At a fundamental level, it tracks digital assets with certainty. This can be bitcoins, software licenses, whatever can be 100% digital. The link between the real world and the blockchain is an area of active research and innovation. Stablecoins backed by audited bank accounts are an area getting a lot of interest lately.
Also, your previous criticism of blockchain being worthless because “it’s 10 years old” is meaningless. The first email was sent in the 1970’s. Technology takes time.
Why would a software vendor want that? Why would anyone else participate in that chain? There are a ton of existing systems to cover these needs, and there has to be a compelling reason to shift over to the blockchain.
I’m not sure I’d go with stablecoins, since the main one appears to be a massive fraud. It’s still unclear why you would want a “decentralized” stablecoin that’s actually managed by a central trusted authority that, pinky swear, has the backing cash.
The assertion was made that blockchains are new, and I pointed out that’s nonsense. I never said that old=worthless, you made that up.
The innovation is that assets can be tracked and traded without any third party saying it’s OK. Essentially we now have programmable money with no middlemen. What comes from this innovation is anyone’s guess, but if you are an entrepreneur, this is a very intriguing technology in which to start new ventures. It may remain niche, or it may fundamentally alter the financial industry (currencies, securities, payments...) and perhaps many others. Time will tell!
> The innovation is that assets can be tracked and traded without any third party saying it’s OK.
That is exactly the opposite of what most software vendors and similar want. They want more control over the assets they release, not less.
If the asset is financial in nature, this is basically illegal. KYC and AML laws still apply, even to crypto, as do other related securities law.
If the asset is physical, you have to solve the issue of making the blockchain match reality. I know you said there's a ton of work being done in that space, but I have yet to see a lot of solutions.
> Essentially we now have programmable money with no middlemen.
Given the rate of bugs in "smart" contracts, that is not an appealing pitch.
I also find that the people angriest at the middlemen often know the least about why the middlemen exist. Hint: they often provide a service to match their fees.
> What comes from this innovation is anyone’s guess, but if you are an entrepreneur, this is a very intriguing technology in which to start new ventures.
It's also a fantastic way to lose your shirt.
> It may remain niche, or it may fundamentally alter the financial industry (currencies, securities, payments...) and perhaps many others.
You basically said "anything could happen". If your prediction is basically "anything", why bother prognosticating?
> That is exactly the opposite of what most software vendors and similar want. They want more control over the assets they release, not less.
Maybe? The ability for something like this didn't exist before, maybe an entrepreneur will come up with something new and valuable around the licensing use-case. I also don't know if such a blanket statement about "most software vendors" can be asserted.
> If the asset is financial in nature, this is basically illegal. KYC and AML laws still apply, even to crypto, as do other related securities law.
Major companies like Coinbase and Circle are not violating any laws. They have lawyers, licenses, and so on. Just because something is regulated, doesn't mean an entrepreneur can't invent a new and innovative product - they just comply with the laws and regulations.
> If the asset is physical, you have to solve the issue of making the blockchain match reality. I know you said there's a ton of work being done in that space, but I have yet to see a lot of solutions.
Time will tell, I agree.
> Given the rate of bugs in "smart" contracts, that is not an appealing pitch.
Active area of research and development, such as formally verified computation. I would bet that technologists are more likely to solve this issue than not.
> I also find that the people angriest at the middlemen often know the least about why the middlemen exist. Hint: they often provide a service to match their fees.
Sure, but if the same service can be provided at drastically reduced cost, then it's a win, and blockchain may be able to do this. Middlemen exist for reasons, but that doesn't mean they can't be disrupted.
> It's also a fantastic way to lose your shirt.
Investing in anything is risky, let alone seed-stage startups on unproven technology, but luckily there is an industry that funds such risky endeavors.
> You basically said "anything could happen". If your prediction is basically "anything", why bother prognosticating?
You are making the bear-case for crypto and blockchain, while I am an optimist making the bull-case. I'm basically saying that a huge amount of potential is there, and writing it all off as worthless or barely useful at best in October 2018 is very premature.
> If the asset is physical, you have to solve the issue of making the blockchain match reality. I know you said there's a ton of work being done in that space, but I have yet to see a lot of solutions.
There are no solutions. The perfect oracle does not exist and any such system is going to have all of the same problems that any non-digital, non-blockchain based system could have.
Any token held in the blockchain is only valuable if the token in itself has inherent value. A token which is merely a proxy for some external value is a waste of time.
The only use I see for the blockchain beyond money is for fraud-proof timestamps, since the ledger is also a distributed timestamp server, but even that has limited applicability because there's no way to prove that something did not happen earlier, for which someone just copy-pasted into the blockchain afterwards.
Currently, none. If you wanted to do it right, the correct way would be to treat so-called stablecoins like a bank and audit them accordingly, except with a 100% capital requirement.
It’s highly entertaining to me how many issues with cryptocurrencies have to be resolved with classical financial instruments and regulatory processes. It’s almosf as if these systems were slowly built over a few centuries and are actually pretty good at what they do, and that you can’t just throw computers at the problem and pretend that you know better.
Also, your previous criticism of blockchain being worthless because “it’s 10 years old” is meaningless. The first email was sent in the 1970’s. Technology takes time.