The most important aspects of the blockchain technology
1. Governance
There is always some decisions that have to be made. There will be softforks and hardforks. There will be blockchain parameter adjustments. How these decision are made? Who can participate? The decision making process should be clearly defined to make sure there won't be situations like with Bitcoin right now – it can't make a decision how to scale, even when the blocks are already full. It's best to think blockchain as a DAO (decentralized/distributed autonomous organization) because it helps to keep in mind the organizational side of things. Not only technology is important, the system has to be also easy to use by humans. It doesn't matter how great the tech is if it's really difficult to actually get things done with a blockchain.
2. Scalability
If the blockchain wants to have lot of users, it must scale. Period. Preferably on-chain because that's what makes it truly peer-to-peer. EOS seems to be the most promising project for scalability.
3. Privacy
If a blockchain is used for currency transactions, as pretty much all of them are, it's important that users can somehow have privacy for their holdings and transactions. Steem is currently very weak in this regard, everything is very easy to see for everybody. If we want steem or SBD to become widely used currencies, there needs to be a privacy feature on the blockchain.
4. Free transactions
One of the greatest blockchain innovations of last year was free transactions implemented by Steem. Still very underrated feature and not recognized by the rest of the cryptosphere. But I predict that people will have to acknowledge that it's pretty damn great feature that can be used for many applications which are impossible with transaction fees.
5. Named accounts
Should be self-evident? Nobody wants to use public keys as addresses.
6. Price stable cryptocurrencies
Mainstream markets need something price stable for everyday use. Most people do not like when prices are too volatile. Also there is growing demand by cryptotraders who want an alternative for real fiat currencies that are very risky because governments can interfere with their transfers. Not a surprise that SBD has been lately valued for more than one dollar: the demand is huge.
7. Trusted/reliable smartcontracts
Wouldn't it be great if people could actually trust in smartcontracts? Reliability is linked to the language that is used for the code. Tauchain aims to be the king in this market by introducing a language that is very reliable, but it's still in the initial development stage. Tezos is also emphasizing this.
8. Off-chain computation markets
What if you want to make a smartcontract that needs more computing power than a blockchain itself can provide? It's possible to outsource it. Projects like Golem, iExec and Truebit are focusing on this.
Would you add something? Did I miss anything important? Please leave a reply and let me know.
100% agree on technological level, all these tech also needs Community. I have seen projects with superior tech but no enough community that is supporting it and is now being forgotten.
Yeah, you are right.
But how to build a good community? I think it's mostly related to governance, but it's like "soft governance". It's not a formalized process of how to make decisions, but more like an informal way of doing business.
Organizational culture is one of the most important success factors for traditional companies and it's important for DAOs, too. Because DAOs are decentralized, creating a certain kind of culture is really hard. That is something that I've been thinking lately.
I agree, creating culture and community is challenging even more challenging sometimes to maintain it, although technology can be improved, challenges can be solved...
A very good list. I'd add those three things:
Yeah, this is important. Although if a blockchain is smartcontract-capable, it isn't necessary to build it on the blockchain because any wallet can add it as a smartcontract. But even then it might make sense to put a simple savings account as a core feature to make sure that it's easy to use and implement in any smartcontract/application.
This is also an important feature, especially when mainstream markets are getting closer.
This is not exactly a blockchain feature but build on top of the blockchain. While very important for mainstream markets, it's not something that blockchain developers need necessarily to focus on. Blockchain technology should be kept separate from everything else so it won't become too dependent on one particular UI. If the blockchain is designed properly, there will be demand for UIs and other developers will be willing to make them.
And we are missing one more crucial thing: every blockchain needs a constitution. Or in other words, a list of principles which are not able to be enforced by the code itself, so they need to be safeguarded by the community.
Those are the meta-rules (which are usually implicit) yet when they are made explicit (before anything controversial happens) they can prevent a lot of drama and prevent a deadly fork.
Yeah, something like a constitution is a good idea. That belongs to the other side of the coin. There is technological side, which I'm describing here, and then there is human/organizational side, to which a constitution belongs.
I disagree a bit, as I remember from the time when BTS 2.0 was coming into existence that blockchain data needs to be properly exposed in the form of a robust and comprehensive API - otherwise creating a responsive GUI is much harder or even impossible. I remember Dan talking about it at that time and him even coding a bit in JavaScript in order to better understand the front-end perspective.
Good point about the API. It's so important that it might be reasonable to add it to the list.
You missed the most important bullet:
1. Decentralization.
It does not matter what-what other features you add to your blockchain. The only thing that separates a blockchain from a centralized database is the ability for decentralized consensus. With the decentralization comes the community, security, governance, privacy, and all the other useful aspects of blockchain technology.
In point 2 - what is EOS?
