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From my understanding of blockchain, I feel the main use of blockchain is to do something in a decentralised way as compared to the traditional centralised way which involves a middle man. Usually, the centralised way is a much simpler way, but use of a more complicated way (blockchain) becomes justified because you are able to decentralise.it.

However, I see a lot of companies which are currently the central party trying to get into Blockchains. For e.g. banks etc. I am not sure what advantage there is here.

For example, take a look at this - ironmountain.com - What-is-blockchain-and-why-should-records-management-professionals-care

In my opinion, regular PKI is best suited for this. A user signs his document with his private key & then submits it to Iron Mountain. This will ensure integrity. So what advantage is it to either Iron Mountain or the user if Blockchain is adopted in this case.

It also seems as if Blockchain is getting forced into places where it's not necessarily the best solution.

Or am I wrong?

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  • $\begingroup$ So, what is your research on this question? What decentralisation options are there for PKI and for blockchain? $\endgroup$ – Vadym Fedyukovych Dec 29 '16 at 16:38
  • $\begingroup$ @VadymFedyukovych - why is decentralisation needed in this case for ironmountain? And blockchain, of course is decentralised. $\endgroup$ – user93353 Dec 29 '16 at 16:48
  • $\begingroup$ I'd think simply because there are conflicts and varying levels of trust within a company as well as between companies, blockchain is being pushed due to being decentralised. Whether it is the right solution, I don't know enough to comment. $\endgroup$ – kodlu Dec 29 '16 at 22:00
  • $\begingroup$ In my opinion, regular PKI is best suited for this - best suited for what? Could you specify the application of blockchain technology you refer in the question? $\endgroup$ – kludg Jan 1 '17 at 9:10
  • $\begingroup$ @kludg - I have provided an ironmountain link - describing the application. $\endgroup$ – user93353 Jan 2 '17 at 3:17
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The purpose of the bitcoin block chain is to provide an imitable public ledger.

If you read the original bitcoin paper you will see that the block chain is but one component of a larger whole that provides public trust that coins were not double spent. See section 2 "Transactions" that states this explicitly.

Within a traditional bank the ledger is private and transactions are not signed by the owner. The trust in this case is somewhat blind but revolves around a promise by the bank that it will handle transactions on your behalf with care, and after all it is in the banks own best interests to prevent double spending.

Why don't banks use a bitcoin style ledger, well a few spring to mind but I will admit to a little speculation here.

  • Block-chains are computationally expensive to check continuously and their are much faster book keeping methods borrowed from traditional accounting practices.
  • Database transaction logs and transaction hashing is available to prevent corruption of data in storage.
  • The ledger is private so the only entity the bank needs to satisfy the correctness of transactions is itself.
  • If the bank were to use a Block-chain then where are the private keys to sign transactions going to come from? Is the bank going to store them for its customers?

Lets now look at the article you cite from Iron Mountain. This is a slightly different kettle of fish. They store data that you CAN sign and while we expect that data to be private between the owner and storage provider the trust equation here is different. The bank was self incentivized not to duplicate or modify transactions because it would directly loose money, in the IM storage case - aside from paying them monthly fees and perhaps reputation - we have no implicit reason to trust that they will not modify information. So for IM storage we do have a case for the use of a block-chain.

The question of 'are digital signatures enough' depends on

  • You use a decent key size sufficient to provide perfect forward security.
  • You trust all members of your organisation that have access to the private keys.

For archiving purposes a block-chain can also prove that one document preceded the next, something that digital signatures alone can not do. It can also show that no record has been tampered with by users with access to the private keys.

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  • $\begingroup$ > The bank was self incentivized not to duplicate or modify transactions because it would directly loose money - not necessarily. They can modify transactions to gain money. They can duplicate pay-out transactions to gain money $\endgroup$ – user93353 Jan 4 '17 at 6:07
  • $\begingroup$ > For archiving purposes a block-chain can also prove that one document preceded the next, something that digital signatures alone can not do. timestamping can do that much simpler than blockchains $\endgroup$ – user93353 Jan 4 '17 at 6:07
  • $\begingroup$ > It can also show that no record has been tampered with by users with access to the private keys. - the person with the private key can archive a revised version & claim that the customer submitted the revised version himself in a 2nd archival thereby making the first document void. $\endgroup$ – user93353 Jan 4 '17 at 6:09
  • $\begingroup$ > This would put their books out of balance. Banks create money against loans. In any case the customer is unaffected. > You can sign a timestamp but so can members of an organisation with access to the private keys. > Yes they can, but they can not remove the older version that would still remain open for inspection. .... We're assuming here that a systems designer would not be stupid enough to allow a user direct access to a private key but via some middle-ware that also incorporates the users name in to the signature. $\endgroup$ – dave.zap Jan 4 '17 at 11:32
  • $\begingroup$ This would put their books out of balance. - this will prevent all frauds. We don't need blockchain at all. $\endgroup$ – user93353 Jan 8 '17 at 22:15

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