“There is no way any miner can rewrite history even if they spent enough money or had enough computation power”says Allen Piscitello From Blockstream. He also gives an insight of new block signing measures as well as blockchain being a new source for creating New Green Technology! Have look at what he has to say. KL
Allen Piscitello (Vice President of Product Management at Blockstream )
Interview Date :17th January 2020
Necessity of Mining
Mining is a very important part of Bitcoin. The idea of mining is that it is extremely costly to change the history of the ledgers. Due to that all miners and Bitcoin are anonymous, you don’t have to register with the network. All you have to do is to run something that is capable of doing computations. There are many fractures that solves these equipment in many mining farms across the world.
There is no way any miner can rewrite history even if they spent enough money or had enough computation power. Exchanges have fixed this from happening by having rewards for the miners to do computation mining. As long as there is enough people mining, and they are not colluding together, this won’t happen. So that’s good for Bitcoin, but it’s also extremely expensive and unpredictable as it is a random process of getting a block. You don’t know how long it will take. So that’s very good for a decentralized system. Mining is very costly but its as far as we know, it is the best way to do this.
Now for Liquid, we replace mining with something we called block- signing. Each of the federation members that are running what we call functionaries that is a server that has a HSM, which is a hardware security module inside of the server, on it that protects private keys. They all need to sign a block for it to be valid, and providing a signature is extremely cheap, especially compared to mining. Any of these functionaries can produce this signature very easily. Because it is easy to do so, we have a HSM following certain rules such as not rewriting history on a block.
This allows them to happen at a very reliable rate. They have time to go off every minute and take turns; One proposes a block, the other members will look at the block see if its valid, and if they find it to be valid, then they will sign the block with a digital signature. As long as 11 of the members have produced a digital signature, a block will be formed. This is why you can make a block every minute. It is a different kind of trade off and these members are known parties. They have an incentive to keep the network running, healthy and functional rather than going back and rewrite history. All the users of Liquid can also run a full node as well even if you’re not a member. If I just opened up the software, I could make sure they are obeying by those rules.
Mining effect on the Environment
Mining does use a lot of energy to keep ledgers going so I can understand the concern. What we have noticed is that a lot of this electricity comes from areas that are not able to actually utilize that electricity anyway. In some areas of China where there is a lot of hydro-power, but it’s in isolated areas and can’t be used anyways. I have a different perspective of it. I think mining will actually generate a lot of demand of electricity in very efficient ways with green technologies. It can also subsidize a lot of these things that otherwise wouldn’t be built. By doing that, you will see more efficient use of energy and basically being able to provide demand for a steady state of electricity.
The state of demand for electricity is fluctuating a lot. For example, in many places around the world there is a need for air conditioners during the day, but during the night the demand will diminish. In comparison, if you have a steady state demand for electricity you can actually offset the costs of electricity. I think you will start to see a lot of innovation into clean technology like hydro-powers and nuclear powers. Even if it was not economically feasible in the past, it will be feasible from now on with new innovations. So there is no shortage of energy. There is something called Jevons paradox; If we start getting more energy in the world in more efficient and responsible ways, it might benefit and help a lot of people.
Interviewer , Editor : Lina Kamada
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