Blockchain Design Principles

was about creating a second generation of the internet

sought to change civilization and reinvent business

was written about a specific cryptocurrency, but implicitly described broader blockchain design principles

All of the above

A doubling in the amount of time spent waiting for a settlement to clear using traditional payment methods compared to blockchain-based payments.

The idea that when making a purchase, a consumer must spend double the value of an item when paying in cryptocurrency compared to fiat currency, regardless of current exchange rates.

A form of fraud in which the same unit of currency is spent in more than one transaction.

A system of accounting in which each financial transaction is recorded using two different entries (i.e. a debit and a credit), and is prone to human error and dishonest manipulation.

The integrity of a blockchain network relies on humans who choose to do the right thing.

Trusted third parties verify people’s identities and vouch for their reputations.

Consensus mechanisms, such as proof of work or proof of stake, allow a securely distributed group of peers to confirm transactions and achieve network consensus.

There are currently no means of achieving integrity within a blockchain network.

The actors in a peer-to-peer network are more trustworthy than those in a centralized system.

No single party or central authority can shut the system down.

Large-scale changes to the network protocol can be implemented easily.

The decision-making process is much more efficient in a peer-to-peer network than in a centralized system.

Incentives are what encourage network participants to cooperate and create the value that will ensure the success of the blockchain.

The incentive structures of a blockchain have little bearing on the security of the network.

Paradoxically, acting in one’s own self-interests benefits the peer-to-peer network.

On a blockchain, there is no economic benefit to performing a Sybil attack.

PKI

SHA-256

ERC-20

ICO

There are currently no methods for establishing privacy on a public blockchain.

Users are only able to see transactions in which they were directly involved (e.g. as a sender or recipient).

Internet Service Providers do not track the IP addresses of devices that are connected to a blockchain network.

Parties are represented pseudonymously using public addresses; a single party can own multiple public addresses.

Privacy for individuals

Transparency for individuals

Privacy for organizations, institutions, and public officials

Transparency for organizations, institutions, and public officials

With blockchain, an artist could register a hash of his/her creative work, thereby providing an immutable, time-stamped proof of existence, authorship, and copyright ownership.

With smart contracts, an artist could be paid directly from fans without multiple intermediaries taking a cut.

With smart contracts, an artist could assign and automatically enforce customized usage rights for his/her work to another party.

All of the above

Users do not require a birth certificate, home address, or proof of citizenship in order to join the network.

There is no minimum account balance required to participate in the network.

The infrastructure makes micropayments feasible, thereby lowering the barriers to investing, entrepreneurship, and participation in global trade.

All of the above

Blockchain Design Principles >> Introduction to Blockchain Technologies

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