I'm increasingly seeing "web 3.0" as basically a two headed beast:
1) a way to part greater fools from their money until the hype has died out
2) a hot topic to drive clicks and discussions for nerds and, increasingly, the tech press, from other more pressing issues that exist in terms of tech and culture and finance
In other words, its a bullshit scam, can we please move on already?
When I was a young engineer in 2006, the marketing about Web 2.0 was in every tender for IT projects, so much that my boss created the “Web 4.3 dev community” in my city to point out the ridiculousness of it.
Every versioning of that idea is marketing speech.
Web 2.0 and 3.0 are not directly comparable just because they have similar names, a fallacy of equivocation.
Web2.0 might have had a silly name, but the idea of the web as something that the average user and company could contribute back to and use to communicate with in real time
provided explicit value and convenience over existing alternatives (letter writing, door-to-door sales, in-person self-promotion, calling a pizza parlor, renting a physical video, long distance phone calls, physical plane tickets mailed to your house…)
It's a way to authenticate yourself without a centralized authority. So right now it's being used to create exclusive communities, access to which theoretically has some value. In the future, there may be application ecosystems which operate solely against your wallet information, no need for registration. Maybe that has some value too - time will tell.
I don't follow the details of the web3 market closely, so not speaking in support or against here.
We've had "auth without centralized authority" for decades, and 99% of people don't care and won't deal with the hassle involved. see PGP, encrypted email, OpenID, etc etc..
The exclusive communities you mention only have value because of the hype and FOMO and high dollar amounts that people see being made on sales of "exclusive" NFTs or some such. Same as many of the many crypto pumps, same as the dotcom bubble, same as tulips. Same as it ever was.
Like it or not, people are already using their wallets as their username. And they're trading cryptographic assets. And everyone can see it because it's public.
This isn't theoretical.
I've been to PGP key-signing parties. I can assure you that this is not that.
I can't use blockchain to pay pretty much any vendor I buy things from without an intermediary - the intermediary requires me to log in to a website and unless I'm willing to go through a lot of trouble (more trouble than dealing with PGP) an intermediary will also be storing my wallet and have "physical" control of all my "coins." Blockchain works to the extent that you aren't really using blockchain but simply a trusted intermediary.
If you're actually personally managing your wallet keys it's worse than PGP. With PGP if you lose your key you just say so and people figure it out, you have to go to some key signing parties. With Bitcoin if you lose your key you have no money, end of story, no recourse.
This depends what you mean "works", if it's meant on the technical conceptual level that yes, of course, I think no one would disagree. If it's taken to mean had widespread and growing usage at the social level, then I think that's hard to argue.
People don't exchange public keys on the blorkchain, they use username/password to access their wallets, and these have a public key. That in itself doesn't authenticate anyone to anything, the only guarantee is that it is unique.
How do we know who is behind a hash? Because there is a server (aka. a "centralized authority") that has that information.
So how exactly is that different from using my google account to login to some webservice?
that's a very very liberal equivalence to make. decentralized authority in practice is just a collection of servers in aggregate that come to consensus according to a certain protocol.
This is not true. Your key serves as proof you own something and nobody else without your key can claim to it. There is no central poin involved. You can connect to any chain node, yours including, and assert control over it. There is no central authority, that's the whole point. If you're referring to an NFT being a url hosted somewhere other tha. IPFS, nobody is arguing that.
> Your key serves as proof you own something and nobody else without your key can claim to it.
Yes, and what maps that to your physical identity? How is that any different from showing someone a public key you just generated with GPG?
For what it’s worth, I recently read Moxie Marlinspike’s essay on web3, and I think he crystallised one of the most interesting insights I’ve ever heard on that topic:
> We should accept the premise that people will not run their own servers by designing systems that can distribute trust without having to distribute infrastructure. This means architecture that anticipates and accepts the inevitable outcome of relatively centralized client/server relationships, but uses cryptography (rather than infrastructure) to distribute trust.
I think he’s correct, and the cryptocurrency of the future – the one which actually takes off as a medium of exchange – will do exactly what we’re arguing about here. It will use purely cryptography as its mechanism, instead of large groups of servers acting as the gatekeeper. You’ll be able to send money to someone with purely a public key, no servers required, just you and them as peer-to-peer. And, as a corollary, you’ll be able to prove your balance with only a key and the encrypted data of your past transactions. I’ve barely stopped thinking about my envisioned implementation for the past couple of weeks.
inefficiency here can actually be useful, it's similar to password stretching. If you know someone had to burn $10 of electricity to make an authentication, it hurts more to get banned.
Except for the tons of CO2 that get pumped into the atmosphere in the process, or the blackouts its causes, or the fact that there are tons of more useful applications for that energy, like heating homes, running air conditioning, charging electric vehicles ...
> It's a way to authenticate yourself without a centralized authority.
Can someone provide me with a clear example of this being implemented? AFAIK accessing blockchain from a traditional client(website/app) still requires going through a central node.
Did something change with 'Web3'? Pardon me for not being up-to-date but it's like one day I woke up and Web3 is all over the place it seems like well-coordinated, heavily funded campaign. How else can we explain this seemingly sudden trend of Web3?
I would like to create an online application which people could use by paying for its usage in bitcoin.
I assume it would make the application much simpler because there would not need to be any or very little user-account management, no sending bills or charging credit-cards. Just gimme them bitcoins. The user-state could be stored on the client-machine, unless they especially want to pay for us backing it up on the cloud. Still it could be backed up anonymously, identified by the wallet.
No more hacking, if there were no user-accounts or passwords there would be nothing to hack.
How do you inagine "giving you bitcoins" will work without you doing something equivalent to sending bills or charging credit cards?
Sure, you can publish your wallet address and tell them to send you money. How do you give them access to your content after they have sent their money? How is Bitcoin helping compared to you publishing your IBAN account number and asking for money to be sent directly there?
I'm not very far on my project at all but I assume that a public ledger could tell me that somebody transferred money to the wallet associated with my application.
I wouldn't need to "send bills" because I wouldn't know who my users are. Except that when they login with their crypto-id my application will do work for them, because they have crypto-paid for it.
I wouldn't need to charge credit-cards since they transfer the bitcoins to my account. I only need to know their id and that they have paid me a specific amount of crypto, and that id has used a certain amount of my application.
There needs to be the infra-structure associated with crypto-currency, but not much else. That would make things simpler, I assume. That's my point. Crypto can presumably make payments and user-accounts management simpler. The less you know about your users, the less there is to manage.
If you want to take a credit card, you need to open a bank account, sign up with a payment processor and integrate with them (stripe makes this easy, what if you can’t or don’t want to use stripe?), handle chargebacks, etc.
If you want to accept bitcoin, you run a piece of software and write a few lines of code.
Yes, and for these extra steps the money I earn is realistically not in danger of losing 20% of value overnight, can't be lost because the harddrive that held my password-safe got corrupted, the transactions are done instantaneously instead of whenever some miner feels like including them in his block, and the amount of energy required to process the payment, is probably not much more than I currently use to write and send this post.
Yep. Want to accept onchain bitcoin? When a customer wants to pay, generate a fresh address. Store that address in a dab associated with the customer id. When they come for the service, see if that address has received payment. Easy peasy. You can run your own node and do this all yourself, or you can use services that run the software for you and work on callbacks or api calls.
Want to accept lightning (bitcoin over a low cost and high speed payment network)? It’s an api call to generate an invoice and another api call to see if that invoice has been paid. Again you can run everything yourself or use a managed service. Bitcoin make programmatic payment processing SO MUCH EASIER than traditional payment rails.
This. Building a webshop with crypto is the most trivial thing.
Complying with all the legal regulation that buyer and seller are bound to is the actual complex part. Insanely complex.
i suggest learning it properly before jumping to conclusions. everything has pros and cons. e.g. cars pollute but would you want to go back to riding horses? judge less, learn more
This is always the defense: “you obviously don’t understand it”. Or, maybe there is a good reason this type of article pops to the top of HN every other day. The skeptics have good reason to doubt the viability of all the hype.
is calling out oversimplifcation is also oversimplifying? i'm not arguing that there is no good reason to be sceptic, i'm calling out against forming a strong opinion strongly held on little understanding
But you haven’t verified little understanding and crypto proponents never do. It’s always “skeptic of crypto = little understanding”. You’re doing that exact thing here.
I build dApps and solidity contracts with hundreds of millions of USD in TVL. But that's besides the point. It's not a contest of who's more knowledgeable, I'm arguing against ignorance through quick judgements and assumptions
> I'm arguing against ignorance through quick judgements and assumptions
Yes, but you're arguing that against someone -- someone whom you haven't shown is making "quick judgements and assumptions". You're just assuming that.
That is the problem GP was pointing out: Crypto-"currency" proponents always jump to that conclusion. Stop doing that.
Read the article by moxie on NFTs. It is so poorly designed that a jr JavaScript developer with 6 months experience would be ashamed of it. Don't "Go-and-lean" us. We are technology people here not your non-tech crowd that'll get scared and silenced by "go and learn"
there is no arguing that the world of crypto is full of scams. just like the internet. we can learn and adopt new technologies while keeping down its externalities by understanding the pros and cons, not by slapping overgeneralised labels of "good" or "bad" on everything to cover for the lack of rounded understanding
I actually would prefer riding horses if it were feasible and safe in my community, thank you very much =).
I've learned enough at this point to know a scam when I see one, and I definitely don't need to go thru my history w/ software and tech bubbles and cryptocurrencies to explain why web 3.0 is full-on bullshit.
well i guess it's simpler to live with fast and decisive conclusions to new information. personally i try to manage my prejudice and keep giving chances for someone or a new piece of information to change my mind, in case i have the wrong understanding
Oh wise one can you tell us more? We're dying to learn from the smart ones who can tell based on their past what the future holds. Or maybe you don't know, which is true, since none can predict future. Therefore you're talking out of your ... and not contributing to the conversation. Now you can say that I'm not contributing either, but it has the same place as your statement...
I've yet to see a "pro" for blockchain or NFTs that doesn't conform to the characterization you're trying to dispute. Care to offer one? I'm eager to learn.
Blockchain and crypto are related yet distinct concepts. I was lining up for a PCR test in Thailand the other day, and it was a huge mess. The lack of streamlined systems between invoicing, identity verification, etc means very long queues, people running back and forth to get their documents printed. The testing scheme is private run but I assume it needs to interface with governmental departments (i.e. Immigration and the police) to initiate quarantine in case i'm positive, and change my eligibility status for travel outside the sandbox area if i'm negative, or to arrest me if i fail to take the test within the specified time.
I thought about why so many centralizsed systems failed, or failed to be built, for streamlining processes in the real world. I think that it's because typically such systems would be built on SQL databases and backend servers that are prone to hacks and downtimes, and the APIs built by different developers often cannot integrate with one another.
What if, instead of databases and custom APIs, a blockchain with smart contracts is used? What if we can also sign documents such as receipts with hashes that can be verified off-chain and off-line? We'd have a fault-tolerant, always-available systems, and also a "unified" protocol in which other systems can interface to.
Instead of having different databases and APIs that are hard to integrate with one another, a blockchain could be the central storage and transactions handler that different systems interface to.
The PCR test system would be something along the line of:
- Booking through a smart contract, paying the PCR test fee, and obtaining a receipt signed by the contract in the form of a hash
- Upon arrival in the test center, they check the validity of this signature offline by using a public key to verify your payment.
- An identification service can keep a hashed version of your personal data on-chain. You can provide your name, DOB, place of birth etc, and this can be checked against the identification service by decoding the hashed data with a one-time key you generated
There's no DB that can be hacked or go corrupt, no BE servers that can be DDOS'd.
There are of course questions to be answered. But I see many use cases in my everyday life.
> Instead of having different databases and APIs that are hard to integrate with one another, a blockchain could be the central storage and transactions handler that different systems interface to.
That's a common refrain that seems to associate blockchains with standards and common APIs, it doesn't resist closer inspection. To take your example, I can easily design two PCR test systems completely incompatible with each other, and leaving no way for anyone else to implement a compatibility layer between these two, even if they both use the same blockchain.
There are various ERC20 tokens that should in theory implement the same interface, but turn out to be subtly incompatible with each other because of how imprecise the specification is. Standardization is hard, even when people try, and blockchain doesn't even enforce a modicum of effort in this direction.
Another way to see it: as a software development constraint, "the system has to live in a blockchain" is akin to "it has to be written in C" or "it has to use functional programming": maybe the end result will be more alike, maybe it'll be easier for a dev to understand one system based on the knowledge of the other, but that's pretty much it.
> There's no DB that can be hacked or go corrupt, no BE servers that can be DDOS'd.
Smart contracts can be vulnerable (and ensuring they are not is very expensive, if possible at all), private keys get lost and some external system has to update the smart contract (you can never really get rid of all external systems, something lives outside the blockchain, if only the human operators), transaction fees are high enough that getting protection from a DDOS mitigation service would be cheaper than using a blockchain in the first place.
I agree with you that not everything has to be done a certain way. Programs don't have to be written in C or functional programming for it to work well. But there are places where those excel in terms of performance and/or reducing complexity.
I am also not arguing that incompatible APIs will disappear with blockchain usage. But things like an EVM can be used as a template to build underlying blockchains to provide a common datastore and execution layer for multiple systems to work together. It is harder to achieve with traditional SQL databases, which shouldn't be publicly accessible.
Also an advantage I thought of is it would be harder in this case for corruption to take place in the PCR testing regime since all transactions are immutable, and transparency ensures that the public would be able to check against those if they so wish. A closed system would allow the government or participating platforms to manipulate data records for their benefit, with less chance of scrutiny.
I agree with your points about the vulnerability of smart contracts and private keys. These are challenges that I hope will continue to be addressed as we try to figure out how to make blockchains accessible for mass usage. I think that smart contracts auditing is still far from mature, but the immutable nature of contracts would allow audited contracts to remain secure, as opposed to some code running on some company's server.
In the end as with everything in life, there are trade offs. It's about picking the right tool for the right job, and to continue experimenting with potential improvements that new technologies can bring and to reduce their externalities.
> But things like an EVM can be used as a template to build underlying blockchains to provide a common datastore and execution layer for multiple systems to work together.
Substitute EVM for JVM and you end up with a similar statement that looks just as correct, but it's still not clear what the EVM brings that the JVM doesn't.
> it would be harder in this case for corruption to take place in the PCR testing regime since all transactions are immutable
In your system, the blockchain would replace the database, not everything around it. That's also something I keep seeing in these discussions: blockchain provides some guarantees, so you assume the system you'll build on top of it will inherit from these guarantees, without questioning the composability further. But the interfaces of the blockchain component of these systems you're trying to conceive are precisely where the guarantees break down.
To take your example, you'd basically replace a database (and just a database) with a smart contract, which would ensure immutability and transparency. But:
2. using blockchains still imply that you're trusting the people holding the keys and interacting with the smart contract, so you haven't changed your trust model (the interface problem I mentioned above).
> the immutable nature of contracts would allow audited contracts to remain secure
The immutable nature of contracts is also what makes them unfit for evolving systems that have to be regularly updated to address new requirements.
[0]: to be clear, I'm talking about permissionless blockchains such as Ethereum
First of all, let me say that I understand where you're coming from. I too try not to use the latest fad just because of it. I use systemd instead of k8 when it's enough. I use plain JS instead of react when it's enough. I run cronjobs that updates jsons served by nginx instead of building graphql APIs.
But there's a good reason things like k8 and react become overused for everything these days, because they provide a standard that works for a relatively large spectrum of cases.
The argument of "you don't need X to do Y" is not wrong, but it doesn't make X absolutely useless. Your points are not really invalid imo, but i think you're missing the point of the continuum between centralised and decentralised systems
> i think you're missing the point of the continuum between centralised and decentralised systems
I'm mostly missing the point in this continuum where I can start listing pros instead of just cons. There are fundamental reasons why we haven't reached this point and may never reach it, as I (and many others) highlighted before, and these haven't changed for the past 5 years.
Or, the provider, namely the government, can write the code to orchestrate these API calls even if these APIs are managed by disparate entities.
It's not pretend like it's not a solved problem. It's just that you're trying to eliminate the central provider in this case and you want to replace that with a blockchain which is excruciatingly slow
A colleague of mine once disagreed to use git because it was easier for him to copy paste the project's folder every now and then to keep "versions" of his work.
There are trade offs, but having data and core business logic in an open and transparent network would allow for better interoperability imo. Not saying there aren't fundamental issues to be solved with using blockchains, but it's a new path to be explored.
The speed of the blockchain doesn't necessarily have to be slow. It depends on how decentralised and safe it needs to be. It's possible to create a "private" blockchain for some use cases. I don't see web3 as open in the sense of open to the whole world, but open to whoever the stakeholders are.
> Instead of having different databases and APIs that are hard to integrate with one another, a blockchain could be the central storage and transactions handler that different systems interface to.
Couldn't this be done with something like an enterprise service bus, without the blockchain?
> Booking through a smart contract [...] There's no DB that can be hacked or go corrupt
But you have moved the hacking problem to the smart contract instead, and last time I looked those seemed a lot harder to make secure.
I see more and more of this attitude these days: "Stop spreading disinformation. Educate yourself"
A useful contribution would be to point out how exactly the GP is wrong.
I can imagine the current international banking system get upgraded with a blockchain like technology such that you don't need a central bank of central banks.
But the web3 guys simply want to compare detractors to luddites
my argument isn't that the GP's information is wrong per se, but that gross oversimplification through slapping labels like "scam" and "bullshit" against the merits of a technology is blind, just as blind as people who worship the blockchain.
my argument is for us to make our cases in an enlightened and civilised way instead of calling out names
And still, you have utterly failed to tell -- either in an "enlightened and civilised" or in any other way -- why and how this whole "Crypto" fad isn't scam and bullshit.
Until somebody does, the null hypothesis remains that it is. (Use some cuter name if that makes you feel better, but it is what it is.)
The fallacy of false dichotomies. Things aren't either totally useful or totally a scam. That's what I'm trying to say, we shouldn't jump into quick conclusions one way or the other, especially without trying to really understand first.
I have my views on positive use cases for the blockchain and/or cryptocurrencies, and I got that by learning and building stuff with it. On whether the technology is a net good or bad to society, I don't know.
One can refuse to participate in anything without completely dismissing its merit. But that's the polarised world we live in :/
Yadda, yadda. Who said I'm 100-0 on the "Scam!" side? I could be 99-1, or maybe even 90-10. Even if I were 60-40, what do you expect -- that I should argue for how it's not a scam?!?
But, hey, you seem to be closer to 100-0 than to 99-1 in favour of "Utopia!".
You would be a lot more persuasive for that side if you didn't natter about meta shit like "fallacies" or "false dichotomies" but in stead presented some actual arguments.
It's funny how HN is negative towards crypto and web3 (see all upvoted articles on the topic, and related comments). Yet can't seem to stop talking about it.
I get it, you don't like it.
So I agree with your last point: let's all please move on.
I’m pretty much convinced that crypto stuff is a scam. Still, I want to question the mob. We only get better understanding, doesn’t take anything away.
I like hashing things out but whenever there is a huge bandwagon effect, I am increasingly getting more skeptical. Happy to be wrong but we need skeptics that question mob mentality.
There are several recent examples of this: 1) Inflation 2) COVID origins (Lab leak) 3) Zero-COVID policies and lockdowns.
I always question these things - what if we are wrong?
Well as long as there is a lot of tech hype about it we will continue attempting to cut through the bullshit buzz words and point out the good and the bad and the worse.
A few months ago I agreed with her entirely. Tether is an unbacked fraud and NFTs are being front-run [1, 2]. The mid-level marketing Ponzi vibe is crazy. The latency of applications on the blockchain is atrocious. But more recently after learning from and interacting with people building in the space my assessment changed. There is an interesting intersection between tech, communities, and economics. There exists a transparency in the open-source code of smart contracts that will disrupt the current gatekeepers like the internet did.
Certainly, there are problems, but some things will live beyond the crash that is coming and change things in ways no one can be sure of. The internet started in the 1960s and was opened up commercially in 1989.[3] It feels like we are somewhere between 1995 and 2000. The energy feels similar with people trying to shove old paradigms into a new world, vaporware companies, and insane investments. I don’t think we’ve seen the top and it will likely make the crash of 2001 look small by comparison. I may be wrong, but if I’m not, it still is early.
I'm sorry, I'm not trying to call you out personally, but this is itching my brain something fierce so I have to blurt it out, and hey, it's the internet. A little derailing never hurt anyone.
It's amazing to me how universal the "I used to be a non-believer" line is in evangelism. From the classic "I used to be an atheist but I've been born again" to all the members of political party A claiming to have been a member of party B before seeing the light to technological evangelism.
That’s a nice little Kafka trap you’ve constructed to disregard the people who change their minds away from what you think. So every time someone changes their mind and uses their previous opinion as informative you are going to non-committally imply it’s “evangelism?”
It's not really a trap -- it's more a rhetorical tactic.
The trick is that when you say "I used to believe X, but now I've realized I was wrong and believe Y", you can get away without giving evidence for why X was wrong and Y is right. You appeal to a commonality between you and your audience (your audience believes X, you used to believe X) and by presenting your change you imply that they are being left behind, that they have missed something you have seen.
It's such an effective rhetorical tactic that speakers will sometimes make up a conversion experience to use in their evangelism, even if they have always been a member of the faith.
There's nothing wrong with changing your mind, with adapting to new evidence. But you shouldn't confuse someone's declaration that they have changed their mind with evidence for the position they have adopted; that's where logic and rhetoric diverge.
(And again, I'm not trying to start something with the GP; I am fascinated by the universal utility of the rhetorical device more than this specific case.)
Late to the party but FWIW I used to be an atheist and then a Buddhist and am now a Christian...
My attitude is very different from the evangelist’s, it says “look that was an important part of my journey and if that’s the direction you’re going, don’t let me dissuade you. I can tell you why those didn’t work for me but I can’t hold up my present consciousness as “the only correct thing, believe as I do or else you are irrational or anything like that. Heck I am sure that we are both irrational in innumerable ways and why would I pretend I’m more sane than you?”
This fatalism also infects a lot of how I teach things like physics, I tell people a lot that “learning is pain—or more precisely, learning abstractions relieves a pain and chaos and difficulty such that you can only truly absorb the abstraction when you have felt the confusion it addresses. So I can no longer pretend that ‘now that I have suffered through all of that, here is the Right Perspective so that you don't have to!!’... I’d have to take you through the suffering to get to the teaching on the other side.”
I'm sorry, but I will do this: I used to think like you're thinking. Pointing other people's logic fallacies, understanding sophism and the logical soundness of arguments.
Logic, for human debates, is very nice in theory. But there is a reason humans adopted shortcut thinking and don't use logic all the time. We are not robots. We don't have infinite processing capacity, and statistics and probability save A LOT of time. For example, doing strawmen fallacies is useful. It allows you to filter through a lot of crap before investing time in digesting whether what that person said makes sense or not. If you would go into any conversation with a blank state of "Let's analyse the logic here" Good luck with that.
So we adopt shortcuts. What shortcut is he doing? "I'm like you" is indeed establishing commonality. The person is saying "I get where you're coming from, i've been there, so I understand at least some reasons why you currently think that way." This is useful if the person is being honest because it let's you know that this person might be saying something more valid than if they had no idea where you're coming from. It means they were once in your position, and something made them switch. It's different than if they never had been in your position. They never had to think anything through. So knowing this is useful. This saves time. Is it fool-proof? Not really. People can lie, or might have not thought that much about it anyway, but like I said people are not robots, and we can't analyse each argument like if we were one.
So rather, let me also help make a shortcut and your argument more clear: Don't call out this behavior, which from an honest person is good, call out what you're actually thinking that he's doing - that he's trying to manipulate readers. Why you would think that, I don't know.
stating that you used to be a non believer isn't necessary. he could have made all those points about blockchain without that piece of information. the GP's point is that the decision to add it is worthy of suspicion
Seems like a reworking of the "everybody has an agenda" retort you see so often these days. It's a slippery slope that only leads to dying a curmudgeon, as all chances for new perspectives were rebuked as agendas/evangelism/propagandist/etc.
If the comment gave any actual reasoning, it wouldn't be open to that criticism, but as it is, it's empty hype which deserves all the criticism it gets.
Yes, to say that you have changed your mind about something as if that carries any particular weight in favour of that something is "dangerous" to the recipients of your message, as it's an underhanded debating tactic designed to persuade them of something that has no actual persuasive arguments in its favour.
can you point to where in the comment OP indicates that his opinion carries 'danger' for the audience? the comment is literally "i used to think this was irredeemable as well, however my personal opinion has shifted, caveated by the fact that i still agree that there are tons of scams and a crash coming"
Sorry, I'm not quite sure what you're talking about. For one thing, nobody else has "literally" said that; your comment is the only one Algolia can find with those exact words.
For another, I can't quite see what's not to get; what is it you're not understanding? saalweachter pointed out that "[i]t's amazing to [them] how universal the 'I used to be a non-believer' line is in evangelism" (Further expounded upon in https://news.ycombinator.com/item?id=29948754 ); throwaway98700k simplified to "[i]t’s a dangerous attitude because it has a paternal edge to it"; you asked whether it is dangerous to say that you have changed your mind about something; and I tried to explain that yes, it is, and why. (You might notice that my reply, like your question, was couched in quite general terms: The danger of "conversion" claims in general, without reference to any particular "OP" in this thread.)
But, to explain it again: No, of course OP doesn't indicate that their own opinion carries danger for the audience. (Would you?) That is precisely the danger, that "OP" (assuming you mean poof131) didn't acknowledge that their "conversion" isn't an argument in favour of "conversion", while still mentioning it as if it had something to do with anything (which, as saalweachter explained, tends to carry convincing weight in people's minds even though it logically shouldn't). Sorry, I don't know how to explain it better. Except, perhaps -- did you think this discussion is about whether the "conversion" claim would be "dangerous" to OP himself? That's not it. The danger is that conversion claims tend to persuade people more than they should; the danger of people getting duped into believing things that aren't true just because someone successfully (maybe even unconsciously) uses a rhetorical tactic.
AFAIK, I never claimed OP themselves indicates that their opinion carries danger. That's precisley why I agreed with the posters who did it for them, and spelled it out to you in my GP. Is there anything else in that, that you still don't understand? Besides your misapprehension that I claimed "OP" had said that, I mean (or possibly that the danger mentioned would be to not to "OP" but to the audience)? Which I sincerely hope is (are) thoroughly dispelled by now.
Alternatively, what if they simply learned something new which caused them to change their belief in something? It's better to focus on what caused their mind to be changed (it may or may not be bunk) versus focusing on the fact that their mind changed at all (which can certainly be a good thing).
> what if they simply learned something new which caused them to change their belief in something?
Then they would have shared that, instead what we got was indistinguishable from "some charismatic people dupped me and/or I'm in on the scamming now."
It's "I didn't find any evidence for God, so I stopped believing." vs "I believe God is real but I can't prove it".
When somebody is telling me they think God is real, they're trying to sell me something, or they think it's important to tell me.
When I tell people I'm an atheist, I probably didn't want to have to tell anyone, and I genuinely don't care what you believe unless you're using it to hurt others.
just look at the OP thread that led to these discussions: the author is vocally decrying blockchains. if you view anti-crypto as the atheists in this analogy then they sure do make a lot of noise on HN (these kinds of posts routinely make the front page).
Assumes facts not in evidence. Show me a "decentralized alternative" that doesn't a) reek to high heaven of Ponzi scheme evangelism or b) burns resources like there's no tomorrow, and I'll be all ears.
But that's not what's being touted here. The current Crypto-"currency" fandango has quite enough downsides as is; notice that it's usually its proponents who claim that any arguments against it are about its "decentralized alternative"-ness.
there are many non-PoW chains and applications built on top of them that meet your criteria, and are already benefiting from the decentralization of these networks. I wrote about one case here:
> and distributed design in the ethos of “web3,” a poorly-termed yet novel paradigm
Half right, half wrong, IMO. (Guess which is which ! :-)
> This marks the death of the website, and perhaps the end of Rafael Lima’s involvement. Yet, the overall community spirit, as well as its tokenized assets and media files, appears largely unaffected. A suite of forks and competing platforms have sprung up in its wake
If the death of one particular Web site lead to "forks and competing platforms"... Then it can't have been very decentralised at all, right? Because if it were truly an "ecosystem" that shouldn't have mattered at all, AFAICS.
But then, later:
> these pillars of decentralization seem to be working.
> These tokens, cryptographically signed by me (the artist) and pointing to a particular generative artwork of mine, have been completely unaffected by the website’s shutdown. The records of ownership and provenance continue to be upheld by the distributed public ledger of the Tezos blockchain, and each token still sits comfortably in their respective owner’s wallets.
OK, so my original interpretation of your preceding paragraphs was overly pessimistic. Or perhaps you're actually underselling it in those.
But that all still leaves me with a question: WTF is this all supposed to be good for?!? What do these distributed high-tech ultra-cool über-Web-3.0 "tokens" actually do?
Is this supposed to be like, say, litography: "This is one of five identical copies signed by the artist. They're only genuine if presented in conjunction with the artist's signature"? Because they each represent only the "rights" to (display, or something?) one copy of the artwork; not the actual copyright or anything, right? But do they really even do that... I mean, OK, sure, they may "represent" that right -- but AFAICS they don't do that better (and arguably worse) than any other, non-blockchain-based, system; they sure don't protect any possible "rights" better than some (horrible) traditional DRM system. Owning a self-proving "token" only proves that you own that token, not the file that it represents. So how, exactly, does the token actually "represent" the file?
If I wanted to rip off your art I'd just take the actual art, without giving a fuck about any "tokens". I would just download the actual graphics file, for instance from the link you so graciously provided. (And, hey, spanning tree sketch 01 is really quite pretty!)
So, to sum up: You make computer art, I get that. But what's all the Web 3.0 Crypto Blorkchain Token foofaraa around the art goood for? I'm not seeing any usefulness at all, any justification for the whole opera.
Now all that's missing is the explanation of what it's all for. :-)
[EDIT:] But that's just my personal wish, in the larger context. Sorry, forgot to note that you'd fully answered my original (G[G...?]P) query for something that doesn't stink of scam. [/EDIT]
The parent's perspective does not come across as an evangelist's though. Quite the opposite. It's balanced, seeing the hype for hype, seeing the flaws, and yet seeing that there is still some truth and potential buried in there. The world is grey.
You know, it's funny. I've worked in and around analytics for a long time now, and I've had the thought that blockchain enables the following.
1) A common "universal" transaction data source
2) A shared, readable format
So the thought occurred to me that as soon as blockchain apps/currencies became popular, people would want analytics on them. There would thus be a startup opportunity for unprecedented analytics visibility into transactional data from a third party without needing to build bespoke integrations into high security/compliance systems.
If a blockchain backed currency was widely used, a third party could easily estimate the real-time sales flow of every brick and mortar store location. You could have real-time auditing and quarterly tracking of both public and private corporations available from a third party. Asset transfers, smart contracts, and their real world equivalents could be instantly monitored - allowing the early detection of emergent supply chain bottlenecks.
The problem with all of this is that in the 5 years since I had this idea, the only use cases for BTC and other cryptos has been price speculation. The market for such analytics products is effectively zero.
There is no future in third party analytics because any "blockchain" that is globally adopted and used for more than shitcoin speculation will be zero knowledge
What do you mean, “will be zero knowledge”? How does that apply to a blockchain in a currency context, when validating a new transaction requires knowledge of both parties’ transaction history?
With zero knowledge proofs, you do have their transaction histories, and you can verify that they are consistent, you just can't tell who the parties are or the values they're transacting
Making all their real-time sales data public, and thus available to their competitors, doesn't seem like something most companies would want.
If the blockchain does enable this, wouldn't that just lead either to 1) companies not adopting blockchain, or 2) some solution for hiding the data and defeating third-party analytics?
Possible, however having this data available makes accounting, and taxation trivial. Money laundering, fraud, theft, and other illegal activities also become extremely difficult to hide.
Which is to say that investors, governments, financial institutions, and small businesses unable to afford external auditing and accounting probably want this capability more than individuals. I'd argue that our current lack of financial transparency may be more of an artifact of banking technology limitations rather than an intrinsically desirable property.
You were right, blockchain analytics was a great startup opportunity and there are already a bunch of companies, like Glassnode, doing blockchain analytics.
You also seem to be missing a lot of interesting stuff happening with cryptos if you think it's exclusively price speculation.
GlassNode's tagline is "Time crypto market tops and bottoms.", I don't doubt that simply analyzing the exchanges is a valid market. But not one that I think is particularly large, particularly not when the exchanges can add their own analytics at any point.
IMO social media needs competition but I don't think it will be disrupted by blockchain or decentralization. It will be disrupted by a continued pursuit of competition by doing things like supporting net neutrality. That keeps the playing field level and prevents current big players from becoming further entrenched. Big tech's monopolies are encouraged by lower-level-monopolies owned by Comcast and the other internet media conglomerates. To solve the problems higher in the tree we should get at the roots.
It is somewhat disruptive to banks. You can invest stable coins and get interest for example which is higher than bank interest. And the operator doesn't need to spend a fortune applying for banking licenses for each country they operate in.
