NVDA: blockchain, bitcoin, ethereum

http://fortune.com/2017/08/22/bitcoin-ethereum-blockchain-cr…

This is an informative article from Aug 22 in Fortune magazine. Bitcoin and Ethereum are 2 examples of how blockchain technology can be used. What is blockchain and why is it important?

A blockchain is a kind of ledger, a table that businesses use to track credits and debits. But it’s not just any run-of-the-mill financial database. One of a blockchain’s distinguishing features is that it concatenates (or “chains”) cryptographically verified transactions into sequences of lists (or “blocks”). The system uses complex mathematical functions to arrive at a definitive record of who owns what, when. Properly applied, a blockchain can help assure data integrity, maintain auditable records, and even, in its latest iterations, render financial contracts into programmable software. It’s a ledger, but on the bleeding edge.

So cryptocurrencies are just one use case of blockchain technology. I think that the other uses of blockchain will be greatly important. Incumbent businesses in countless industries, from finance to energy to health care to food, are peeling back the layers on this budding technology, seeing the potential to trim costs, share and secure information more efficiently, and unleash new products at unprecedented speed. And they’re doing so knowing that one day their survival may be at stake: Having witnessed what the advent of digital, cloud, and mobile did to laggard companies, no one wants to be the sucker left behind.

Why is blockchain technology important? >>> Perhaps most spectacularly, a blockchain can get rivals to cooperate in creating a common record that is accessible to everyone and controlled by no one. This was the genius of Satoshi Nakamoto, the alias for the as-yet-unidentified creator (or creators) of the first blockchain, Bitcoin, which debuted in 2009. (Since then, the value of a single Bitcoin has reach a high of more than $4,300.) Part of Bitcoin’s secret sauce is its consensus mechanism, which allows people to agree on a canonical order of transactions, thereby preventing double-spending and fraud, through a combination of cryptography and economic incentives based on game theory—all without needing a third party or middleman, like a bank. Even if participants don’t trust one another, they can rely on the shared ledger they create through the transactional dance of their software. You don’t need honor among thieves—you just need a blockchain.

Here is one example of how blockchain can be used to help businesses function better:

One day last December, Frank Yiannas went to a Walmart store near company headquarters in Fayetteville, Ark., and picked up a package of sliced mangoes. Yiannas is Walmart’s vice president of food safety, and the fruit was part of a crucial experiment. He brought the mangoes back to his office, placed the container on a conference table, and gave his team a mission. “Find out where those mangoes came from,” he ordered, setting a timer.

It took six days, 18 hours, and 26 minutes to get an answer. That’s better than the weeks it can sometimes take companies, Yiannas says. Still, a near-week is a long time. In the event of an outbreak of foodborne illness—one in which a suspected pathogen is tied to mangoes somewhere—a lag that long could be painfully costly. By that point, Walmart might have had to pull every package of every mango product off its shelves, as a precaution; farmers, distributors, and Walmart itself would take the hit.
Yiannas has for years searched without success for what he calls the “Holy Grail of food traceability,” a technology that could track and catalog a product’s status across his supply chain. He admits he was “very skeptical” that a blockchain could fill the gap, but he gave it a try. Walmart (WMT, -0.60%) partnered with IBM (IBM, +0.34%) for a trial run on Hyperledger Fabric, a blockchain built under the purview of the Linux Foundation’s Hyperledger group, where companies collaborate on blockchain R&D.

In the Walmart test, food shipments were tracked and digitally recorded via a blockchain. (Yiannas’s team’s manual search was the “control.”) From the start of their journey at the farm, pallets of mangoes were tagged with numeric identifiers. Every time they crossed another checkpoint—from farm to broker to distributor to store—their status was signed and logged.

A few months after the fact, Yiannas repeats a version of the IBM demo for me. He enters a six-digit “lot” number on a web portal. In an instant, the mangoes’ identifying details appear on-screen: Mango spears, 10 ounces, “Tommy” variety (a cultivar optimized for transport). The fruit was harvested April 24 from orchards in Oaxaca, in southern Mexico. A day later, the fruit underwent hot-water treatment to exterminate the eggs of potentially invasive insects. On April 27, an importer received the shipment; after a few more days, it passed through Customs and Border Protection, entering a U.S. processing plant where they were sliced on May 1. From there, the mangoes moved to a cold storage facility in Los Angeles (you can pull up a safety inspection certificate with a click of a mouse). Finally, the lot arrived at a Walmart store.

The time it took to compile and present all this information: about two seconds.

