En route to the witnessed ledger
What was the issues we took away from looking at the challenges now again?
- individual transactions be private (p)
- open to justified scrutiny (o)
- encourage transactions (t)
- remove speculation (s)
- Fees should be next to negible (f)
- transactions occur in milliseconds (m)
- incorporate security measures (S)
My personal ledger
(p) Using a piece of paper to buil my personal ledger would not prove an unsurmountable problem! With only one piece of paper, I'd be big on the (p) from the set go!
(o) If I was to carry the piece of paper on me all the time, I'd have to be awake and give my consent, ie hand over the piece of paper; really big on (o)!
(t) I'd be able to process as many transactions as I could possible write down - no problem with (t) at all!
(s) No one would speculate in my ledger - the volume of transactions and reach will be of no interest; (s) is super green!
(f) Unless I start charging myself - (f) is totally ok!
(m) Total fail on (m) - I'd never be able to add transactions in milliseconds :(
(S) I guess I could start using invisible ink of sorts or writing down all numbers and text after using a computer to encrypt values/text, and I could lock the piece of paper in a safe between transactions. (S) is a 50/50 done!
My personal digital ledger
(p) If I was to choose a digital version of my ledger, I'd still be good on the privacy as long as I keep the digital devise disconnected from anything else, but I'd have to make sure no one else gets to my device - see (S)
(o) Handing over the device would work in a digital version too!
(t) Using a digital version would make it even faster/easier to add transactions, if the UI was done right!
(s) Speculation is still utterly out of the picture!
(f) No fees - no problem - except the cost of the device and the charging now and then. Fees are negligible; (f) is green!
(m) I could build a UI with buttons to automate various standard kind of transactions and have the software add these in what would translate to milliseconds. (m) within reach!
(S) Security starts getting in my way now! An electronic/digital device will require me to always keep it disconnected (no OS updates, etc). Some kind of access control would be preferable and adding encryption would fit the bill nicely! (S) could be greenish!
A digital ledger shared with my brother
(p) Unless my brother did not know I shared the ledger with him, (p) is out!
(o) I would have to bring my brother to be able to legitimately hand over the ledger now; doable but inconvenient and highly uncommon; (o) mostly out!
(t) Transactions are now almost down to nil! Only when my brother and I are present and with us being located almost 100 miles apart (t) is close to impossible on a daily basis!
(s) With transactions down, volume is even worse, and reach is still next to nothing. (s) is super red!
(f) Fees went through the ceiling! Every transaction requires me or my brother to travel 100 miles and waste 4+ hours total. (f) is red!
(m) Speed died totally!
(S) Security did not get worse nor better. With an ACL both my brother and I could access the ledger and encrypting transactions keep (S) in the greenish!
A distributed digital ledger shared with my brother
(p) no change - he knows of me and I of him - that's not private!
(o) With both of us keeping a copy of the ledger, I'd need his consent to hand out my copy. That could be fixed with a digital signature. (o) would be doable!
(t) Transactions are getting better. We'd both have to make a note of any transaction but neither of us did have to travel to accomplish it. (t) almost green!
(s) Still no transaction volume to speak off and lack of reach making it an investors nightmare!
(f) Another positive change! Fees are (almost) back to nil. My brother and I'd have to let each other know when we would add transactions, but (f) definately within reach of 'green'!
(m) Speed no where near milliseconds! I'd have no idea when my brother would be available to add a transaction, which would force me to either wait or make a note of the transaction and keep the ledger on hold until my brother would report in!
(S) Security keep getting worse. Now we have digital signatures to deal with as well! But even so, (S) is kind of bordering green!
The distributed ledger through a 3. person shared with my brother
(p) Now the ledger is private - my brother does not need to know that the other owner is me per se. We are good on (p)!
(o) A digital signature to open the ledger for scrutiny still works through a 3. person. Question is whether this 3. person would have a say. Probably not if this 3. person would only be like hosting the ledger. (o) is mostly green!
(t) No changes to transactions. Still requires multiple updates but could be done asynchronously. (t) likely to be green!
(s) With a 3. person in the mix reach is gaining but volumes are still like none existing. (s) is reddish!
(f) Probably a slight decrease! With a 3. person hosting the ledger we'd have to be prepared to "dish up some Benji's", still (f) would be greenish!
(m) Speed could go up with adding transactions async, but I'd have to build som mechanism into the adding of transaction process to wait for my brother to make a note of my transaction, and as such still be dangling on hold! (m) not quite there!
(S) Security still keep getting worse! Now there is this 3. person to care about! What do he/she know and learn? Now encryption is a must as is ACL's and somewhere to stow away the digital signatures once used. With that cleared, (S) would once again be mostly green!
The witnessed ledger
Now we've gone through a number of iterations which clearly identify the hurt points of shared ledgers. So far we have neglected one issue entirely in so far as the ledger was shared only with a trusted party (my brother)!
Now I widen my focus and start sharing with people I do not know – as in trust with my life and fortune!
Now consider this: I build an algorithm into my wallet that will a) find a common denominator ie a mutual trusted party, or a path of trust between myself and the person I am going to share the ledger with, or b) if all else fail finds a professional underwriter ie a person or company that "takes bets for a living" (a bank might sign up for this).
The happy path will incure no or negligible fees – my (path of) trusted part(ies) will allow me to share my ledger and thus exchange data (possibly but necessarily payments) with the partner in question.
The (not so) happy path will incure fees which will be known to me in advance and thus I can calculate with them and perhaps even browse for a least expensive path! The underwriters will have to know my rate of success and that of my partner in question too, perhaps. This could all be algorithms, system state, and machine learning!
I am left with not a single blockchain but a number of blockchains really! My private blockchain with blocks shared with those contacts I accumulate along the road.
Directed Graph meet Blockchain!
Now to the variables:
(p) It's private. I share my ledger with contacts whom I know, only. Know or come to know. The come-to-know part would be underwriters in particular.
(o) Collecting digital signatures from all parties involved is a daunting task but given to software certainly surmountable and with a confined set of parties (not an entire blockchain with millions of users) it is quite doable. (o) is green!
(t) Again; all parties in a path from A (me) to B (the partner in question be it Starbucks or the grocer around the corner) must make a note but this is what software is good at and will be able to handle swiftly. (t) is green!
(s) Even with more parties in the path from A to B reach is limited and volume relatively low. There will be room for speculation but that would be focused with the parties in question (say a big contractor, a building society, a cars manufacture, or some other contact with a huge volume of transactions, and a very big number of contacts; not the witnessed ledger as such). (s) is green!
(f) Fees will incure but most people trade in closed circles (barring vacations) and underwriters will act as ice-breakers or trust builders but after a few deals you will have a happy path even to that dodgy website. (f) would be greenish!
(m) Speed will easily be green in the happy path cases but slower in the not so happy paths! Over time speed will pick up - perhaps not 100ms on average but still; 800-1600ms with an odd one out when you must buy something off of a dodgy website is fairly green!
(S) You share the ledger with known parties only (and with underwriters who cannot afford to break their 'customers' trust). Still security will always be the sore issue and it would be foolish to believe that the witnessed ledger is in the clear! Encrypting transactions, maintaining an ACL and log access, and use of digital signatures; it all adds to lowering the probability of theft, false representation, etc. (S) is mostly green!