Absolutely not. The reason bank interest is lower is because the FDIC ensures that you get your money if the bank stops existing. If the company backing your stablecoin stops existing, what are you left with? Nothing, of course
This not disruptive. This is just normal investing with all the risks attached
According to Nexo "Disrupting the financial system, one bit at a time." they have 3 million users on their saving platform. (https://nexo.io/about-us). I haven't used them and am not recommending them but there seems to be something going on there.
You say this on a thread that confirms Tether to be an unmitigated fraud. How and why are we supposed to trust in USDC, USDP and all the other permutations of USD to not be frauds themselves. It is easy to give a 10% return when all your really doing is offering unbacked IOUs
> A few months ago I agreed with her entirely. Tether is an unbacked fraud and NFTs are being front-run [1, 2]. The mid-level marketing Ponzi vibe is crazy. The latency of applications on the blockchain is atrocious. But more recently after learning from and interacting with people building in the space my assessment changed.
I feel like a lot of the cryptocurrency critics commit the "fallacy fallacy". That is, they have the following reasoning: people believe crypto is good because of X, X is false, therefore crypto is not good.
Yes, there are a lot of people who are into crypto because they think it's a way to get rich quick. Yes, there are a lot of guru technical analysts who sell bullshit dreams on their Youtube channels. Yes, there are a lot of criminals who use cryptocurrency. Yes, crypto attracts a lot of charlatans and snake oil men. Yes, there are a lot unbacked stablecoins and shitcoins.
Given the above, it's easy to dismiss all cryptocurrencies as a scam. But when you dig a bit deeper, you'll find that there is true technical and financial innovation. For me, Bitcoin's potential to be a programmable money without government or central authority is a very powerful idea. The idea that you can be your own bank and do p2p electronic money transfers without an intermediary. That has never been possible before.
I could go on but my point is that even if there are many wrong reasons people like X, it doesn't necessarily mean that X is wrong/bad.
Everyone doing P2P transfer and bypassing traditional banking institutions is a powerful idea... but ultimately everyone needs to agree on a single medium of exchange, otherwise efficient market pricing is too hard.
And it's debatable whether fiat will ever whither and die. The Government will ultimately have to endorse a currency for tax purposes, and they'll always seek to control the inflationary environment so they can maintain a workable budget and keep public services afloat.
Just a century ago or so, banking was only for large corporations. Commoners and small businesses all used cash and exchanging bits of valuable metal was the norm. I mean, believe it or not, we had good reasons to abandon that simpler system in the first place. Things are better now. Markets are more efficient.
> but ultimately everyone needs to agree on a single medium of exchange, otherwise efficient market pricing is too hard.
This is one place that there is something interesting in the crypto space, but because it's so "inside baseball"/esoteric, it doesn't usually get any mention on skeptic's forums. Given asset A and asset B, given individual A with asset A, B with asset B, and C who wants to trade their asset A for B, how do you get all three to come together and make it all work. The fact that there
must be exchanges is obvious, what's less obvious is how they actually work, how individuals A and B incentivized to participate, and what sort of payment they get out of it. Well, that's one of the not-entirely-trivial usages of smart contracts I've seen,
where A and B get a payout and C gets what they want, but with more than 3 individuals involved. It's not actually important to anyone outside of the crypto space but it's interesting to take a look at the implementation details for the curious.
Yes, I’m a strong believer in cryptocurrency, but I don’t believe any current cryptocurrency will be the one that changes the world. They deserve praise - some of them - for laying groundwork, but I tend to believe that the world-changing crypto will have to behave more like Moxie Marlinspike described in his recent essay: i.e. truly building on cryptography as the source of trust, not distributed consensus among servers.
The transaction processing mechanism will also have to radically change, and be detached from the mechanism for generating money (even if you believe the two should be proportional, to strictly couple them is an impracticable engineering failure).
As for Bitcoin, aside from the flaws in Satoshi’s scheme itself, the current Bitcoin system has suffered from focussing on its unexpected popularity as a store of value, which popularity has meant it’s incredibly volatile and thus useless as a medium of exchange or unit of account. Of course the slow processing as a result of the mining mechanism is also a major hurdle.
I hope something better will come about soon. I know that it won’t come from the world of people who suddenly idolise Bitcoin because of the cult around it. It’ll come from the people who were capable of reading the original paper and seeing its potential even before it was in the news - that’s a tiny subset of crypto enthusiasts, but I hope they stay motivated.
(Final thing: it’s ‘wither’, not ‘whither’. ‘Whither’ means ‘from where’.)
Oh I don't know, everybody's carrying around an internet-connected computer in their pocket, it can't be that hard to show current prices in a variety of currencies. But if it is too hard, then stablecoins backed by on-chain assets are another option.
Ohio businesses can no longer use Bitcoin to pay taxes. Don’t worry, though. Sprague went on to say that in the 10 months since OhioCrypto.com launched, less than 10 businesses have chosen to pay their taxes in Bitcoin or other cryptocurrencies. No one is really going to miss it. [1]
Yeah, sure it's that simple. Hey, isn't this all about decentralising power, everyone being their own bank? So let's be really decentralised: Everyone should of course be their own central bank ("Fed"), and issue their own "coin".
So when I want to buy something from or sell something to you, I'm gonna say that a MyCoin is worth ten YouCoin; you'll presumably try to claim the opposite.
No one should be suggesting that 100% of crypto is a scam and that there will never be anything useful in the crypto space. Vitalik seems the be operating with best of intentions and IMO the threat of decentralized money has already effected the central banks in their thoughts around inflation.
My main problem is similar to the original article here. In 2014 Bitcoin was "The future of micropayments" 6 years later and now the narrative is that "Layer 2 networks are the future" It would be great if the crypto people could stop talking about how great the future will be and just deliver what they are promising
>But when you dig a bit deeper, you'll find that there is true technical and financial innovation.
I will give you the technical innovation, but I really have not found anything financially innovative about cryptocurrency. What does crypto do that traditional currencies or payments systems don't? The only thing I see is that it largely replaces the old financial elite with a new financial elite and maybe under the right circumstances reduces fees for transferring money. That seems to be it unless you count circumventing financial regulation as a financial innovation.
Seems unnecessary to nitpick innovation between the disciplines.
The technology enables many new tools to be developed and many old tools to be augmented. Saule Omarova (Biden’s comptroller pick who resigned) had some interesting ideas in her papers/essays. DLT-based deposit debtor accounts being offered by the government was one that I thought would be pretty great.
>Seems unnecessary to nitpick innovation between the disciplines.
Cool technology has no value if all it is is cool technology. The important question is whether it enables something that wasn't possible before that technology. I have not seen a convincing example in which crypto does that.
>DLT-based deposit debtor accounts being offered by the government was one that I thought would be pretty great.
For example, how is this improved by using a distributed ledger here especially considering that this program would already be centralized by the government?
Nah, it’s like this: people believe crypto is good because of X, Y, Z, A, B and C. All of them are false, except for C in some odd circumstances. Therefore, the current state of crypto is not good.
> But when you dig a bit deeper, you'll find that there is true technical and financial innovation.
Ah yes. The good old "just google it". There's literally not a single "dig deeper" resource on the internet that explains the need for blockchains/cryptocurrencies etc.
But sure, there are a lot of "innovations" with recursive circular "innovations" (like currency speculation, HFT and flash loans, all of "innovatively made available" by regurgutating the same fatasy tokens and pretending they are worth something)
> Ah yes. The good old "just google it". There's literally not a single "dig deeper" resource on the internet that explains the need for blockchains/cryptocurrencies etc.
> I just named a rather massive one in my comment.
Do you mean this one? " For me, Bitcoin's potential to be a programmable money without government or central authority is a very powerful idea."
It's really isn't a true technical and financial innovation.
So, you have a slow and inefficient VM that runs an esoteric programming language, and all this VM allows you to do is exchange fictional tokens whose primary value is derived from ... trading fictional tokens. That's all there is to this great amazing innovative idea.
> The idea that you can be your own bank and do p2p electronic money transfers without an intermediary. That has never been possible before.
Of course it has. Never on this scale, true, but "I will print my own money that you can only use in these specific circumstances, otherwise you have to convert it to actual money at severe discount/penalties" is probably as old as the world itself.
> I just named a rather massive one in my comment.
You named one that was envisioned by the creator(s) of Bitcoins 13 years ago and was subsequently abandoned. Today bitcoin is marketed as a store of value, not money. Also the idea that it is a P2P money without intermediaries is laughable. What are miners other than intermediaries in a transaction?
> What are miners other than intermediaries in a transaction?
Additionally:
What is "programmable money" without programmers writing unverifiable undebuggable code in esoteric languages other than intermediaries that you have to trust?
Sorry to be blunt, but you both demonstrate a poor technical understanding of Bitcoin. Miners are not "intermediaries" and it is possible to send/receive Bitcoin with any regular programming language.
The links you posted refer to Ethereum smart contracts which are indeed prone to programming errors. The tooling around them is improving (e.g. debuggers, verifiers) and there are a couple of multi-billion dollar smart contracts which have stood the test of time.
> Sorry to be blunt, but you both demonstrate a poor technical understanding of Bitcoin.
Sorry to be blunt but you are demonstrating your poor reading skills.
> Miners are not "intermediaries"
I have some bitcoin. How do I send them to you without miners?
> it is possible to send/receive Bitcoin with any regular programming language.
dmitriid was talking about, what you called, "programmable money" and not about sending/receiving bitcoin. You don't need knowledge of any programming language to do that.
Ah yes. Because with "programmable money" we now have untrusted intermediaries: programmers who code scammy contracts (at the very least you'll need those intermediaries).
And don't forget those who code the wallets, and the exchanges, and the people who will convert your tokens into actual money you can buy stuff with...
Ah, it's so good to finally get rid of these "trusted intermediaries like PayPal, Visa, a bank..."
Oh wait, my money is gone, how do I revert the transaction?...
> but you both demonstrate a poor technical understanding of Bitcoin.
No, we don't
> smart contracts which are indeed prone to programming errors.
Indeed. So. In the context of "potential to be a programmable money without government or central authority" you literally have to depend on an intermediary to write a smart contract and depen on that intermediary to write this contract correctly.
> The tooling around them is improving (e.g. debuggers, verifiers) and there are a couple of multi-billion dollar smart contracts which have stood the test of time.
Either all this is "too early" or "it has stood the test of time". You can't have both.
The fact that some contract exists, and handles "multiple billions" in no way, shape, or form disprove my original statement: "Programmable money" relies on intermediaries in the form of programmers writing unverifiable undebuggable code in esoteric languages
' Programmable CARS relies on intermediaries in the form of programmers writing unverifiable undebuggable code in esoteric languages. '
I am also skeptical of the current state of programming in autonomous cars. It's buggy and not perfect today. Even the code in anti-lock brakes is unverifiable and esoteric.
/s
I have wondered for awhile why the crypto mega-whales in my vicinity are trading USDT at par or better over the last year or two.
My conspiracy theory is that when insiders trade a distressed asset at par or better it’s often a bailout expectation that’s really being traded.
Who has unimaginable access to financing, a “stablecoin” going so/so, and a primary line of business critically dependent on Tether, like, I don’t know, a massive exchange with the highest volume pairs all sharing USDT as quote?
It’s not that hard. When Bitcoin goes down, people like tether because it’s “safe” at $1. So bitfinex makes more tethers and trades them for bitcoins. When Bitcoin goes up, bitfinex sells the Bitcoin and gets dollars.
It’s fractional reserve banking swapped around, with no reserve requirements. The market is the bank.
And because bitfinex is not obligated to redeems tokens for $1 they have no risk. It’s in their interest to keep the market price at $1 because the longer it runs the more money they make but if there’s a run on the currency they can just shrug and go home with their bag of dollars.
This is like giving central-bank levels of power to private entities. Which obviously follow from de-centralization. It’s insane.
The only way this could be a reliable replacement for our existing financial systems, would be with strong oversight from.. some kind of central entity that acts on behalf of society’s collective best interests.. staffed by people chosen through popular voting..
I stay away from USDT. The sooner it disappears, the better.
We no longer need central authorities to create good trusted products. Centralized can suck (communism, Federal Reserve bailouts of banks they regulate). DAI decisions are decentralized and done by the DAI holders. You may want to check it out.
The price of things like USDT are effectively set by Tether rather than the free market. If Tether have billions of US$ and offer in the market to buy back USDT at 1:1 then that's what they price will be near enough.
What you've described is metastasized moral risk. We could argue that maybe some risk should be rewarded. But not all risk, such as spending billions in beanie babies as a corporate strategy.
Eh, there are some important distinctions here. Pricing risk is an activity with fairly clear value, and as a result you can make a ton of money by being good at it. Assuming risk is something that every individual and organization does to one degree or another, and to the extent that they do so in a rational way it’s because they are pricing risk well or delegating that.
Your use of the word moral makes me think that you might be talking about shifting risk off onto others. Keeping the upside in some more favorable ratio to handing others the downside is (IMHO) immoral but also one of two main ways that people get rich, the other being inheritance.
Well, as opposed to hearing "oops our black box implementation of your information got hacked", I honestly don't mind the trend of "read the contract, it is code". Sure it can be misleading, sure it can be intended to trick someone. However, code is law, and even backdoors are "code". Instead we should fix the backdoors so that code can be reasonable "law".
Every time a nascent technology bubble crashes (dot com, AI winter, crypto...) speculation gets reset, scams and projects with no future get wiped out, and the space gets healthier.
And yet you still don't name any actual useful applications!
The Ethereum world computer has 300,000 nodes, and yet has 1/5000 the computation power of a single Raspberry Pi 4.
Except for actual cryptocurrencies, all the "web3" applications could use boring old 1980s vintage cryptography, be just as distributed, and run ten thousand times faster and cheaper.
----
So far the only way anyone has ever made any money from cryptocurrency is to sell it to someone for more fiat currency. In fact, in real terms, it has net lost money because of the huge amounts of electricity expended.
So once people such as yourself purchase cryptocurrency, they know in their hearts that the only way they will make more is if further people buy into their Ponzi scheme.
The big question in my mind: is this the internet in 1997 or expert systems in 1982? It could be the next big thing. Or
it could be an interesting idea that was oversold and overhyped, that never really disappeared but became irrelevant as its real value became a commodity that found its way into the software of established companies.
The worrying thing (for me) isn’t which one it is. The worrying thing is that so many people seem incapable of even making a creditable attempt at answering that question and analysing its fundamentals. This has opened my eyes to how many people only think through the prism of “well, this has got really popular lately, and the internet did that too, so this will be the next big thing even if I don’t know why!”. Survivorship bias is very very real.
Or I guess many people are not dumb at all, they just simply want in and profit as long as the hype is still going and they (hope that they) are not left as the last people holding the bag. They might find all sorts of excuses to try to convince the others, even to some extent themselves, when they’re just fundamentally doing the above.
> is this the internet in 1997 or expert systems in 1982? It could be the next big thing. Or it could be an interesting idea that was oversold and overhyped
...and then returned a few decades later to be oversold and overhyped some more, this time as "Deep Learning" or "AI".
Seems the alternatives on offer are scam or scam. (Or scam, scam, scam, ham, eggs, and scam.)
A nitpick is that [2] isn't front running. Front running is where you figure an institution is going to buy lots of some stock and get a buy order of your own in first, typically done by brokers.
Making fake trades to make the price look like it's going up can be called market manipulation in this case I think. This is also called painting the tape. A similar but slightly different scheme is wash trading where you basically sell an asset to yourself to make it look like that's the price and that there is trading volume going on. There's a lot of this kind of thing going on with NFTs.
> All that to say, a lot has changed in the technology world in the past six to twelve years
It sure has. But not really that fundamentally, since 2009.
A lot has changed in the blockchain space too. Just because you don't know about it doesn't mean it isn't true. A lot of those changes are on par with some of the tech advancements mentioned before my quote in the article. In 2009, you had bitcoin, so basically a distributed consensus workaround that enables artificial scarcity of fungible digital items. Today, you have sharded blockchains, triple entry bookkeeping, proof of stake, blockchains that handle incentivized file storage, alternate name lookup systems, purchasing compute power on an automated order book, liquidity pools (a major, major fintech advancement if you're not familiar with then), arbitrary code execution with a canonical record of it.
It is absolutely still early days.
Because these are decentralized consensus networks, there's inertia. Bitcoin is never going to be cutting edge. Because there's a lot of money to be made, there will be scams. Most of the "cutting edge" isn't cutting edge at all. But there are some real developments happening, allowing novel use cases, enabling very interesting things to be done.
I'm not a fan of the whole web3 concept. I think 99% of the selling points that the charlatans hype every market cycle are nonsense. But a little digging beyond an animated JS bloat landing page (a red flag all it's own) and you can quickly figure out what projects potentially have something and what's bullshit. Or you can do what I do and assume a project is a scam until proven otherwise.
> blockchains that handle incentivized file storage, alternate name lookup systems
It would be a shame if IPFS and Filecoin end up in the dustbin of history if the web3 music stops. They're the only reasonable non-financial applications of blockchain tech that I've been able to wrap my head around to date.
Yep, they're great. I prefer IPFS without the incentive layer of filecoin, but it is interesting to be able to incentivize storage in protocol, and there's obvious use cases. Plenty of people pay google drive or Dropbox for extra storage. Democratizing access to the demand and supply side of that market is pretty cool.
There was a project called Golem aiming to do the same thing with compute, it was pretty cool last time I read about it. Not sure how far along it is, and I'm sure there are other projects aiming to do the same thing.
Well then what's the point of this discussion? The thread is "how has it advanced? How long can you call it early days?" If you just stop reading rebuttals as soon as they're mentioned you're better off talking to a wall, and you'd waste less people's time that way too.
Because technical minutiae are completely irrelevant if they don't eventually convert into useful features for products with at least some level of mass-market appeal.
I have yet to see a single enticing idea for blockchain/web3/whatever for a consumer or business not related to finance. If that requires an ever-increasing number of technical challenges to be solved for that to happen, then we're just looking at vaporware.
> Because technical minutiae are completely irrelevant if they don't eventually convert into useful features for products with at least some level of mass-market appeal.
Why?
You might care about building businesses, mass-market appeal, blah blah, but many (most?) technologies were created because people thought they were cool or interesting or just because they could. Nobody knew what LASERs were for when they invented them.
To me the point of tech is to invent stuff and see what people do with it, not to make money or feed the economy or whatever, that’s a byproduct. Which coin is worth more money or what will gain mass market adoption is the least exciting part of the whole thing to me. We started with bitcoin having BFT consensus and proof of work to create decentralised, permissionless value (volatile or not!) but we now have multiple chains that can execute arbitrary code, sharding, performance improvements, lightweight chains, various types of proof of stake, token standards, automated market makers, DeFI, NFTs, DAOs, data availability proofs, IPFS, etc. etc.… that’s incredibly exciting! And if you read the actual academic and published research and see the advances being made, it’s even more incredible and wide ranging, and progress is very rapid.
Of course it’d be nice if _some_ of it changed the world (and maybe it already has), but there’s plenty of time for that and it may only be 1% of the interesting new tech that turns out to do so. So what? It’s incredibly cool just to learn and understand it all and think about what might be. (And sure, buy tokens or whatever if you like them or just fancy a gamble. Do your research and don’t spend what you can’t afford to lose.)
Right when it wasn’t subject to centralized control which could actually, easily, and covertly scam people. Just because you say something doesn’t mean it’s true or smart. Being short in the delusion of being clever is a sin of rationality and you should repent to Hitchens as soon as you can.
Bitcoin is not a Ponzi scheme because IF it successfully achieves a certain level of adoption or usage it WILL have some intrinsic value. The current value can be seen as a view of the average expected future value. A risky bet/investment is not the same as a Ponzi scheme, even if _some_ people are talking it up like scammers.
The fact that YOU do not believe that future will happen doesn't make it a Ponzi, just a bad investment in your eyes. And yes, some people talking up their book and trying to manipulate it's price — a pump and dump — is still a scam on their part, but it doesn't make the underlying asset a Ponzi scheme.
At a bare minimum there are some fringe use cases (no matter how unsavoury - dark web, ransomware, etc.), so I'd argue that barring a major security flaw, even if bitcoin was banned everywhere, the floor price would be >0. (I am considerably more optimistic for long term use cases, but we're just talking about whether it's a Ponzi or not here, which doesn't require any extra optimism.)
I honestly don't know if BTC will end up above the current price in 2, 5, 10, 50 years time, but I do still think it's incredibly cool that we were able to create something with a demonstrable non-zero value and no centralised control.
The challenge now is to keep iterating the ideas, make new weird and wonderful things, throw them all at the wall, and see if anything sticks. Luckily plenty of people seem as excited about that research and exploration for the sake of it as me, so I think we're going to get to find out :)
its interesting that at this point, the arguments on HN have become so one sided and idiotic, that every time i see a web3 article, you might as well skip the comment section. the actual smart people that are into the blockchain as tech and a concept are providing really interesting points/examples, while maintaining a healthy and educated level of skepticism.
then you have the HN holier than thou geniuses who think they have it all figured out because they can quickly scream ponzi over and over. it's fuckin weird. i always subscribed to this forum because it's full of nerds who are deeply interested in tech and can debate things neutrally. so not the case lately.
and this is coming from someone who is deeply interested in the tech and fascinated by some of the subscultures that had been created out of crypto, while also remaining extremely skeptical and very turned off by some of the scams and mindless fanatics that exist. but, i still dive deep into whitepapers, and read a lot to have a good opinion on a subject, like...you should. there is A LOT of interesting shit in this space. i've been into it for a couple of months now and have yet to scratch the surface, honestly.
...yet the comments are always the same low effort crap which makes me realize nobody knows or understands a goddamn thing about this tech on here. really reductive surface level points.
> the actual smart people that are into the blockchain as tech
actual smart or just hustlers? It is a scam. Yes, you can make money from it. But are you ok with ripping people off? Because the only way to make a gain with any coin is to force the next bigger fool to sit on a bigger loss. They might not have realized it but it's there. All of these made up usages are just there to trick people to buy your coin at an elevated price -- but there's still no uses of coins which have a real world use case and couldn't be better done with a centralized database (or sometimes git). I just wrote up in a top comment that when tech does deliver something real it needs no explanation or these discussions: https://news.ycombinator.com/item?id=29951993
You also can take a very lucrative job at Facebook. It might be interesting tech too. I refused one this week.
You can also like... use the technology to get the coins. Mine from your laptop for some BTC. Use some of those 2TB hard drives in your drawer to host files. Sign up for airdrops, provide liquidity in defi... I haven't spent alot on buying any coins and i enjoy the space. I've always treated it like this neat little world that me and my friends can compete in. See who can out nerd the other nerds, have late night rust marathons to do stupid shit with substrate.
You seem to forget that it's about interacting in the crypto economy, not selling all your coins to make more fiat. I wonder how long this fad will last of people hating on crypto because they don't understand it.. Probably forever?
i can tell by this comment that you've spent no time in the space and it's all made in bad faith so i'll just disengage here and save us both the time.
Bitcoin is a scam -- whether you call it a Ponzi or a Nakamoto scheme as suggested by Preston Byrne -- because the players are split into two groups, where each member of one group is guaranteed to win and the second en masse is guaranteed to loose, further they are funneling this loss to the members of the first group.
Edit: I can't answer for some reason below but I can edit this one, it's miners vs everyone else.
That's what the big blockers thought, and they got their own BCH network to show for it. I can't find any adoption metrics to show that the miner-controlled BCH chain has won.
On BTC, miners just run the code and get rewarded to do that simpleton job.
This seems to be an incredibly simplistic view to me. I can’t even identify which of these two supposed groups I would fit into, let alone map it onto the rest of the people I’ve met who are somehow interested, involved, or invested in bitcoin…
But the things I mentioned aren't technical minutiae, they're real technological advances with real applications, today.
> ...not related to finance.
Why place that arbitrary restriction? If all this stuff does is improve finance is that not enough? Again, I'm not a web3 evangelist, this stuff was originally created strictly to create financial tools. All I expect any of this stuff to do is change finance.
But still, the development of new cryptography, new consensus mechanisms, new routing protocols and network topologies, these are all advances that have come as a result of all this and they're not related to finance. Again, just because you don't know about an advancement doesn't mean it doesn't exist.
Several curves are being researched, non interactive ZKPs are getting heavy development and research due to their applicability here, interest in cryptographic accumulators is growing, people are finding novel ways to do old techniques, bulletproofs are an example, look at Mimblewimble, it's an interesting implementation of a blockchain using Schnorr signatures. That's just what I've got off the top of my head.
Do we have proof of stake or do we have a lot of bitcoin folks avoiding criticism about the wasteful nature of most chains by claiming that proof of stake will fix all this.
How many coins are actually using proof of stake?
Why haven't the biggest including Ethereum done so?
The same reason Bitcoin doesn't implement every tom dick and Harry's supposed solution to every technical problem. The big boys have to get it right the first time. Again, inertia.
Ethereum does have proof of stake, a protocol called Casper FFG. It is currently live on the Ethereum beacon chain, waiting for consensus to move the entire network to it.
There are lots of smaller projects trying different protocols they call proof of stake too, as well as different proof of whatever they came up with for whatever reason. Most of them are veiled centralization, some of them are interesting for one reason or another. I'm not here to shill networks or coins so I won't be tossing names around.
Right now Ethereum has 9 million ETH deposited on its proof-of-stake network, worth about $30 billion.
That's running in parallel to the main network, which is still mining. Code to merge the two and eliminate mining is currently running on a public test network. Previous upgrades have all taken less than a year to go live after the launch of their public test networks.
Most of the "proof of stake" coins are some form of delegated proof of stake, usually with an opaque and shady set of highly compensated validators with hidden connections to the project. Effectively proof of authority masquerading as proof of stake. This lets them have big TPS bragging rights while maintaining the appearance that they are running a decentralized blockchain rather than a centralized database with extra steps.
Real, decentralized proof of stake is a hard problem that has only just started to become reality.
Changes in the implementations are not the question. It's application that she's skeptical of. Who has found a reason to use Blockchain for anything other than cryptocurrency?
I actually witnessed one attempt. An actual Fortune 100 built a Blockchain for their public communications. Mostly just an excuse to show off their street cred. It landed with an absolute thud. Nobody cared.
One idea that I am fond of is Nym, an implementation of the high-latency mix network Loopix[0], but with incentives for nodes to act as mixnodes and message providers, using a model in which users pay nodes for their bandwidth. The goal being to provide strong anonymity in the face of a global passive adversary.
I’m not a crypto fan, but I’m not sure what that example demonstrates. A company made an overengineered gimmick just to show off their street cred; nothing came of it, just as they expected, and it was a waste of the engineering. I’m lost as to how this reflects poorly on the engineering technique.
The central problem in this entire debate is two groups talking past each other. The skeptics say "what is it for?" expecting a detailed answer, and the response from crypto enthusiasts is vague and high level; most of what I hear is heavy on words like "revolutionize" and "decentralize" but very, very short on specifics. Or I get argument by analogy to other technologies.
If I heard a single use case where blockchain technology actually created real value in the world, and was better than other alternatives, I'd listen. But it has to create real value, based on the real world and not some fantastical notion of what money is or governments are for.
I think we skeptics want a grounded narrative, and we're stuck hearing a thesis statement and nothing to back it up.
I also find funny how all the fighters for the bright future, peace and rainbows are planning to become filthy rich in the process of making the world a better place. People like Vitalik and Charlie Lee (Litecoin) happily cashed out their coins into dirty filthy USD in 2018 and became millionaires. You remove the chance to become crazy rich and who really gonna stay there?
How about uncensorable donations? For example Wikileaks got blocked by banks and payment processors when they wrote about the war crimes the US committed.
The US could block the banks, but they could never block crypto donations.
Not now that companies like chainalysis exist: the transactions are on a public ledger. Monero was designed for private payments, and its value hasn't exploded like Bitcoin or Eth...
People this uninformed are somehow the vocal majority of blockchain talk on HackerNews. What a seriously embarrassing misconception which demonstrates ignorance on a fundamental level.
I've been in this space since very early on. I've yet to see another problem that crypto solves other than pseudo anonymous transactions, mostly valuable in the black market space.
Of course there are awesome use-cases, but the real problem of the skeptics is that they can't let go of their fiat.
Take Nano for example: sub-second, 0-fee transactions, of any amount, to any (unbanked) person in the world. Of course, there is no way that any other (fiat) system can achieve this (due to operation costs, regulation, etc)
But the response of skeptics will always be "but I have to convert my fiat money". And at that point, it's not free and instant anymore.
But just because the new system loses its benefits because of backwards compatibility with the old system, doesn't mean that it is inferior. Maybe for some things, you don't need to pass through the old system anymore. One example is mining pool payouts, which can do payments through Nano to get the 0 fee transactions. (see https://2miners.com/blog/how-to-get-payouts-for-ethereum-min...).
You can argue that this mining is all a scam etc, but in the end real value is transferred using the most optimal network. More optimal than any central system that you can think of (remember 0-fee, instant trancations).
> ... but the real problem of the skeptics is that they can't let go of their fiat.
>But the response of skeptics will always be "but I have to convert my fiat money".
Here's a thought experiment for you. Your mother/father/neighbour's entire wealth is converted, at no cost to them, into BTC/ETH/whatever. What is their reaction?
Is it, 'thank god we didn't have to pay those conversion fees!'
With the exception of Libya, Western Union supports transfers to all of those countries. Fees look like $3-7 to transfer $400.
Using crypto is unlikely to be much cheaper or faster for me - my salary is paid in USD, so if I want to transfer cryptocurrency I will need to convert it from USD first, which is neither free nor instant. The same problem likely applies to whoever I'd be sending money to in the foreign country - if they need money to buy food or pay rent, its extremely unlikely they will be able to pay in cryptocurrency.
Thank you. This hits at the essence of why “I can send money instantly!” is such an absurd argument.
It’s not money. You can’t use it as money. You have to convert it to money, at a loss.
If that counts as ‘sending money’, then hell, I can send someone an email saying “I promise to pay $100 to the bearer of this note”, and just hope that they’ll be able to exchange that for money at a reasonable loss.
They are different. And sending a FAX is not sending postal mail. And sending email is not sending a FAX.
Sending money as quickly as sending email is not the same as putting paper checks in envelopes in the postal system. Like free speech, bitcoin can't be censored if you hold your own keys. For some people, PayPal censorship and freezing accounts still works okay for them.
So a use case the average citizen doesn’t give a flying fuck about.
Oh gosh, I wish I could transfer money to <country I never had any desire to send money to>~ let’s sacrifice consumer protections, privacy and stability for that said nobody ever.
It’s just like ‘financial inclusion’ from the ilks of Peter Thiel is code for shoveling vulnerable and financially illiterate people into the gears of the pyramid machine
They asked for a use-case, I presented one. And to be honest, I don't give a shit what the sceptics think about it. I just wanted to prove once more that even when you present a valid use-case, "the sceptics" twist and turn to still only see the negative side of it.
Keep being blind, I have absolutely no problem with that. It's nice entertainment here on HN, with all those folks frustrated of missing out on the biggest investment opportunity of their lifetime.
"I didn't miss out, it's just all a scam and I want no part of that"
This constantly-in-hysterics tone is why people find it tiresome to try to understand crypto advocates. Cool - you like your new technology. That’s great. I’ve been in the same boat with countless things and I know what it’s like.
But if you respond to perfectly reasonable and polite questions about its use cases by screaming “you’re just asking these mean questions because you’re jealous!”, then it doesn’t exactly help the impression that the cryptocurrency market are predominantly driven by speculators hoping they’ll get rich like a handful of early fans did.
This saddens me, because I’ve long been a fan of digital cash and its promise. I hope Bitcoin or suchlike can fix its serious flaws and become a viable means of exchange. I’ll cheer any cryptocurrency which seems to be seriously trying to do that. But, respectfully, people like you are what I hate about the modern crypto scene: tribalistic, loudmouthed, unthinking, and obsessed with the pipe dream of getting rich off the next round of buyers, rather than improving our world.
The crux of what makes it popular is decentralization which is a fantastic feature and I'd argue the single feature that it has that regular currencies can't ever have. However, everyone doesn't have a wallet and about 60% of all bitcoin is in the hands of only about 10,000 wallets. It's one of those things, if everyone had it then it would work great but because no one has it, it doesn't work at all. In order to get it you need someone you trust to trade you it, which means a centralized exchange, high fees, and slow transactions. However, if you only ever live in a bitcoin or other decentralized coin economy, meaning you never have to trade out of it into another currency, then it can work for you. Say Tesla accepts bitcoin, and everyonjhe pays in bitcoin, it still has to pay it's suppliers who don't accept bitcoin, this means it has to make a conversion to regular currency, adding an additional step, making things slower and less liquid. It's one of those things that just won't work, until it does.
I don't buy this framing for a second. Crypto is popular, I mean actually popular amongst most people on the ground, only because the price keeps going up; with the implicit promise that it will keep going up. Everything else is creative story telling. On-paper benefits are trotted out only to post-hoc explain the growth (which is mostly there from pumping and people seeing past growth) and to pump the coin further. "Decentralized" is only as important as it keeps the "this is still crypto right?" identity in lay-peoples minds that is tied to magic money out of nowhere. Otherwise it can be weakened arbitrarily.