So the blockchain enables distributed ledgering and cryptocurrencies are just one incarnation of how the technology can be applied. Since GPUs run all the calculations and encryptions, NVDA should benefit when blockchain technology proliferates.

46 Likes

A few months after the fact, Yiannas repeats a version of the IBM demo for me. He enters a six-digit “lot” number on a web portal. In an instant, the mangoes’ identifying details appear on-screen: Mango spears, 10 ounces, “Tommy” variety (a cultivar optimized for transport). The fruit was harvested April 24 from orchards in Oaxaca, in southern Mexico. A day later, the fruit underwent hot-water treatment to exterminate the eggs of potentially invasive insects. On April 27, an importer received the shipment; after a few more days, it passed through Customs and Border Protection, entering a U.S. processing plant where they were sliced on May 1. From there, the mangoes moved to a cold storage facility in Los Angeles (you can pull up a safety inspection certificate with a click of a mouse). Finally, the lot arrived at a Walmart store.

So what is special that the blockchain did?

My stores UPS, FedX, USPS packages are tracked the same way, barcode scanned at every transfer point.

JT

5 Likes

So what is special that the blockchain did?

My stores UPS, FedX, USPS packages are tracked the same way, barcode scanned at every transfer point.

JT

Based on my very high level understanding the difference is a centralized server with those companies versus a decentralized network where there isn’t one server to hack or one cloud provider to rely upon.

http://www.thegazette.com/subject/news/nation-and-world/bloc…

What blockchain does is connect participants to a decentralized record-keeping tool, or ledger, that records all transactions, usually financial, and adds a time stamp and other information. Each block links to another in a continuously growing chain of records.

Every time a transaction occurs, it propagates across the global network so all parties host records, and each computer continuously monitors for anomalies. Transactions are encrypted, verified by all parties, and immutable.

Since the entire chain is continually self-updating, thieves and hackers would have to breach all computers that contain the ledger at one swoop to steal money or alter data.

8 Likes

Nice summary IRdoc.

I think ‘blockchain’ will be thrown around but not well understood by the masses for a good while yet. Someone needs to create a very good/fun educational video to teach us all what it really is.

I’m not a fan of cryptocurrencies. Early investors have obviously done extremely well. Decentralises currencies so your monies can’t be taken off you by governments (e.g. China), and it can be untraceable (good for money-laundering). So it definitely has its uses!! But as already said on this board…it just has that feeling of a Ponzi scheme in terms of the bubbling value! I can’t get my head around it not being a bubble. There’s a new cryptocurrency popping up everyday touting itself to be the next big thing. The next bitcoin!

Blockchain, on the other hand, is definitely here to stay. I don’t understand it very well myself. But I know ethereum is much much more than a cryptocurrency, hence its rise in popularity. They are the building blocks of future programs.

Since the entire chain is continually self-updating, thieves and hackers would have to breach all computers that contain the ledger at one swoop to steal money or alter data.

Thanks Gauchochris for bringing NVidia to our attention. AI, Databases, but now blockchain. Still difficult to say if NVidia will be the winner. GPUs are great at the moment but I think if the way the blockchains work don’t keep changing, more specific asics may be developed to run them.

2 Likes

I think ‘blockchain’ will be thrown around but not well understood by the masses for a good while yet. Someone needs to create a very good/fun educational video to teach us all what it really is.

searched “blockchain for dummies”:
https://www.youtube.com/watch?v=1ycJfp6-6Is

Enjoy,
Brian

Have no experience with block chain, but while watching the U.S. Open and the IBM cloud commercials, although they did not outright say it as the ad was more enticement over specifics, the first product they were enticing us to learn more about was clearly a block chaining product regarding secure financial transactions and contracts.

As such, blockchain is more than some to be some day technologies but is already large enough for IBM to want to sell it.

Tinker

2 Likes

One has to make a clear distinction between blockchain technology, which it seems clear is going to be useful in a number of ways in future financial transactions, and a specific implementation of it such as bitcoin. The meteoric rise in the value of bitcoin is based on nothing … not profit, not revenue, not earnings, not anything. So, it can disappear as quickly as it came … or even faster.

4 Likes

How does bitcoin help me when I want to buy a cup of coffee at 7-11? I always want to have a few bucks in my pocket.

So, yes, blockchain technology is definitely here to stay and I will confess to having no clue about what the value of cryptocurrencies should be.

Proponents claim the benefits to blockchain technology are transactions that are more transparent, secure, streamlined, and cheaper than other methods. Blockchain technology also allows for far fewer middlemen to be involved in each transaction, including payment processors, brokerages, payment networks, and even banks. Without these parties each taking their own small cut, transactions are naturally more efficient in time and cost.

