyone can add valid lines
2. settle up every week
http://jxf.me · @jxxf
A
B
C
$1,500?
http://jxf.me · @jxxf
A
B
C
¯_(ツ)_/¯
http://jxf.me · @jxxf
A
B
C
¯_(ツ)_/¯
http://jxf.me · @jxxf
protocol:
1. anyone can add valid lines
2. no overspending
ledger is now its own currency (🔒)
http://jxf.me · @jxxf
http://jxf.me · @jxxf
Ledger
http://jxf.me · @jxxf
Alice gets 🔒100
Bob gets 🔒100
Carol gets 🔒100
Alice paid Carol 🔒15
Bob paid Alice 🔒20
Bob paid Carol 🔒30
(...)
problem: malicious actors
http://jxf.me · @jxxf
http://jxf.me · @jxxf
Alice gets 🔒100
Bob gets 🔒100
Carol gets 🔒100
B
http://jxf.me · @jxxf
Alice gets 🔒100
Bob gets 🔒100
Carol gets 🔒100
Carol paid Bob 🔒100
B
problem: can’t trust the ledger
forgery: actors can add lines that aren’t valid
erasure: actors can remove lines that are valid
http://jxf.me · @jxxf
how do we stop forgery?
http://jxf.me · @jxxf
securing the ledger
http://jxf.me · @jxxf
3
http://jxf.me · @jxxf
"Digital signatures provide part of the
solution."
http://jxf.me · @jxxf
Alice paid Carol 🔒15
Bob paid Alice 🔒20
Bob paid Carol 🔒30
http://jxf.me · @jxxf
Alice paid Carol 🔒15 Alice
Bob paid Alice 🔒20 Bob
Bob paid Carol 🔒30 Bob
physical signatures can be copied
http://jxf.me · @jxxf
http://jxf.me · @jxxf
Alice paid Carol 🔒15 Alice
Bob paid Alice 🔒20 Bob
Bob paid Carol 🔒30 Bob
Alice paid Bob 🔒50 Alice
B
let’s use digital signatures instead
http://jxf.me · @jxxf
http://jxf.me · @jxxf
sign(⋯)
sign lines to authorize transactions
verify(⋯)
verify signed lines to ensure signature is valid
http://jxf.me · @jxxf
A
http://jxf.me · @jxxf
A
public key (pk)
secret key (sk)
http://jxf.me · @jxxf
A
public key (pk)
secret key (sk)
http://jxf.me · @jxxf
sign(m,sk)
sign lines to authorize transactions
secret key (sk)message (m)
Alice paid Carol 🔒15
http://jxf.me · @jxxf
sign(m,sk)
sign lines to authorize transactions
secret key (sk)message (m)
Alice paid Carol 🔒15
http://jxf.me · @jxxf
sign(m,sk)
sign lines to authorize transactions
http://jxf.me · @jxxf
sign(m,sk)
sign lines to authorize transactions
signature
0101 1101
1110 1010
0001 0111
[⋯]
=
http://jxf.me · @jxxf
changes in m produce unpredictable signatures
sign(m’,sk)
sign lines to authorize transactions
signature
1010 1101
0010 0110
0111 0101
[⋯]
=
http://jxf.me · @jxxf
sign(m,sk)
sign lines to authorize transactions
verify(m,s,pk)
sign lines to authorize transactions
=
signature
0101 1101
1110 1010
0001 0111
[⋯]
http://jxf.me · @jxxf
sign(m,sk)
sign lines to authorize transactions
verify(m,s,pk)
sign lines to authorize transactions
=
signature
0101 1101
1110 1010
0001 0111
[⋯]
http://jxf.me · @jxxf
sign(m,sk)
sign lines to authorize transactions
verify(m,s,pk)
sign lines to authorize transactions
=
signature
0101 1101
1110 1010
0001 0111
[⋯]
http://jxf.me · @jxxf
sign(m,sk)
sign lines to authorize transactions
verify(m,s,pk)
sign lines to authorize transactions
=
signature
0101 1101
1110 1010
0001 0111
[⋯]
http://jxf.me · @jxxf
sign(m,sk)
sign lines to authorize transactions
signature
0101 1101
1110 1010
0001 0111
[⋯]
verify(m,s,pk)
sign lines to authorize transactions
=
= validation
{true, false}
http://jxf.me · @jxxf
sign(m,sk)
sign lines to authorize transactions =
signature
0101 1101
1110 1010
0001 0111
[⋯]
virtually impossible
very easy!