Centralize it and implement something like M-Pesa, or build it on top of the existing mobile networks. The solution is selling standardized contracts to small hold farmers that pay out automatically; the problem has nothing to do with decentralization or trustless transactions.
The blockchain adds nothing here, and creates a layer of complexity that makes it more brittle.
> The solution is selling standardized contracts to small hold farmers that pay out automatically
And how easy do you think that is in Kenya?
You and I being able to take stable banking and government for granted says more about our own position in the world than it does about the efficacy of the technology itself.
You think Kenya doesn't have even a single, large, stable bank/trust/underwriter? You think they don't have underwriters that can delegate most of the money and authority to overseas institutions, worse comes to worst?
Countries with bad credit frequently issue bonds and instruments in the state of New York. If it's good enough for a nation I'm sure companies can work something out.
I'm still very opposed to the idea of taking a technology and then searching a problem for it. Why? Back in 2017 during the first hype cycle, blockchain companies raised hundreds of millions with ICOs. I became very interested in the technology too, and some friends still work in this space. 4 years later in the web3 era, there is not a single product aside from trading/finance that got traction. Use cases like storing the history of a car on-chain, transparent supply chains, public voting... this all sounds interesting but never made it to product-market fit.
I always assume that I'm wrong, so I'll keep looking for successful applications and I'm sure you can prove me wrong :)
"Omnichain CEO Pratik Soni speaks to Inbound Logistics about the growing number of blockchain use cases in the supply chain, including in reverse logistics, product authentication and sustainability."
Apparently this company started with the idea that they would use the blockchain to make supply chains more transparent. And they raised money from investors with that goal in mind. But they have since retreated from that goal.
I worked with a retailer that worked with Omnichains. None of Omnichains tools had anything to do with the blockchain. Certainly, we were never given access to a blockchain, nor was it mentioned after we had signed the contract. Instead, we were granted limited access to an API that I believe was run with Ruby on Rails and MySQL. So at a certain point this company retreated to traditional technologies, rather than trying to use the blockchain.
This is one example. At some point I hope to write up some of the other examples that I've seen.
I do not believe anyone will ever find a legal use for blockchains that cannot be more easily served with traditional technologies.
> I do not believe anyone will ever find a legal use for blockchains that cannot be more easily served with traditional technologies.
One does not blockchain to build a product in the cleanest, most efficient manner.
One blockchains to have access to investors/speculators that control the gigantic pile of on-chain wealth that has accumulated over the past ten years, who would never sink $100k+ into a poorly drawn picture of an ape with sunglasses if it was running on Rails+MySQL.
This may sound like I'm being dismissive, so let me be clear, I am not - this is an extremely valid reason to chase this technology, and the existence of these (maybe ridiculous and shady, maybe not) massive stacks of digital cash is going to drive a lot of investment in the space, so if there is anything that can "break through" and prove real value beyond just targeting this wealth, someone is going to find it, likely as a side-effect of targeting these whales.
Web 1.0 couldn't have happened without the late 90s tech bubble, and as ridiculous as the Pets.com era hype was, when the dust settled there was much broader connectivity and a real market for the Internet companies that did live up to the hype over the next two decades.
One big issue is that the largest supply chain participants generally do not want transparency because they make their money on opacity. Transparency attracts more entrants, applicants, and competitors. It is business intelligence that provides important things like pricing advantages. When competitors can see your supply chain, they can do all kinds of stuff to make your life harder and gain an edge.
Almost everyone at every stage in the supply chain have an interest in opacity rather than transparency. The people who may want transparency want transparency for themselves but not for others: they want the equivalent of a one-way mirror to spy through. Naturally, people tend to react with extreme negativity to the installation of such one-way mirrors. Actual transparency is desired by almost no one. This is even true at the consumer level: the consumer may want to know the supply chain information for various purposes, regulators certainly want to know it, business partners certainly want supply chain documentation, but a consumer would balk at the notion that they expose all of their credit card transactions to the entire world at all times. It's always transparency for thee and not for me.
Most of the companies that tout blockchain seem to be doing so to attract free marketing and VC funding. Once they have that the real products seem to use the same old reliable tech that runs the entire internet.
There's selling NFTs of ape cartoons, or selling crypto coins or other imaginary assets.
Rails and MySQL are too transitory for that - you'd buy a record in the database only to find the company hosting the database had gone broke or been bought by Yahoo who closed them.
You buy a bitcoin and you can be fairly confident in a decade or two you'll still have it.
> You buy a bitcoin and you can be fairly confident in a decade or two you'll still have it.
You’ll have a copy of some hashes. That doesn’t mean anyone will want to buy them at the price you want or even that there will be an operating network around them.
This is especially important to learn when it comes to NFTs: blockchains are too inefficient to store the media so you’re still dependent on paying for outside hosting (yes, even with IPFS). Because you’re buying a link but not the rights, you would also need to make sure you have the right to even make your own mirror, too.
> You buy a bitcoin and you can be fairly confident in a decade or two you'll still have it.
And it will be worthless. Most assets that NFTs point to are already gone. Because that useless hash you have in your NFT? It points to a centralised storager somewhere.
>Rails and MySQL are too transitory for that - you'd buy a record in the database only to find the company hosting the database had gone broke or been bought by Yahoo who closed them.
Wouldn't working with more robust companies (like banks) solve this?
I guess it does to an extent with things like share ownership. Although there are ongoing costs for the various peoples salaries at the institutions involved.
You're missing the point. The goal when you use blockchain is not to more easily serve. It is all the things that don't matter to you until it is too late, like censorship resistance.
Censorship compared to what? What can’t you post on the internet? Specifically that the government would stop you from, not private companies like Twitter booting people.
There is no censorship resistance with blockchain.
You’re still beholden to the whims of centralized developers and miners.
You’re still beholden to a court order. If the government wants to confiscate your crypto assets they can simply put you in jail until you provide the location of your private key.
If the government can penetrate offshore bank accounts they’ll have no trouble with your crypto wallet.
I’m happily mining ETH with gminer on flexpool.io and selling the coins as fast as I get them just like I did with BTC a decade ago. Because I know this whole thing is a temporary pyramid scheme.
Because when there is an immutable record of all transactions you ever did in perpetuity, you’ll be so much better off in a fascist run country.
The freedom to fuck your life over, forever, in record the moment you make that one transaction that connects your identity is sure worth the fact that it’s uncensorable.
> Use cases like storing the history of a car on-chain, transparent supply chains, public voting... this all sounds interesting but never made it to product-market fit.
Anything that does not exist natively on the blockchain doesn't need a blockchain at all.
If a token on the blockchain would represent you as the owner of a car and one day someone steals your private key which represents your car ownership, that person is now the owner of your car. Still, the car keys are located in your house, the license plate is registered on your name and address, the insurance is on your name.
I guess I don't need to explain further how ridiculous that idea is that a token would officially represent you as the car owner.
I don't see why something like insurance needs a token on a decentralized blockchain. The Bitcoin blockchain needs a token because the token itself represents the value (BTC) inside the network. The token is also needed because it adds an incentive for nodes (miners) to support the network.
Note: this is my current view of it. If someday it turns out it is useful, I am happy to admit that I was wrong.
You're missing the forest for the trees. Bitcoin is broken and will never be more than a speculative asset with no intrinsic value. Blockchains can solve problems. Decentralisation can quickly become federation. Example: a global id system where the "miners" are countries. It removes the need of physical passports and their associated costs and delays.
> You're missing the forest for the trees. Bitcoin is broken and will never be more than a speculative asset with no intrinsic value.
I disagree. It's off-topic so I'm not going start an endless discussion about intrinsic value.
> Decentralisation can quickly become federation. Example: a global id system where the "miners" are countries. It removes the need of physical passports and their associated costs and delays.
As long as humans submit the external data to the blockchain someone can cheat with the data. Actually, cheating is a nice feature if you need double passports for diplomats, spies or informants. The result is a blockchain with permanent records with data you can not fully trust because the data did not exist on the blockchain in the first place.
I'm all for a digital solution instead of physical passports but I do believe this can be solved with distributed systems and international standards, instead of permanent records on a decentralized blockchain.
> As long as humans submit the external data to the blockchain someone can cheat with the data.
I am glad to see someone else who realizes this point. When people were all excited about supply chain blockchains (for example, a blockchain to verify a piece of fruit is picked in a certain place at a certain time, that the transportation truck maintains a certain temperature) I kept asking what stops someone from lying and putting in bad data or tampering with any sensors along the way? There seemed to be this idea that what was on a blockchain was automatically truth just because it was on a blockchain.
I think the only good case is with KSI, but that's not actually a blockchain even if they use the name in marketing.
In their case, they limit themselves to verifiable timestamped witness. Someone can still submit bad data, but now you have a log that at time T entity E submitted document D, and if it turns out to be fraudulent you can't backdate or put a different one for it (could be also used to detect tampering with sensors if you receive something that shouldn't pass a sensor that worked correctly yet you obviously have it)
I'm thinking of a blockchain where the ledger is public read (for verifications) and write-constrained. How can you verify the.legitimacy of the introduced data? Probably some other tool. But it being federated across countries would have the nice property of non-gatekeeping. There are politics in play, but if the UN is possible, só is such a system.
This is all just my theoretical assessment, anyway. And I agree that other standards and toolchain is necessary to add value. Blockchains don't do KYC nor identity verification and a lot of other things.
You’d have to get those countries to agree on a common set of governance rules, and inevitably some bloc of countries would eventually fork and go it on their own because they want a different set of rules (e.g. mandatory biometric data, inability to update passport data like gender, etc). I’m not sure it solves any problems that the diplomatic system doesn’t already solve.
This also ignores that the costs and delays associated with passports are frequently the point — you can’t have a corrupt official ask for a cash payment to “expedite” your passport / visa application if it’s fast to begin with, and doling out those kinds of patronage positions to the right people is often how you build a winning political coalition domestically.
> you can’t have a corrupt official ask for a cash payment to “expedite” your passport / visa application if it’s fast to begin with
And yet this happens. Theoretically the blockchain reduces the entry barrier more, while not compromising on compliance and security guarantees.
You're spot on that countries would have to agree, and different blocks could form. It's no different than trade and visa agreements. The blockchain doesn't solve the problem IMO,it just reduces the cost. Trust in institutions will never be replaced by the blockchain.
I’m not convinced that blockchains would actually reduce the cost or provide any benefit over a federated system where each nation (or group of nations like the EU) controls the data of its own citizens. I run into this problem with nearly every potential blockchain application I hear: it’s usually faster / cheaper / less disruptive to use a centralized or federated system governed by legal agreements that are hashed out in negotiations.
Politics underpins all of it — a lot of blockchain advocates look at blockchain as a way to sidestep political squabbles, when really the politics exist at a lower level of the stack upon which blockchain governance rules are built. A nation could unilaterally cease participation in any blockchain at any time, and use political pressure in other areas (trade, defense, etc) to get other nations to join them.
Blockchains can, and most likely will, be federated. Legal agreements can be managed via such a system. Bear in mind that the blockchain does not solve politics, and all the problems you mention are a problem of the currently most common implementation of a blockchain, which is cryptocurrencies.
But like, why? Sure, blockchain can do a lot of things, but it’s not clear that it’s better than an API for the vast majority of applications while being worse in a number of ways. You can put similar governance rules on an API without the complexity. The flexibility inherent in human interpretation of legal agreements is a key feature of a common law system like we have in the US.
To echo the author’s thesis, we’re no longer in the early days of blockchain. We’re over a decade in and nobody has gained traction with a use case that isn’t purely speculative. That in and of itself should say something.
Blockhains can be as simple as an API. See the 7 layer stack in the Nexus blockchain (you definitely don't need to go smart contract all the time).
I think the author exaggerates a bit the tone. Sure, 10 years is a lot of Internet time. But the steam engine took 50 years to become viable. Then the industrial revolution was a period of 80 years. Put that into perspective.
I guess, by speculative, you mean the cryptocurrency craze.and I can agree is a speculative bubble, an MLM scheme. But then you also have https://cyber.ee/resources/news/digital-identity-and-blockch... . You'll soon have CDBCs. And when it's here, you'll barely remember what this conversation.
I’ve done some work in the supply chain space around blockchain; the problem is that in many industries there is already an oligopoly of 2 or 3 companies that control things. They have no incentive to give up any amount of control; instead preferring to lock their customers in to their products and platforms. Governments are the same in an international sense.
The technical problems are solvable. The political ones are not.
> a global id system where the "miners" are countries.
Can I mine on this blockchain? If not, what stops me? If it's some permission I need, then what's the point of using a blockchain? Why not just have countries issue digital certificates for passports?
It sounds like you're in the "Blockchain not Bitcoin" phase that was all the rage around 2017 or so ("we're going to put cows on the blockchain!"). Most of us either moved on from that to purely on-chain financial chicanery (defi, nft) or became disillusioned with it.
I believe the promise of having an insurance contract publicly verified by a decentralised system is to reduce the inherent costs of the current regulated system.
In my country,and I assume in most it's the same, in order for you to sign a buy contract for a house, there has to be a notary involved. The whole process costs a significant percentage of your already heavy purchase.
A blockchain won't solve all the problems here, but it may cut a few middlemen. And it doesn't have to be on ethereum or bitcoin. The Estonian (or is it the Finnish?) Government already uses a blockchain for their digital id system.
The notary is a teeny-tiny portion of the expense in the homebuying process. And you'd still need a lawyer involved if your transaction involves mortgages (and likely you'd still want one anyway to construct the transaction). Putting deeds on the blockchain changes the homebuying process almost not at all.
As for state IDs... why not just a centralized database with a public API? What does decentralization achieve for a system that is fundamentally centralized. Nobody can issue an ID except the government in this case.
The promise of blockchain is to eventually remove lawyers and all middleman. It can be done already with existing tech. I can easily imagine a smart contract managing property rights, another one managing mortgages, etc. And of course all that has a back door so a court order can rollback a transaction.
if we are trusting courts to have backdoors, does it not completely negate the purpose of blockchains, i.e. trustlessness
if you trust the court, why not just have them store everything on some mysql database and execute all the ""smart"" contracts as regular java code? blockchains are necessarily orders of magnitude worse in terms of performance. why do you want to use an extremely slow linked list based DB?
No, because courts can be elected by voting on the blockchain which gives society a way to control them. And voting on the chain (if implemented right) cannot be controlled that easily by a government.
I’m all for the central database. To enter data into it the government will appoint an agency which in turn will appoint individuals after they pass exams or get their license. The said individuals will have to fill in regular reports that had to be somehow processed and analyzed. Also each such individual required to keep records in a safe manner, sometimes this means hiring a security and a compliance officer. At this point it is not clear if the cost of maintaining the agency and all that people is less than automating the agency of the blockchain.
i dont know how to explain this to you but the only thing that blockchains replace are databases like mysql. if, for whatever reason you needed a security and a compliance officer, then you would still need them even if you switch to blockchains. if you needed to file reports using a centralized db, then you would still need them with blockchains.
the only difference between centralized databases and blockchains is the property of trustlessness. everything else can be done much more efficiently by normal databases. if you dont need trustlessness then you dont need blockchains
> i dont know how to explain this to you but the only thing that blockchains replace are databases like mysql.
This is just one half. The other half is blockchain and smart contracts also replace all the people involved in controlling access to a central database. I can imagine a smart contract that would allow me to transfer ownership of my car to you and get paid in return. I cannot imagine an API to a central database that can do the same. One thing you can do to defeat my point is to show how such an API can be built.
You got me, lawyers can stay :) But a bunch of clerks and middleman are out.
Today the job of a middleman/clerk is to modify a centralized database in a regulated way. They got their licenses, exams, special education and so on. There is a government machinery behind every such database - agencies, controllers, educators, bookkeepers, etc. While you may be paying $4 for a notary signature you might be paying way more from your tax money to keep governing bodies running across the country.
My point is statement that a centralized database is cheap because it is easy to modify simply ignores governance cost which might be huge.
The reason why lawyers and middlemen are required is not because authority is too centralized into the relevant governing bodies. They're there for lots and lots of other reasons that blockchain can't help with.
The only reason why we have trusted middleman is because before bitcoin there was no scalable solution to Byzantine generals problem. Now we have it. Whenever this solution is better than having a central entity appointing middleman is remains to be seen.
Blockchains can reduce number of middleman we have to deal with. The open question is at what cost.
Mire important than a notary is title insurance. Title insurance is a form of insurance that protects lenders and homebuyers from financial loss from an improper title to a property, for instance someone selling you a property they don’t own.
This is the kind of thing at first glance people say is made for the blockchain, but in reality the incumbent solution is actually pretty reasonable and the actual gains from a new system are negligible.
> the incumbent solution is actually pretty reasonable and the actual gains from a new system are negligible.
This is especially true when you learn about the nasty edge cases title insurance helps with. A lot of people trying to drum up buyers for their hashes talk like the value comes from recording the chain of transfers when you're really paying for things like handling cases where, say, a surveyor made a mistake in 1952 and now two landowners have legal ownership of overlapping properties or some mistake in probate three owners ago meant that someone has a claim on 10% of it.
Title Insurance is indeed a racket at this point. Their payouts are a tiny percentage of their overall premiums. As you mention, this seems like a good option but in fact isn't a good one.
In order to replace title insurance and make it so anybody can verify the state of a property you need to first make all liens ever live on the blockchain. That's the hard part here. If it is possible to have a lien on a home without that appearing on a blockchain then there is still a need for somebody to review the title.
Further, there is no need for decentralization! The state can simply operate a centralized append-only database where transactions are recorded and liens are created and publish that to everybody.
It is true that the price of title insurance is very small compared to the price of the house. But their expected payouts are still a smaller percentage of their premiums than other insurance.
Torrens title is the boring have a database solution. It solves messy issues like courts having to determine if a lien is valid and recording it if so by changing the DB.
FWIW, I think a notary signature in the US costs like $4. If verification is the only problem that blockchain solves, it's not a very cost-effective solution.
For me, a US notary signature currently involved a 2 month wait time at the US embassy. At the notary I used back in San Francisco, it cost $30, not including the cost of going there.
> The Estonian (or is it the Finnish?) Government already uses a blockchain for their digital id system.
if the estonian government is operating and enforcing it, why do you even need the blockchain bit? just put the database onto mysql and and make a website for people to transfer ownership online
If home ownership was on a distributed blockchain, local regulators would rapidly discover a need for something like a notary to verify that the transaction has been done correctly on the correct blockchain by the people who actually own it, so as to ensure the consumer isn't sitting on the other side of the table with someone not bamboozling them about their ownership of the house, or bamboozling them about their transfer of ownership, or so and so forth. The notary would also validate that the transfer has successfully been completed on the blockchain respected by the local governing authorities, and has been filled out completely correctly.
You might think this is silly, but fake selling of homes is actually thing that happens! I don't just mean that regulators would do it for gatekeeping purposes, I mean there would be a real need for this. In the bizarre circumstance that this move to the blockchain actually happened for home ownership, the HN gestalt would rapidly be screaming for legislation and regulation around blockchain changes.
Which means, once again, that blockchain is solving a problem that doesn't exist here. The problem with home ownership and the problem notaries are solving was never that the authority was too centralized into the relevant governing bodies.
That's the reason why after 11 years blockchain has exactly one use case, and even that one is dubiously solved IMHO. It brilliantly solves problems we don't actually have.
I believe you're downplaying the potential here (and I'm overplaying it). A particular blockchain you could immediately verify home ownership online via some sort of signature with the public key from a seller seems like providing the same type of guarantees. Is it 100% safe? Certainly not. But considering your notary might be a fraud, a scammer or just not very good at what he does...
Compare the example with withdrawing money: you can go to an ATM and withdraw money for no fee, depending of the country. Do it in the bank, there I an associated fee.
The legal system would still have to adopt it though. And it's an industry less prone to digital innovation. And there is no financial incentive, as there is no narrow profit margin you need to optimize. So yes, it may never happen.
Typewriters had immediate value: buy one and you can produce easier to read documents faster — a very fast writer might do as much as 30 words per minute, which is like a third of a proficient typist’s throughput. Businesses bought them rapidly because it meant the same number of clerks could do more work and you reduced errors due to bad handwriting.
Put another way, the first commercial typewriter was sold in 1874 and was an immediate success. By the 1880s, typist was a booming field — especially for women seeking employment outside of the home.
Blockchains have been commercially active for 13 years at this point. If Bitcoin shut off tomorrow, the only reason anyone who isn’t involved in shilling it would know is that all of the speculators would be screaming for government bailouts.
The GP pulled one of the cryptobro rhetorical scams: X existing technology took Y years to catch on!
Besides the statements rarely actually being true they're nonsensical. A typewriter (or whatever technology they point out) has obvious utility. No honest assessment of whatever they can bring up will say that X technology is useless. Maybe at the time typewriters we're released fountain pen manufacturers or penmanship clubs said they were useless. But they have a vested interest in the status quo.
I don't think most anyone pointing out flaws in cryptocurrencies have a vested interest in the status quo. I certainly don't. I don't and doubt you have some sort of short against Bitcoin or own a bank full of fiat currency.
The cryptobros can't seem to fathom that they got sold on a bunch of useless shit. When they're not at the top of the Ponzi scheme they can't seem to conceptualize that they've been had. It's kind of sad to see. At the same time it's infuriating because their scam is literally wasting a small country worth of electricity to mint Geoffrey dollars.
> The cryptobros can't seem to fathom that they got sold on a bunch of useless shit.
I think it’s more that they can’t afford to acknowledge it: the only way cryptocurrency has meaning is if they can line up a buyer, and as soon as you allow that to be questioned those big dreams about becoming as rich as the people selling them on “web3” start to look pretty unlikely. A lot of these people have built their vision of the future on very high returns and the only way that happens is if they donate their time pro bono to the major investors backing these companies.
So your reasoning does not deal with anything we're discussing, rather you go on describing people as cryptobros, define their characteristics and then make a conclusion, based on what you think. So you didn't bring anything to the conversation other than your wrongly held opinions. I could go on my own exploration and conclude that you, speaking in such a way, don't know what you are talking about.
Not having to speak to anyone to do it. I don't know if blockchain is going to go anywhere but I think there's inherent advantages in not talking to anyone (and being able to do it programatically) to do banking-like things. What you get in exchange is lack of security, no recourse when things go wrong, and possibly being in the same space as criminals. But there's a palpable advantage to not having to interact with any humans in order to do things that historically require a lot of meat space interactions that now can be automated by anyone in their home.
It's like having access to a completely deregulated bank ran by the mafia that has an API anyone can use. I think there's use cases for that, though maybe not the ones the community usually mentions.
But like.....what kind of things can you do without interacting with people when using a blockchain? Name anything. My insurance policy I bought online and I can manage entirely online, change the address, the car, the add-ons, add and remove drivers as well as cars......what exactly is blockchain allowing me to do here that I can't do already?
Same with the bank. I don't think I ever had to speak to my bank in the 8 years I've been with them, or even been to their branch for that matter. You do everything online or in the app.
IMO it is because so many people have a kind of sexual fetish of technophilia.
They literally get off on new technology. It doesn't matter if it doesn't solve anything. It just needs to feel new and as if progress is being made. As long as it feels new and like progress the technophile will be happy to reinvent the wheel.
Even the word technophile has positive connotations as opposed to something deviant in our society. We don't even have a word for a deviant technophile , deviant over obsession with nonsense and "the next big thing".
With this attitude, nothing. I've compared it to an unregulated banking API. So for example you can launder money, do transfers that don't go through KYC, among other things.
By now you can also do things that benefit from the network effect of crypto enthusiasts, for example, you can sell JPEGs from a no-name artist for significant amounts of money, which would historically be difficult for outsider-art, regardless of the fact that you're not even selling the actual rights to the images. It also proved to be an interesting way to speculate on internet memes.
There's millions of people using this ecosystem, even if it ends up being overall net negative for the world and a temporary technological distraction, I think one should be able to neutrally assess what it's being used for. You may not like it but it's like saying a nuclear bomb has no use. You may not like what it's being used for, and it may be immoral or illegal, but to say there's no uses when clearly millions are engaging with it and doing "stuff", seems short-sighted for the purposes of discussion.
So it's only good for circumventing crippling social phobia? How many people suffer from those? And, hey, I've been using non-Blockchain-based online banking since around the turn of the century; can't recall when I last spoke to a bank teller, but it must have been well over a decade ago[1]. So even that use case is adequately solved without Blockchain.
___
[1]: Except for buying some foreign cash before going on vacation, that may have been in 2012. Do the clerks at Forex count as bank tellers?
no they didn't ask the same question, because the electronic keyboard had solved some problems better than a typewriter.
I think there are problems that are suited to be solved on the blockchain - like land titles, domain names, etc. But the existing solution to those problems are adequate, and the sudden change is too costly.
It's worse than not serving any purpose. It's information about your life that is forever stored out in the open. Except for some limited cases, it's no ones business to know whether I am insured and for how much.
Agree, and once quantum comps are more readily available - re-analyzing the entire chain and profiling individuals will be so easy, an AWS quant rental will be able to decrypt and do it.
I don't even know if quantum is necessary for that. There's already blockchain analysis tools. All you have to do is slip up once and tie a wallet that you didn't want anyone to know about to your identity and then it's relatively easy for those tools to be used to see everything you've done.
I almost paid for something with bitcoin once because they weren't taking anything else. Nothing illegal but also something I wouldn't want the world to know I paid for. I ended up choosing not to because I didn't want that transaction forever stored on the blockchain.
You're totally off. All those things you said _can_ go on the blockchain including the private key that they could use to start the car. Of course they can sell it for parts...if the parts didn't have private key protection too...
Someone has to do the data entry into the blockchain. You end up having to trust this person, which completely negates the purpose of the blockchain: trustlessness.
For supply chain issues the Oracle problem is very apparent. How does your smart contract know if the shipment has actually reached its destination?
The government enforces property rights though, so it's not a matter of distributed consensus, it's a matter of who the government views as the rightful owner. In a property dispute, a court might look at a number of factors: occupation and use, maintenance and upkeep of the property, paying bills associated with the property, registration of a deed with a title office, etc.
A digital signature on a blockchain somewhere means nothing. How do you connect it with the real property? All of the other above things go some way to demonstrating a real connection to the property. A block chain does not. It's the same problem all blockchain solutions have: verifying the data at the point of entry to the block chain. If that is distributed and can not be trusted and verified remotely, then the existence of it in a block chain does not help.
I'll create PropertyBlock™ blockchain tomorrow and sign a block with your property address it over to myself. Worthless.
Exactly, and while the government database "land registry" could, of course, be replaced with a government "HouseChain" it wouldn't actually solve any Problem but would introduce a ton of new ones.
However, if you have no government, the housechain could be a way for a decentralized society to implement the concept of a land registry. Once everyone agrees that the housechain is proof of ownership, then measures can be taken to enforce that without necessarily evoking a central government.
I'm not sold on the idea of a society without a central government, but I think the blockchain would help — or even enable — such an experiment.
The people in charge of enforcement would become a de facto government. What distinguishes a government from any other organization is the monopoly on violence (more precisely, the monopoly on deciding when and how violent measures can be employed), and enforcing property rights sometimes requires violence (e.g. if someone refuses to leave your home, eventually the police will have to physically remove them against their will).
Blockchains do nothing at all to help anything about this situation. You could use a blockchain to manage ownership, but it would be far more efficient to use a central database of some kind that is held by whatever organization is responsible for enforcing property rights. In the end you are not going to care how your ownership is managed, you are only going to care that, if someone tries to violate your rights, the police will come and protect you. You need to trust that the enforcement will actually be applied, but what difference does it make if you use a blockchain?
In a decentralized society, there may be multiple organizations deciding on when and how violent measures can be employed — and they could be as small as one person. If each organization thinks a different person is the owner of a property, that would be very unstable. However, if they all agree that a certain blockchain implementation of deeds is what decides ownership, then they can co-exist more peacefully. Not saying there aren't other hurdles, but that is certainly one of the big ones.
That does require that most of the society agrees on some set of principles, but that's true of a centralized government too: most of the society has to agree they are legitimate. Going back to the decentralized society, everyone would agree that the blockchain determines ownership and currency. So, an organization that accept those is viewed as legitimate, one that doesn't is illegitimate. In that scenario, illegitimate organizations would be less stable than legitimate ones.
So, the existence of a system that allows people to all agree in things like currency and ownership without giving that power to one specific organization is a step forward into making decentralized societies possible. Is it sufficient? Most likely not.
It is indeed not. I'm not claiming that all problems are solved and that decentralized governments are easy or even possible. Just that blockchains solves some of the problems in that area.
> In a decentralized society, there may be multiple organizations deciding on when and how violent measures can be employed [...] a system that allows people to all agree in things like currency and ownership without giving that power to one specific organization
What, did you read Snow Crash as u- in stead of dystopian? What's to say they'll all agree?!?
The important point is what happens when two of those organisations disagree. What happens when I have Mr Chen's Robot Dog Republic saying I own a property -- because they have the blockchain to prove it -- and evicting you on my behalf, while you have the Cosa Nostra Pizza Delivery Co. saying you own it -- because they have the blockchain to prove that -- and evicting me on your behalf?
Civil war, that's what happens.
Decentralising stuff that everyone needs to agree on sucks.
You cannot get your hacked bitcoins back even if you are the government with police and army. Lots of things that government does can be replaced with a smart contract. Hey, you can even have direct democracy - vote with your citizen token for a change in a smart contract and voala the law changed and immediately enforced.
It could be the norm. It all depends on how the society is organized. If there is a system of law and a court and you prove someone stole something from you, the government will coerce that person to give you back or pay some sort of fine. For instance, even if the system says you own those bitcoins, a court can rule that you give it back to the person you hacked and also pay for the costs of the case. The same goes for smart contracts. A court may rule that the contract is invalid and require one of the parties to pay the other, regardless of the smart contract. So, that technology doesn't, in and on itself, revolutionize any of that. However, it could be made into law that a court cannot revert a smart contract or that the contents of a digital wallet belongs to whoever has it, regardless of how it was obtained.
In the absence of a governing authority, property disputes would revert to being settled by violence or the threat thereof.
Why should my band of armed thugs defer to what it says on the blockchain when they could instead hit you with a $5 wrench until you vacate the premises? https://xkcd.com/538
I'm hopeful that when the Ponzi schemes fade away, we'll end up with a slightly more informed populace that has inadvertently received an introduction to political science, state-building, the origins of power, etc. Civics teachers take note! :)
Almost the entire populace will be more informed -- except for the Ponzi-"coin" proponents, because they're busy innoculating themselves against reason by... Well, being Ponzi-"coin" proponents; strengthening their own biases by debating in favour of these ludicrous schemes. Like, right here on this page.
Then in the end, we all live by the rules established by whoever has the largest band of thugs. Good thing we got rid of government and created this libertarian utopia.
Because everyone else around them would help defend the validity of the deeds, as they all own property in the same way. Like I said before, I'm far far away from having all the answers about how to set up a decentralized society and I'm not even sure I would like to live in such a society. However, issuing deeds and currency is an important job that currently you need a central government you trust to do. With a blockchain that problem is solved. There are plenty of other problems besides that. But it is one less item in the checklist.
> Because everyone else around them would help defend the validity of the deeds, as they all own property in the same way.
That feels a bit like saying that everyone will pitch in to stop mugging since we all carry physical cash in the same way. Maybe some civilians would intervene some of the time, but most will not risk their own bodily autonomy to defend another's property.
Issuing deeds and currency feels like the easy part of creating an agreed upon land registry or economy. I have a printer and know how to use SQLite, so nothing is stopping me from issuing my own physical currency or deeds today. I could even save paper and put them on my own personal blockchain. Convincing others to honor my currency or deeds sounds like the hard part.
It is not the easy part if you want a decentralized government because no one person can be tasked with issuing and governing over those, otherwise that person will have power over everyone and kind of defeat the purpose. That doesn't mean that there aren't other equally or even harder challenges. I was not claiming that blockchains was the last problem stopping us from becoming decentralized. Anyway, like you said, nothing prevents you from issuing your currency and deeds today. And, before blockchains, the only way to have a decentralized government would be for many people to do that. However, that system is more fragile than a system built on a single blockchain everyone agrees on.
The big thing about blockchains is that it allows people to all agree on a certain asset, without giving control of that asset to a single party. That is big news for anyone group wanting to live in a decentralized society, because it was one of the big problems.
Reality (eg, Jews in Nazi germany) shows that this is bullshit.
If the local government and population is on your side, then you're fine.
If however you're a minority that's now deemed to be the enemy, then what supposedly belongs to you doesn't matter one bit. You can prove it as mathematically as you want, and you can have your neighbors on your side, but if a bigger army of goons shows up to take your stuff, they'll take it.
Ultimately this is an entirely political problem, and the blockchain will simply be completely ignored if things go to shit.
I think you're missing the point. I agree with everything you said. The validity of everything comes from the people (the majority at least) agreeing on the legitimacy of something. Everyone agrees on the legitimacy of the dollar, so that's why it has value. However, by agreeing on that, we give USA's central bank a lot of control over it and, therefore, power. If everyone agrees that dollars are worthless, but bitcoins have value instead, then the central bank has a lot less control. Moreover, a society without a central government would never be able to agree on any fiat money without the blockchain. Now, such society could do so. Also, that society would have a hard time evaluating the legitimacy of deeds without the blockchain. So that is yet another feature that can help building such society if one so inclines.