It's a new blockchain project by Dan Larimer: https://steemit.com/eos/@dantheman/join-me-at-consensus-2017-for-the-eos-launch-party
It's lauded as a more elegant, faster version of Ethereum. Everyone is excited to see what is meant by that.
Nicely put. By privacy, do you mean encrypting the transactions on the chain?
Also, I guess I'd put security at No. 1 to be the most important aspect of a blockchain.
By privacy I mean that users should be able to hide sender, receiver and/or amount of transaction. Things that Monero, Zcash, Dash, PIVX and others are doing. If you are interested to know more, R3 published a paper on this topic a while ago: Survey of Confidentiality and Privacy Preserving Technologies for Blockchains.
Security is kind of broad concept. Is there anything particular you have in mind?
Thank you for the Survey link. I'll read the paper. In security, I guess the most fundamental expectation of blockchain is to solve or prevent the double spending problem effectively.
I consider the double spending problem to be pretty much solved by now. There are hundreds of blockchain projects and it's very rare to see any double spends. Even the weakest blockchains seems to be working quite well in that regard.
Usually security needs trade-offs between usability and scalability. If the system is really secure, it's hard and slow to use – so it's not going to get a lot of users. When a blockchain is designed, it's really important to understand what kind of trade-offs can and should be done.
The double spending phenomenon might be rare and depends upon the consensus algorithm being implemented but I guess it's still the most important aspect which cannot be ignored or taken for granted as it can collapse the entire system if not dealt with. A lot of research is being done on consensus algorithms to minimize the probability of double spends to bring the theoretical-probability closer to zero and a smooth fallback mechanism in case of a successful double spend attack.
For reference, you could read this brainstorming by Dan and Jaekwon from Cosmos regarding DPoS algorithm that we already consider to be a pretty great.
Agreed, but as you mentioned - Dan claims that EOS will change things in terms of processing and scalability to the next level.
Yes, this is true. But I still think that pretty much all real blockchain developers understand this and try to make their best efforts to mitigate risks. It's not something that they might forget to include in their project, unlike all other things that I listed.
That is great conversation, I've read that earlier for several times to understand DPOS better.
Right! You summed it up pretty accurately! And yes that's a great conversation. We need more discussions and participation like that.
How's your proposal for focusing more on communities coming up?
I might publish a post on that tomorrow.
Great list!! I hope that the newbies get a chance to see this!!
In Response,
@Samupaha
Governance is a mechanism and methodology using decision science, to derive the best possible outcomes. All of which following "governance" in your original story is marketing. Altcoins generally fail because founders lack real financial knowledge and engineering. Most are kids or young adults whom learned a bit of code and decided, to clone a gitcoin and cloners always clone mistakes. One must first accept this as a fact before decrying something other is wrong with an Altcoin.
Further, one can't expect finances, to rally against the dollar when there was never a finance specialist nor finance engineer involved in the first place. Sort of like opening a bank having neither accountants, bookkeepers or nor chartered financial specialists as staffing personnel. It's irresponsibility and unaccountability topped with immaturity that, eventually crashes an Altcoin.
Litecoin is a perfect example. A cryptocurrency built of the same code as Bitcoin and challenges Bitcoin, as some sort of split personality. However, understand issues with Litecoin; my take versus their take. Litecoin declares problem with the Altcoin is it lacks global usage and acceptance. My take is Litecoin has global usage so, the statement is senseless. I had asked the organization in whole about having seen no member of the parent organization who was a financial engineer nor financial specialist. I had been forwarded, to the aforementioned problem with the Altcoin. Essentially, the organization is operating Litecoin having neither a working CFO, finance engineer nor finance specialist. So why should this cryptocurrency succeed as I would question any financial organization of the same? It makes no sense!
Therefore, all those hopes and dreams boils down to commencing real business within the parent parent organization with other organizations. It is not, the responsibility of end-users, to ensure an Altcoin function and with popularity, rather it's a matter of the parent group undertaking accountability and responsibility for the Altcoin created.
Thank you,
MFAS
@sphap-steemit
By governance I mean that the blockchain has to have some kind of defined process how to make decisions. If there is no governance process, the result is usually chaos and nothing gets done. You can see this in the case of Bitcoin today: it can't make a decision how to scale. Blocks are full and nothing is done to make situation better because the community can't agree on the next steps.
A well-designed blockchain has a clear process how to make any kind of decision regarding its existence and function. The decisions might be sometimes bad, but at least it can make them.
A good governance process also makes sure that the blockchain can exists for a long time. If the original developers, or "parent group" as you say, are taking all the accountability and responsibility, the system can collapse when any of them leaves. A properly designed decentralized system shouldn't be depended on certain individuals, it should be able to replace anybody easily.