http://jxf.me · @jxxf
sign(m,sk)
sign lines to authorize transactions =
signature
0101 1101
1110 1010
0001 0111
[⋯]
virtually impossible
very easy!
http://jxf.me · @jxxf
sign(m,sk)
sign lines to authorize transactions =
signature
0101 1101
1110 1010
0001 0111
[⋯]
computationally infeasible
very easy!
http://jxf.me · @jxxf
protocol:
1. anyone can add valid lines
2. no overspending
3. must sign lines to be valid
http://jxf.me · @jxxf
Alice paid Bob 🔒50 0111⋯
B
http://jxf.me · @jxxf
Alice paid Bob 🔒50 0111⋯
B
can no longer forge lines…
http://jxf.me · @jxxf
http://jxf.me · @jxxf
Alice paid Bob 🔒50 1011⋯
B
http://jxf.me · @jxxf
Alice paid Bob 🔒50 1011⋯
Alice paid Bob 🔒50 1011⋯
B
http://jxf.me · @jxxf
Alice paid Bob 🔒50 1011⋯
Alice paid Bob 🔒50 1011⋯
B
but can duplicate legitimate lines!
http://jxf.me · @jxxf
http://jxf.me · @jxxf
sign(m,sk)
sign lines to authorize transactions
secret key (sk)
1 Alice paid Carol 🔒15
message (m)
add id to message
http://jxf.me · @jxxf
1 Alice paid Bob 🔒50 1011⋯
2 Alice paid Bob 🔒50 1011⋯
B
http://jxf.me · @jxxf
B
1 Alice paid Bob 🔒50 1011⋯
2 Alice paid Bob 🔒50 1011⋯
http://jxf.me · @jxxf
protocol:
1. anyone can add valid lines
2. no overspending
3. must sign lines to be valid
4. lines have unique identifiers
problem: ledger is centralized
http://jxf.me · @jxxf
http://jxf.me · @jxxf
A
B
C
Ledger
distributing the ledger
http://jxf.me · @jxxf
4
http://jxf.me · @jxxf
A
B
C
LedgerLedgerLedger
http://jxf.me · @jxxf
A
B
C
Ledger
Ledger
Ledger
broadcast our ledger updates
http://jxf.me · @jxxf
http://jxf.me · @jxxf
A
B
C
Ledger
Ledger
Ledger
http://jxf.me · @jxxf
Ledger
Ledger
Ledger
B
http://jxf.me · @jxxf
Ledger
Ledger
Ledger
2 Bob paid Alice 🔒50 1011⋯
B
http://jxf.me · @jxxf
Ledger
Ledger
2 Bob paid Alice 🔒50 1011⋯2 Bob paid Alice 🔒50 1011⋯2 Bob paid Alice 🔒50 1011⋯
LedgerB
http://jxf.me · @jxxf
Ledger
Ledger
2 Bob paid Alice 🔒50 1011⋯
2 Bob paid Alice 🔒50 1011⋯
2 Bob paid Alice 🔒50 1011⋯
LedgerB
http://jxf.me · @jxxf
protocol:
1. anyone can add valid lines
2. no overspending
3. must sign lines to be valid
4. lines have unique identifiers
5. distribute the ledger
problem: what order to use?
http://jxf.me · @jxxf
http://jxf.me · @jxxf
2 Alice paid Dave 🔒30 1001⋯
2 Alice paid Carol 🔒30 0101⋯
LedgerB
http://jxf.me · @jxxf
2 Alice paid Dave 🔒30 1001⋯
2 Alice paid Carol 🔒30 0101⋯
LedgerB
double spending!
http://jxf.me · @jxxf
protocol:
1. anyone can add valid lines
2. no overspending
3. must sign lines to be valid
4. lines have unique identifiers
5. distribute the ledger (how?!)
trusting the ledger
http://jxf.me · @jxxf
5
http://jxf.me · @jxxf
http://jxf.me · @jxxf
http://jxf.me · @jxxf
http://jxf.me · @jxxf
how do we know it’s valid?