Things like BTC are even worse. BTC has two main sources of control:
1. The developers. Somebody has to develop the software, and no matter what, this ends up being a very select group. If you have multiple groups, that's still not a lot of people and they'll have to cooperate somehow, which will result in some sort of system you're not involved with.
2. The miners. They group up into pools, and there's not that many of them that are big enough to matter.
Those two groups are the ones truly in control, and they're unelected, unaccountable, and have their own interests and agendas. If you think the banks are bad, then using a system made of a cabal distributed among the globe is hardly better.
Decentralized software development already exists, we trust it and it works. Besides, as long as you speak the same protocol and use the same data, lots of people can roll out their own software. But indeed, if a small enough percentage of the population control enough of the mining power things could collapse or at least degenerate back to a centralized society. It is up to the members of a decentralized society to do their share of mining and be in the lookout for that not to happen. In order for a society to be decentralized and remain so, a big majority has to want that and hold it as one of their values. It has to be something embedded in the culture. It is the opposite problem of trying to build a decentralized society over fiat money. In that case, you want the fewest people possible printing money. That's the reason BTC can work for a decentralized society, but the regular currency we use today would not.
> Decentralized software development already exists, we trust it and it works.
Not in the way needed. You probably means git, which yes, allows for distributed development in that unlike previous systems it doesn't rely on a central server to exchange code.
But that doesn't mean people don't organize. I review people's code. People review mine. There's a list of people that's been agreed that are in control of a project. There's somebody who owns the domain, somebody who builds installers and makes releases, somebody who can say "no" to adding some code.
> Besides, as long as you speak the same protocol and use the same data, lots of people can roll out their own software.
Cryptocurrency is to a huge extent about the contents and management of this data. So nearly anything interesting will need cooperation. This means a small group getting together and figuring out how to change the protocol.
> But indeed, if a small enough percentage of the population control enough of the mining power things could collapse or at least degenerate back to a centralized society.
It already is centralized. The decentralization is more theory than practice.
> It is up to the members of a decentralized society to do their share of mining and be in the lookout for that not to happen.
They already failed, then. And no wonder, because 99.9% of the world is not even capable of having opinions here. Like if you show a random person a diff from the bitcoin git, they couldn't tell you what it does, let alone if it's a good or bad thing.
Even if you can, there's lock-in. If you already put a significant amount of effort and money into say, BTC, there's a cost to pulling out. So a lot of people will stick around even if things aren't exactly to their liking. This means there's a variety of changes that can be made for the worse with impunity on the part of the people in control.
> In order for a society to be decentralized and remain so, a big majority has to want that and hold it as one of their values.
Then it's an outright impossibility. It's the downfall of all libertarian schemes, the idea that everyone is passionate about governance. The vast majority of people want to lounge on the sofa, not to attend regular meetings with their neighbors to discuss a variety of issues like roads and sanitation.
Really, a democracy offers lots of ways of participating that the vast majority doesn't use. I don't see crypto changing that.
> if you have no government, the housechain could be a way for a decentralized society to implement the concept of a land registry. Once everyone agrees that the housechain is proof of ownership, then measures can be taken
Once everyone agrees on anything, they can agree to have a centralised real estate ownership registry. Or a whole centralised government.
Your idea seems to be a thought experiment with weird priors. (Feels like that makes it rather meaningless.)
I don't have the answers, but I'm easily drawn to such thought experiments: all the neighbors would agree with you that you're the owner and not the person who sold you the deed but wants to remain inside of it or some intruder or whatever. So, when you knock on their door and try to remove them, you'll get support from the local people who will try to respect what's in the "housechain". It is in their interest that the deeds are respected, because they also own their houses that way.
That's beside the point, though. I'm just noting that the possibility of have distributed deeds does make it possible to have some of the benefits of a centralized government: deeds and currency, without having one. That obviously only works if everyone in the society has come to the agreement that those things are valuable (just like in case of central governments too). But the point is just that you don't need a central person with all the power of issuing them.
This is only true if people with guns will show up to kick somebody else out of the house that you own the token for or if we figure out a way to completely eliminate antisocial behavior voluntarily.
A blockchain (or the contracts that run upon any particular one) could also incentivize a distributed group of participants to take it upon themselves to temporarily and physically enforce some ones else's real world claims (a signed tx from the same addr with the on chain claim putting their owner ship up as collateral to be liquidated at a discount conditional if the buyer can secure the premises by any means necessarily, some onchain decentralized AMM prediction markets already have alot of this functionality and more), esp if those up for the task already have the means to do so and the potential payout is enough… irrespective of a particular jurisdiction laws.
Gets even more interesting when people can buy puts and calls on someones liquidation via options dex.
A few of the ex-mil people in a DAO i'm apart of are really interested in this space growing for services like that, for obvious reasons.
> if the buyer can secure the premises by any means necessarily
How does the blockchain know that said access has been secured? Is it up to the original requestor to confirm this? If so, what if they're malicious and don't want to do so as to not give up their collateral? If it's down to a neutral third-party acting as an oracle, what prevents said third-party from being bribed/coerced/hacked into providing false data to the blockchain?
All of this can be solved by the law (eventually escalating to people allowed to use deadly force), but at that point why do you even need a blockchain?
Blockchain only works for assets that live entirely on the blockchain, such as cryptocurrencies. Anything that lives in the real-world is a bad use-case for blockchains as you now need a centralized, trusted third-party to sync the state of the blockchain with the state of the real world, at which point you may just do away with the blockchain entirely and let the third-party run a good old database.
> How does the blockchain know that said access has been secured? Is it up to the original requestor to confirm this? If so, what if they're malicious and don't want to do so as to not give up their collateral? If it's down to a neutral third-party acting as an oracle, what prevents said third-party from being bribed/coerced/hacked into providing false data to the blockchain?
Auger[0] has something like this:
"Reputation (REP) and (REPv2) is a cryptocurrency, used by reporters during market dispute phases of Augur. REP and REPv2 holders must perform work, in the form of staking their REP or REPv2 on correct outcomes, to receive a portion of the markets settlement fees. If you do not report correctly, you do not get the fees. If you report incorrectly, you lose your REP or REPv2. If you don’t participate in a fork (when the network has a very large dispute over an outcome), you permanently lose your ability to migrate your REP or REPv2 to a forked universe, making it functionally useless within the used version of the Augur Protocol, and in theory making it worthless. Passive holders of Reputation (REP or REPv2) that are not using their Reputation (REP or REPv2) within the Augur protocol to stake on disputes and forks are penalized. The treatment of REP and REPv2 within the Augur protocol is governed not by the Forecast Foundation but by the protocols smart contracts as described in the Augur white paper and documentation."
Other protocols may handle things differently.
> All of this can be solved by the law (eventually escalating to people allowed to use deadly force), but at that point why do you even need a blockchain?
Assuming if the law in all jurisdictions around the world were as sufficient for all cases presently and into the future. Also this assumes that its not the enforcers of a particular law aren't also the ones that the on chain claimant wants to take action against (again, the payout would need to be high enough for those to incentivize action against a particular jurisdictions enforcers, which need not necessarily mean engaging on the property, but anything to get the enforcers to back off even going after friends and family and their property in retaliation [which is more doable in jurisdictions who databases with such sensitive information have been compromised])
What if many people collude so that the general consensus is wrong? What if many people are coerced (by their government/etc) to report wrongly?
> Assuming if the law in all jurisdictions around the world were as sufficient for all cases presently and into the future.
Are you saying that there should be one global jurisdiction and law? That is a completely separate can of worms.
At the moment the only law that matters is the law that can be enforced, which is generally the law of the country where you reside or have assets that can be seized, and this system appears to work well enough for everyone involved.
The law can also be changed if needed. I'm not sure how a blockchain can account for all future use-cases without changes either.
> What if many people collude so that the general consensus is wrong? What if many people are coerced (by their government/etc) to report wrongly?
Well according to how auger has it, those people will lose their funds they had to put up as collateral to vote on a particular market dispute outcome either through proof of their wrong decision or by a network fork if many people are in disagreement on an outcome and the many people don't bother migrating over to the forks ("you permanently lose your ability to migrate your REP or REPv2 to a forked universe, making it functionally useless within the used version of the Augur Protocol, and in theory making it worthless"). Seems like those people will have to continually pay for tokens that will be worthless as the network keeps forking as other non coerced reporters do not.
> Are you saying that there should be one global jurisdiction and law? That is a completely separate can of worms.
No, many contracts may operate simultaneously, and some even over shared claims in market disputes (at least what i get from how auger describes itself as enabling). I don't dissagree that it can be of worms though, but people can be incentivized during every step of the way in a variety of different ways. I just wanted to point that it is possible now with the tools that are viable that don't need to rely on a particular jurisdictions laws.
> The law can also be changed if needed. I'm not sure how a blockchain can account for all future use-cases without changes either.
The way to change laws may or may not be compatible with someone uploading a new contract and particular protocols users agreeing to abide by it with their assets at stake on market disputes.
It seems to be that for the blockchain to have an understanding of the real world it needs an oracle. That oracle can be made of many different actors each staking some funds and the "correct" value is determined by the value with the most funds staked against it. This still doesn't prevent coercion of a large majority or just a very rich whale betting on achieving what is essentially a 51% attack on the network.
> many contracts may operate simultaneously, and some even over shared claims in market disputes
Potentially - I don't disagree that the tech can technically do this, but ultimately it's still down to 1) people choosing to use it (as opposed to traditional contracts enforced by judges & subsequent law enforcement personnel) and 2) that whatever outcome reached by the blockchain can successfully be enforced in the real world - you'd need a government with jurisdiction upon the disputed assets to recognize the blockchain's outcome as legitimate and enforce it. People are unlikely to do "1" if they're not confident that "2" will happen especially if the problem can be solved by existing legal contracts who unlike blockchain-based solutions have a track record of being enforced.
Ultimately I don't think we'll ever reach an agreement here so I think the best course of action is that we stick to our opinions and either of us can tell the other one "told you so" in a decade as we see how the situation evolved.
> Seems like those people will have to continually pay for tokens that will be worthless as the network keeps forking as other non coerced reporters do not.
What if it's a majority that is coerced (or bribed, frightened, etc) into lying? Then it's the truth that will be left behind as "reality" forks in favour of the usurper, isn't it?
If the entire chain state was only this decision and nothing else in the future and that majority could be coerced without major contention (which is not really possible off chain either) then that might work, but the problem is that all the other decisions that need to be made by the validators will require those people to be coerced to vote accurately in the present and in the future on the forked chain states.
"distributed group of participants to take it upon themselves to temporarily and physically enforce"
Do you think I should risk my life to enforce your property rights? I have two kids and I want to watch them grow up, I can't die because someone with a gun claimed ownership of a stranger's house.
Without an organized government of some kind, society does not scale beyond about 200 people. We just cannot keep track of relationships and trust and whatnot beyond that. I live in metropolitan area with a population of 25 million people; a distributed group of vigilantes enforcing property rights is not even remotely workable here, and this is not even the largest city in the world. My in-laws live in a suburban area with a lower population density -- their town has a population around 20 thousand, and that disorganized group is not going to work there either.
> Do you think I should risk my life to enforce your property rights?
I have no expectations of you personally if you wanted to protect my property rights (if i had claims on such and had a tx posted for someone to secure such), but I cannot control if an address controlled by a multisig of psuedoanons sends a tx to a contract where they provide proof that something has been secured according the rules of decentralized AMM market settlement contract and they get their payout. I cannot also control whether people make leveraged side bets on that happening or not, and I cannot control if those making leveraged side bets try to collude with the multisig that submitted the a tx for settlement.
> I live in metropolitan area with a population of 25 million people; a distributed group of vigilantes enforcing property rights is not even remotely workable here, and this is not even the largest city in the world. My in-laws live in a suburban area with a lower population density -- their town has a population around 20 thousand, and that disorganized group is not going to work there either.
I'm pretty sure that if they pay is high enough for the people that controls the multisig, and they have the skills and resources to execute, they can get where they need to be, and be gone when its finished, while accepting some risk that who they are up against may be prepared for it.
Dude you are freaking me out. If someone feels somehow mistreated by me they could send an army of cryptobros to my house to lynch me … that sounds like the worst scenario possible.
That said, blockchain-like technologies (ksi, more specifically) can be used to assure the integrity of databases storing the relationship between you and your car.
Yes, but is it a problem worth solving beyond what we have today? What’s the last time we saw an database integrity failure at the DMV/… leading to cars being owned by people that shouldn’t?
I'm pretty sure it wasn't more recently than the last time people lost control of assets on a blockchain!
Replacing databases which afaik have never been manipulated anywhere in the world (despite representing legal ownership of high value assets) with tokens similar to those people lose access to or are duped out of on a daily basis is very Web3
when you start to coin terms like rug pull and web3, it sure does feel like a systematic problem. There are people who specialize in asserting if you can trust a new token or not - why would i invest in something so janky?
Databases have been doing that for a long time. Blockchains only add additional guarantees that matter when you have hostile participants, which only matters if you're decentralizing your system, which you probably don't want to do for a lot of things (like tracking ownership of a car).
I don't think it's a naive example. All these kind of proposed blockchain solutions raise the same questions for me:
Why do you need a decentralized blockchain with tokens to solve that problem? If not for the tokens, what incentive have people to keep running and protect the blockchain against attacks? The oracle problem: how do you prevent someone from pushing false or duplicate data to the blockchain?
> And literally none of it, not a single step that you mentioned requires blockchain.
Then tell me, where is this wonderful centralized database that tells me who owns which car?
Blockchains are not just about decentralization, it's also about publishing the actual databases in the wild for everyone to see, because you have the guarantee that no-one can fake it.
Sure, a lot of the use cases could be done with centralized databases, but that's the model we had for decades now, and I don't see any effort to make these centralized databases accessible to everyone.
>>Then tell me, where is this wonderful centralized database that tells me who owns which car?
Uhm, here in UK DVLA holds it? Anyone can access it too, you can just check the entire car history including its tax payments as well as technical inspections online. No Blockchain needed.
>>because you have the guarantee that no-one can fake it
I'd like you to explain why you think that's true. If you assume an external authority is entering details into the blockchain, how is that different to the exact same authority entering details into the systems that we have currently?
How much taxpayers money goes into maintaining this database? Not sayin blockchain is a better solution but it can replace 99% of UK DVLA staff with an algorithm.
How exactly? Please explain. In particular how would using blockchain instead of a regular database replace 99% of the staff? What algorithm do you mean? What kind?
Last time I bought a car the process involved multiple people that was there only because of a centralized database. First of all I need a contract with a dealership, so there is a lawyer involved. Then I pay for a car (cashier) take my contract and go to a special road police department that exists only to register car ownership transfers. There I have one guy that takes my contract, another who will check it and fill-in data into the centralized database. So we are looking at least 3-4 people who are there only to review documents and authorize update to a centralized database.
Instead of this I could have pay to a smart contract and get my car ownership record in exchange. No clerks or lawyers involved. I cannot imagine how you implement this scenario as an API on top of a centralized database.
A) Last time I bought a car, the guy at the dealership filled out the entries in the car registration DB (probably using the centralised car registry database's dealership API...). The guy I was negotiating with anyway. So one guy (or less, considering he was mainly doing the job of, you know, actually selling me the car), not three or four. And don't worry -- I didn't -- he could probably have filled in some bullshit, like transferring ownership to himself or something, but then I'd have set the police on him.
B) So how many people would it take in your blockchain scenario -- why wouldn't there have to be just as many to enter the change of ownership with the "special road police department" etc?
C) How would you know that your "smart contract" couldn't do the exact same bullshit, transfer it to the dealer or whoever he has fencing his hot cars for him? If it did, wouldn't you have to go to the police just like I would?
D) "Lawyers"?!? Where the fuck do you live; in North Korea or something?
Please see here, I dug some nice links specifically about how DVLA works. I think you don’t understand the process and how much manual
work might be involved.
So all those problems could be solved by the "DVLA" (whatever and wherever that is) simply adopting the same system we have here. No wasted energy, neither in the form of "manual work" nor in the form of blockchain involved.
1) So you do live in North Korea! Or, well (Heh), Russia -- who cares, what's the diff?
2) So the weirdly-specific link to British vehicle registration procedures is... Because you're one of Kim Jong-Un's -- eh, I mean that other Über- kleotocrat, Putin's -- coterie, and keep your money and your children there?
3) Your whole argument is as stupid as that other guy's who claimed that "Bitcoin is needed to transfer money abroad". No, countries with dysfunctional systems -- be it for international money transfers or vehicle registration -- would need to uproot and rebuild their systems anyway, to base them on Bitcoin in stead of what they have now. But if they're uprooting and rebuilding anyway, then they can just rebuild to use the same systems that already work elsewhere -- without the whole blockchain mumbo-jumbo.
4) Two people who have actually used working online systems -- that British car owner and I -- have told you that such systems exist and work. But you seem to be just simply refusing to believe us, insisting that no such system could work without your blockchain mumbo-jumbo. One would think that residents of, and owners of cars registered in, Britain and Finland would know more about the car registration systems in Britain and Finland than a Russian. (Except, see #2 above?) So, besides your obvious violation of the "assume good faith" site guidelines in calling us liars, consider which of the two alternatives
a) You are right, and know more about the car registration systems in our countries than we do; we, OTOH, are either outright lying, or have deluded ourselves into thinking we got our cars registered in a much easier way than you know to be possible. (Or perhaps we both got incredibly lucky and got it done much easier than actually is possible.)
or
b) We are telling the truth, in our countries it is possible to easily get your car registered online without any blockchain mumbo-jumbo; and you, OTOH, are either misinformed, mistaken, or just plain obstinate (or deluded) --
-- which alternative would seem most reasonable under Occam's Razor?
I don't know where you live, but in UK it's even easier than what you described.
When you buy a car it's just registered online, takes 5 minutes to do. No actual in-person anything involved. You get a PDF confirming your registration, the dealership prints the plate for you right there and then, nearly every garage has a machine for priniting them. You stick it on your car, drive off, done. The registration document arrives in post 1-2 weeks later, but you don't really need it for much as it's not proof of ownership anyway, it's just for your records.
Literally nothing about buying a car involves actual people reviewing anything. It's all automated, it's all online.
So I'd still like you to explain how exactly are you going to get rid of 99% of DVLA's staff and what algorithm exactly allows for that when using NFTs/blockchain.
>>First of all I need a contract with a dealership, so there is a lawyer involved
Why? I bought several new cars in the past, you read the documents, sign them, the car is yours. Why involve a lawyer? What for?
What you describe seems way more automated than what we have today in Russia. Still…
> Literally nothing about buying a car involves actual people reviewing anything. It's all automated, it's all online.
Who gives dealer access and rights to update government database? I would not be surprised if the dealer does not have access but update their own system and then submit documents to an agency which checks them and modifies the database. DVLA API is documented online and unless they have another undocumented endpoints I don’t see any way to register a vehicle with it.
> Although you can download some forms online, you will still need to return them via post. This is because the forms may ask for sensitive information or require that a passport photo be affixed to the application.
Summing up - it seems what you experienced at the dealer is a sugarcoating for the same old paper based registration process that requires countless clerks.
I'm don't know where you live, but I have purchased cars in both Australia and the UK and both involved verifying via a centralised database that the car was not stolen or financially encumbered.
Don't know about the US but in most countries you do have those databases. And them not being in the Blockchain makes it easier to solve hard problems such as inheritance disputes, or illegally purchased goods.
When some fuckwit runs me over and speeds away, you betcha I'm gonna want to know whom XYZ-123 belongs to. What did you think license plates are for in the first place?
If you've lived under the misapprehension that what you do with a multi-ton piece of lethal equipment hurtling through traffic belongs to your sphere of privacy, it's high time to snap out of it.
(Fortunately, of course, no blockchain silliness is needed for this; I can look up a license plate on the centralised car registry DB any time.)
> You could very well have a proof of authority ...
> ... by a further authority if keys ...
As soon as your blockchain solution requires proof of authority, your trustless solution starts requiring trust in some form of central governance. At that point, what utility does your blockchain solution provide that the DMV database does not?
Vote with your (imaginary) citizen token to appoint a notary. And have a right to vote against it at any time. With blockchain you can elect new notaries every day if this is how you want to manage it.
I don't see your point. You attack an outline of a system. Fun system will be complex and I won't describe it here in full. In the same way as today notary appointment procedure is complex and involve multiple organisations.
I claim that blockchain solves Byzantine generals problem (BGP) in a scalable way and no other such solution exists. I also claim that this very problem (BGP) is being solved right now in multiple instances by using a trusted middleman, usually appointed, controlled and often funded by the government. I also claim that maintaining trust is not free and often paid from tax money (as in DVLA example). And my last claim that partial or full automation of a middleman function with blockchain is cheaper than running it traditional way (considering all costs involved).
Potentially unexpected corollary from the first and second claims - a software without blockchain cannot automate a trusted middleman function because of trust issues.
Why would I need to attack any of your claims, when one of them is that the "problem" you cryptards are getting your panties in a bunch about is already solved?
The thing is it's not really particularly good at that. No moreso at least because of any attributes of the blockchain. It's really because of external reasons:
1. Lack of tooling and cooperation for investigating fraud
2. Lack of regulation
3. Programmatic interfaces
4. There are markets like the NFT space that are amazing for laundering
But no part of why it's good for crime has to do with blockchain.
"Censorship resistance" was the original use case for blockchain, and demanding money with menaces remotely is the one area where it's unquestionably superior to being discreet about where your money is stored
Reason 2) does seem to be due to an attribute of the Blockchain, as there is no central organization that the government can force to establish the real-world identity of all participants. (Although this is now happening at the point of conversion to/from fiat currency.)
>> Blockchain is proving a more than capable solution in the ransomware payments space
> The thing is it's not really particularly good at that.
Sure, but apparently it sucks less at that than at anything else. Which would be why that's the only use case in which it's actually used as a "currency"; the law of comparative advantage and all that.
> But no part of why it's good for crime has to do with blockchain.
It also enables people to finance themselves despite tyrannical restrictions imposed by bad governments. Using bitcoin I can send money to someone in Chi no a who's social rating was degraded by the CCP and who is forbidden from using banks.
This alone trumps any arguments against bitcoin. Crime will exist forever and criminals will find ways to finance themselves anyway, so the use of cryptocurrencies for their operations is not really a factor.
> Using bitcoin I can send money to someone in Chi no a who's social rating was degraded by the CCP and who is forbidden from using banks
How will they convert it into something they can use to pay rent and buy groceries?
> Crime will exist forever and criminals will find ways to finance themselves anyway, so the use of cryptocurrencies for their operations is not really a factor.
Does this make it easier for the wealthy to evade taxes? I find just signing transactions using something like gpg a much easier to reason about.
My biggest concern about cryptocurrency is fees. There is no reason why fees should be based on payload as far as I understand. Whether I’m sending one satoshi (or any other unit of money) or a trillion, the cost should be the same and ideally as close to zero as possible if not zero. This was the original reason I was drawn to bitcoin but it was obvious it would never be the case.
> How will they convert it into something they can use to pay rent and buy groceries?
Exactly my question. Exchanges where you can sell the crypto for real money are still regulated and require KYC.
> My biggest concern about cryptocurrency is fees.
High fees are required to pay for the insane electricity bills and specialized hardware. PoW cryptos are expensive and inefficient by design so there will always be more transactions waiting in the queue to get on the chain than the processing power required to mine the next block.
You don't even need black market. On one the largest crypto exchanges in India (WazirX), P2P is the only viable option left to get money into exchange because most banks have stopped dealing with them.
Fees are based on resource usage. In Bitcoin this is usually the total data size of inputs and outputs that are used to make the sum. This is where the issue of dust arises, when an address holds a mass quantity of low value inputs, but combing them yields a very large and therefore costly transaction.
In some other chains, like Ethereum, the accounting is ledger based. With these systems theres is no variety in input count, but it similarly scales by transaction computation so more complex contracts are more expensive.
Both networks have a fluctuating transaction cost due to congestion competition, but the “base cost” in either is totally unaffected by the value/total amount of currency.
> Using bitcoin I can send money to someone in Chi no a who's social rating was degraded by the CCP and who is forbidden from using banks.
Okay, let’s think about this even a little bit: receiving that Bitcoin requires them to have software and access websites which the Chinese government has restricted. Assuming they successfully get a wallet app which isn’t compromised, they then need to connect to a well-known, trivially blocked high-volume network service without the Great Firewall triggering. Having done that, they then need to pay a substantial processing fee for any transaction. Since their landlord, grocer, etc. need to be paid in real money this person will also need to find someone to convert it, again requiring a substantial payment because accepting something banned from a pariah is high-risk.
All of this is not only expensive but incredibly risky since you’re leaving a lot of electronic records of illegal activity and you’re forced to trust various third-parties who can be compromised without your ability to easily tell. Bitcoin is perfect for state authorities, too, since it leaves a signed record of intent to break the law for each transaction — if they bust a business which does a lot of cash sales, it’s a lot harder to prove where each bill came from and there’s no way to do so if they only start monitoring after the fact like there is with Bitcoin.
> It also enables people to finance themselves despite tyrannical restrictions imposed by bad governments. Using bitcoin I can send money to someone in Chi no a who's social rating was degraded by the CCP and who is forbidden from using banks.
In no way does bitcoin being blockchain based enable you to do this better or more effectively. It's just because it's a less regulated currency.
Alright, how does a potential recipient use those funds?
Pay rent? No, because the government would notice the missing income on the landlords tax return.
Pay for food and other goods? No, because the government would not allow companies to take funds from permissionless blockchains.
Buy real estate or a car? No because those needs to be registered with the government as well and payments are regularly checked for fraud and money laundering.
A black market for all of the above? Sure but any government to weak too prevent a black market of this scale would also be unable to restrict transactions (no matter the method) in the first place.
Conversion of bitcoin to whatever currency is hard to block. USSR had death penalty (!) for buying or selling things using foreigh currency. Yet, the black was persistent.
Also, we are talking about the unbanked: people who otherwise have no other state-sanctioned way to use financial services. Bitcoin first and foremost helps such people.
> Also, we are talking about the unbanked: people who otherwise have no other state-sanctioned way to use financial services. Bitcoin first and foremost helps such people.
No. No it doesn't.
The main reason for a large portion of the unbanked population is that they are so poor that they can't even afford to open and maintain a bank account. But sure, "we require a person to have a smartphone with always-on internet connection to do anything useful and have egregious transaction fees in most popular chains" surely does help the unbanked.
I got into bitcoin when i could receive payment from a client that normally was declined to process by banks in our respective countries, and options like Paypal were too expensive.
In the result buying buying bitcoin for a client for his currency, sending it to me and selling for my currency was cheaper than simply converting USD to my local currency. That's where I understood that bitcoin is a great thing and is here to stay. It is enough to shut your argument. I wasn't poor, but absurd restrictions by banks stood in my way just the same. Bitcoin liberates money.
So if your personal anecdote "shuts down" my argument, then my personal anecdote of never having these problems sure as hell shuts yours.
What crypto peddlers don't understand is that:
- money transfer doesn't need blockchain in any shape or form
- restrictions and regulations exist for a reason, and these reasons are being rapidly discovered by all the people who are being scammed in the web3 space
- the moment money transfer over presents even a fraction of what banks routinely do, they will introduce same money transfers at a fraction of the cost (and they already have, in many parts of the world, but not because of blockchain)
What YOU don't understand that bitcoin has 2 key properties: permissionless and artificial scarcity. I haven't heard of any successful implementation of both without the use of Blockchain. Have you? Whatever else you'd offer would have a CA at the core which can censor and block people under duress or at will.
Restrictions and regulations exist for a reason, here I agree with you. What I don't agree with it that this regulation is good. I think most of it is veryverybad for people, designed to keep them under control. In my country, this control takes very draconian forms against anyone who is in opposition to the (criminal) government.
> 2 key properties: permissionless and artificial scarcity. I haven't heard of any successful implementation of both without the use of Blockchain. Have you?
Perhaps Because they are not that interesting or useful? So far you've given me two "solutions" in search of a problem.
> What I don't agree with it that this regulation is good. I think most of it is very very bad for people, designed to keep them under control.
Go and read something on food and drug safety (like Horse Named Jim, https://en.wikipedia.org/wiki/Jim_(horse)), an automotive safety, on emission safety, on workplace safety, on...
There's high probability that you're alive and healthy today precisely because of regulations.
> In my country, this control takes very draconian forms against anyone who is in opposition to the (criminal) government.
Ah yes. And crypto will surely help with that because that criminal government will never ever find a way to bust you for trying to convert that "censorship resistant crypto" into, you know, actual money you have to pay for food, rent, electricity etc.
I think it's important to note that what you're talking about is bitcoin, not the blockchain or even cryptocurrency. No aspect of cryptocurrency or blockchain plays any part at all in your story.
The reason why you could do what you did is because you participated in a young, unregulated market. Blockchain added nothing.
Bitcoin is not possible without blockchain or 'cryptocurrency'. Thanks to these properties, it can't be truly regulated, which is a good thing in my book.
Of course, this breaktrhough opens a way to zillions of shitcoins, but they should simply be ignored.
Of course it can be regulated. Countries are working towards that already. It's already a taxable asset. Nothing about the blockchain makes bitcoin harder to regulate.
Permissionless has nothing to do with blockchain. As an example if you want to exchange currency without blockchain you can do that by buying gift cards and exchanging them for cash on any number of online markets.
Blockchain provides integrity guarantees given a number of malicious participants. That's all it provides over any other ACID database.
I had the same experience. The thing that gets me as well is that normally with the rise of new technology you get an excitement that is tangible. Like when the internet first xame around there were emails, multiplayer games via modem, websites. A whole plethora of new wonderful experiences. So far all I've really gotten after doing a lot of research is some good projects and a long tail of terrible projects/websites and a lot of scammers.
It really feels like with the NFT backlash in the gaming world right now that crypto hasn't found its landing and it really hasn't taken off - its kind of in this weird purgatory. Im hopeful but very suspicious at this point. I wasn't suspicious of “the internet” until it was around for a long time. Crypto is past its wave of this is cool and lets build stuff phase afaik and now everyone is trying to make money off it.
In Dubai, buying real estate with bitcoin is a real thing, and by the looks of it also a big thing.
If nothing else, it shows that crypto has succeed in one of its goals: moving money between countries, without being detected/hindered by governments.
I mean, I don't know who buys real estate with crypto, but I am assuming that people who live in dubai and have large crypto values are bullish on crypto, and won't waste it for a low roi investment like realestate. So that leaves rich foreigners who wants realestate away from their own government and I can see them purchasing bitcoins as a way to siphon money out of their country.
Other than that, I am also out of ideas for useful uses of crypto currencies
close to? sounds exactly like money laundering, since people who can move money legitimately wouldn’t do so through a relatively risky instrument like bitcoin. tax evasion is a likely entry-level reason, but often coupled with other sketchy illegalities.
The pseudo-anonymous nature of Bitcoin makes it easier to hide transactions. It’s for example why online games that let you cash money out (or have rampant RMT) have issues with money laundering and credit card fraud.
If you bought your bitcoin with legit money, and then you exchanged the bicoin for a house, and you're doing your taxes correctly, how could that be money laundering?
Why shouldn't I buy the house directly with legit money then? Why add one more layer and pay some amount in commission and also deal with volatility in BTC prices?
There are all kinds of limitations in how exactly you are allowed to use your money. And settlement of such a large amount of funds between two parties is not simple and fraught with danger if you "do it alone".
Bitcoin or your blockchain of choice has no such issues though! You can prove to your seller that you have the funds, as well as even pre-commit the money in a smart contract, or a multi-sig transaction. Doing so would completely remove the need to wait on the slow and inefficient banks to do their thing.
> There are all kinds of limitations in how exactly you are allowed to use your money.
Where are you getting that from? If the money has been earned in a legit manner and you want to spend it on a legitimate thing, who's stopping you from spending it?
Yes if your source of money isn't legal or you want to spend on something illegal, that's a different story.
My money is completely legal, but it was a protracted process to:
A.) Transfer a part of it (for this particular bank, anything more than $5000) to pay a deposit for a house;
B.) Make a final settlement on a house, again with money I had available in my account.
There are limitations on how much you can transfer easily at once, and different kinds of approval and parties have to be involved to pay for something large.
Those per transaction limits are for YOUR protection so in case someone hacks into your account they won't empty it and you can ask the bank to raise the limits.
Banks ask you the reason for transactions beyond a certain amount because they have to report it to authorities.
Large transactions like paying for a property don't happen at the drop of the hat. You won't just wake up in the middle of the night and decide to buy a property immediately right then.
You asked who is stopping you from spending your money as you want. I listed who and provided some examples. The reason why they make it difficult is beside the point.
It took me the better part of a morning I would have ideally spent on more productive tasks.
I spent an hour on the phone to get my limit temporarily raised, then another hour or so later in the day when the payment was flagged as suspicious and my account was locked. There was then an arbitrary waiting period of one day where the transfer sat in limbo before getting processed (more security theatre), and finally an additional two days for the funds to clear.
There really isn't.. I can pay 1 million EUR with my debit card if there's enough money in the account. That's the default limit, and can be raised anytime if needed.
If I have the money and they are legal, I can spend them without anyone getting in the way.
