On October 26, at the 7th Blockchain Global Summit 2021 hosted by Wanxiang Blockchain Lab, Dr. Whitfield Diffie, senior consultant of Findora, delivered a speech on the theme of "Blockchain Overview". Dr. Whitfield Diffie believes that we are facing clear but unprecedented challenges. We are building on blockchain technology, which traditionally produces equivalent products in life and economic industries. And our greatest achievement is the communication technology industry. In my work area or in the past 25 years, the Internet has connected everyone in the world.
host:
host:Welcome back to the conference site. The next guest speaker is Dr. Whitfield Diffie, the Turing Award winner and senior consultant of Findora. He will also connect to the site through an off-site connection. Next, let us applaud Dr. Diffie for his wonderful presentation. Dr. Whitfield Diffie, Turing Award Winner, Findora Senior Consultant.
Dr. Whitfield Diffie：Ladies and gentlemen, the topic of this speech is "Blockchain Overview", and I am honored to serve as an advisor to Findora. I wish the blockchain event in Shanghai a complete success.
It is a pity that I did not participate in the event with you in Shanghai. We are in an unprecedented new era. From 5000 to 7000 years ago, human beings began to move into cities. Before that, people lived in villages and primeval forests. a long time. For the first time in history, human beings lived in cities built by themselves, and at the same time gained control over their own residences for the first time. Human civilization is entering the age of electronic information, which means that a small part of life is evolving into a technical and policy issue. We are facing clear but unprecedented challenges. We are building on blockchain technology, which is equivalent to traditional production and economic industries. And our greatest achievement is the communication technology industry. In my work area or in the past 25 years, the Internet has connected everyone in the world.
However, in the new environment of the Internet, there are still many areas that need to be explored and developed, especially in the economic field, which is also a focus of our attention now. There is a huge paradox in the human way of thinking, people always say that if there is free food and land, there won't be any wars. When people get something for free, like data, they try to give it scarcity. Because in traditional economics, we are used to pricing and charging various scarce resources.
From the perspective of blockchain technology, you will ask what functions these things have. Its core function is the decentralization of finance. Let me briefly introduce the current status. Specifically, how to visualize the data structure relationship to ensure that it can be verified and cannot be tampered with at the same time. There is also a medium of exchange, and this is not the first time that such a medium has appeared in human beings, and the previous medium of exchange was centralized. We have a deposit department, a regulatory department, and a patent department to coordinate and coordinate at any time. communicate. We designate a coordinating party, and this coordinating agency will be responsible for recording and connecting people on all sides.
In a small town, a system that works well will face huge problems when it is used in the whole of China or the world. Centralization itself is also a double-edged sword. The advantage of centralization is that it is more convenient to concentrate various resources. Once there is a problem with the central system, the entire system will be in trouble. This leads to a discussion about the reliability and security of the system. We hope to build a system that is not prone to errors and crashes, so we have encountered something beyond human control, like a gold supply. It is true that people can slightly control the supply of gold, and we can mine and discover gold, but the supply of gold we get will not fluctuate too much for a period of time. In the 19th century, the price of gold was guaranteed to be stable for a long time, and the price of gold was directly linked to the US dollar. At that time, an ounce of U.S. dollars was less than 1 U.S. dollar. This price has remained stable for decades. In the 1970s, the U.S. dollar was decoupled from gold to ensure the stability of its value in another way. Since then, the central bank has made the value of the dollar more elastic, and this value is based on fiat currency.
Closer to home, the problems we are facing now represent everyone's consensus and recognition of the current form. We need to ask ourselves, one of the great successes we have had in the whole cultural migration process is digital signatures, digital signatures are data transformations that only individuals can do. But many people can see the correct result, one person can sign, but many people can verify. Of the signature schemes we've done in the past, I know of three that are the most common, which are written signatures or stamped ink signatures, or in very fancy signatures, wax stamped. And all these methods rely on physical paper puzzles, and now we have a purely digital signature method.
We go through some similar techniques, what's the other question? We live in an online world, now you can have Facebook friends in China, everywhere. You can't necessarily afford to visit them, but there's a great relationship and people chatting all the time. The problem is that in the old days, up until a few decades ago, the basic mechanics of private chatting was, the two of you away from the other person, talking between the two of you. And that no longer exists in the digital world, it has been replaced by encryption. So you need a mechanism to arrange a conversation with someone you have never met, and you can communicate remotely in different places. This is the so-called public key agreement.
I have just mentioned that these things face great success, but they also have great difficulties because they depend on secrecy. I sign something with a key that only I know, and you can look up the public key in the phone book and verify that. If my key is compromised, someone else can sign my signature, so no matter what type of secret you have, you have a funnel because the secret can be compromised. Therefore, the blockchain opens up a new way of signing. Here to share with you, its several steps.
