Blockchain: Decentralization is Central | Stuart Haber | TEDxBeaconStreet

many of you have heard of Bitcoin the magical cryptical purely digital currency perhaps not all of you have heard of blockchain which is one of the pieces of Bitcoin as I'll explain to you decentralization is central to the appeal of blockchain and a Bitcoin and as I'll tell the story I'm at the center of the story not just the center of this dot because I was present at the creation of the blockchain that is along with a colleague the two of us invented the blockchain so let me jump to the beginning of the story it's 1989 and I was a young researcher at Bell core Bell communications research at the time the brand-new Bell Labs of the local phone companies in the US which had just been broken up as some of you may remember my field was cryptography the science and engineering of protecting information keeping it secret if it should be secret and making sure it doesn't change if it shouldn't and that last piece is the center of the story so it's it's 1989 and a new guy who was just hired at the lab came to me with what he thought would be a good problem for us to tackle his name was Scott Store Netta the problem was how to timestamp a digital document so he did tackle that problem and came up with a reasonable solution for it the paper describing our solution which you see behind me was published the following summer at crypto 1990 the main technical conference conference in the field of cryptography so for us a digital document is just a computer file of any kind on on your computer nowadays on your phone or stored in the cloud we had in mind business records but digital document could also be a lab notebook entry patent application legal contract even that photo of your cat is a digital document that can be modified or changed easily as you all know back in 1989 it was clear that all of the world's records were moving online they hadn't quite gotten there yet but that's where things were going and store Netta and I were deeply worried about the integrity and authenticity of the world's records cryptological tools cryptographic old that were available at the time pointed to a straightforward solution to the problem rely on a single central trusted entity for the integrity of Records at least within a certain domain or area this corresponds in the real world to relying on City Hall for your marriage license the DMV for your driver's license your bank for the balance of your checking account but relying on a single trusted entity is what security people call a single point of failure one that can be bribed corrupted hat we wondered if we could do better turned out after working on it a while we could for the next three or four minutes I'm going to animate our solution I'll explain to you how the blockchain actually works but first I'll start with one technical tool which I'll explain to you by means of a metaphor there's a standard way to as it were take the fingerprint of any digital file record that's an apt metaphor the fingerprint of a file is small no matter what the size of the file the fingerprint of a file gives you no information about the file itself just like my own right forefinger fingerprint gives you no information about me you can't tell from my fingerprint how tall I am the color of my hair whether I have any hair the fingerprint is characteristic of the file if you take the fingerprint of several identical copies of the same file you'll always get the same fingerprint and most important of all the fingerprint of a file is unique to the file to different files even if they differ in only a single bit will have completely different fingerprints so now I'll show you how store data and I use this fingerprinting front process which is known but in in the literature by the way as one way hash functions I'll show you how we used fingerprinting to solve our time stamping problem and build a blockchain our solution was actually spun out of bellcore as a commercial enterprise called surety in order to offer time stamping services so here's how it worked we would receive timestamp requests from customers consisting of the fingerprints of the records they wanted to register with us as records came in we would group them into units now I'll call them blocks we would as it were take the fingerprint of each block resulting in a summarizing fingerprint that depends on the the entire set of fingerprints in the block resulting in a summary fingerprint that can be linked unforgeable II but efficiently to each of the requests as more requests come in we would group them into blocks again for here's the second block we would treat it to say 'we take its fingerprint but linked it again using fingerprinting with the previous block and the same thing with the third block and a fourth block and so on after a while we have a long chain of blocks every so often for example once a week we would take the previous week's chain of blocks and in exactly the same way boil them down to a single summary fingerprint that encapsulates the entire previous week of requests and thereby because of the chaining depends on the entire history of the chain up to that we wanted to take this single summary fingerprint of the week and turn it into a widely witnessed widely witness of all widely verifiable event how do we do that in 1995 we we placed that fingerprint in a classified advertisement in the National edition of the sunday New York Times every week that chain is still running right now to this very day behind me you see you see a picture where I'm holding the most recent copy of the sunday New York Times and let's zoom in you'll see you can see an advertisement there containing a digital fingerprint a number every bit of which depends on every bit of every single request that was been that's been received by our time stamping service since it was commercially launched in 1995 look for it in next Sunday's times the now the story jumps ahead 13 years just a couple weeks ago we celebrated the 10-year anniversary of Bitcoin with the appearance of this paper many of you have read that Bitcoin was created by a pseudonymous author engineer designer economist who called himself or herself or themselves Satoshi Nakamoto Satoshi created a financial system that completely got rid of the central and centralizing roles of banks but as in any financial system Satoshi needed a way to ensure the integrity of the transactions that happen in the system so that if I promise to send you 17 Bitcoin you can't turn that promise into a promise for 1,700 Bitcoin or 17 Bitcoin cents in order to do this Satoshi directly adopted the blockchain algorithm that I just explained to you now I'm I've omitted a complete description of the brilliant way Satoshi combined several ideas to create the system but the blockchain was used is still being used to ensure the integrity the immutability the unchanged ability of the entire history of transactions in the ledger of Bitcoin now banks are not the only kinds of central institutions whose records we depend on for important aspects of our lives and by now blockchain has been suggested for all kinds of record-keeping projects silly ones and solidly grounded ones I'll finish by listing a saying a few words about a few of the more solidly grounded ones ID 2020 is an international project to provide a digital personal digital identity to anyone who wants one in particular the more than 1 billion people on the planet who cannot depend on a national ID because of political chaos or natural disaster here's a completely different sort of Records the documents that come along with the International global supply chain tracking goods from their origin there the contents of the containers they're shipped in customs certification and so on IBM for one has a large commercial offering for this but it's not only huge companies and you mungus shipping containers did you wonder about the origin of the fish you had for dinner last night pretty soon you'll be able to track the supply chain of that fish all the way to your plane coming back now to my original motivation for the integrity of digital records I'm working now on a project to bring cryptographic verifiability to the audit and financial reporting of business records of all sorts audit chain so lo these many years later it turns out that asking a pointed question about decentralizing the integrity of digital records can upend all kinds of central institutions I'm excited thank you [Applause]

Channel: TEDx Talks

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Keywords: TEDxTalks, English, Technology, Business, Computers, Digital, Software

Id: AmQyJoTdnwo

Length: 12min 27sec (747 seconds)

Published: Wed Feb 20 2019