Last summer, Broadridge Financial Solutions, Inc.'s (NYSE:BR) CEO Rich Daly wrote in Forbes about the benefits of blockchain technology.

“Some people know blockchain as the underlying technology behind the controversial digital currency Bitcoin. However, blockchain is so much more; it’s incredibly innovative and its promise is far-reaching. This technology is a secure and transparent way to digitally track the ownership of assets before, during, and after transactions, and it has the potential to ultimately transform everything from how stock exchanges operate to how proxies are voted.”

Read more at https://www.fool.com/investing/2017/07/20/confused-about-blo…

And in this article I highlighted three companies (IBM, Broadridge, and Nasdaq) that are beginning to use blockchain technology quite extensively: https://www.fool.com/investing/2017/04/08/3-ways-to-invest-i…

I would also now add Microsoft to that list, as Azure offers what is basically a blockchain-as-a-service platform on its cloud.

Matt
Long MSFT
MasterCard (MA), PayPal (PYPL), Skechers (SKX) and Square (SQ) Ticker Guide
See all my holdings at http://my.fool.com/profile/CMFCochrane/info.aspx

5 Likes

I watched a video last night on Netflix entitled Banking on Bitcoin which speaks
considerably about blockchain technology and its development. All major banks are
reportedly hiring, or have already already hired teams to research banks’ future in
blockchain technology.

Here’s the funny (but not humorous) chain of events leading up to this. Cryptocurrency has
already has its ups and downs but one thing is for sure: it works. It worked flawlessly until
one of the major bitcoin ‘banks’ went bust when the 23-year-old CEO had no idea what he was
doing and people reportedly lost 500m.

The major demand and markets right now for bitcoin is NYC, one of the highest-regulated
cities on the planet. A well-known financial regulator came up with and strongly promoted the
idea that he should design a licensing program for digital currency dealers and brokers. He
and his team took I think about a year or 1-1/2 years, and came out with a thick book of
regulations for the cryptocurrency players. It was purposely made so difficult to meet the
requirements that for a long time no one applied for a license, and several people who were
lined up to start out in the business, gave up and left New York.

Next thing you know, this regulator quit the commission he was working for and (ta da!)
opened a consulting business for wannabe crypto dealers. Next, every single person on his
committe also left government and started new consulting business for (ta da!) wannabe crypto
dealers.

So we have government employees who made all the rules (now laws, by the way), made
them so complicated no one can pass the requirements, and then quits the government and
starts their own busineses teaching others how to “pass the test” to get a crypto license.

Not just the leader, but EverySinglePersonOnThe*Taskforce. If that doesn’t sound exactly
like a playbook written by major banks (hello, Goldman Sachs people!) and the very definition
of the revolving door, then I don’t know what does.

Supposedly the block chain is much closer to being positively hackproof than any previous
endeavour, but bitcoin and it’s ilk rely on 100% error-and hack-proof authentication on a peer-
to-peer method so it can’t be hacked. The major banks want to change that to be the be-all-end-
all chain for all crypto currencies, which totally defeats all the original goals in starting
digital currencies in the first place. Not only that, but of course the banks would (/will?)
take a big chunk out of every transaction if they become the referee, which again rules out the
tremendous savings offered for users of bitcoin.

Most of these things got rolling in 2007&8 when it looked like the worlds financial system
could easily tip into the total meltdown phase. Now the banks are scrambling to steal as many
experts as possible on the subject of of blockchain technologies, even though many of the
developers and early adopters are rotting in federal prisons.

If you’re into the subject the documentary is a decent place to start; it’s also interesting
to get a handle on some of the personalities involved as well as government and financiers’
views on non-government-sourced currency. Like so many privacy and freedom arguments these
days, a lot of their reluctance is blamed on terrorism and black-market sales and money
laundering.

That’s a tough sell to this dude, even though I’m sure that no banks launder money or make deals
with drug dealers and terrorists. And now they have a teller (ATM) on every street corner so you
can buy any legal or illegal thing available wherever you happen to be. But that unassailable
fact isn’t related to terrorism or money laundering, no, not at all. Not possible. When it comes
from the masters of the universe, like NSA’s ability to read, record and study all my emails, web
travels, video, photos and phone calls, it’s called progress.

Whatever.