The first element, which is a very simple cryptographic phenomenon, is a key, it's called a secure hash function, or I prefer to call it a message digest, it's only a few hundred bytes, but it's a lot of bytes things are closely related. These functions are easy to compute, we want it to be fast, we want it to work with megabytes or gigabytes of data, but it's hard to crack. It doesn't make sense to say that you know one of these message digests and you want to find the corresponding message. And it's hard to find two items with the same hash value, there are three important standardized message digests, one is called MDS, from a fifth digest proposed by a cryptographer. In addition, the national encryption standard is SHA2, which is the standard of the United States. We will mention it again later, and the SM3 standard, which is a commercial secret algorithm, is the standard of China. 45 years ago, a guy named Ralf Merkel saw how these things could be used for signatures in a very different way than the digital signatures I mentioned earlier. The things Merkel built are called Merkel trees, and they're everywhere. You can see that there are two little things coming together on the tree, and the item below is a summary of the two items above. As a result of this, something very tamper-resistant is created. Once you have a Merkle tree like this, and know that the root of the tree is at the bottom, the widest part of the branches, you can't be fooled by a file in it. And the file is in the tree, this roadmap is not what you expect, you say this file does not exist in the Merkle tree, and there are no secrets involved in this file. That is, you create a strict data structure, which acts like a signature on each file, but these only depend on you knowing a small amount of information, which makes it very tamper-proof.
In the 1990s, taking things a step further, Lenstra on the left, Haber on the right, what they invented timestamping to do, is people submit files that they want to be timestamped, there's some priority, and you get A timestamp on the description of your invention. People all over the world, send them something, and get back a timestamp. In the 90s, this was taken a step further by two guys who built Merkle trees of document hashes that were appended to the document at the time, aka the timestamp. You have invented something now, you want to patent it, and you need to determine the priority, send it, actually send its hash value, without revealing what the patent is, and you can get a patent on this patent timestamp.
For example, the hash was already known on March 5, after that, there is no way for you to make a similar proof. Over the next week, someone else will develop a Merkle tree, and each week the root node of the Merkle tree will be published in the New York Times, the American record newspaper.
In fact, what the blockchain does now is similar to what it used to be, but it eliminates the physical element, that is, the newspaper. The root of the tree released every day is replaced by those who participate in the blockchain system. The participants continue to discuss what the root is, and here, we slightly change the name of the root, and call the root Blocks, so every few minutes, hours, or seconds, these people will come together to produce new blocks, and these new blocks are linked together. So the whole process does not depend on secrets, but it is a very strict and tamper-resistant system. You can't change any element of the system, and once it's fixed, it means it's a reliable source of history, and you can study it and see what happened to it in the past. This method has many applications, the earliest way to fame is to try to create a new form of currency, which is called Bitcoin. Others have since tried to do so, with mixed results. The next thing is supply chain management. In terms of supply chain, people are eager to find a new supply chain, which means you need a distributed database that can serve multiple companies.
Overall, this provides a trustworthy, distributed accounting mechanism. In fact, the history of wanting to make money is very simple. We used to have something as immutable as gold. It is not the only one, but it is the most famous. Gold itself is tamper resistant because it cannot increase the supply of gold by a large margin, is that an advantage? No, it is a disadvantage. You want to start a new business, you need a lot of money, that is, you need a lot of gold, but you can't provide that much gold. Therefore, legal currency has appeared. In some countries, the central bank issues currency. In the U.S. Constitution, the most important EDN is to assume that the previous debts are sustainable in accounting, which provides huge flexibility for the supply of money, and the flexibility becomes a function of public policy, not the implementation of the amount of gold. The purpose of doing this is the same, or you can’t agree with these goals. People hope to go transnational, just like gold wants to resist inflation. This is a very hesitant idea. This has no premise, it hopes to be completely digital, and this is very successful.
It is meaningless to talk about the fluctuation of inflation over a year, because it changes in a day more than the change of inflation in a year. In a sense, I don't know if this is common, but supply chain management doesn't have a similar problem. It has the problem of not being easy to centralize, and it has not been able to expand quickly again. That is, if you achieve great success in commercialization, your supply chain will become very long and very complicated. And this has to be redone, and if you have a scalable technology like blockchain, this can solve the problems just mentioned.
What to do next? We have a very promising new technology that's been around for 12 or 13 years, or maybe as far back as the 90s, and it's barely been explored. So at the end, I quoted what President Xi Jinping said, we must manage the blockchain well, and at the same time govern the network according to the law to promote the orderly development of the blockchain.
I wish him the best of luck here, great new developments don't always happen in an orderly way, thanks everyone!