If I am in a country from where I can legally send money to Dubai to buy property, should I still convert money to BTC for buying property? Common sense says no. It may be legal but I don't need to add another layer of complexity.
If I am in a country from where I cannot legally buy a property in Dubai, would buying a property via BTC route be legal? Definitely not.
The only scenario in which it makes sense to buy property directly in BTC is if I had bought BTC years ago when it was cheap, it would be better to convert it into a real asset like an apartment in Burj Khalifa and convert my on paper wealth into real wealth.
The core scenario in which it makes sense to buy property in bitcoin is if you already hold a ton of bitcoin. Then, selling the bitcoin in order to pay fiat for a house is the more cumbersome route to take.
A few years ago I was earning a fair chunk of loyalty points (and hence air miles) by buying gift cards in supermarkets, then immediately depositing the full value of the gift cards into a savings account of mine.
This was entirely legal, and I was Making My Own Financial Decisions™, but the route got shut down pretty quickly anyway.
How easy is it to actually buy 5M USD of bitcoin? Assuming you have legit money?
And why would you move legit money out of the banking system? Assume you have 5M USD in bitcoin, can you sell it and deposit that in your bank without lots of money laundering questions that are hard to answer?
My two cents is that if you have legit money, you will want to keep in the banking system, and avoid risks of being accused of money laundering.
That would be a stupid thing to do, as Bitcoin transaction chains are public and permanent, and the use of mixers[1] close to a deal will set off alarm bells.
Cash is an infinitely better money laundering vehicle.
[1]: tools that blur the transaction chain, masking the origin of one's coins.
Cash is not so easy to move internationally. It is not so easy to move around internationally at all with flight-delays and cancellations and what have you covidis
You have cash (like a ton of cash in bank notes). The cash has unsavory origins. You go to a shady local dealer who will take your cash and give you crypto in an offshore exchange. That is cross border money laundering. You then use that crypto to buy property or NFT "art". Some months later you sell the asset, either for money in bank or crypto which you convert to money on a KYC exchange like Coinbase. Voila, you have washed your dirty money into perfectly clean money in bank. Best, you do it in a jurisdiction which doesn't have personal income tax. Like Dubai.
Yeah it's difficult to see how this facilitates money laundering. Say you're a drug kingpin who has a billion in literal paper cash that you need to make appear legitimate.
Somehow, you've got to do a billion dollars in cash to bitcoin transactions, but what's the point of buying middle eastern real estate with the bitcoin after that? Why not just rinse the bitcoin through a tumbler and sell it on an exchange and tell the taxation ministry that you simply made a great investment? Then you have a billion dollars minus tax in your bank account that you can do anything with. Dubai real estate is completely irrelevant to the process.
I think "money laundering" is like "ponzi scheme". The more likely someone on the internet is to use it, the less likely it is that they actually understand the term.
You may be right but let me explain why I think Bitcoin actually works well in this example for money laundering. You have cash and you buy bitcoin. US bitcoin exchanges probably do kyc (know your customer = laws / forms you file saying you know where the money comes from) but many offshore exchanges supposedly do not.
You could take your bitcoin and sell it on an exchange as you suggest but there are two problems with this. First, it's not that easy to sell a lot of bitcoin for real USD and the transaction costs can get high. Second, and more importantly, as money launder what you really want to do is take your dirty money in one jurisdiction and take it to another. Did you ever see Blow? Based on a true story. A US guy raised incredible money selling cocaine and stored it in a shady Panama Bank. The bank steals his money. What his recourse? If you are an oligarch in a corrupt country you want to get your money somewhere your government can't seize it. So why not take your bit coin and use it to buy real estate in Dubai? If you took your bitcoin and sold it in a way that ends up in a western bank, that bank is going to do kyc and defeats the whole purpose.
Obviously I have never laundered money and I don't really know. Tell me I am crazy.
But to buy bitcoin on an exchange, even if it doesn't have KYC laws, you'd need to have the money in a bank account first to do the wire transfer to fund your crypto exchange account. The problem of money laundering is how do you get it into the bank account in the first place. What I'm saying is that you'd have to do actual cash transactions, meaning giving someone paper money and getting bitcoin into your wallet. That's quite a problem, especially as the numbers get larger.
There are plenty of HNW individuals who want to buy or sell crytpo for cash no questions asked. Just last week a Swiss guy wanted to buy 1.5 million EUR of bitcoin from me for cash at a 10% premium. He'd supposedly have the cash delivered anywhere in Europe.
Too risky for me, but if you're a drug cartel, that's business as usual.
I think it's easier if we think about it with concrete people. How exactly would someone like El Chapo be using bitcoin for laundering activities?
Furthermore, when people bring up the laundering and crime argument, I always point out that the us dollar is by far the medium of choice for laundering money, crime, ransom, extortion, drug payments, human trafficking payments, terror financing.
Accepted almost everywhere, virtually untraceable.
Plenty of countries don't. I was just asking a friend if it would be difficult for an American to open a bank account in Thailand or Vietnam because of the reporting requirements. He said that with the proper introduction, there would no problem at all. Doesn't matter if you want to deposit $500 or $5 million. There might be an extra "service charge" for the larger amounts, but there will be no questions about its origin.
"DLD has created the blockchain system using a smart and secure database"
A blockchain system using a secure database. Makes it abundantly clear, how much they understand what a blockchain is. Truly, future belongs to blockchain systems.
That is what financialization does. Finance is a parasite that will destroy all potential if given room. To force finance to be symbiotic you must never allow them to control anything.
These ideas are best left in the academy, and then later financialized. The exception to this is internal R&D (like Bell Labs and countless other extremely productive corporate divisions.)
Out of curiosity: How well have significant Bell Labs contributors been compensated? It seems to me that lost of current tech, and even 'future tech' not yet adopted has come out of Bell Labs. But how many of the engineers that came up with said advances settled for relative peanuts? Getting paid $250K for something that changes the world seems... less than adequate.
'Public voting' is not a technological problem but political one. There's a lot of opposition to making voting more accessible to everyone. Voting should be easy, and you don't need blockchain for that but maybe it could help. The question is who wants "voting rights".
Unfortunately, trust in voting can only be achieved with paper voting, there is no technological solution to improve it that doesn't completely remove trust as well.
Removing trust completely is a pretty high bar... but there are different voting schemes out there and some of them do a pretty good job of removing a lot of the trust. Cryptography is typically involved, but blockchain is not needed. I wrote more about this here: https://www.attejuvonen.fi/thesis/
Here by "remove trust" I didn't mean "trust-less assurance that voting is correct", I meant "you have no reason to trust that the system recorded your vote correctly".
A basic problem with electronic & cryptographic voting systems is that it is impossible for a non-expert to convince themselves that the system is working correctly. In-person paper voting has this property by virtue of the simplicity of the system and the ability for regular people to observe it's working. This also normally includes members of all political parties participating in the vote, giving a high degree of confidence that either (a) the voting was correct, or (b) the parties you voted for are colluding, so the result is meaningless anyway.
You write as if there is only one voting scheme for in-person paper voting, and as if laypersons by and large trust the results of paper voting elections. Neither of these claims is true.
First of all, there is more than one in-person paper voting system, and some in-person paper voting systems involve cryptography.
Secondly, layperson DO NOT by and large trust the results of paper voting elections. You don't need to look further than the previous presidential election in the U.S., in which a significant portion of votes were cast on paper ballots, and a large portion of the population STILL does not trust that those votes were counted correctly. And if you look at developing countries handling their own paper ballot elections, you will find out that many of those elections are manipulated, and people do not trust the results.
That said, I agree with your general sentiment that adding electronic and cryptographic elements to a voting scheme will make that scheme generally "less understandable" to a layperson, such that they need to defer to "expert opinion" on whether that voting scheme can be trusted. However, it's not a binary thing like you make it out to be; people do not 100% trust your chosen paper voting scheme and 0% trust your chosen electronic voting scheme.
Anyway, I feel like "how do we get people to trust the results of the election more than they currently do" is a secondary problem. The main problem is how we can actually secure the results of the election while maintaining ballot secrecy. It's more important.
> Secondly, layperson DO NOT by and large trust the results of paper voting elections.
That is false. Though there is some distrust in many parts of the world, the overall consensus is that the result of the vote was at least close to the real vote. Even in the USA after the recent election, many focused on accusations of fraud about voting machines (the infamous comments about "Hugo Chavez's machines").
I do agree that it's not a 100%/0% thing in practice - some people will always choose to trust or mistrust the government regardless of other facts; and some people know or are convinced by facts that others don't believe or don't have access to to trust or mistrust.
However, I would say the right response to pure electronic voting would actually be 0%. It's actually out of gullibility and misunderstanding that people put any trust in pure electronic voting *, when in fact it can be attacked in ways that not even the best expert in the world would ever notice, and this can be done by sophisticated out of state attackers (such as the USA or Chinese spy agencies). In such a high-stakes environment, you can't trust the CPU, you can't trust the RAM, you can't trust the USB controller, you can't trust the cables - everything could have been rigged to perform different computations than what was apparently programmed, and this would be often be impossible to prove.
* with the possible exception of electronic voting systems that make everyone's vote public, with obvious downsides. Though even there, I have some reservations - if I claim I voted differently than what the public ledger shows, what happens next?
You're again describing one type of electronic voting, while making an argument against all forms of electronic voting. Regarding this specific type of "black box" electronic voting, yes, I agree with you, it's horrible. Now, it isn't the only type of electronic voting out there. I recommend you familiarize with other types before making sweeping arguments like that.
If we want more democracy I think we must get some help from technology. Liquid Democracy (https://en.wikipedia.org/wiki/Liquid_democracy ) sounds like an approach that would be hard to do without computers.
Of course, the public can mistrust a paper vote, for good or bad reasons.
But, it's not possible to reasonably trust an electronic voting system - the people installing and maintaining the system have myriad ways to manipulate the vote that are almost impossible to discover or prove (at least as long as you don't accept public voting, which has different issues).
The difference is scale: if you’re doing something funny with paper ballots you need a conspiracy involving a LOT of people shipping things around, disposing of the correct ones, etc. Trying to monitor people’s votes similarly requires something like cameras in a lot of places.
Software systems make all of that possible at scale with far fewer people, and thus much more plausibly possible to keep secret.
Outside the huge difference of scale that another commenter mentioned, there is also the difference of how easy it is to ensure this doesn't happen. For paper voting, in many countries, each party participating in the vote will have members observing every step of the process - the voting rooms, the local ballot counts, the vote transport, the regional and global vote tallies. Additionally, every citizen and even foreign independent observers has/have the right to do the same. And, since the system is dead simple, they each have the actual ability to tell if nothing was tampered.
The same thing is in no way true for electronic voting. Giving everyone access to personally inspect the electronic equipment at any level of detail is difficult logistically, and also very likely to result in damage. Even if you were able to, vanishingly few people could actually convince even themseoves that the systems are not tampered with.
There are many different ways to construct an electronic voting system. What you are describing is a traditional, centralized electronic voting system. There are electronic voting systems out there that provide certain guarantees without the need to trust.
No, there aren’t. There are systems designed to solve the problem of the inventor not getting paid by election officials but voting is an extremely hard problem once you learn about it and safe electronic voting is unsolved.
The big challenge is that it needs to be anonymous even in the case of attacks. Electronic systems offer many ways to cheat which you may have thought about in the context of making purchases but voting also needs to deal with unique problems like changing votes or coercion. If I buy a coffee, I don’t care if the owner alters their database as long as I get my coffee. I also don’t have a reason to fear that charge showing up on my statement but most proposed systems re-enable old attacks where, say, your boss/union/neighborhood crime leader/etc. could use the verification mechanism to confirm that you voted the way they told you to.
Paper ballots are the best system known because the system is easy to understand and doesn’t require huge amounts of trust. We just went through this in the United States where the leader of the country backed by a multibillion dollar propaganda machine tried to claim fraud but lost repeatedly because there was no plausible way to have altered or replaced paper ballots at scale. Electronic systems would have made it much easier to cast that doubt because the babble they tried about hacks would have been harder to disprove for the average voter and there would have been far more leeway for a partisan judge to find doubt.
That shows that in-person paper ballots are superior once you correct the system in Finland (P6/7 would normally be green for in person paper).
More importantly, however, it’s a mistake to give all of those equal weight. For example, if married couples vote together a spouse can monitor or coerce their partner’s choice but that doesn’t scale up better than linearly, whereas all electronic systems which don’t rely on voter-verified paper ballots are subject to very hard to disprove allegations of widespread fraud. This is the conceptual problem to the very clever mathematical approaches: even if they are theoretically sound, it is much harder to build public confidence in a system which a fraction of a percent of the population understands.
> P6/7 would normally be green for in person paper
I doubt that. Are there voting schemes out there which prevent people from bringing mobile phones inside a voting booth? If not, then spouses can walk to a polling station together, and one spouse can walk inside the voting booth alone, take a picture of the filled-out ballot, and then drop the ballot to the box in view of their spouse. If there is no method of preventing photography inside the voting booth, and no method of invalidating a cast vote afterwards, then spouses can easily prove to each other how they voted.
> More importantly, however, it’s a mistake to give all of those equal weight.
Fully agreed.
> it is much harder to build public confidence in a system which a fraction of a percent of the population understands
I agree that more complicated systems are harder to understand than simpler systems, especially to laypersons. That said, I do not think that laypersons have a very in-depth understanding of how their paper-voting schemes currently work. There's an element of trust that goes into it, like surely some smart people have verified that the voting system in place is alright. If we had a more complicated system in place, then laypersons would need a bit more of that trust.
Laypersons have trust in things like online banking, even though it's technically a flaming garbage fire. People could just as well have trust in a cryptographically verified voting scheme.
> I doubt that. Are there voting schemes out there which prevent people from bringing mobile phones inside a voting booth?
Well, this is one reason why the last three places I’ve lived don’t allow phone usage in the polling station and have processes for getting another ballot, but also none of the electronic systems can survive that level of control either — most of them make it substantially easier for the attacker, especially at scale. That last part is important because the more people are required to pull off an attack the less likely it is to be successful.
> Laypersons have trust in things like online banking, even though it's technically a flaming garbage fire. People could just as well have trust in a cryptographically verified voting scheme.
Banking has key differences, though, which I think are significant: you can do non-anonymous audits, you don’t need deniability, and most importantly you can restore losses after the fact.
> Well, this is one reason why the last three places I’ve lived don’t allow phone usage in the polling station and have processes for getting another ballot
Do they kindly ask people not to use phones inside the polling station, or do they actually bodyscan people for electronic devices when they go in the booth? Because if they just ask kindly, that's not preventing anything.
Finland also has processes for getting another ballot, but only until you cast a ballot. You can't invalidate a ballot that has already been cast. So that means you can go in the voting booth, take a picture of how you voted, and then ask for another ballot. This would be sufficient to fool anyone trying to buy votes en masse, but it wouldn't fool the spouse of the voter, who could be physically present at the polling station.
> none of the electronic systems can survive that level of control either
Some of them do, actually. Some electronic voting systems craft proofs which are convincing to the voter, but only to the voter. This means that the voter can cryptographically verify that their vote has been cast correctly, but the voter wouldn't be able to convince a potential vote-buyer how they voted, because the voter could have potentially forged the proof.
> Banking has key differences, though, which I think are significant: you can do non-anonymous audits, you don’t need deniability, and most importantly you can restore losses after the fact.
Yes, online banking is a much easier problem. Despite that the actual implementation is garbage fire from 1970s. I was just trying to say that getting people to trust a complicated system is possible (e.g. people trust online banking, despite it being a complete garbage fire). Therefore, it could be possible to get people to trust a cryptographically verifiable voting system as well.
> Some of them do, actually. Some electronic voting systems craft proofs which are convincing to the voter, but only to the voter. This means that the voter can cryptographically verify that their vote has been cast correctly, but the voter wouldn't be able to convince a potential vote-buyer how they voted, because the voter could have potentially forged the proof.
You’re positing a situation where someone can force them to vote at a specific time and place and either watch them or have them send proof of how they voted on paper. How realistic is it to think that an electronic system wouldn’t be at least as vulnerable to that same attack, even before you consider the likelihood that an attacker with that much control could use their credentials to vote or verify their history, install spyware, etc.? It’s one thing to have a game theoretical chance to deniably cast a vote and quite another to, say, be confident enough that you’ll be able to convince an abusive spouse to believe you.
Let's take Civitas as an example. In Civitas, a voter has both "real credentials" and "fake credentials" that they can use to vote. Let's say that the spouse of the voter forces them to vote on a malware-infested machine, at a specific time and and place, while physically watching them vote, and also capturing any forensic evidence available on the machine. In this hypothetical the voter can simply use their fake credentials to cast a fake vote, and later use their real credentials to cast a real vote in secrecy. Will an abusive spouse be convinced that the coercion worked? No, but there is nothing the voter can do to convince the spouse in this case anyway. Even if the voter uses their real credentials to vote, they still have the same problem: they have no ability to convince their spouse that they voted as requested.
It was also designed as a pyramid scheme though to drive adoption. This was an unfortunate mistake and that and the inefficiency at scale doomed it as a currency.
Decentralized, anonymized identity is one application. It sounds amazing in theory - and can work for the general use cases of sharing information with corporations. But, I believe it won't really be anonymized, as "data exhaust", "identity touch points revealing identity in aggregate" can help identify.
An example I use, is people expect bitcoin is anonymous. Yes, it is anonymous to the general layperson and corporation - but not to say NSA/FBI for "people of interest". And once bitcoin to USDollar transactions or financial institutions are more common - banks will sell your wallet information to credit bureaus, and eventually corporations will be able to de-anonymize chains for profiling just as today.
I can think of small problems that use blockchain as a solution, but they're relatively niche and only make the game-space straddle the real world, so they tend to be a bit on the vaporware side. Handy, sure, but I'm not sure they are A) 100% necessarily or B) as revolutionary as everyone seems to think blockchain is meant to be =[
EDIT: forgot to say, this could be a complete lack of imagination on my part past what's been done with blockchain already or just my horrible indoctrination into the game-space like some kind of cult =)
It seems you are looking for a product blockchain enables you, but there are activities the blockchain enables which are not products, and are very difficult up to impossible without.
One example is sustainable (financially) open-source project is one I use now. Before that it was always impossible. You get a bunch of people all over the world, many of them are identified only by Internet handles. There's no investment to handle all the legalities of establishing a business, and anyway there's no legal framework for international businesses with psuedo-anonymous people.
But with blockchain we've been using DAOs and online voting tools etc. since 3-4 years now, and it works great. It handles the governance and the finance in a way the traditional system cannot offer.
> One example is sustainable (financially) open-source project is one I use now. Before that it was always impossible.
And yet just like blockchain, you allude to something without providing any substance. What is the open-source project? You’ve failed to actually tell us what the real “thing” is.
You're saying that you wouldn't be able to perform online votes or surveys and remotely send money without a blockchain?
Could you expand more on what functionality that the blockchain provides that the other solutions in this space (online surveys and remotely send money) don't?
"Remotely send money" is a super hard thing to do. I literally just struggled for a month with a transfer that included 3 countries, none of them is English speaking. It required letters from banks, accountants, plenty of forms of different countries, translations, stuff which is lost in translation (the bank was unhappy with the word selection of a non-English speaker accountant, for example), different formats, different standards and navigating countless options and tricks in order to avoid ridiculous exchange and transfer fees.
This was for a "simple" action in the real world, involving me and a regular seller of something. Now take this and try to divide donations between 5 participants of your project, each from a different country and a different language. Good luck with that.
Hwoever, in my open source project we did the same thing in 20 seconds with crypto. Not because we avoid tax (we don't), but because the international mechanism is cumbersome and inaccessible if you're not an expert, and expensive probably even if you are.
We manage the donations/profits with votings, and are not familiar with a platform offering a safe way to do that in our settings.
Besides, my experience with platforms for open source projects (or in general) is bad. There is no one platform offering all the services we need, so we end up having dozens of accounts (which is actually a source of tension, because when you offer to use a new platform, an argument starts with those who "have enough accounts in their life"). Moreover, platforms eventually close, so you get stuck (migration is a hard thing to do).
Let me ask a question that maybe will look at it from a different angle. Which problems remotely sending money and online platforms solve that crypto has for managing votings and finance of an international online open source project? Seems to me it beings 100% extra problems and 0% solutions.
> "Remotely send money" is a super hard thing to do.
Technologically it is not.
Which is why anyone in the EU can instantly send money to anywhere else in the EU, for free, despite being a collection of 27 countries with dozens of different languages and legacy banking systems.
The hurdles are legal and regulatory, not technical.
Blockchain and new technology does not solve the underlying problem at all.
Part of the transaction I described (which was personal) involved a bank transfer between two EU states, and it's simply not true. It's not instantly, doesn't work 24/7 (a transaction made on Friday arrived on Tuesday), and you have to find plenty of tricks to avoid high fees and super bad exchange rates (EU has more than one currency, you know).
Free instant transfers are the direction of travel, but in the EU, that is a question of regulation, not technology. Maybe in 2030 we will be there :)
But for many transactions, I see that instant would be nicer, but I don't see the crucial need. My employer pays all Eurozone salaries from a bank account in Luxembourg, I imagine it is just a script checking "Initiate transfers on 10 AM, 1 day before last working day of month". Being able to do "Initiate transfers on 23.59 PM of last working day of month" would be slightly nicer, but I don't think it really solves a huge pain point?
Wise (former Transferwise) is pretty much instant in the EU, with very low fees.
Even then, transferring money with SEPA from my Swedish account to friends in Germany, Poland and the Netherlands is pretty much instant, I just don't like the exchange rate of my bank.
It's a technological problem. The SEPA system relies on MANY providers giving a many services. Replaces it with a technology that doesn't rely on any providers but instead allowing direct transfer of money from one person to another, and by almost by definition it'll be faster.
It doesn't matter what I believe, it's what I experienced and observed. For example, I knew a couple who lost their money via fraudulent debit card transactions and bank did piss all to investigate - and I understand its hard and bank is not motivated much. By using a credit card for example fraudsters would've spent bank's money and my friends would not be responsible for such transactions. Now if they used crypto they would be in the same position and there wouldn't even be an authority to ask to investigate (how convenient). I am not saying that people are not getting ripped by corp - just by probability many people are. But I don't see "crypto" as the answer to the problems I know about. What specific problem crypto solves in payments?
But none of that needs Blockchain as a technical solution.
E.g. my bank allows worldwide free SWIFT transfers in many many currencies. It's not hard to find out someone's name, bank account number and SWIFT code et voila... money sent. There's plenty of other solutions from Paypal to (Transfer)Wise etc.
Saying "it can be done in 20 seconds with crypto" is really only half the truth. At the end of the day we all need fiat money. So there's always a conversion step (if not two!) between fiat -> crypto -> fiat money. I can't pay my baker in Cardano nor my hair stylist in Fantom.
Using some kind of crypto as a more internal transfer and accounting unit seems like a fair use case. And then on/off ramps to traditional when needed.
Could likely be done simpler, but then why not (there are payments solution providers that keep everything internal etc.).
> "Remotely send money" is a super hard thing to do. I literally just struggled for a month with a transfer that included 3 countries, none of them is English speaking. It required...
But this only shows that some (many?) places are woefully behind on online banking, not that blockchain is required. I can transfer money abroad from my bank account to, probably, yours (do you have an IBAN account number?) with just a few clicks more in my online bank than a domestic transfer. If the banks in your target countries caught up to that (not incredibly advanced) standard, you could have done that too. And I'm fairly sure neither my bank nor the ones of my recipients, nor the systems in between them, use any blockchain whatsoever for this.
So not a valid example that blockchain is actually needed.
In the end, someone has power over the things in the real world, like releasing a version of the software or purchasing stuff. So everyone involved has to trust that someone at the least.
If the developer introduces a major change, it'll fork the chain. Everyone on the old version of the software will see one chain, everyone on the new version will see the new chain. If not many people switch, the old chain will be the valuable one. So it's kind of a voting system where the community as a whole votes. If the vote isn't decisive, both chains have value.
As far as purchasing stuff, there's no central purchaser that I can think of.
> If the developer introduces a major change, it'll fork the chain. Everyone on the old version of the software will see one chain, everyone on the new version will see the new chain.
Why? Can't the system keep using the same chain, or is this just convention? If any software change required a fork, you couldn't do even the most trivial of bug fixes (say, fix a typo in the UI, or whatever). But I notice you said "major change"; so who decides what's "major" and what isn't? On which grounds?
It's not convention. If it's possible to create a transaction that one version thinks is valid, and the other doesn't, someone will create such a transaction, it will be included in the chain that accepts it if that side has the majority of the hash power, and the other one will reject it. Thus you will have 2 chains (not to be confused with 2 Chainz).
The definition of "major change" in this case is a change that changes the definition of a valid block or transaction.
> Auditable in the sense that the code is there to read
Which code? Just your client code, or the code that miners and brokers and exchanges run on their servers, too? If the claim is the latter, how do you know that the published source code actually corresponds to the executables they're running?
How do you comply with compliance and reporting requirements? I would naively imagine that interacting with the financial system/fullfilling requirements for cross border payments etc. are still difficult when everyone is anonymous
Not saying you are doing something wrong but rather that I see a lot of applications in the wild that have to do with people imagining also a different regulatory landscape - which actually is a discussion to be had.
I transfer all my financial actions to my accountant who's reporting it while instructing me what I need to do further.
Compliance and reporting really differ from one country to another, and I'm not familiar with the US system (which I heard is one of the most strict). But as far as I checked (I'm not a lawyer, not an accountant and not an expert), where I live in the EU, compliance is something for legal entities (like, organizations, companies) and not for individuals like me.
[E: I take the last sentence back, it's a too general statement and I don't have the knowledge to make it. Thanks @hnhg for the comment]
I'm not sure that's the case. I'm no expert but I believe those entities exist in part to take liability away from us as individuals. It's my understanding that, for example, in certain cases of privacy and security regulation I would be personally liable as an individual without an entity to undertake it for me. This could change by country and entity type though, even in the EU.
You're probably right. I really wrote a too general remark, but actually meant specific things about my situation. I added a part now taking this general statement back.
Thanks. So pretty traditional in that respect - sounds like a nice example of getting both worlds to work. In my work I also see this kind of "non-maximalist" use cases as the more successful at the moment.
I like the idea that the chain can be used as the source of truth when other sources of truth have failed us. first 15 minutes of this https://www.youtube.com/watch?v=Cwbbxb987vE
that will always be the case for anything off chain. the question is do oracles and well constructed systems provide better data than what we have access to today
And the answer is no, because anything which can be done to improve the trusted third-parties can be done more efficiently without the extra overhead of a blockchain. Blockchains require expensive always-on networks whereas many operations can run with much lower data requirements and even work entirely offline.
You can do that using public-key cryptography much cheaper, without depending on a massive network and expensive processing fees. The only time a blockchain can make sense is if the parties don’t know or trust each other, and by definition you’re trusting an oracle.
Issuing tokens is still probably illegal in both countries I live/work in. Regulatory and tax compliance immaturity are holding back a lot of people besides at the wild frontier or offshore operations with the resources to navigate that
> Back in 2017 during the first hype cycle, blockchain companies raised hundreds of millions with ICOs.
Yes. Those scams have been put an end to by regulations by the SEC, as unregistered ICOs are now illegal since 2017. [0]
> there is not a single product aside from trading/finance that got traction.
So what is wrong with using blockchain domain names like ENS for identity, or sign in use cases? Are we going to look back at this in 10 years time and we will see this sort of adoption? [1]
It's muddy waters. I just heard some guy from a public office saying they used DOT for some specific need (related to managing bonds somehow). And it was before last year boom. It's all very fuzzy
I'm glad someone remembers the (2-year) history. NFTs=ICOs, just another scam to keep "crypto" afloat. Neither ICO nor NFT resulted in anything useful, wait, maybe Bored Ape??
Helium network is an example of a successful blockchain project/application in my opinion. They created the biggest decentralized lorawan network in the world that is used by more internet of things companies everyday. Also they are trying the same thing for creating a decentralized 5G network. It’s still early days for them because I think they started in the end of 2020 or the start of 2021, but they have grown to 490000 lorawan hotspots already. The network usage could be better, but is increasing (saw increased sensor data activity for my hotspot in 2021).
The math for Helium just does not make any sense. Looking at forum threads every gateway makes about $50 in rewards / month. That's $294,000,000 per year in rewards paid out to gateway owners.
Sending one packet costs $.00001 (100K packets for $1 according to their website). So we need to see 29,400,000,000,000 packets yearly on the Helium network for data fees to cover the gateway rewards.
Looking at data from The Things Network - who operate another LoRaWAN network - from their conference last year they mention routing 600 packets/second using 30,000 gateways => that's 630,720 packets per gateway per year.
Assuming that Helium sees the same ratio of packets, and that every packet is unique, and that every packet is meant for the Helium network (and thus paid) this yields an expected (630,720 * 490,000) 309,052,800,000 paid packets => 309,052,800,000 * 0.00001 = $3,090,528 in data fees.
So ~3 million $ in revenue (in very best case scenario) from data fees, but paying out ~294 million $ to gateway owners.
Naturally the only way this works is because they give out their own invented tokens rather than dollars. This does not make any sense, and will never make any sense. I read that the gateway manufacturers pay the Helium company 50$ per gateway (to provision a private key) which probably pays for some stuff (and to pump up their own coin), but if that's the case then it just looks like a pyramid scheme.
Also scale doesn't help if you pay out 100x more for every gateway than you can potentially earn per gateway. But that should be obvious. You're paying a gateway for 600$ and then you get >600$ in rewards per year. This does not make any sense.
Ok, I will bite :) The gateway rewards are becoming less and less every month because more gateways join the network. So in a certain way that feels like a pyramid scheme because the people that joined earlier have an advantage (they also took the most risk by backing this project in a early state). It is quite normal to reward the first movers to your platform (PayPal even gave away free money to grow their user base)
There is a twitter account that publishes the DC burn rate hourly/daily/weekly: https://twitter.com/HNT_DC_Burn. Last week they burned $1,064,348 in data fees so the revenue is way higher than the 3 million per year you described, but you make a fair point for the gateway activation fee and not sure how much of the DC burned is because of this. But focusing on growth by giving out rewards for early hotspots is not a weird tactic and the question is indeed if the pricing make sense for the long run. Nowadays most priced stocks or other assets don't make any sense to me as well, so I would have agreed with you 10 years ago, nowadays I'm not so sure. They are also expanding to the decentralized 5G market and the packets send will be way more than the LoRaWan network, so I think that is priced in the helium price as well at the moment.
Your last statement I don't really understand. If you participate in a network by investing/running the hotspot you would want a compensation and nowadays a gateway would earn less than 600 dollars a year because of the increased hotspot amount. There will be an equilibrium that the market decides otherwise people would shutdown their hotspots.
This is what Elon said about PayPal growth strategy:
ELON MUSK: Yeah. Well, we started off first by offering people $20 if they opened an account. And $20 if they referred anyone. And then we dropped it to $10. And we dropped it to $5. As the network got bigger and bigger, the value of the network itself exceeded any sort of carrot that we could offer.
Helium is trying the same thing (only decentralized) with the proof of coverage algorithm and rewards (which are diminishing by a halving process every two and a half years I think) so that the network can sustain itself. Please let me know why the cognitive dissonance is astounding because their proof of coverage hotspot rewards look a bit more advanced to the growth strategy PayPal used and they hope the network will be sustained by data transfer only when the rewards are not given anymore. (https://cdn.codetober.com/wp-content/uploads/2021/05/1111471...)
Sorry, can you please explain (or give some link) how it is related to blockchain? https://www.helium.com/lorawan doesn’t mention this word
In general, I was under the impression that IoT devices are underpowered for such usage.
Thank you!
Also the internet of things devices are not running the blockchain but can (energy) efficiently transfer data to the helium network. The hotspots are also quite efficient if you look at the power usage (more similar to a light bulb instead of a proof of work miner)
So the devices probably go across the WiFi networks they're on and hack into the owners' PCs (or phones?) to mine Crypto-"currency"... At least that's the one way I can see for it to make financial sense for the manufacturer.
The manufacturer earns money by selling the hotspots, so not sure what you mean tbh. I think wat you are describing is a anti virus scheme like Norton 360 and Avira are doing by install/hack into PCs with hidden PoW mining code which is unethical/horrible . Bit weird to claim this for a hotspot that hasn’t a connection to your PC and trying to slander something without investigating it properly. I get the blockchain hate (especially PoW), but unfair to accuse every project of unethical behavior if there is no proof whatsoever.
Now that's an interesting idea. I'd wanted to have "proof of decentralization" - require that nodes be physically distant from each other, to prevent mining farms. But I couldn't figure out a way to prevent cheating. It's easy to fake that you are far away, but hard to fake that you're close, because the speed of light limits ping time.
But if you have something that's a useful network in its own right that keeps track of its own coverage, you can use that to enforce decentralization. The higher the density of nodes in an area, the lower the reward.
Helium network is also battling bad actors in the network and even though the have anti cheat measures in place they are currently voting on a deny list approach to target bad actors as well.
I am very curious about these actual users of Helium you refer to. I know there are a lot of nodes (where if you dump money at people--whether by direct subsidy or via circular incentive engineering--to run them that isn't surprising); but I hadn't heard of actual users. Is there any documentation of such, charts of actual usage over time, or articles covering "we adopted this and it was great"?