http://jxf.me · @jxxf
http://jxf.me · @jxxf
http://jxf.me · @jxxf
sign(m ⋯)
http://jxf.me · @jxxf
sign(m + n)
nonce
http://jxf.me · @jxxf
sign(m + n)
01011101101⋯nonce
http://jxf.me · @jxxf
sign(m + n)
01011101101⋯nonce
http://jxf.me · @jxxf
sign(m + n)
01011101101⋯ ~1
2nonce
http://jxf.me · @jxxf
sign(m + n)
00101101101⋯ ~1
4nonce
http://jxf.me · @jxxf
sign(m + n)
00001101101⋯ ~ 1
16nonce
http://jxf.me · @jxxf
sign(m + n)
000000000000⋯ ~ 1
2 𝑛nonce
http://jxf.me · @jxxf
signature
http://jxf.me · @jxxf
signature
nonce
http://jxf.me · @jxxf
signature
nonce
http://jxf.me · @jxxf
signature
nonce
175 <network> paid Dave 🔒50 1001⋯
http://jxf.me · @jxxf
$
$$$
$$
$$$
$
$$
http://jxf.me · @jxxf
signature
nonce
previous
http://jxf.me · @jxxf
signature
nonce
previous
signature
nonce
previous
signature
nonce
previous
http://jxf.me · @jxxf
signature
nonce
previous
signature
nonce
previous
signature
nonce
previous
consensus: trust longest chain
http://jxf.me · @jxxf
http://jxf.me · @jxxf
http://jxf.me · @jxxf
http://jxf.me · @jxxf
http://jxf.me · @jxxf
http://jxf.me · @jxxf
building with blockchains
http://jxf.me · @jxxf
6
http://jxf.me · @jxxf
Should I use a blockchain for my app?
Probably not.
can I wait a while for consensus?
http://jxf.me · @jxxf
is this better for me than a database?
http://jxf.me · @jxxf
does my app need to be distributed?
http://jxf.me · @jxxf
do I need to trust people?
http://jxf.me · @jxxf
blockchain challenges
http://jxf.me · @jxxf
7
a very different kind of money
http://jxf.me · @jxxf
is it a good kind of money?
cryptocurrencies aren’t currency…
http://jxf.me · @jxxf
cryptocurrencies aren’t currency…
right now
http://jxf.me · @jxxf
http://jxf.me · @jxxfblockchain.info price graph [source]
http://jxf.me · @jxxfblockchain.info price graph [source]
$7,000
$1,000
2014 2017
deflation discourages production
http://jxf.me · @jxxf
http://jxf.me · @jxxf
http://jxf.me · @jxxf
http://jxf.me · @jxxf
http://jxf.me · @jxxf
$
http://jxf.me · @jxxf
$ $$$
http://jxf.me · @jxxf
$ $$$
🔒 🔒
http://jxf.me · @jxxf
$ $$$
🔒 🔒
PoW is ecologically problematic
http://jxf.me · @jxxf
http://jxf.me · @jxxfVice Motherboard [source]
the future
http://jxf.me · @jxxf
7
http://jxf.me · @jxxf
0101 0010
1010 1110
0110 0101
1000 0011
trust rules history
+ +𝐻 𝑡 ≡ ⋯
🔒
http://jxf.me · @jxxf
0101 0010
1010 1110
0110 0101
1000 0011
trust rules history
+ +𝐻 𝑡 ≡ ⋯
🔒
http://jxf.me · @jxxf
0101 0010
1010 1110
0110 0101
1000 0011
trust rules history
+ +𝐻 𝑡 ≡ ⋯
🔒
takeaways
blockchain applications offer trustless, permissionless rules
cryptocurrency lets us trustlessly exchange value
many protocols have some serious problems
blockchains have enormous potential … if we get it right
http://jxf.me · @jxxf
takeaways
blockchain applications offer trustless, permissionless rules
cryptocurrency lets us trustlessly exchange value
many protocols have some serious problems
blockchains have enormous potential … if we get it right
http://jxf.me · @jxxf
takeaways
blockchain applications offer trustless, permissionless rules
cryptocurrency lets us trustlessly exchange value
many protocols have some serious problems
blockchains have enormous potential … if we get it right
http://jxf.me · @jxxf
takeaways
blockchain applications offer trustless, permissionless rules
cryptocurrency lets us trustlessly exchange value
many protocols have some serious problems
blockchains have enormous potential … if we get it right
http://jxf.me · @jxxf
Thanks!
★
questions?
email: jxf@jxf.me
Twitter: @jxxf
http://jxf.me · @jxxf
3px shadow should be visible
above
shadow test
⇖ bleed ⇗ bleed
⇘ bleed⇙ bleed
28: λx.t(λt).x
36: λx.t(λt).x
44: λx.t(λt).x
http://jxf.me · @jxxf
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