Dan

17 Likes

Dan - I think the utility of blockchain technology in securing provenance of everything on the planet that can have a digital trace attached to it is much greater than the get rich quick speculation in Bitcoin as a non asset backed, volatile and opaque crypto something but it aint a currency.
Take your point on regulation!
Ant

5 Likes

“So the blockchain enables distributed ledgering and cryptocurrencies are just one incarnation of how the technology can be applied. Since GPUs run all the calculations and encryptions, NVDA should benefit when blockchain technology proliferates.”

Not necessarily. GPU’s are used for “mining” to add more currency to the pile already existing. With Bitcoin, mining gets harder as more currency is created, so it needs more processing power. I’m not sure if this is true for other currencies. And this is done peer-to-peer, so a guy on the street could do mining if he had a good enough processor.

But I doubt strongly that this increase in difficulty and need for high-end processor power (and the peer-to-peer method) will apply to eventual mainstream blockchain applications. A lot of that will probably be done by banks, which already have access to lots of processing power.

There is so much else driving the growth of Nvidia that this is a side issue, especially for the long term.

Ed, I thought you were going to make a point that I think is important, but I’m not sure it came through in the end. GPUs are important for mining blockchain, as you said, but mining is not what is important about blockchain itself. Super processing power is irrelevant to maintaining blockchain. I.e., growth of GPUs for mining is only tangentially related to the use of blockchain as a technology.

1 Like

Dan - I think the utility of blockchain technology in securing provenance of everything on the planet that can have a digital trace attached to it is much greater than the get rich quick speculation in Bitcoin …

Hi, Ant,

Absolutely. You don’t have to understand or even be aware of crypto currencies to learn about blockchain tech. But it doesn’t hurt, since the tie between blockchain and bitcoin is simply that 1) bitcoin was the prize that the inventor of blockchain technology was aiming at and 2) this explains and proves the power of the technology. But knowing a little of this history helps one wrap one’s mind around the power of blockchain and the thinking behind its development. Blockchain is so durable that theives could trade anything with thieves 100% unknown to them for (anything) and do it so reliably that honor and trust between even thieves becomes a moot topic.

The power of the (original) blockchain tech is that no one controlled it. But everyone controlled it. Once you sign on to (approve the conditions of) your segment of a blockchain, you can’t ever erase your signature, you can’t claim you didn’t sign it, or that it was a forgery, or that your secretary faked it, or the date was in error. You can’t plot with 8 other parties to the chain to steal player #10 out of his share by saying “#10? Never heard of him.” In every step of a chain, be it a transaction or many transactions, or all transactions (think employer-bank-customer-FedReserve-loan company-IRS-taxpayer-insurance agent-employer chains) everyone must agree to the terms and the history is indisputable, its authenticity unquestionable. What allows for all these conditions is that there is no central repository of the chain docs. Everyone involved has the identical record throughout its history, continuously updated.

So now many people and institutions want to be the repository, the referee, the gatekeeper, the fee taker, the master of the universe for the technology. Who will win? The most likely answer leads one to another question: Who has the money? (If Goldman Sachs becomes the gatekeeper, there is truly nothing new under the sun and all hope is lost.)

Just imagine when the IRS gets a handle on the technology. Forget about hiding income, faking or stretching expenses, “forgetting” gifts received, multiplying gifts given, or “misremembering” contributions made, bonuses received or faking deductible items. Now if you’re an honest person, that’s all good as suddenly everyone must pay their true fair share just like you always have. If not, you either have to change your ways or go to jail, or use something the IRS doesn’t recognize and can’t chain: Rocks, gold, twigs, marbles or < what do you know?! > crypto currency.

Take your point on regulation!

Just a pet peeve of mine.

Dan

2 Likes

<<<Just imagine when the IRS gets a handle on the technology. Forget about hiding income, faking or stretching expenses, “forgetting” gifts received, multiplying gifts given, or “misremembering” contributions made, bonuses received or faking deductible items. Now if you’re an honest person, that’s all good as suddenly everyone must pay their true fair share just like you always have. If not, you either have to change your ways or go to jail, or use something the IRS doesn’t recognize and can’t chain: Rocks, gold, twigs, marbles or < what do you know?! > crypto currency.>>>

I did not read the details of the article but China has made illegal some aspect of bit coin a few days ago. Further details needed there.

Governments are not going to allow something like this to go forward without their imprint and stamp and control.

As such, once government gets their hand on it, it will cause the technology to become more mainstream, but at the same time the trade in rocks, silver, gold, etc. will increase for anonymity. Frankly we don’t need to let government in on all our transactions and doings. Bad enough that our medical records are vulnerable to hacking (hopefully blockchain can do something to improve security there).

But is a technology to revolutionize may things, and also Orwellian at the same time.

Tinker

1 Like