I got some airly (https://airly.org/en/products/airly-sensor/) air quality sensors in my neighborhood that are using Helium and you can see other solutions that are using https://www.helium.com/ecosystem. Not sure about the actual usage over time from sensors vs new hotspots joining the network and paying the DC fee, but I'm following https://twitter.com/HNT_DC_Burn and this should increase if the Helium network will be adopted more by sensors/IoT companies. Also the 5G hotspots they are providing in the US will probably add some value as well. You can check the helium twitter feed for companies they partner with or are using the helium network.
Do you know of any logistics company that actually uses it? What exactly do they store on blockchain? Who gets to add blocks to the chain? Are those permissioned blockchains? Can a private permissioned blockchain even be called blockchain? How does a private blockchain differ from a centralized database?
That's a very energy-inefficient way of rewarding content creators. Given that most users are going to go through Coinbase et al, it's no different from any of the other similar schemes (anyone remember Flatr?) except that you have a volatile wallet and a payment mechanism that somehow manages to be even more expensive than Amex!
Plus, it was clear that online shopping could work and offered certain advantages (and disadvantages). It was also pretty clear that online access was only going to expand, which would make online shopping more attractive.
It hadn't hit a peak, but it was clearly _doing_ something that wasn't scams.
Maybe you could refer to some history more specifically? Are you saying networking technology was developed in advance of a concept of what it's useful for?
Or is it that a global network of networks was a qualitative step beyond simple networking that didn't have a clear justification?
> Maybe you could refer to some history more specifically? Are you saying networking technology was developed in advance of a concept of what it's useful for?
I'm saying that networking technologies original intended use (resilient nuclear launch capability) is a tiny irrelevant fraction of what it is used for today.
I'd argue that most transformative technologies are in fact not relegated to their original intended use. Following cool/interesting/powerful technologies to see where they lead, rather than knowing the destination in advance, is how we have gotten almost everything that we have.
Being resilient to unreliable connections in general is a feature that was important initially and has never stopped being relevant.
The purpose of ARPANET was to implement applications like telnet, ftp, and email, so people could benefit from remote access to computers. The first network link went up in 1969 and the basic applications were implemented by 1973.
It seems to me that people knew exactly what they wanted to do from the get-go, it was useful almost immediately, and even though we have exponentially more people, computers, and applications today, the internet itself hasn't fundamentally changed.
This is not a proof that cryptocurrency is a dead end, but I think it's as clear as it can be that it has not been developed and adopted like internetworking was.
One could argue that the internet was in fact not innovative, transformative or interesting, and identify that as where it is different from cryptocurrency. Isn't connecting existing networks to each other as obvious, mundane, and utilitarian as it gets?
There is a RAND paper from the 60s that suggests the development of the internet over the next 50 years was fairly obvious:
> Being resilient to unreliable connections in general is a feature that was important initially and has never stopped being relevant.
That is a very abstract way of referring to the feature. Suppose 100 years from now the entire world runs on decentralized blockchains. You could make the same exact abstract point: "Well, leaderless consensus was the original design goal, and it was achieved immediately, so, it was useful from the very beginning".
Of course the core innovation will always be integral to the relevance of that innovation. The point though is that the specific applications envisioned for the internet were very narrow and almost completely unrelated to what we use it for today, when it was invented.
> It seems to me that people knew exactly what they wanted to do from the get-go, it was useful almost immediately, and even though we have exponentially more people, computers, and applications today, the internet itself hasn't fundamentally changed.
Again, only if you conceptualize "knew what they wanted" in a very abstract way that makes the point tautological.
Cryptocurrency as it stands today is already useful. There is no real debate about that. I personally find it useful as an alternative value store. The use cases might be narrow, and not nearly as revolutionary as some of its proponents think (yet), but they do exist. If I am the only person in the world that derives utility from it, then its utility is still non-zero.
But abstracting from crypto specifically, the idea that technologies need to have specific applications in mind before they are pursued is just not how the history of technology has ever worked. Many of the best discoveries were made entirely by accident, in the pursuit of random, interesting things. We make progress by pulling at threads, and pushing boundaries down avenues that lead to highly general, abstract, and powerful primitives. I don't know about you, but I think Byzantine fault tolerant contract execution is a profoundly powerful, abstract, and general primitive, much like the internet itself. We do not know what its specific applications will be, just like we didn't know about Uber, Amazon, or Google in 1969.
Go take a look at the history of the early internet. As recently as the early 90s (more than 20 years after ARPANet came online!) people were saying commerce would never happen on the internet. Nobody would ever feel comfortable buying things that way, it was absurd. Here's Paul Krugman, in the NYT all the way in 1998 saying as much:
It's way too easy to see where we are now with the internet as inevitable. But it was extremely far from obvious 30 years ago. Most of the world thought it was a toy. Thought business and commerce and ordinary people would never take it seriously. This was not a fringe view, it was the mainstream consensus.
Now, I don't want to fall into the trap of arguing that because the internet's future was obscure, and crypto's future is obscure, therefore crypto will be as successful as the internet. That's stupid. What I do want to argue is that the premise that technologies need to have clear-cut and specific applications before being pursued is wildly out of sync with how some of the most important technologies in human history have come about.
>only if you conceptualize "knew what they wanted" in a very abstract way that makes the point tautological.
I don't understand what you mean.
If they wanted remote login, email, and file transfer, and those applications were up and running in a year or three, and solved an immediate purpose/problem, that existed before the first network link was running, then what is it that is abstract or tautological?
I don't know how the contrast with cryptocurrency could be clearer.
> If they wanted remote login, email, and file transfer, and those applications were up and running in a year or three, and solved an immediate purpose/problem, that existed before the first network link was running, then what is it that is abstract or tautological?
Those are very small parts of the value proposition of networking today. Similarly, cryptocurrency delivered a feature on its first day: decentralized digital scarcity. You may not find this feature useful today, but some people do, and most people did not find remote login useful for quite a while after networking was invented.
The fact that the utility of decentralized digital scarcity is not world changing yet is not surprising. Remote login wasn't world changing in 1979 (10 years after ARPANet launched) either. It took quite a while for these things to find their modern use cases, and permeate the culture.
> I'm saying that networking technologies original intended use (resilient nuclear launch capability) is a tiny irrelevant fraction of what it is used for today.
But that's not what your GGP comment says (or at least strongly implies). ARPANET was not a solution in search of a problem; it was a solution to a pre-existing problem.
That this solution (or its progeny) was later found useful for a whole lot of other additional uses is something else entirely.
The reasoning in your progression of comments smacks if shifting the goalposts. To me, that implies an intellectual dishonesty that is all too typical of blockchain proponents.
A resilient decentralised computer network -- first realised as ARPANET, which later grew into the Internet -- was a solution to the (at least perceived) pre-existing problem of a military (nuclear) threat to the USA from the Soviet Union.
The difference was that the nuclear-war threat was somewhere between at least plausible and imminent, whereas the "problem" of centralized control over the money supply never actually existed; it's a delusion based on a fundamental misapprehension of what money is.
This is literally how research in the Universities makes it to the world. Spin-offs like Boston Dynamics are essential to building things that may not have immediate use but payoff can potentially be huge. We need to do more of this.
Don’t throw the baby with the bathwater. I really don’t think generalizations of certain jaded experience and then seeing the entire world with the same broken lens does any good. Probably the opposite. We ought to try new tech and keep an open mind.
Before people go off on Boston Dynamics - there are thousands of spin-offs, pick some other charitable example. The point isn’t about BD.
Boston Dynamics is and always has been on a trajectory to build useful products based on technology that is promising. Whether they're going to be successful or not is dependent on financing and time and luck of technology.
Blockchain was awesome technology in 2008, and Ethereum brought very interesting developments. But in the end there's only one thing it can do, and that's be an irrefutable ledger, and for most purposes that are of interest to the common person that is an insignificant improvement on centrally governed ledgers.
boston dynamics has never even been close to being on a trajectory to build useful products. they’re a grant-harvesting company first and foremost. they simply do not know how to build efficient and useful locomotors despite at least 3 decades of practice and millions of years of evolutionary precedents literally living right outside its doors.
in that way, the analogy to blockchain is apt: technology focused efforts are not product (read: marketing) oriented ventures.
They literally have a product for sale now. You make it sound like they're somehow worse at making locomotors than other companies are. Do you have any competitors in mind that achieved more with less practice?
the difference is that boston dynamics does not advertise get rich quick schemes to poor people. for example, 70% of the ads on the london tube are blockchain related. if blockchain was just something industry and academia poured money into, no one would have cared so much about it
Except that university research does not tend to produce that many charlatans and snake oil salesmen. I'll keep my skepticism until this technology gives us at least one useful mainstream thing.
I don’t understand your point. So if University research makes it out to the world - but the world decides to create scams from it, is it University’s fault?
I get it. People are angry about blockchain. Let’s shoot the world, not the messengers. Otherwise, we’ll be blaming the Bell Labs engineers for 4chan.
I don't think people are angry about blockchain (the technology) but about promises people make that with this technology will solve almost any society or world problem and then attracting people to invest and then if it does not work make the promise larger and atrract more money.
To use your example: it is like Boston Dynamics and people around will start saying invest in our IRO (Initial Robot Offering) as we will solve with robots everything. We can fix with our robots democracy flaws, we can fix with our robots inflation ... and when asked how will this actually work world wide they will say "We will just build more robots, invest more money into this and then when everybody will have one then that is how we fix those problems".
See the problem here? The problem is not the robot but the company/organisation and business model trying to sell it as a solution for everything without actually talking about the solution itself nor explaining how a robot will help with our financial system at large scale. At every critique they will just say "The solution is to build more robots and thus having robots everywhere so people will think about robots and not about other stuff".
There's no big problem, science and technology are progressing at a great pace. The whole marketing of snake oil solutions is just a nuisance, they're not really affecting anything of value significantly.
People are annoyed by Blockchain the same way people were annoyed by Justin Bieber, it's a whole lot to do about a person who is just a kid, a cool kid maybe, and he did make some good songs when he got older, but he didn't change the world, and he probably isn't going to either.
People hated Justin Bieber because he appealed to young girls, and tons of men automatically hate everything young girls like as some kind of twisted self defense of their masculinity.
People hate bitcoin because it appeals to people they find really annoying.
> People hated Justin Bieber because he appealed to young girls, and tons of men automatically hate everything young girls like as some kind of twisted self defense of their masculinity.
Naah, nothing to do with "self defense of their masculinity". We were just jealous that they found him so sexy and not us.
The primary difference is that basic research is conducted with everyone's money -- mostly via grants, and a lot of it in the US underwritten by the federal government -- for everyone's benefit. Even the venture capital industry is largely averse to basic research; they want more Ubers, or companies that can bring University tech to market.
Blockchain? The money flowing in is substantially from retail investors. And that's the problem. This is why we have regulations.
If Bitcoin is like gold, then there's really not much money going into it, into how to make better bit-coin, how to make better gold. All the money just goes into buying the bit-gold itself, or perhaps buying more mining equipment. But Bitcoin is not a replenishable resource so mining it will have diminishing returns, and like with every mining industry the nature is at risk.
From my very (admittedly very inexperienced) perspective, both views here are valid: it's foolish to scour the world for nails, but it doesn't hurt to make a hammer.
Build the technology, think of how it could help, and if you can't find a niche in the world that it fits, don't force the issue. Move onto new things: perhaps re-use some old ideas, of course, but actively get a wider experience, so that you increase your surface area of finding some way for your technology to help.
I have no idea what blockchain does or not. But just because its applications have turned out to be scammy, is it possible that it still has good uses in the future?
May be and may be not. OP is saying more generally that we should stop looking at tech that has no uses. I am disagreeing with that stance and it is just silly to be so wound up about Blockchain zeitgeist to not see through the fog.
the problem with Blockchain is that it is strictly less efficient than centralized databases. therefore the only reason to use it is if you can't trust a centralized database. it's like torrents in the alternate universe where torrents were slower than a download from a server.
It's not a bad analogy. Torrents have more cumbersome UX and are less data efficients than direct downloads, yet they are widely used for some types of applications.
This is waste to keep throwing resources at something because maybe someday something good will come out of it.
There’s many more areas like sequencing genomes and fighting cancer that these programmers could be spending their time on.
Is there any cool stuff that doesn't involve speculative trading in some "coin" or "token"?
I recently read about a steel maker in India executing a cross border order on blockchain. On further reading it turns out their bank used a third party company for digitizing letter of credit and that company claims to be using an enterprise blockchain R3 Corda. R3 itself is owned by a consortium of banks and on their website they don't use the word blockchain to describe Corda. They call it DLT.
My understanding is that a blockchain is supposed to be distributed, trustless, permissionless, immutable and open. At least that is what the core ideology behind it and is touted as the cornerstone features of blockchain. An enterprise blockchain is private, trustful, permissoned and everything that is a blockchain is not supposed to be. At that stage is it even a blockchain or just another propitiatory data store?
OK so a privately owned and controlled blockchain which only allows trusted users to add blocks is still a blockchain?
What would be the advantages of using a private, permissioned blockchain over a MySQL/Oracle/SQL Server database for storing data?
Why as an external user would I trust a centralized blockchain more than I would trust a centralized database? They are both private owned and controlled by a company.
You'd use a private, permissioned blockchain over federated SQL databases due to the technical difficulties of synchronizing audit tables across organizational boundaries -- since an enterprise blockchain is append-only, immutable, time-stamped, and each new entry has a hash of the previous view, it overcomes a lot of data integrity issues inherent to a distributed SQL database. None of the companies here will fully trust each other to hold an exclusive copy of the data, so the blockchain here replaces an expensive manual reconciliation step in the event local accounting databases don't match up.
As an external user? Nobody cares, it's not for you, move on.
> since an enterprise blockchain is append-only, immutable, time-stamped, and each new entry has a hash of the previous view, it overcomes a lot of data integrity issues inherent to a distributed SQL database.
And why couldn't a distributed SQL database be append-only, immutable, time-stamped, and implemented so each new entry has a hash of the previous state? (If you own it, just set it up to disallow updates or deletes, and allow inserts only through a trigger / stored procedure that adds the timestamp and hash.)
Talking of R3, their recruiters reached out to me. I wish they'd mentioned Blockchain or crypto hype up front, it would have saved me a few minutes browsing their website.
Allowing censorship-resistant / chargeback free donations, most coins.
Enabling private transactions, Monero.
Most "dapps" empower decentralization, distributed exchanges, trading, DNS, ownership contracts (DOAs), etc.
NFT's for art as silly as it is, more importantly for Handshake domain names and other cases where ownership proof comes into play.
Please feel free to go and attack all of those ideas and projects, but don't think for a second you can really gaslight people into believing they aren't worth of pursuit.
Paying for hosting with extremely volatile and environmental harmful tokens that only a part of population pretends has a real value, that you want to hoard rather than spend, and that might go to 0 at some point?
To have basically torrents?
Sending deflationary ponzi scheme tokens to people is not helping them. Also, fees are high.
Private transactions are great if you are a criminal, I'll give you that.
Tell me one "dapp" (or "extremely wasteful programs that run on a CPU that is orders and orders of magnitude slower than an actual one) that is doing something useful. I haven't found one yet and I've been searching for some years now.
With NFTs you don't own anything, unless there's an actual contract that comes with it. Also you buy a hyperlink that points to central storage. Also money laundering and wash trading are rampant.
If the powers at be allow you to (PayPal, banks, credit card companies)
If Mastercard doesn't like you or your wares (porn or dissent) good luck!
> Private transactions are great if you are a criminal, I'll give you that.
Tired old trope. You don't have to be a criminal to enjoy privacy.
> Tell me one "dapp" (or "extremely wasteful programs that run on a CPU that is orders and orders of magnitude slower than an actual one) that is doing something useful. I haven't found one yet and I've been searching for some years now.
>With NFTs you don't own anything, unless there's an actual contract that comes with it. Also you buy a hyperlink that points to central storage. Also money laundering and wash trading are rampant.
Tired old trope. It's simply a non-fungible token that can represent your ownership of an asset. You can own a Handshake domain using NFTs. There are other uses other than a hyperlink pointing to artwork. Yes others can access your domain and artwork, but you own it and you can sell it. In regards to your domain that's how you prove you own it and can admin it.
> Please feel free to go and attack all of those ideas and projects, but don't think for a second you can really gaslight people into believing they aren't worth of pursuit.
This hostility is completely unnecessary.
But if you want I can add one more to the list: funding the North Korean nuclear weapons program.
I'm confused. Are you being facetious about crypto having adverse uses too, or are you saying we should ban rocketry (another technology with good & bad uses), or something else entirely?
>> Are chargebacks on donations are major issue for any legitimate non-profit organization?
> Virtual game currencies, controversial politics, porn, gambling etc.
Paying for porn is not a donation.
Paying for in-game currency is not a donation.
Gambling is not a donation.
Giving money to someone for "controversial politics" is almost never an issue, especially if you're actually donating (which is only possible if you are, e.g., giving money to a registered candidate, a PAC, or an org that files a Form 8872). I make a lot of political donations and have never had an issue.
If you're:
1. giving money to someone for political reasons, who
2. explicitly opts out of tax-advantaged status so that they don't have to use that money in a way that's congruent with donor's intent, and
3. has a huge issue with charge-backs on unrestricted non-tax-advantaged gifts...
IDK. I'd tend to consider that a massive red flag. But I guess funding scam artists who get tons of money from identity thieves and prey on controversial politics is indeed a use-case for crypto.
That's interesting, but I don't see how it's related to OP's point. (Which was ostensibly about legitimate donations to legitimate non-profits, but was apparently actually about gambling, porn, and politics...)
Using fraud detection technology and/or swallowing the chargeback fees would probably be cheaper than the overhead of using a crpytocurrency+exchange.
Setting a minimum donation so that you're not a good target for card testing probably has a lower barrier to entry than requiring use of a crpytocurrency.
Yup, and crypto nips that in the bud. If you get a confirmed transaction, it's not going to be reversed by some unfair arbitration, you can trust it.
It sucks trying to run a game losing $20+ per chargeback and risking getting funds frozen entirely.
It sucks to be delisted by PayPal over political bullshit.
It sucks Mastercard and other CC companies can decide porn is essentially illegal.
- edit @ notahacker -
The point is you're at the whim of PayPal, Stripe, and credit card company policies for traditional fiat currency.
Have fun trying to sell guns (FFL be damned), porn subs (legal like you mentioned), virtual currency (legal ofc), or anything like that with traditional processors.
Crypto is the only option for those industries and a few others if you want to accept payment online.
Doesn't matter how many billions the industry is worth if you can't accept a credit card on your site for the service.
If all majors processors ban it, it's essentially blocked.
If I'm understanding what you're referring to, this is one of the worst part of NFTs. How is it any different than me having to pay Ford a royalty when I sell my used car on Craigslist? It's such a toxic feature for consumers. Sure, when used correctly it could be cool to help creators or whatever. It will absolutely be abused. It already is being abused by scammers who create NFTs that can't be sold.
It can be abused, but it allows the creator or developer to align incentives in different ways.
eg if the royalty goes toward a DAO, maybe that DAO’s charter is to grow awareness for the NFT project. Or the rewards could accrue toward a staked project token that all community members hold, or fees could go back to the creator to fund development for next gen.
I don’t know the best use, but my point is because someone programmed royalties, there’s now another dimension of configuration for NFT projects.
That's not example of something NFTs can do, is it? Royalty fees are not programmable. How does the NFT know whether someone has to pay royalties? And how on earth is an NFT going to make people pay royalties? An NFT can't use coercive force.
I don't know what this means. Let's say I own the copyright of a musical composition, and I sell a license to a film producer. How does this standard help me collect royalty fees?
Then you should be opposed to most basic (theoretical computer) science and mathematics research too that doesn't have any immediately apparent application.
The scientific research to engineering pipeline is the backbone of our rapid technological progress. Basic research can target unexplored areas in a more organized fashion, allocating resources properly instead of industry's ad-hoc approach. Sort of like breath first instead of depth first. Industry will waste resources solving just their own individual instances of a mini-problem one by one resulting in a total resource consumption that is greater than what academia would have used in solving the overarching problem.
I couldn’t care less :) if you want to pretend the rest of the ecosystem doesn’t exist it’s up to you. But it’s a bit like China looking at democracies in the west and only looking at the US and being “democracies don’t have universal healthcare, what’s the point lol”.
>> the only blockchains that are relevant are just colossal energy sinks
> I couldn’t care less :) if you want to pretend the rest of the ecosystem doesn’t exist it’s up to you.
Eh... You're the one defending a system that doesn't give a shit about the ecosystem. You know, the real actual ecosystem, the one POW[1] blockchain so immensely contributes to destroying. It's almost as if you guys are all pretending it doesn’t exist.
___
[1]: And what an apt acronym that is, in this context.
PoW is what makes Blockchains of BTC truly permissionless and decentralized. It's a solution to the 51% attack. Yes PoW is resource hungry and expensive but it's a feature not a bug.
If we remove PoW to reduce cost and stop wasting energy, it just makes it another centralized system. PoS or FPoS is centralization in the hands of a few whale coin holders.
Many other VC backed blockchains like Solana are not even decentralized. And to talk about enterprise blockchain like Corda or Hyperleger, I don't know if it's even correct to call them blockchain.
The idea that blockchain tech is somehow invented out of nothing and then we search for a problem to match couldn't be further from the truth. Talk to anyone who works in the industry and they're trying to solve a problem.
I used to work in blockchain tech and the main problem I was focused on was "How do we prevent internet monopolies like Facebook and Google?".
If you don't see those monopolies as a problem, then you're disagreeing with the problem space, that doesn't make it "trying to find a problem".
How does blockchain tech prevent monopolies exactly? Any environment that respects property rights and has activities that can be done more efficiently with scale and concentration will have centralization. Cryptocurrencies themselves are centralized by almost every dimension because mining exhibits those characteristics. Nearly any interesting on chain technology is centralized in that a minority disproportionately receives the vast majority of the upside. None of this kills monopolies
You are using a very different meaning of centralisation and decentralisation than blockchain people do.
That's neither here nor there though.
The way you kill Facebook, Google and any Web2 company is to kill their business model. These are all 100% ad-funded businesses. Kill the advertising funded internet and these monopolies categorically die with it.
The only _attempt_ I've ever seen at addressing the issue that all the major websites are ad-funded has been within the blockchain space. Show me any other realistic alternative to ad-funding and I will happily adopt it.
The question is how does additional fund sources prevent people from also using advertising or collecting data? For example subscription services for newspapers often still show ads. Usually additional revenue streams are used to capture more revenue.
If the answer to killing the ad funding business model was individuals pay directly it’s going to face a steep uphill battle because right now for most people the cost to read is free. What improved experience does it provide for the additional cost?
> If the answer to killing the ad funding business model was individuals pay directly it’s going to face a steep uphill
Indeed, we tried that and it failed, so we need something else.
Blockchain will probably fail because the narrative has been taken over by greed and NFTs.
But Web3 will fail because the tech world seemingly (as evidenced by the comments here) have no interest in solving the problems of Web2, rampant privacy violations, predatory business models and advertising. The answer to all these problems by HN is ”no one cares about privacy so it’s not worth solving”.
Then we're all doomed. Regulation has proven they have neither the interest nor capability to do anything about it, GDPR being the perfect example which have achieved nothing more than make Web2 more annoying to use.
> The answer to all these problems by HN is ”no one cares about privacy so it’s not worth solving”.
I think that's bullshit. It's just that most normal, sane, people think something like ”burning down the planet is no solution to the problem of privacy, and even if it were it would in itself be just as much of a problem, so it’s not worth attempting to solve it that way”.
It is frankly astounding that this isn't immediately obvious to anyone; verges on psychopathy in my book.
And how does a distributed Ledger solve these problems?
Monopolies like Google and Facebook exist, in no small part, because the amount of computation and data they handle is vast, and they have the data centers to deal with that.
How much data gets has to be stored on the servers of such services? Per second? I'd assume its in the range of several GiB...again per second.
Okay, so how does the blockchain compare to that? Ethereum can store data, each byte requires about 600 of its "gas" computational equivalent. A block represents 30,000,000 gas, 1 block is generated every 15sec, so we can store a grand total of about 1MiB every 300 seconds...that is, if none of the gas is used for anything other than storing data, which means, no other computations running.
So how is "blockchain technology" going to solve the problems that come from such highly centralized services exactly?
Monopolies like Google and Facebook exist because of advertising. Remove advertising and they don't exist.
The fact that they're processing a lot of data is in large part because they need to for advertising.
Still, your understanding of blockchain tech is misleading here. Ethereum is public key registry at best and is not and should not be used to store or process data.
In a blockchain world you can still have service providers, but the user is the one with the power, not the service provider. Users are free to switch service providers as they see fit because their identity and data isn't tied to a single company.
Remove advertising and the amount of users for most social networks drops to oblivion, because barely anyone wants to spend money every time they post a picture of their cat.
> The fact that they're processing a lot of data is in large part because they need to for advertising.
They need large amounts of storage because millions of hours of video & audio, billions of food-pictures, tens of billions of lines of text, and a megagagazillion of references on who-like-clicked-what-when, take up a lot of storage.
> and is not and should not be used to store or process data.
Well then, what should be used? What decentralized storage solution can handle something like youtube, where 500 HOURS of video were uploaded PER MINUTE in feb. 2020?
And storing is half the deal. The solution also has to have high availability, consistency, low latency, and needs to be environmentally sound.
> Users are free to switch service providers as they see fit
No they are not. That is, they will need just as "free" to switch in the non-blockchain world.
Why? Obvious, isn't it?
- Blockchains can't store the amounts of data required (Youtube/Instagram/TikTok on blockchain? What a nice joke)
- Even if you somehow can, companies will store data in their own proprietary ways incompatible with each other
- And, of course, this data will be on different blockchains, some of them invented specifically for the purpose
In reality though, as we're seeing it with NFTs all the data will be centrally stored with only some meaningless tokens referencing it stored on blockchains
So if its not stored on the chain, where will it be stored, if not on central servers, where its ultimately under control of whoever owns them?
In a distributed network? How does that handle the data loads and requirements (availability, latency, security) of services on the scale of fb or youtube?
ique: Users are free to switch service providers as they see fit because their identity and data isn't tied to a single company.
me: data can't be stored on the bockchain, it will remain proprietary, so good luck "being free" and switching between service providers
ique: Data will never be stored on blockchains, its not what they’re for.
So, how exactly are users going to be "free to switch service providers" if their data will literally remain in a walled garden of the service provider?
> Talk to anyone who works in the industry and they're trying to solve a problem.
Sure. But are those problems worth solving? How many VCs does the world need to pump cash into NFT-enabled video games before we ask the question, "why?"
There's quite a bit of distance between blockchain tech and preventing Facebook/Google monopolies isn't there? And as long as blockchain tech has some dependency on capital investment, your better funded outfits are always going to have the terrain tilted in their favor.
If it has dependency on capital investment, it's not blockchain tech. Like almost by definition. Unless you adopt a super dumb idea of "blockchain = linked list". If you're talking about more than the data structure then what you're saying makes no sense.
the final paragraph seems to summarize the article :
"The more you think about it, the more “it’s early days!” begins to sound like the desperate protestations of people with too much money sunk into a pyramid scheme, hoping they can bag a few more suckers and get out with their cash before the whole thing comes crashing down."
Future will tell. But the author is either acting on bad faith or they are not informed on the innovations that happened since then and are currently happening in the crypto space. And I am not even focusing on NFTs but on hardcore crypto stuff such as multisig and zero-knowledge proof protocols.
Well, 10y ago is not ages ago. Email existed for 30 years before it was ready for consumers. Same is with the internet. Certain types of technologies require decades research and development. I would argue that in 20 years it will still be "early days" of blockchain. And only in mid 40 we will figure out apps and who nows what to fully utilize underlining technology. Right now we are just coping what we have outside of blockchain and put it on the blockchain. Same as people couldn't imagine how internet could possibly transform their business and life, we now can't imagine how Bitcoin and blockchain will transform our business and life in the future. It's too early.
I'd say with email the application was always crystal clear: It's like sending a letter, but electronically and therefore instantly. This must have been obvious to everyone in that space even 40 years ago. Maybe it wasn't obvious how big email would be one day, but there were definitely no doubts about what it would be used for. As someone who is trying to understand the applications of "crypto", it is very frustrating to hear stuff like "we now can't imagine how Bitcoin and blockchain will transform our business and life in the future". Please give me something! If we can't imagine it, maybe there is nothing there.
The application of Bitcoin is also crystal clear: distributed, digital money. It’s like gold, but electronic, and therefore much faster/cheaper in certain scenarios (and slower/more expensive in others).
Reasonable people disagree on whether this application is actually something we need, or will need in the future. But the application is clear as day.
Except for that you can't take a bar of gold and view a public log of every wallet/transaction it has ever been in. Something like Monero would be better for your analogy.
Email is also used for authentication, all those 6 digit codes that come in for 2fa are doing so. Definitely not something that was imagined 40 years go.
we now can't imagine how Bitcoin and blockchain will transform our business and life in the future
40 years ago people on the cutting edge of tech had VHS video recorders to record broadcast TV. The tech grew slowly, became the dominant standard, and after 15 years in the mid-90s they were everywhere. 25 years later no one has one, or wants one, or even has an equivalent.
Don't assume too much about the future based on the present. Things can change in strange and unexpected ways.
I'm not saying Bitcoin and blockchain won't be around in 2040. They may well be. I'm saying current trends aren't a particularly good predictor of the future. They're wrong more often than they're right.
It might be that the idea is too complex to be viable or useful. The graveyard of technologies created in the past decades stretches to the horizon, so if something doesn't work after 10 years doesn't mean it will work in the future. This is kind of obvious.
Specifically with blockchain my intuition is that, if its main selling points - immutability and decentralization - are already invalidated in the early days (10 years that is), the chances that it will recover are slim.
Complex tech tends to centralize to become cheaper. Also immutability is very problematic in terms of the right-to-forget and also in terms of illegal content and illegal operations.
Email's purpose and utility was super-obvious from day one, we just had to figure out how to make it more secure. Notice how email too became centralized, however.
No. Email didn't have useful implementation (UI) until 30y after it was invented. Only geeks and tech savy people were able to use it because it was not so easy to use. Sending messages was really hard, sending would often fail. So you would say, 25y after email inception there was no useful implementation and no usage by consumers, so technology is worthless. And there were people who were saying that, I'm sure. Same was with the internet.
Until 1998, my middle class American family didn’t have internet. I was a rather tech-curious kid, but until we actually had a second phone line run to our house and a new Gateway computer and a modem, there was this huge barrier to what I could learn about on our airgapped Windows 3.1 machine. My Dad was able to navigate the command line because he’d needed to on our previous DOS computer, so I feel like he could’ve handled email if we’d had a connection back then. I’d argue that infrastructure was a pretty big barrier to email catching on, not just the UI.
I totally agree. We got the Internet in the mid-90s and by that point all the utility was totally obvious. Even using services like Wireplay for online gaming showed the potential very clearly. As you note adoption of the Internet is way more tied up in adoption of home computing and the exponential expansion of that. It was a pre-requisite.
Blockchain tech on the other hand has no pre-requisites blocking adoption, just no use cases. All this “it’s too early” talk never says why.
This is false. You can google what people said about internet in early days. Robert Metcalfe (the inventor of Ethernet) said: "I predict the Internet will soon go spectacularly supernova and in 1996 catastrophically collapse"
So people really didn't see potential in early days of internet, except small minority of people.
We see same happening now with Bitcoin and blockchain. In 30y someone will point into some (now small) project and say "people saw potential very early, just look at projectX which demonstrated that potential quite clearly".
I was giving my own opinion so it by definition can’t be false. You also quote a single person and present that as general sentiment. Can you show definitively that was broadly shared?
You’re also not really addressing the factual point made which was that Internet adoption had the pre-requisite of home computer adoption. Whereas there doesn’t seem to be such a stumbling block for blockchain tech.
>was giving my own opinion so it by definition can’t be false.
This statement is false and therefore your opinion could be false. Example, in your opinion white bread is the best, I think wheat bread is the best. Are you right, just because you believe it and said so? Obviously we both cannot be right. But to us, you and I, the statements are true.
They’re both opinions so they are statements of what we think. We are the arbiters of that so get to say whether we think them or not. That you like wheat bread and I like brown bread are both true and not false.
You have massive hardware pre-requisites for adopting any decentralized technology. Syncing Bitcoin node takes days, Ethereum weeks. Storage is constantly expanding. I think we still don't have hardware requirements to enable end-users decentralized self-sovereignty. You have storage limits, as well as network limits. This needs to improve (and get cheaper) more than 10x to enable blockchain native (meta) world.
> "somehow no one appears to have managed to find a positive use for blockchains that wouldn’t be better served by blockchainless technologies"
There is now a sovereign nation state that accepted Bitcoin as a currency, and, mark my words, no doubt more will follow this 2022.
Replacing central banks, and by extension, their grasp on the limitless money printing, is the whole reason why bitcoin and it's blockchain exist. And it is working wonderfully well.
People in countries where the central bankers and politicians are letting them down are flocking to bitcoin and other later inventions (such as stable coins).
