Orderrr! A tale of Money, Intrigue, and Specifications

Mistrust over traditional financial institutions is motivating the development of decentralized financial infrastructures based on blockchains. In particular, Consortium blockchains (such as the Linux Foundation Hyperledger and Facebook’s diem) are emerging as the approach preferred by businesses. These systems allow only a well-known set of mutually distrustful parties to add blocks to the blockchain; in this way, they aim to retain the benefits of decentralization without embracing the cyberpunk philosophy that informed Nakamoto’s disruptive vision. At the core of consortium blockchains is State Machine Replication, a classic technique borrowed from fault tolerant distributed computing; to ensure the robustness of their infrastructure, consortium blockchains actually borrow the Byzantine-tolerant version of this technique, which guarantees that the blockchain will operate correctly even if as many as about a third of the contributing parties are bent on cheating.

But, sometimes, “a borrowing is a sorrowing”.

I will discuss why Byzantine-tolerant state machine replication is fundamentally incapable of recognizing, never mind preventing, an ever present scourge of financial exchanges: the fraudulent manipulation of the order in which transactions are processed — and how its specification needs to be expanded to give it a fighting chance.

But is it possible to completely eliminate the ability of Byzantine parties to engage in order manipulation? What meaningful ordering guarantees can be enforced? And at what cost?'

Bio: Lorenzo Alvisi is the Tisch University Professor of Computer Science at Cornell University. Prior to joining Cornell, he held an endowed professorship at UT Austin, where he is now a Distinguished Professor Emeritus. Lorenzo received his Ph.D. in 1996 from Cornell, after earning a Laurea cum Laude in Physics from the University of Bologna. His research interests span theory and practice of distributed computing, with a focus on scaling strong consistency and dependability guarantees. He is a Fellow of the ACM and IEEE , an Alfred P. Sloan Foundation Fellow, and the recipient of a Humboldt Research Award, an NSF Career Award, and several teaching awards. He serves on the editorial boards of ACM TOCS and Springer’s Distributed Computing, and on the steering committee of Eurosys and SOSP . Besides distributed computing, he is passionate about classical music and red Italian motorcycles.