The article fails to mention that while separation of a blockchain from the currency is technically possible, in reality a blockchain without associated currency won't work as nobody's going to spend their CPU time maintaining it without getting something (money) in return.
This isn't actually true. In theory a blockchain could be maintained by interested parties only. For example, if an honest blockchain solved a problem of great importance to me (value = x) and even by putting a small amount of work (value < x) into mining the blockchain I could protect myself (say withdraw from action during double action attacks) then you can create a system where many people are mining, making the entire blockchain more secure each while guarding their own interests.
The closest analogy would be people setting up water sprinklers in their home. Sure it helps keep the whole town safe, but the reason they do it is for their own protection.
Similarly, in theory there are some other blockchain applications that give each miner a gain just from mining. For example, imagine that scientific communities around the world built a blockchain that checked folded proteins for applications in medicine. In order to compactly represent this they use a proof of work algorithm that solves these protein problems. The blockchain allows them to quickly share paths that do (or do not!) bear fruit in a specific direction, but it also coordinates search efforts along various veins of discovery.
These are just two examples I thought of in the span of 5 minutes, I'm sure there are countless ways of using blockchains, PoW algorithms, and cryptographic techniques for communication, synchronization, and commerce.
For example, if an honest blockchain solved a problem of great importance to me (value = x) and even by putting a small amount of work (value < x) into mining the blockchain I could protect myself (say withdraw from action during double action attacks) then you can create a system where many people are mining, making the entire blockchain more secure each while guarding their own interests.
Wouldn't a rational actor free ride instead of mining? Also, the total hash rate needs to be high enough to prevent 51% attacks, so there's no guarantee that your cost of mining would be smaller than your benefit. A blockchain that doesn't pay miners seems to have an equilibrium where trolls 51% it into oblivion (as has already happened with some scamcoins AFAIK).
How so? With 51% of hashing power you can essentially rewrite the block chain to say whatever you want. What possible use could you have for a block chain that is not accurate and controlled by a single entity?
If you have > 51% hashing power for a long period of time then you could theoretically choose an arbitrary block some time in the past (the further back you go the more difficult and time consuming it will be) and begin mining from that block. Including (or making up) whatever transactions you want as you go. Eventually you will have a longer chain than the "main" block and unless manual intervention is made you will orphan all of the other blocks and be able to rewrite history.
Dylan16807 is correct. You can't forge transactions. You can create an alternative history, but each transaction still requires holding the necessary private key to sign the transaction. If you're trying to make up new transactions out of whole cloth, you can only do so if they're transactions that you could have otherwise legitimately created.
What the 51% attack lets you do is remove transactions, which lets you double-spend. And of course there may be other benefits too. For example, if someone is using the blockchain for purposes other than sending money to people (e.g. notarizing a document, proxy transactions that represent movement of physical goods, etc) then removing transactions may be beneficial without double-spending.
do you know if it's possible to compensate miners beyond offering them a digital currency? could they, for instance, demand a higher transaction fee? just wondering what happens to the system when we hit 21M bitcoins, and if there are other ways of preserving the blockchain. thanks!
Higher transaction fees is one of the ways that blockminers will be compensated. There are other possible solutions as well, depending on protocol changes to Bitcoin, or crypto-currencies in general.
if miners charge higher transaction fees, doesn't this negate one of the benefits over centralized systems like MC and visa that charge high (2% - 3%) fees on each transaction? that's not to say this neutralizes other benefits of bitcoin, just that applications like microtransactions are not viable? not trying to attack bitcoin, just trying to understand the true benefits and applications.
The article has a whole section on transaction fees, but non-monetary blockchains do tend to raise the question of what currency fees should be paid in and how they can be paid securely.