> "Rampant inflation is once again plaguing Turkey’s local currency, the lira, but one saving grace could be its citizens using bitcoin to supplant the plunging fiat currency."
By all accounts the adoption of that tech in El Salvador has been a disaster, the app is slow, buggy, not everyone has access and it’s easily exploitable for crime. Protests against it. Etc. I anticipate a reversal of this by the next government. Current governments cannot admit mistakes, so it’ll take a new term for it to be dismantled.
Uhm it might be hard to use but I completely reject the "exploitable for crime" part. Actually Bitcoin payments are a blessing for all those people that had to physically travel to Western Union branches to receive cash from abroad. Gangs frequently targeted such poor individuals and stole their cash. Bitcoin fixed this.
Yes, I agree, and this is all very cool, however regarding this point:
> There is now a sovereign nation state that accepted Bitcoin as a currency, and, mark my words, no doubt more will follow this 2022.
Sure. That's true, but doesn't actually matter, imo., because the point of crypto is to:
> Replac[e] central banks, and by extension, their grasp on the limitless money printing
So approval from the government in the case of crypto is worth about as much as it is for making love. It's the losing side of a game saying "You know what, we'll be so gracious as to allow you to win". Never needed your permission to begin with.
You’re referencing the point of Bitcoin, not the point of crypto. Other platforms aren’t interested in destroying the existing financial system and would much rather digitize it and make it open to everyone.
Not just a significant portion, the vast majority of money in circulation is money created by commercial banks, not central banks. For example, in 2007, Euros issued by the ECB accounted for less than 15% of the supply of Euros (M1): https://en.wikipedia.org/wiki/Fractional-reserve_banking#/me...
Any sane web3 proponent would agree with this statement. Only the scammers wouldn't.
Sane people interested in web3 don't evangelize and are totally aware of and agree with most of the criticisms. If you criticized Ethereum as being expensive and inefficient, you'd get head nods from people that understand the space and pointed to projects that are trying to fix those issues.
The problem is that when a space becomes dominated by the insane people, it's the insane people who drive its future. Any hope for a sane web3 depended on the hype starting after there was an actual use case. As it stands, web3's Eternal September began before the foundations were even laid, and it's going to be very difficult to retrofit them.
That’s absolute nonsense. Scammers and grifters making vaporware projects have no significant influence on the projects who spend their budget on development rather than marketing.
What you just said is “all these novice basketball players training the wrong techniques is a dire problem for those training effectively.” No it’s not, if anything investments in actual projects during relative, senseless mania is cheaper and easier than it ever was.
The analogy to basketball falls short because the narrative surrounding basketball is driven by the pro teams. It doesn't matter that there are millions more amateurs than there are pros because all the money and power lies with the pros. The pros dominate the space even while being a minority.
In web3, the amateurs are the majority and control the narrative. The space is dominated by people who make promises they can't deliver on and found companies that disappear in a year. When those are the people who control the narrative, it's impossible for the sane folks to prevent them from sullying the field's reputation until no one else will touch it.
IMO L1 (Ethereum, Solana, Fantom, etc.) development is closer to building out a communications or telco network.
From that “hard” technology perspective, it’s very early days. And the apps that run on top of these L1s are fully limited by L1 bandwidth, latency, and blockspace.
So, I think we’re in the pre-dial-up days for blockchains and will need a couple more orders of magnitude improvement to be (universally) on par with today’s app performance.
The information bandwidth on block based cryptocurrencies is far too low to support these deeper levels of complexity, and I doubt will ever get much better. Blockchains, despite being a distributed phenomenon, still centralize the flow of information into one stream, the chain. Ethereum, by my estimation, operates at around 7 kB/s, and Bitcoin at 2kB/s. These are clearly glacial speeds - think of how limited an internet connection at those speeds is. How will more informationally needy systems be constructed on top of so paltry a base? The problem is a blockchain's protocol must somehow coordinate the distributed actions of its participants, which are generally spread out across the world. By centralizing information in the chain, they are exhibiting the same intractable slowdown that we would see trying to emulate a brain on a CPU.
I think we’ll see if bandwidth and latency improvements bring more application development. Solana and Avalanche are orders of magnitude faster than Ethereum and their ecosystems are rapidly evolving.
Btw Solana founder is ex-Qualcomm and worked on embedded distributed (multi-core) systems and Avalanche founder implemented a faster more elegant consensus algorithm. Can hear them discussing technical aspects of development: https://open.spotify.com/episode/632rPGnMZlHag7DJ1SCDUV?si=F...
read up on L2 chains - both optimistic roll-up and zk-rollups. this problem you are breaking down has been the subject of study and development for years now and is nearing implementation - https://www.gemini.com/cryptopedia/layer-2-scaling-zk-rollup...
Good stuff, so you would suggest to the author that their examples are too narrow. Perhaps that smartphones, Uber, and Facebook all represented somewhat minor "time has come" type innovations, whereas you see Bitcoin as a development more like the internet itself, and that instead we are in the Arpanet days.
Are there any other examples of recent + long cycle developments? Solar? Electric vehicles?
Part of me has come to expect such fast development (Facebook, Uber, Yelp!), but other modern industries must have longer cycles I just am not paying attention.
This presentation of the data suggests Bitcoin is at a "1998" level of development in terms of total number of users. I'm curious about this "number of users" metric, how would it map to adoption of other tech like telephones, televisions, cell phones, and smart phones.
My purely anecdotal experience so far has been that crypto bulls have tended to be more business-y/finance type people and, even among technical people, the technical people who don’t actually know how a blockchain works. Not a good sign for the technology and its applications but I don’t think all crypto is useless… but a lot of the hype is definitely by people trying to get rich quick with a hand-wavy understanding of the technology.
A lot of people missed out on Bitcoin early days… best way to cash in is to fork it and voila, the crypto Cambrian explosion where most of the forks will eventually die off.
Exposure bias. Who are you going to see more? The thoughtful coder and innovator who spends their time working on problems, or the excited businessman telling everyone about that work? Even the more outgoing founders are overshadowed by influencer types, and that’s not surprising at all.
One dichotomy I have noticed in crypto is that non-involved “tech” people seem to understand crypto and the big picture much more slowly than economically minded people (no, not just speculators). People don’t usually understand that crypto currencies are an economic innovation using cryptographic primitives, though more recently the space has started driving cryptographic innovation as well.
Well the excited businessman telling everyone about the work is the one hyping it to everyone. My point exactly is if it was just the hard working coder in a dark room everybody and their grandma wouldn't be buying into crypto right now. I'm also bullish on the utility of Bitcoin, as it allows for an almost cash-equivalent that's digital. Silk road took it as currency, and cybercriminals. These may be illegitimate businesses but they are businesses nonetheless.
"Crypto" shat itself in the area of payments (noone really needs or wants it and it provides 0 value), so now they are trying other angles - NFT, DeFi. The problem is the crypto influencers are losing touch with reality. You could at least bullshit someone clueless about cryptocurrency and payments, but it's really hard to sell the idea of collecting JPEGs or investing into DeFi (which aggressively described in the terms of a classic ponzi scheme for some reason) to the general public.
So the people buying houses with crypto have dirty pants? Or in El Salvador, where BTC is on par with USD, they all have dirty pants? Please re-read your comment before publicly posting, as this is not advancing conversation, nor adding anything, but only exposes your narrowly held (wrong) beliefs.
El Salvador doesn't have its own national currency at all. And yes, imaginary people paying for houses in bitcoin is another example of a crazy meaningless argument. Maybe there is one or two, who knows. I think more people pay for properties in camels or Vodka bottles if we really search.
I’d say continue to use Wise now. No reason to switch UNLESS you get faster transaction, lower fee, less risk, and it’s more practical to do a crypto transfer. I believe if you join the novi beta today this might be the case if you want to send $$ to Guatemala. For the rest of the world: Early days my friend.
How often they need to? How often average person actual does that? Maybe there just isn't that big of an market there outside things like web payments. Or a market that doesn't involve complexities of dealing with money...
Just because you ~never do, doesn't mean there's no market. In this case, there's a huge market for remittances, on the order of hundreds of billion (USD) in 2020 for the industry globally. Every immigrant with family back home is saving local currency and sending as much as they can back home because of the difference in exchange rate. The incumbent players aren't very good, having been created before the Internet. Western Union is still a choice in this area, though it's worth noting that they did close down their telegram service in 2006. Whether cryptocurrencies are competitive in this area depends on if theres a way locally to get local cash for crypto. In countries where this illegal, it's a bit harder to do so, and the old ways are still the best, depending on how high the service fees are.
So there is no progress in non Proof-of-Work coins today? Perhaps the author is saying that there are no blockchains that are being used as the basis of regulated stable-coins and CBDC projects that are being tested by central banks today?
I mean, the author is arguing as if Bitcoin, and Ethereum are the only blockchains that exist today. Hence why this is another blog-post that associates all cryptocurrencies having the same characteristics as Bitcoin, and Ethereum, which that isn't true and the author knows it.
This is all given that they 'claim' to have done 'research' even though they feel 'annoyed' by all of this. [0] If you are going to argue about cryptocurrencies and blockchains technologies in general, at least attack the current alleged 'state of the art' rather than using the same old arguments on the same old cryptocurrencies (Bitcoin, Ethereum) that everyone knows its faults already.
I spent some time looking into Proof-of-Stake coins. Specifically, the Proof-of-Stake system advocated by Tezos. Give it a lookover, it's actually a fairly quick read.
Unfortunately, it's also very flawed, and nulls most of the security properties we thought we would get by switching to "Blockchain Technology": if someone captures 50% of this chain, it is quite easy and trivial to turn that into a full chain attack, since all future seed data comes from past chain data. The RNG is seeded deterministically, meaning a motivated attacker can maintain influence forever by maintaining control over the seed.
When you usually bring this up, people usually say "yeah, but it would be against the economics interests of the miners to crash their own coins". Aka, the technology isn't providing the security, we're back to the same "no banker would ever be evil enough to crash the economy for small economic gains" security that most cryptocurrency enthusiasts usually claim is evidence of corruption at work. So, no, I don't see what the blockchain is adding over a typical database.
I've tried multiple times to read through the Ethereum Proof-of-Stake FAQ [1], but I have a sneaking suspicion it's intentionally obfuscated, just so people like me bounce off of it.
Maybe I should! Feel free to suggest links and papers. Part of the challenge is that some of these concepts are super varied in their implementation, despite having similar names, and I can only come to understand the tradeoffs of a complete system.
"Byzantine Fault Tolerance" is a huge umbrella term that covers a lot of different tactics and approaches, so I welcome recommendations for concrete systems to investigate.
EDIT: The reference to Hotstuff was added after I posted this reply. I'll investigate it.
PoW is the fundamental breakthrough. Yet, everyone is oblivious to that fact, a decade later.
It's amazing that people on a technology forum talk about proof of stake as something new. That's what basically DNS runs on, and it's been around since 1983.
I don't think the complaint is about the lack of new ideas for coins. No shortage there.
There have been a lot of prototypes, trials, testing, and scams, but not a lot of hits.
The only major exceptions are the same old cryptocurrencies (Bitcoin and Ethereum) where the same old arguments still apply.
Part of the problem here is that, with no centralized authority, it takes much, much longer to make changes. Perhaps that's what the author is missing and that's why we're many years in without the kind of success you might expect for a web technology that's not destined for failure.
Not related to blockchain but just an interesting difference in perspective. Using 2010 to refer to "ages ago" is almost comical. The internet was created in the 60s and I'd say 2000-2010 was still early days for the internet. So saying something is old because it was created 10 years ago is just ridiculous.
The hype around the blockchain reminds me of the hype around XML around 2000. People were blown away by the potential... but no one could quite demonstrate it with a product. Now the blockchain can point to cryptocurrencies as a success story, and XML can kind of point to HTML, but it is a reminder that real change in tech happens when someone comes out with a product where the rubber meets the road. When everyone is talking potential potential potential, I am very skeptical.
It's truly incredible that people still confidently proclaim that there is "no use case" today.
Because of the technical nature of the underlying tech, it's hard for the average individual to recognise how and why it's different. However, it's not possible to explain away the particular applications and their properties.
Here are 2 use cases which are live and working today:
-Taking a collaterised USD loan without permission or interference from a third party.
- Creating a public digital object which lives forever and can be exchangeable and extendable without a third party involved.
The immediate response from critics then is to question the validity of the use case. But that requires to admit that the use case is there.
Presumably you’re talking about a loan against an NFT or other crypto asset. But taking a loan against a financial asset is already really easy. Does loaning against a house, car or stock portfolio get any easier with crypto? I don’t see how.
The digital object in your second example is just a hyperlink or a hash, because the digital object itself won’t fit on the blockchain. And there is no link between digital and meat space identity, which means it’s exchangeable but not between people.
This is the perfect example of a critic response and exactly the phenomenon I'm describing.
On 1, you're somehow conveniently ignoring the "without permission or interference from a third party.". I never mentioned against a car, stock, or house. Nonetheless the functionality still exists. Using ETH or other crypto assets. It gets so much easier. Have you tried it?
No talking to advisors, no documents, no discriminatory requirements. Pretty much 1 click and 30 seconds. Fully expect the next question of validity "aha! Well that's against a useless asset!".
2nd example. Yes it can be a hyper link or a hash, is there something particularly wrong with that? The use case I described has still been achieved, it's a digital object. Are you really questioning that people exchange assets using a digital identity? I'm not sure how that invalidates the use case.
By the way you're incorrect that digital objects don't fit on the Blockchain. First it depends which Blockchain. Second, there are some objects that do fit. Look at ENS. A domain name, address mapping fits on the chain. That is an NFT. That exists today.
> without permission or interference from a third party
Aren’t other nodes the third parties?
If you are talking automated loan, you should look into credit lines backed by assets. Pledge assets lines. Once open, it’s fully automated and you don’t need to interact with a third party either.
They can't interfere with what you want to do. They could try to prevent you from interacting for a while but it would be futile. There are heavy disencentives, and decentralised enough. Which is why this has basically never happened. Talking strictly bitcoin and Ethereum here.
In honesty I have no experience with a pledge asset line but I can guarantee you that if the institutions involved in conducting it wanted to, they could cancel it on you anytime. With a correctly coded smart contract on Ethereum, you could ensure that never happens.
One system requires trust in third parties. One gives you the option to design a system to minimise or eliminate it.
PAL is 1-2 clicks once they are open. And you borrow a lot at a very low interests. You might lose your stocks though if the market goes down too much.
Please note that the lack of paperwork in Ethereum just means you borrow or loan money in a way that might be not legal. I am all for removing redtape here.
This comment assumes that the world == the developed world. Crypto offers borderless access that does not exist in today's world for many millions of people. In my country, getting a loan is near impossible, but no one can stop people from taking a loan against their ETH or stablecoins
Because you're taking a loan against it, duh. Therefore you want to keep it. Just like taking a line of credit against your house. You don't sell your house immediately.
The author's description of 2015 doesn't sound like some ancient era to me.. Have things moved on and changed so dramatically from ML hype, Microsoft Edge, Apple Watch, and ES6?
I'm not really here to argue about blockchains being good or not, I just don't feel great about how the article tosses out a body of technology for not keeping pace with Uber. It's a bit like saying it can't possibly be early days for reusable rocketry, mm-wave communications, or quantum tech, because all those things were being developed decades before some guy named Satoshi wrote a very popular blog post.
Regarding ES6: Definitely. It used to be that there’d be a new JS framework every week, and the language was rapidly evolving to catch up with over 10 years of programming language innovation. No change to the language as big as ES6 has happened since, and the Cambrian Explosion of frameworks has largely subsided.
Nowadays things are way more stable. I’m sure someone will pop in and mention how their workplace just changed from Webpack to Vite, or how hard it is to keep track of Angular, React and Vue. To which I’d chuckle and note that when I got started in 2014 we had AngularJS, Ember, React, Backbone, Knockout, Google FOAM, Polymer, OJ.js and Aurelia (which emerged as Google announced that AngularJS 1.x would be deep-sixed and Angular 2 would essentially be a totally different framework). To build/bundle your app you would use one or more of Grunt, Gulp, Brunch, Webpack, Browserify, 6to5, Traceur Google Closure Compiler and/or RequireJS (so far we’re assuming you’re not using CoffeeScript, ClojureScript, or one of their downstream variants like IcedCoffeeScript).
How's this any different than the typical technology hype and adoption cycle? Perhaps we are just at the "peak of inflated expectations" right now, and are about to dive into the "trough of disillusionment".
This certainly happened with AI at least twice... remember the AI summers of 1970 and 2010 and the AI winters in between...before certain applications of machine learning became industrial tools.
I'm personally in agreement with the author that crypto is probably a waste of energy and a way to scam people, but I can look at the 30,000 foot view and admit there might be some applications in the future as we climb the "slope of enlightenment".
My wife recently suggested a possible one: NFTs minted by your university as proof of your diploma. Or perhaps your academic transcript. No way to forge a fake diploma again.
> My wife recently suggested one: NFTs minted by your university as proof of your diploma. Or perhaps your academic transcript. No way to forge a fake diploma again.
This is once again better served by a database. Diplomas are inherently centralized and issued by a trusted authority.
Guess we gotta keep brainstorming for use cases -- that's how technology development works, right?
Except it isn’t. The actual Jorge are hosted on open sea. No one actually stores the “product” on chain because it would be prohibitively expensive for anything pastba few bytes.
What makes you think you can’t sign as a trusted authority a decentralized object? Maybe before you condescend you should learn the utter basics of what you are talking about.
I'll grant you that sometimes there's just such a cool tech that you gotta hammer your head against the wall until you find something worth using it for. And sometimes maybe that creates something awesome (though I can't conjure anything at the moment.) I think that's usually a money-loser, and someone else building something like 140 character messaging ends up making the money.
In general though, I believe solving real-world problems with whatever tech is available creates the most value. (And I mean real value, not some numbers on a ledger that don't mean anything at all.) That doesn't mean tech for tech's sake isn't interesting.
> NFTs minted by your university as proof of your diploma. Or perhaps your academic transcript. No way to forge a fake diploma again.
The problem with this an many similar examples is that there already exists a solution for this sort of authenticity problem: digital signatures. Basically, the university creates a public and secret key pair, makes the public key available on its website, and signs all diplomas with its secret key. This is a much more efficient solution than the one based on blockchain.
Or is that a problem in first place. If someone really wanted to check your diploma. They could ask a proof of permission from you and then contact the issuer...
A cryptographically signed diploma could be sufficient for this use case, no specific need to commit it to a ledger. Certainly the transferability property of NFTs is not desired in this case.
"My wife recently suggested a possible one: NFTs minted by your university as proof of your diploma. Or perhaps your academic transcript. No way to forge a fake diploma again."
> My wife recently suggested a possible one: NFTs minted by your university as proof of your diploma. Or perhaps your academic transcript. No way to forge a fake diploma again.
You could already do this using x509 certificates signed by a university owned CA. No need to use blockchain here.
Did Moore ever talk about the time length of such cycles? I imagine it differs from industry to industry. Is blockchain on a 10 year cycle like Uber/Facebook, or a longer cycle?
Same question I suppose. The parent diagram featured both the hype cycle and Moore's chasm. Do they both operate on different timescales or are they usually a decade end-to-end?
Honestly? I think it's similar to a lot of pop-business constructions. Post hoc, and it sounds insightful enough to inspire pattern matching, but doesn't actually have any real explanatory power.
Anecdotally, I have heard people applying different timescales for the hype cycle for different technologies. Makes the pattern that much easier to match.
Memorable moments from interacting with the Internet -- and web3
It's 1993. We are given a tour of the university I just got admitted to. I peel off the group at the physics building where the university VAX is. Something, something Internet. What is that. I get an account. I begin to use Usenet and IRC where I can talk to people so far away. Usability of these are on par with any other application (say, WordPerfect 5.1 for DOS) at the time. My mind is immediately blown. No one needs to give a pitch how useful or how fundamentally different this is to anything we had prior.
It's 2006. I began travelling the world, settling in Canada in 2008. I can chat with family for free. Later, even do video calls. I remember the weekends when we wrote a letter to my uncle who moved to the United States in the 80s. It took months to get a reply. Phone calls were rare and short. By the time my grandfather passed in 2011, my uncle was talking to him daily for a long time for free -- thanks to the 'Net.
It's 2007. I am wintering out in Israel. Moving around is very challenging, as I don't read Hebrew and I don't drive.
It's 2015. I am again in Israel. For a week, every night I sleep in a different apartment, booked online. Moving around is trivial, my phone tells me where and when to get on and off buses.
It's 2022. This a quote from someone touting the advances in the so called crypto"currency" space:
> Today, you have sharded blockchains, triple entry bookkeeping, proof of stake, blockchains that handle incentivized file storage, alternate name lookup systems, purchasing compute power on an automated order book, liquidity pools (a major, major fintech advancement if you're not familiar with then), arbitrary code execution with a canonical record of it.
The article suggests that using the phrase "it's early days" is incorrect in blockchain technology because Bitcoin and Ethereum have been around for 13 and 6 years respectively.
The author goes on to give examples like smartphones, Uber, and Tesla, all of which have had serious developments in terms of impact and usability in around the same time period. Then given that Bitcoin and Ethereum have not made similar progress in that time period suggests it is not "early days".
Users continue to get scammed and lose funds. So what is it instead? Middle days? End of life? Pre-early days?
Open to ideas here. The author seems to suggest that what we're seeing in blockchains is the best we're going to get out of it. If Bitcoin were middle aged, would users put up with all the warts knowing they won't go away?
It will always be "early days". Crypto requires a constant influx of marks who genuinely believe that they are early, as a ponzi scheme only ever benefits early entrants. No crypto enthusiast is ever going to tell that you are late.
For a pyramid scheme that certainly holds up. Whoever joins last seems most incentivized to bring others in. Has anyone modeled pyramid scheme dynamics to Bitcoin perhaps at an academic level?
I don't understand how bitcoin is a ponzi scheme. There's no pyramid shape, which is kind of crucial. "Just look at the whales" uh huh, you mean like the dollar?
It's just a value store. Debating the efficacy of the value store is fine, labeling it a ponzi scheme seems reductive to absurdity.
The real problem (unsurprisingly) is with fiat currencies. These are heavily regulated, nearly made up values. That crash, often. We put handbrakes on the systems (see gamestop, mortgage debt crisis etc) because of how unsafe they can be.
If we trade goods for fiat currency, we put handbrakes and regulations there too.
The bitcoin/fiat exchange is merely proof why we need these regulations. Until it (the crypto/fiat intersection) is regulated, it's not gonna look and feel like what we're used to.
There are good criticisms to be made of bitcoin (like how centralized most mining operations are, the community's constant in-fighting and many more). It's drowned out by daft arguments like pollution (that's a whole other economic sectors fault) and ponzi schemes.
Maybe other coins could be construed that way (again, regulations required) but not bitcoin.
I think most people don't get the dichotomy, and misconstrue things by attempting comparisons to a historic precedence. The truth is there is none. The breakthrough is fundamentally a trusted centralised store, which is decentralised in topology. No single person or organisation is in control, a self sufficient network, gamed into existence.
I am still surprised people continue to be still so enamoured by the financial aspects, which is the all important fuel to keep the engine going. Greed is a hell of a motivating factor though.
IMHO this is just the first generation, it will evolve in ways we cannot predict, but it is revolutionary and challenges banks and financial institutions to the core.
Have you found anyone talking or writing about this "trusted centralized store"? I could even see reading fictional use cases for the year 2030 or something. Bitcoin will be twice as old at that point. What happens to the petrodollar in 2030? Speculative is fine, even encouraged. Dystopian futures are in general easy to imagine ("and then everyone dies!!"). These stories I want require hard thinking and analysis instead.
Appreciate your response here. I also find the "pyramid scheme" framing to fall short. But I'm no expert, I welcome a rigorous analysis by someone with a background in ponzi and pyramid schemes. (Disclosure own btc and etc)
The author exemplifies people in the digital field who are making it their life mission to criticize blockchain/crypto all day.
I invested a significant amount in bitcoin very early and am now retired thanks to that decision. My hunch was that it was the combination of interesting innovative tech and a vector for greed that would be unstoppable. I never talked about this publicly, very few people know. Crypto is not my identity. I honestly don’t care about whether it gets banned, disappears, or ends up replacing parts of our digital experience. I recognized from the beginning that it would be unstoppable, whether it was to be a net negative or positive contributor to humanity being completely irrelevant. You can’t stop an idea.
But since I’ve been watching this space from day 1, literally installing the bitcoin client the day Satoshi posted it here, I’ve noticed that people who criticize blockchain tech tend to be folks who could have made the same bet I did and didn’t. At the time I invested I worked in a tech company and some people were already going on and on all day about how bitcoin is a scam, etc.
These folks were aware of the tech very early, considered it a scam. And now they’re making this crypto bashing their identity. I think a lot of that drive comes from the frustration that despite the space having so many negative aspects, they missed out on a once-in-a-lifetime opportunity. They personally know people like me. And now the only way to make peace with that decision is to publicly bash it constantly, to revolt against it. This becomes who they are, as much as crypto bros make it their identity too.
I don’t see people from the general public criticizing blockchain/crypto with as much passion as them. It’s only people from the tech field who go on personal vendettas against that space. People who had the tools and the information to transform their lives and even leave that space since… and didn’t.
As much as people who promote blockchain constantly probably have a vested interest in it due to the money they’ve put in it, making their opinion less interesting, the same is true for people who bash blockchain constantly because their vested interest is to make peace with the fact that they didn’t put money in it when it was really early.
The problem is that we’re still in the phase of “it’s good because it’s blockchain” so people are trying to get in early to make some free bucks. It will only work when someone comes up with a decentralized product backed by blockchain that simply works, and users don’t even need to know it’s a blockchain. It needs to be a blockchain use case instead of attempts to retrofit the blockchain into current problems.
When comparing the situation of crypto to the internet, I would say we are at around 1997 now. 1996 was the year when Yahoo went public and 2021 was the year when Coinbase went public.
The usability of crypto solutions also reminds me of 1997. It is still so bad that it makes them almost unusable. Reminds me of acoustic couplers where you had to manually plug your cable bound phone into some device and dial a number to connect to a bulletin box. Just that today the bad usablity looks very different. It has to do with complicated, privacy violating KYC processes, no standardized secure way to make a socially recoverable secret key, lightning network only used in very few places etc.
TCP/IP and DNS were both developed in the early 70s (1972 I think). So over 20 years before the first internet company went public.
So the adoption of the internet evolved more slowly than the adoption of crypto it seems. As the Coinbase IPO came already 13 years after the Bitcoin whitepaper.
The IPO of a company makes a nice reference point for several reasons:
- It is a specific point in time which is easy to look up
- To go public, a company needs a big amount of traction already
- A lot of data is published for the IPO
"Useful" is in the eye of the beholder. But how much the company is "used" can be approximated by its revenue.
Yahoo had $1.4 million in yearly revenue the year before it IPOed. Coinbase had $1.14 billion. So about a thousand times more. Even when adjusted for inflation, this should be one or two orders of magnitude more.
Adoption of the Internet had serious pre-requisites in terms of the availability of computers in the general population so it’s not really surprising. One thing that was amazing about it was our ability to reuse existing networks to connect them all together.
I would say the pre-requisites are just as high this time. Just very different.
At least you could buy a computer in the 90s.
In my country, you cannot buy crypto anywhere. You have to go through some shady KYC process of a foreign company. Me and almost none of my friends are willing to do that.
And the very few who do are not willing to sell crypto to the others "Uuhhh no, go make your own Coinbase account."
The banks are all "Yeah, we are working on it. We don't know yet when we will offer it. It will take time to figure out the legal and technical aspects.".
I thought that crypto was supposed to be easy money transfer to absolutely anyone in the world. For nearly "free". A member of unfounded Amazon rainforest tribe could buy it and send it to for some service a Somalian farmer... For very tiny fee... Then somehow each would be able to convert it from their local currency...
But I don't understand why people get so invested in it being a scam or failure.
Maybe it is, and it'll all die. That's fine. Why do people spend so much time insisting that it's the inevitable outcome. Let it do its thing, find something better to do.
> But I don't understand why people get so invested in it being a scam or failure.
Can't speak for everyone. But from my perspective, it's because certain "applications" are being marketed very heavily to non-technical people who aren't able to reasonably assess the viability of the technology. I'm thinking of NFTs in particular. The only other popularized non-NFT applications are cryptocurrencies, which are pure speculation (i.e., gambling).
In short, that's a moral issue. People were outraged by the Madoff scandal (and others), and this doesn't look a lot different to people who understand the underlying technology. Nobody wants their mom going broke because they bought some hyped-up blockchain thing on the advice of some super-hustler internet marketing influencer out looking to make a buck.
Many of us believe all this stuff is incredibly harmful right now. Just standing back and ignoring it, rather than attempting to direct people away from it, will likely cause more harm.
Imagine all your friends were really into MLM schemes and even quitting their job to join Amway and Herbalife. Sure you can just ignore it, but you can understand it’s tempting to ask them what the hell.
I was of the same mindset until this year when the pro-crypto crowd invaded the online art scene. Now I unfortunately can't avoid it, as much as I try, not matter how many keywords I mute.
I'd like to go back to ignoring it. But it looks like it's here to stay, and it's taken away one of the few things enjoyed about the internet. I guess I'm still moving through the anger and grief stages and am yet to reach acceptance.
As this series of blog posts detailing why the crypto/bitcoin/ntf/web3 ecosystem is bad and wrong, I am continually reminded of two quotes from people worth listening to:
“Never argue with stupid people, they will drag you down to their level and then beat you with experience.”
It's all about consensus and enforcement. The courts hold power because we all agree (actively or passively) that the decisions made by the courts are legitimate. We choose to keep our citizenships and pay taxes to enforce these decisions with coercive/violent means (police). If people lose faith in this arrangement and start disregarding the legal systems - e.g. if the police refuse to do their job - you could very well end up with blockchain officers taking their place and kicking down doors with the approval of the masses. For now, though, it doesn't really matter what you own on the blockchain because you have no shotgun to back it up (no legitimacy nor means of enforcement).
Comparing Bitcoin with companies and software products is not a good comparison.
Replacing software or products is not the same as exchanging government-issued fiat money to a new decentralized non-governmental form of money. The transition between different forms of money depends on trust which takes time[1]. E-mail and internet (web) took of faster but these inventions did not require people to exchange their money into an alternative system.
I've been against the whole blockchain space for some time but I only just realised the one big positive to come from it - a new market.
I think that's why it's become so popular, you can actually invest in ideas just as they're being born now. The stock market is a marvel but the barrier to entry for companies is insane. It's also why there's so much money flowing through VC channels these days.
I'm just hoping the resolution to these issues that sticks, a proper market for investing in early stage startups, is created outside of the blockchain.
This article feels like it's just riding the crypto bandwagon for clicks.
The "early days" of something is relative to the lifespan of the thing. If crypto lasts for the next 1000 years then yes we are very much in the early days.
Moreover, a label like "early days" is entirely irrelevant, because really the question that needs to be asked is "Is it still changing, evolving, growing?" Based on what I've seen (I'm not a crypto enthusiast) the answer seems to be yes.
I don’t think the “early days” will be over until we can in fact see a few of the big projects crash and fail AND THEN some new projects survive and take over with killer products as we saw with the dot com bubble.
At the moment there are already some successful private blockchains, some of those the end user interacts without knowing about them.
70-ish years. I'd say we just recently came out of the early days of computing around the 1990s or 2010s.
>How long do we need to wait before someone comes up with an actual application of blockchain technologies that isn’t a transparent attempt to retroactively justify a technology that is inefficient in every sense of the word?
Currency is inefficient? It's sure better than trading cows.
Smart contracts? Writing things using english and then every side involved hiring lawyers to be used as bad just-in-time compilers for what was written is way more inefficient.
"Bitcoin was the beginning of the end for the state" – geohot. And I can't imagine much more of an inefficient system than the state and central banking.
> How much pollution must we justify pumping into our atmosphere while we wait to get out of the “early days” of proof-of-work blockchains?
Energy production problem, not a blockchain problem.
> How many people must be scammed for all they’re worth while technologists talk about just beginning to think about building safeguards into their platforms?
God, devs, please don't put restrictions on your platforms under the guise of "safety". Same goes for governments. Stay out. If you have no clue how something works, it's partly on you if you gamble all your savings on it. But also, who is excusing scams? We all think scams are bad. Nobody is seeing someone who fell for BitConnect and saying "Well, it's the early days, so it's fine that you got scammed."
It seems to me that this lady really wants to dislike. In general. She enjoys disliking things.
> Currency is inefficient? It's sure better than trading cows.
Currency is a problem that's already solved much more efficiently in a lot of countries.
> Smart contracts? Writing things using english and then every side involved hiring lawyers to be used as bad just-in-time compilers for what was written is way more inefficient.
Writing a bulletproof smart contract is difficult, as demonstrated by endless exploits despite the contracts being written & reviewed by specialists paid lots of money.
The advantage of the legal system is that when shit hits the fan, humans (in court) can step in and determine what the intent of the contract was despite potential loopholes, whereas in code, there is no difference between "loophole" and "intended behavior". Now you can of course have an authority that has power over smart contracts and can step in and rollback exploits, but that's just the current legal system with extra steps, at which point you may as well not use a smart contract at all.
> And I can't imagine much more of an inefficient system than the state and central banking.
There are obviously edge-cases and cryptocurrency is valuable in those, but in the vast majority of the world banking is a solved problem and much more efficient than cryptocurrencies. Compare the total cost (fee + environmental impact due to energy use, etc) of a card transaction or bank transfer with a cryptocurrency transfer.
I'm not saying that cryptocurrencies are useless - there are use-cases for them including in countries where the established monetary system is broken. But outside of those edge-cases, cryptocurrency would be a very wasteful downgrade from the status-quo.
> Currency is inefficient? It's sure better than trading cows.
> Smart contracts? Writing things using english and then every side involved hiring lawyers to be used as bad just-in-time compilers for what was written is way more inefficient.
If crypto is doing these things really more efficiently than current solutions, then why neither use case has any significant adoption of blockchain solutions?
Every technological revolution is held back as long as possible by those making the most money using the current system.
London streets will be covered in 3 feet manure if industry progresses at this pace.
You’re crazy if you think this fool contraption you’ve been wasting your time on will ever displace the horse, there is no significant adoption.
Electricity is dangerous, there is no significant adoption, gas lamps and candles work fine.
Remove trollys since we can make more money selling tires, oil, and buses.
Internet is a fad, what use case is it solving, it burns a lump of coal every time a book is ordered, there is no significant adoption.
EV1 - we will take your electric cars and crush them, there is no significant adoption.
Proof of work guaranteeing that no one can alter history unless they spend more energy than the entire network has spent already to secure property rights has no use case and no significant adoption.
At this point either you see a pattern from history, or you remain perpetually on the wrong side of a Blub paradox.
PoS blorkchains do not solve the first problem completely (they still require an obscene amount of power to do something that can be done way more efficient) but implement an entirely new kind of problem: The more tokens someone already had, the higher his chances in the "stake-lottery".
Essentially, PoS makes sure that "he who has the gold makes the rules" becomes hardwired in the system, instead of only being a side effect of it.
How "green" something is, is determined by how much resources one unit of what it does uses, compared to how much resources doing the same unit of work on an alternative system uses.
eg. a petroleum lantern produces light more efficiently than a campfire. However, neither of them is "pretty green" compared to a LED.
Compare the amount of energy per transaction required with a PoS system to the amount of energy required to do it with, say, a credit card.
PoS is just a bunch of computers largely idling. Whether it's 1k or 10k, it doesn't matter - there is no energy use to speak of, at least none that society has a legitimately interest in regulating.
The Tezos Foundation, who's interest is in advertising how green they are, claims in a year they consume as much electricity as 17 individuals (https://tezos.com/carbon/).
It is up to critics to provide evidence of PoS energy use being a concern; no one has done so, because the outcome is essentially is predetermined.
> It is up to critics to provide evidence of PoS energy use being a concern
So, is there evidence, as in peer-reviewed studies, that PoS blockchains can handle the volume of transactions of traditional financial systems while requiring LESS energy?
I don't know, but I don't see how that is an interesting question. As crypto critics rightly point out, the vast amounts of energy that the financial system consumes provides a huge amount of different services; from bank branches to regularity compliance.
From a literal technical point of view, storing a ledger on 10k computers consumes more energy than than storing it one one. But maybe the backup and operational infrastructure of a bank to manage that one centralized ledger consumes more energy than 10k PoS nodes. But then people also build all kinds of services around those blockchains which require their own computers. In both cases, you get something unique: the blockchain gives you permissionless financial network, your bank gives you a regulated one.
Meanwhile, a single branch of McDonalds consumes many multiples more energy than any PoS blockchain.
My point is really just this: Critics can try to critique PoS blockchains as useless. They may also try to ban them using arguments around say, securities laws or AML. But the energy argument is DoA.
Apparently high levels of debt will really limit the amount rates can be increased. This is something I have heard from crypto investors, but also from people who dislike Bitcoin.
I've started telling my tech-following friends and relatives: Whenever you hear somebody say "Web 3.0" you should think "YABS" (Yet Another Blockchain Scam).
History will not be kind to @pmarca for promoting this shite.
I just can't take the power and pollution argument seriously. There's just nothing salient about it. I might have otherwise agreed with the author on their other points but if you can't see the issue with this argument it disqualifies your opinion (which js just my opinion).
"Bitcoin requires lots of electricity". No, nowhere near the scale human activity sans blockchain does and to provide it we burn coal. Like we've done for a looong time before bitcoin. Removing bitcoin doesn't remove the coal we burn. Genuinely daft argument.
And that's before we get into looking at the numbers from areas like the mining sector. Aluminum smelting isn't cheap from a power perspective, yet I don't see this argument leveled against coke.
The difference is that from then perspective of the critics, cryptos burn the energy needs of multiple small country for Ponzi schemes.
Purely to represent the opinion of the critics now, aluminum smelting might be and, but at least aluminum out of it, so they don't criticize the base activity, just the energy type. From the perspective of the critics, we don't need to struggle and transition crypto to RE, we can just stop doing it.
I personally agree, but people with your perspective (presumably) don't and place Crypto in "expensive but inherently valuable activity" or at least in "entertainment" both of which also use a lot of coal power but aren't negotiable, hence people focus on the energy sources not so much the activity.
You're talking as if the crowding out effect didn't exist: Even if we had a lot more renewable energy than we do, every kWh used for crypto-"currencies" is a kWh that can't be used for something else
To me, the most promising use cases for a blockchain would be activities that are today carried out by government agencies, states or lawyers. Anyone who has ever bought a property in central Europe knows how much money has to be spent on trustees and notaries. If such transactions can be carried out in a secure way between buyer and seller without an intermediary, that would be a huge win. However, the lobby of lawyers and notaries is big, the connections to politicians are tight and they will not give up this business easily. Additionally the public sector is not known for its fast technology adoption.
Until the first person gets tricked into signing over his property for free...then suddenly, all these lawyers, agencies and notaries are back on the track again, because it turns out they were there for a good reason the entire time: To make sure its really really really hard to get someone to hand over his home via something like a typo or a misclick.
> activities that are today carried out by government agencies, states or lawyers. Anyone who has ever bought a property in central Europe knows how much money has to be spent on trustees and notaries. If such transactions can be carried out in a secure way between buyer and seller without an intermediary
So if the system in those countries could be thoroughly reformed to work totally differently than it does today... Then why couldn't it just be thoroughly reformed to work more like it does in Western or Northern Europe today, where it works with a lot less hassle even without blockchain?
I think it's still early days in terms of what's been built and what valuable applications have been created, i.e. nothing of note. But it's definitely not early days for investing in tokens - almost all of the top tokens seem completely overvalued. I think the token prices will crash and rise continually over the next 5-10 years as developers and entrepreneurs take the ridiculous amounts of VC money that has been raised to invest in crypto, and ultimately (perhaps) build a handful of useful and popular applications.
Uh, 2001 happens to be the year that Amazon became the biggest bookseller in the world, having been founded five years earlier. That's literally about as mainstream as you can get, and it was half a decade.
Whether or not you agree with the arc of the linked article, the basic facts are correct: blockchains have been with us for a decade now and haven't done much or made anything that wasn't itself a speculation about blockchain.
You call it speculation and that’s convenient for your argument. Bitcoin as a store of value is not speculative. It has objective qualities that make it valuable and you dismissing those as speculation lets you be ignorant to the comparable short term success of Bitcoin.
FWIW: a thing that has value only on a balance sheet is pretty much the definition of "speculation". I was saying that crypto and web3 hadn't produced any new kinds of economic activity beyond buying more crypto. The only reason to get involved in crypto now is to own crypto, just like it was a decade ago.
(2) why is the blockchain still so lacking in practical use cases with widespread adoption?
I think she is totally fair in complaining about (1). Either it is impossible to have decentralization and efficiency or it's just a technical problem that will be solved given more time. I don't have the answer here - only time will tell.
For problem (2), I think it's mostly an over-exaggeration of the use case(s) where web3 that beats web2. As far as I can tell there is one and only one use case: web3 can do things while having a middle finger pointed at major governments. Web2 cannot. In that bitcoin and eth can offer people of Argentina a some reliable store of value (against their own currency which depreciates at 50% per year) it has generally achieved that. You can't even buy a Tesla in Argentina so the adoption of that wonderful technology there is zero.
To claim that it's the next web2 or mobile tech is both an exaggeration and an underestimate. Web3 will not be much of a challenge to web2 or mobile. Instead it will be a huge challenge to existing political, monetary and taxation systems. It will be the tool of the rich to evade taxes, for libertarians to evade control and for those living in high inflation countries to build wealth.
Those who complain that this is hardly revolutionary are both right and wrong.
Reminds me of something Elon Musk said. A lot of the content on the internet is a "projection of our limbic system". (Elon saying this https://youtu.be/ycPr5-27vSI?t=1074)
I see the craze around crypto the same way. It is a representation of something in our limbic system. Perhaps greed?
If there would be a legal framework in place that can tie a DAO to basically be legally binding bylaws of an actual org. and the smart contract lang. is expressive enough for this to work this would be extremely valuable. Outside of this most of web3 looks like hype.
If there was a legal framework, it wouldn't be decentralised! ...and hence, it's pointless, since you could recreate it at much lower expense without the blockchain and associated speculative coins.
This has 0 to do with coins. Going through court systems can cost 10s of millions of dollars and someone actually has to actually bring the action to court.
The question is: does the legal framework override the results of the smart contracts and blockchain records? If so, you don't need the crypto. If the crypto cannot be overriden by the legal framework, you don't need the legal framework. Pure redundancy.
That's literally how things work now. ~99.99999999% of contractual agreements are not litigated. The legal process is there as a slow debugger when it all goes wrong. But most of the time, things don't go wrong and people work out their disputes without involving courts and judges.
A legal framework. You mean laws? We have those for all sorts of things but we still have courts to interpret How the laws apply for specific situations.
a very narrow example you are nonprofit in charge of .org TLD
the DAO managing bylaws of that org have no provision for you to be able to sell
.org TLD to a third party. You don't have to constantly worry that some ahole will take over the org and do this, because there is no way to do it.
Well I am def not a legal expert to know if it is sufficient for the above purpose and if we can ever create a lang for smart contracts that is expressive enough, but it's cool to see things are happening.
people have the tendency to quickly categorise things into "good" or "bad". as scammy as the crypto world is, there are a lot of potential uses for the blockchain. think fault-resistant backends, think open and transparent data flow and storage. "the early days" is subjective but in my opinion there are still so many things that'd run better if it were run on a blockchain instead of a traditional centralised server
Only due to the internet existing in the first place, which by the author's own logic, 'that wasn't new either'.
The World Wide Web was the 'killer app' for the internet (which that has been there for years before) in the early 1990s; perhaps even fuelling the dot-com boom. A decade after that, the whole market crashed.
The critics were celebrating, did the utility of the web stop? Nope. Only the scams and useless, overvalued websites died.
The same thing applies to just blockchain technology even beyond 'Bitcoin or Ethereum' where when the concept of that is not new. The regulations will come and eliminate the coins that do not comply and the useless cryptocurrencies or meme coins will be extinguished - probably will cause another crash again and eliminating more useless unregulated cryptocurrencies.
That is even before the regulatory framework has been even properly implemented. A few of these cryptocurrencies will survive all of that.
Not really. The innovations in 90s web technologies solved more “real” problems and gained mass adoption. much different than the blockchain/crypto innovations of the past decade which are still used by a relatively small number of people.
Automation has not delivered his full potential but only side effects which favored the few sociopath over the many.
Internet has delivered as much as possible in the early days, not its full potential, and has been regulated so that the orwellian side effects will be prevalent.
Bitcoin put a dent in the banking system, and it is being normalized. But the ideas behind blockchain and trustless consensus have a great potential. They will probably fail like the rest but why not give it a chance. I do NOT mean invest money. I mean invest time in understanding how those principles can be applied so technology can fight soulless technocracy.
Because when the genius Satoshi Nakamoto thought up about digital funny money in the aftermath of 2008 financial crisis, he didn't think hard enough about all the possible scenarios.
Blockchains exist for a reason completely other than performance. Of course a centralized database would perform better. That’s not the point. I think engineers keep getting hung up on this and don’t zoom out and see the big picture.
I feel like even after zooming out and seeing the big picture, it's hard to imagine blockchain solving real world problems. Blockchains are good when there's a lack of trust and decentralization is absolutely necessary. There are very few problems that actually need a blockchain. Anything that has the government in the loop (like buying houses or property) is a non starter and anything that runs on centralized servers (like game NFTs) also doesn't make sense.
You're right. And bitcoiners have been saying this from the very beginning of the crypto madness.
A global, government agnostic money like bitcoin that no group of insiders and early adopters have unassailable control over, seems like the only likely candidate for something that needs a truly decentralized and trustless blockchain.
And in practise not government or central bank controlled money is not practically desirable. The gold-bugs and crypto people might think it is, but there are very good reasons why no one is using gold standard anymore. It makes modern fiscal and financial policies impossible and probably leads to massive issues for everyone.
I'm genuinely not sure whether this statement is pro-crypto or anti-crypto... I assume it's anti- based on the reference to it being better for the planet?
Or is the "designed for hyper consumption" a reference to inflation in fiat currencies? Sorry, perhaps I've confused myself.
Our inflationary currencies that are in vogue in the modern era are explicitly designed to psychologically encourage people to go out and consume more than they actually need to, because their money is terrible at preserving it's value long term.
Inflationary currencies might be great at keeping the economy red hot, but I'm of the opinion that they're terrible for the long term sustainability of our planet.
> Blockchains are good when there's a lack of trust and decentralization is absolutely necessary. There are very few problems that actually need a blockchain.
How about the current status quo of the Internet? Do you think being mined, sold, and endlessly tracked is OK?
BitTorrent is wonderful for sharing information, but it's not really a platform to build on. Something like Ethereum on the other hand is literally a decentralized computer that no single entity controls. The blockchain part enables this.
It's not, but blockchains don't magically fix that. And the "web3" stuff built so far is still pretty centralized and could include that same tracking if the incumbents so chose.
Of course a blockchain doesn't magically fix anything, it's a distributed log. But a decentralized distributed log is a great building block for something that isn't owned by FAANG.
What is the big picture then? I've never got anything concrete that doesn't sound like the usual buzz word snake oil.
Blockchains solve the wrong problem for a lot of the proposed applications I've seen, like handwaving about "supply chain". The biggest difficulty is not that you don't trust the database, it's that you don't trust the connection between the electronic data and reality. How do you trust a person to have packed the correct grade of meat into the box you are buying? If they've dutifully recorded something on the blockchain and you can verify that nobody has tampered with that record, it still does not help you.
And if you have regulation to ensure supply chain steps comply, then you trust the regulators, then you can have a central database.
Crypto coins are unique in that you can verify them mathematically. They have no connection to anything else out in the real world so they don't have that problem.
So aside from coins, where else is it that you would not trust a central database, but you can verify/trust the entries being added to that database?
>>So aside from coins, where else is it that you would not trust a central database, but you can verify/trust the entries being added to that database?
I would not trust a central database for any application, even those where I have to trust the verifiers of the entries to that database.
E.g. I would prefer stablecoins over credit in a bank.
With a decentralized database, immutability and permissionlessness are the default, until the trusted third party actively intervenes to strip you of these privileges.
With a centralized database, access is by default denied, and requires active intervention from the trusted third party, in the form of a grant of permission, to acquire.
You can't trust a central database but you can trust a central blockchain? A proof of work blockchain which is trustless and permissionless and has many nodes can be trusted to be tamperproof and immutable, but it is also slow and inefficient (thanks to PoW). A PoW blockchain is inefficient by deaign, it's a feature not a bug beucase that is what gives it's trust without trusting.
But when you make that blockchain private, trustful, and permissioned (only designated nodes can add blocks) you are taking away the very properties that make the blockchain immutable. And it has to be done because that is what enterprises would want. So an enterprise blockchain like Corda/Hyperledger is no different than a central database. And no serious business least of all banks would do their business on a public truly distributed open blockchain.
> I would not trust a central database for any application, even those where I have to trust the verifiers of the entries to that database.
I don't see how that's reasonable. What am I missing, surely virtually nobody would be willing to spend the massive resources of a blockchain for that kind of risk model.
> E.g. I would prefer stablecoins over credit in a bank.
So aside from coins, what's another concrete example?
> With a decentralized database, immutability and permissionlessness are the default, until the trusted third party actively intervenes to strip you of these privileges.
> With a centralized database, access is by default denied, and requires active intervention from the trusted third party, in the form of a grant of permission, to acquire.
This sounds very much like the buzzword snake oil I've heard many times before, but I'm willing to be open minded about your non-coin example.
>>So aside from coins, what's another concrete example?
What you wrote earlier is:
>>Crypto coins are unique in that you can verify them mathematically. They have no connection to anything else out in the real world so they don't have that problem.
Stablecoins cannot be verified entirely mathematically, as they have a connection to real world bank notes, so my example doesn't fit your exception.
>>This sounds very much like the buzzword snake oil I've heard many times before, but I'm willing to be open minded about your non-coin example.
I'll use the coin example, because it's easy to demonstrate the principle.
I can move my stablecoins, without having to ask a third party custodian for permission. With bank credit, I need to ask the bank for permission to withdraw it, or transfer it.
The coin certainly can be verified, otherwise you couldn't move it.
A stable coin where you trust whoever is providing the backing for that asset is no different from a crypto currency in that way, the trust model still requires that you trust someone to honor the coin or value it in some way.
So it's a bad example. The interesting part about it that you can move coins between people who don't trust one another without a 3rd party is entirely due to the remotely verifiable nature of the thing, like any other coin. That is the one and only interesting thing about it, and that's common to all these kind of coins.
>>A stable coin where you trust whoever is providing the backing for that asset is no different from a crypto currency in that way, the trust model still requires that you trust someone to honor the coin or value it in some way.
I don't follow. With a cryptocurrency you don't have to trust any one. The cryptocurrency can't be redeemed for anything, and thus there's no one to trust for honoring the claim upon redemption.
>>The interesting part about it that you can move coins between people who don't trust one another without a 3rd party is entirely due to the remotely verifiable nature of the thing, like any other coin.
Yes true. And that applies to any digital property on the blockchain.
The challenge for digital property that is a claim on a real world asset is being able trust a third party to honor the claim upon redemption of the digital property. Some parties have solved that for claims on national currency, and thus we have a few stablecoins.
Whether this model can extend to real estate, automobiles, commodities and other assets/goods remains to be seen.
> I don't follow. With a cryptocurrency you don't have to trust any one. The cryptocurrency can't be redeemed for anything, and thus there's no one to trust for honoring the claim upon redemption.
Of course you do if the currency has been backed by some other asset. You can't just declare that your crypto currency is a "stablecoin" and therefore it is backed by US dollars. There has to be something actually backing it. And that's what you have to trust.
And if it's not a stable coin then you have to trust that you will be able to sell it or exchange it. If your government bans banks or merchants trading in crypto then you might have a problem.
But I specifically didn't want to talk about crypto currency because as I keep repeating, that is the one place where block chains can make sense (even though you still have the edge problem).
> Yes true. And that applies to any digital property on the blockchain.
No, no it doesn't. Not sure what you're having trouble understanding, but it specifically only applies to property that you can verify remotely without trust. I.e., coins.
> The challenge for digital property that is a claim on a real world asset is being able trust a third party to honor the claim upon redemption of the digital property. Some parties have solved that for claims on national currency, and thus we have a few stablecoins.
It's not solved. You still have the trust problem. If you have to trust the entity backing your stable coins then you don't need distributed trust.
> Whether this model can extend to real estate, automobiles, commodities and other assets/goods remains to be seen.
>>Of course you do if the currency has been backed by some other asset. You can't just declare that your crypto currency is a "stablecoin" and therefore it is backed by US dollars. There has to be something actually backing it. And that's what you have to trust.
You're misunderstanding me. By cryptocurrency, I am referring to a natively digital asset, with nothing from the real world, e.g. US dollars, backing it. ETH would be an example of a cryptocurrency.
I am distinguishing cryptocurrencies from stablecoins, which do have something from the real world backing them.
That's why I wrote:
"The cryptocurrency can't be redeemed for anything, and thus there's no one to trust for honoring the claim upon redemption."
With stablecoins, you need to trust a third party - the issuer of the stablecoin - to provide USD in the event that the stablecoin is redeemed.
With a cryptocurrency, there is no third party you need to trust to honor any pledges.
Yes, governments can ban a cryptocurrency, but that is NOT a case of a trusted third party violating its commitment to you, as in the case of a stablecoin issuer in default, so it's an entirely different category of dependence on trust in a third party.
You realize all this web3 stuff runs on top of the internet right?
There are centralized CAs, domain/ip registrars, ISPs…shit even the libraries that comprise your entire computing stack all come from centralized databases!
Your comment is stored on a database.
USDC/Tether have private databases and their collateral is held by third parties in again their own database.
I would prefer all of the databases used within the internet infrastructure to be immutable append-only blockchains maintained without any centralized trusted third party.
Except that as Moxie pointed out just recently, the way it all is set up, everything is centralized anyway. So it's not actually being used in a different way.
Every time there's a bull market in cryptocurrency, the charlatans jump out of the woodwork. They build a bunch of websites and scam a lot of naive people. When the market reverses, these project disappear one after another, usually with people's money, sometimes because they don't actually solve a problem. Almost every one of these NFT grift projects are going to disappear over the next year or two.
Some blockchain technologies are highly centralized, but even then I think it's more like an "active/passive" configuration than a truly centralized system. If the system goes wrong, it's still easy to move to a different one.
The parent article doesn't say anything about performance. Therefore this comment seems like a red herring. A case of not reading the article?
The parent article's point is that most currently popular technologies found an application rather quickly, whereas blockchain technologies have been around for a long time (in tech terms) and still have not made ground.
> How long do we need to wait before someone comes up with an actual application of blockchain technologies that isn’t a transparent attempt to retroactively justify a technology that is inefficient in every sense of the word?
OK perfect. "Inefficient" in every sense of the word. Let's say I'm wrong and skipped over that line. What else could the various senses of "inefficient" mean in the context of this article?
Probably the fact that, despite having been under development for > 10 years, we haven't seen any ground broken by any blockchain technologies for any reasons other than speculation or triviality. Which is what the other 95% of the article focuses on. The inefficiency of the development process, not necessarily the technology, although yes, the latter is a factor.
Maybe you mean that they haven’t made useful ground, where useful is specific to you.
Remember that blockchain technologies have become legal tender, have over a trillion in market cap, have become financial instruments traded by people around the globe, is taught at Universities and part of the CFA accounting exam, is in the news daily, has resulted in large investments in research, etc…
It’s impact has hardly been non-trivial. Just the impact on finance is substantial even if people seem to gloss over a new financial asset as “just finance stuff”.
When has "market cap" been a measure of a currency? This is indicative of the logical fallacy so common in these debates, conflating "store of value" with "useful mechanism for transactions."
It's a Ponzi scheme. There's no inherent underlying value, its "market cap" is strictly a function of more dumb money flowing into the system. Occam's razor, this is the most likely explanation for everything in the crypto space; the model makes sense and explains a lot more than "a new financial asset" hokum.
Depends if you view them as stocks or currencies, no? If it’s stocks then market cap is normal. Anyhow, if it was a giant Ponzi scheme then what about the projects ran by JP Morgan/Visa/Deloitte/etc? I have no doubt some projects are scams, but there are also non-ponzi projects and I don’t agree with painting them all with the same brush.
>To be explicit, the reason blockchains exist is to have a globally consistent database that doesn’t require trusting the operator.
which I mean when I think of that I think - that would be really useful for crime because you don't want to trust the operator because either 1. they're a narc 2. they're a criminal.
it's also useful for currency because not trusting the operator allows you to keep them from turning into paypal.
but then I just draw a blank on what it is useful for after that.
I'll be honest, I find the "blockchain is for crime" argument to be worn out in 2022. It feels a lot like "think of the children".
Of course blockchains can be used for crime, almost anything can. In fact, if you want the preferred currency of criminals the world over, look no further than the US Dollar.
Most organizations, governments, businesses, etc. start with plenty of trust to go around. There's no reason to inherently distrust them, so their governance, currencies, securities, etc. work just fine. Distrust breeds over time, which is why establishing governance, currencies, securities, etc. in a way that can be cryptographically verified by anyone is a useful property to have to ensure the system remains generally trustworthy long into the future.
For example, there are many reasons to distrust stock brokers, the Depository Trust Company, the spineless SEC, and other entities who run our securities exchange. If securities were traded on a blockchain instead of an opaque database that can't be audited except by a corrupt few, everyone could strongly trust in the freedom and fairness of the securities exchange markets.
If I could own all my stocks on the blockchain, I would do it in heartbeat.
'Zooming out and seeing the big picture' seems to mean buying into a libertarian vision of the world where the current money system is horribly broken and blockchain technologies are a viable and superior alternative. I profoundly disagree on all points of that analysis.
Right-wing American libertarians in particular have this simplistic view that government control over anything is the root of all evil. Therefore the decentralized aspect of crypto must seem like a wet dream.
I believe the system where a semi-independent central bank has the ability to regulate the currency of the country is a good thing on the whole. It's the best balance of compromises we have seen actualized.
Having a fixed supply of digital coins seems more like a return to the old days where there was a fixed supply of gold and silver coinage. And that era was called the dark ages. A system with fractional reserve credit is much more conducive to economic growth and prosperity.
I’m not libertarian at all. I see cryptocurrency as a fair and transparent way out of the extreme wealth inequality we see in the world today. Decentralization gets me excited. New ways of using technology gets me excited.
A non-inflationary currency promotes hoarding. The biggest whales in crypto own a huge chunk of the total supply, even more so than in our current fiat system. How you think such a system does anything but worsen wealth inequality is a mystery to me.
cryptocurrencies are not going to solve extreme inequality. they are a transparent way to transfer wealth from new investors to early investors (aka ponzi scheme)
"A Ponzi scheme is an investment fraud that pays existing investors with funds collected from new investors"
Sorry to burst your bubble, but cryptocurrency does not work this way.
Your reasoning can be applied to any asset, for example, a shitty house in California that is now worth $1M.
Exactly, People on all extremes of this just cant seem to understand the simple reality that “the market can bear it.”
The market can bear smart contract platforms whether that platform writes to a proof of work system, a faster distributed set of nodes, or on localhost with port forwarding.
It doesnt matter! People like to deploy that kind of code on a platform that can be accessed that kind of way.
If there isn’t a token then people DDOS it instantly, with smart contracts that take up too much processing cycles or memory. Simple. People dont want to use limited fiat payment rails to attempt to preallocate resources, it doesnt work very well at arbitrary amounts, it ceases to be permissionless and the author is agreeable here: its been 13 years of this other solution and is an international hit!
Think about developers on Shopify’s app store that try to sell to ecommerce merchants. Its the same people with the same goals! Sell tools that theoretically make someone else’s life easier. Extract value because commerce exists. Thats really valuable. Thats exactly whats going on in blockchain. Just because you and your friends are taking linear bets with your capital and cant quantify why things go up way too often really has nothing to do with the people that built that tool for you who are taking little basis points here and there.
I think the author hasn’t heard about DeFi. It’s pretty mind blowing what people are building on top of blockchains these days. But of course users who are not directly affected are oblivious to the advances and are just upset that they are not being served as users. If you think blockchain is useless: you are not the target user. The day it becomes useful to you, then you can choose to use it or not, but that day you’ll probably use it without knowing you’re using it. After all, do you have a clue what backbone your bank is using to perform wire transfers?
“Low slippage stable coin swap” is one of the most jargony things I’ve read on here in a while. Can you please ELI5 because I have no clue what this is or how it could be useful.
Have you heard of leverages, margin calls, derivatives, put options, etc.? DeFi is pretty much the same level of complexity but implemented on top of cryptocurrencies.
This https://youtu.be/8CAafjodkyE?t=104 is a recent thing I found mind blowing; 2020 iPhone can do on-device image processing and object recognition and speak a description of what the camera sees. Just quietly a builtin feature.
2010 iPhone, I was mind-blown by the Word Lens app which could do OCR on text in the camera feed, translate the words into another language, and overlay the results on the image in near-realtime. http://edition.cnn.com/2010/TECH/mobile/12/20/word.lens.ipho...
These are tasks I had never seen any computer do in any circumstances, things which would be unthinkable on a Java MIDP Blackberry from 2005, or a Pentium II desktop from 1997. Compare this to the wearable augmented reality devices Professor Steve Mann was building through the 80s and 90s[1] and this "describing the image" is so so far ahead in so many ways - processing power, imaging quality, battery life, storage space, size, weight, convenience, reliability, it's just mindblowingly better, neural networks and fast chips and solid state storage is a step change in a way that "faster" isn't enough to really convey.
Google tells me "Derivatives have a long history in the United States, dating back to the founding of the Chicago Board of Trade in 1848.", you're telling me people are doing that but with blockchain, why is that interesting at all, why mind blowing?
Personally the reason it blows my mind is because it’s now permissionless to craft a unique structured product or derivatives protocol, deploy it globally, and anyone on the planet can participate in that market.
It’s fully customizable and accessible to anyone with an internet connection.
Call me old fashioned my I prefer regulations in the markets I participate in. I still fail to see how “permissionless market creation”, while impressive, actually solves a problem. Where is the demand coming from, besides people in tech??
In what way "permissionless"? In the way "the government has agreed that they can be unregulated financial products" or in the way "hopefully it can evade government financial regulation"? or in some other way?
Sure there’s definitely US-centric issues given the current regulations in place.
But it’s permissionless in that if the financial markets don’t support a structured product you or your community needs, you can create and deploy it yourselves with instant global accessibility.
You could (Matt Levine talks about his ExcelCoin he tracks in a spreadsheet), but with the rise of AMMs [1] (and SSOV’s) it’s easier to make the market in the DeFi space.
That feels like saying stealing food is a permissionless new way to get food. And I'm not at all convinced that the governments of the world could not regulate blockchains, or their use, if they wanted - either in ways like outlawing it, or auditing / regulating / taxing companies which use it, or pressuring insurance companies to put limits against insurance cover, or numerous other ways.
That’s not a great argument. It’s like comparing the invention of tcp with the iphone. They’re just two different technologies. If you’re interested in learning there are many resources, but it’s too easy to criticize something by looking at its cover.
And if you told me there was a new "TDP/JP" which is like packet switching but much slower and more energy hungry, and it was blowing your mind, and I asked why, and all you could say was "do your own research", I don't think I would do any research about that either.
Money obsessed people moving money around in ways that seem manipulative and gambling feels like a negative influence on the world.
Ok cool, so basically just fancy ways for traders/investors to gamble and “create value” that doesn’t really benefit anyone besides themselves and others tied to the platforms. Got it.
The idea is you can lock capital in a pool, and as people trade between two usd stablecoins, USDC and DAI, you earn a fraction of the trade fees. The low slippage is due to the pool being large enough that you will get $1->$1.
So this is Yet Another Liquidity Pool? $14B is not the kind of scale I mean. That is frankly trivial especially when transactions are large (or initial funding is high).
What I mean is, if blockchain is going to be a revolutionary technology backing all finance, where is the evidence it can handle the kind of transaction volume that, say, major credit card networks generate?
This is a protocol that rolls up ETH transactions and executes them in batch, in an attempt to alleviate scalability concerns. I can't really speak to the side/unintended effects of transaction rollups on a blockchain, but I'm interested in learning.
This excerpt from the FAQ
> It is worth noting that anyone can become a relayer so long as they have staked the required bond in the smart contract. This incentivises the relayer not to tamper with or withhold a rollup.
kind of bothers me. It does not seem like such a small step to go from 'decentralized' to 'cartel of relayers' to 'central bank and subordinate branches'. And the fact that this protocol is unavailable to US persons is interesting, though perhaps standard for the space right now.
The censorability of rollup relayers bothers me too. As you mentioned, the fact that US persons are blocked from the protocol shows this is a real problem.
I think this is a problem with technological solutions (perhaps anonymous and redundant relayers, or private rollup transactions so that the relayer does not know the content of transactions in a block but can produce a valid output state) that will be worked on in the next couple years now that the base technology (rollups) exists.
Sorry, thought my last paragraph covered that. Can any blockchain-backed tech handle the number of transactions per second that current major credit card/payment networks do?
1,700 tps for VISA is a good benchmark. I recall VISA's technical capability is 10x or 100x that number,
Ethereum 1.0 can handle 30 transactions per second.
Part of the development dubbed "Ethereum 2.0" is focused on scaling the number of transactions via sharding. Each shard will be able to handle 2,400 tps. As more shards are deployed up to 64, Ethereum 2.0 will reach 160,000 tps.
I am interested in learning about how "shard chains" work.
I'm concerned after reading https://ethereum.org/en/eth2/shard-chains/ that sharding is aimed at letting individual dApps roll up transactions -- i.e. the individual app would be the effective shard key -- and thus that would introduce some notion of centralization into the system.
1) a way to part greater fools from their money until the hype has died out
2) a hot topic to drive clicks and discussions for nerds and, increasingly, the tech press, from other more pressing issues that exist in terms of tech and culture and finance
In other words, its a bullshit scam, can we please move on already?