“In 2018 the blockchain/decentralization story fell apart”(twitter.com)
twitter.com
“In 2018 the blockchain/decentralization story fell apart”
https://twitter.com/random_walker/status/1079759096272818178
214 comments
As I mentioned in the Twitter thread, my chief criticism of cryptocurrency since the beginning is it's naivete of the history and politics of money.
The discussions about economics applied here focus too much on microeconomic rather than macroeconomic arguments. So they end up missing the point entirely which is this:
Money isn't a neutral instrument and it's not something that can be decoupled from societal/political concepts and structures.
You can evaluate it as though it is neutral, but it has not ever been and will never be a neutral instrument because of the historical tendency for resources to pool and therefore become power centers, among other things.
Therefore if you view cryptocurrency as having the primary intention to de-couple commerce from coercive power structures [1], then you'll see immediately the historical problem. Namely, history doesn't favor distributed power, especially not when it can easily be co-opted by the powerful systems in which they rely.
In the best case scenario for crypto-utopians, millions of people transact and do commerce on a decentralized currency. In that case, whatever sovereign is most impacted, will then either outlaw commerce by crypto by force or require parity with the sovereign currency and control of the crypto currency through tax payments. This has happened multiple times over the centuries with alt-currencies and they are killed off by the most powerful (see: Most powerful economy/military) organization.
Politically, there is nothing different about Bitcoin than there was with the confederate states dollar for example.
[1] From the original whitepaper: "What is needed is an electronic payment system based on cryptographic proof instead of trust, allowing any two willing parties to transact directly with each other without the need for a trusted third party." https://bitcoin.org/bitcoin.pdf
The discussions about economics applied here focus too much on microeconomic rather than macroeconomic arguments. So they end up missing the point entirely which is this:
Money isn't a neutral instrument and it's not something that can be decoupled from societal/political concepts and structures.
You can evaluate it as though it is neutral, but it has not ever been and will never be a neutral instrument because of the historical tendency for resources to pool and therefore become power centers, among other things.
Therefore if you view cryptocurrency as having the primary intention to de-couple commerce from coercive power structures [1], then you'll see immediately the historical problem. Namely, history doesn't favor distributed power, especially not when it can easily be co-opted by the powerful systems in which they rely.
In the best case scenario for crypto-utopians, millions of people transact and do commerce on a decentralized currency. In that case, whatever sovereign is most impacted, will then either outlaw commerce by crypto by force or require parity with the sovereign currency and control of the crypto currency through tax payments. This has happened multiple times over the centuries with alt-currencies and they are killed off by the most powerful (see: Most powerful economy/military) organization.
Politically, there is nothing different about Bitcoin than there was with the confederate states dollar for example.
[1] From the original whitepaper: "What is needed is an electronic payment system based on cryptographic proof instead of trust, allowing any two willing parties to transact directly with each other without the need for a trusted third party." https://bitcoin.org/bitcoin.pdf
> history doesn't favor distributed power
In that case, why do we have ~200 nations instead of a single world government? Clearly, sovereignty matters to groups of people.
"Sovereignty of money does not matter to LARGE groups of people" - might be a more defensible argument.
In that case, why do we have ~200 nations instead of a single world government? Clearly, sovereignty matters to groups of people.
"Sovereignty of money does not matter to LARGE groups of people" - might be a more defensible argument.
In that case, why do we have ~200 nations instead of a single world government? Clearly, sovereignty matters to groups of people.
Italy alone used to be a dozen+ independent city states. Divided the world 200 ways seems like a lot unless you look at how much it's been divided historically. And in comparison, that's extremely centralized.
Italy alone used to be a dozen+ independent city states. Divided the world 200 ways seems like a lot unless you look at how much it's been divided historically. And in comparison, that's extremely centralized.
The history of political organization is driven by the history of military technology. Historically, the earth has flip-flopped from centralized to decentralized power several times, eg. Rome (legion) => feudalism (mounted knight) => Mongol Empire (mounted archers) => Rennaissance city states (crossbow, musket) => nation state (industrialization) => global superpower (atom bomb, ballistic missile). Basically whenever the dominant military technology is expensive to produce or benefits from large highly-organized armies, the trend is toward centralization, while whenever it is cheap to produce and gives the advantage to independent guerilla fighters, the trend is toward decentralization. There's some evidence (break up of Soviet Union, Eastern Europe, Islamic terrorism) that we're headed toward a new era of decentralization, driven by microchips, the Internet, drones, and cheap encrypted communication.
I agree with your main point, but not the last sentence. The complexity and expense of state of the art military technology is beyond the means of smaller nation-states, let alone rebel groups, and that trend has been accelerating since WWII.
Stealth, space supremacy, global surveillance, carrier groups, strike wings, nuclear arsenals, reaper drones and all the other crazy battlefield robot tech in service or development can cut to pieces any obsolete nation state military, let alone some rebels armed with cheap 3d-printed guns.
Stealth, space supremacy, global surveillance, carrier groups, strike wings, nuclear arsenals, reaper drones and all the other crazy battlefield robot tech in service or development can cut to pieces any obsolete nation state military, let alone some rebels armed with cheap 3d-printed guns.
"Stealth, space supremacy, global surveillance, carrier groups, strike wings, nuclear arsenals, reaper drones and all the other crazy battlefield robot tech in service or development can cut to pieces any obsolete nation state military, let alone some rebels armed with cheap 3d-printed guns. "
So why isn't the US (which has all this tech) winning in Afghanistan over some rebels with AK 47s? Likewise Vietnam after literally a decade of fighting.
Weapons superiority is one factor in winning wars. Likewise, to address the gp's point, the history of political organization is partly driven by military technology.
So why isn't the US (which has all this tech) winning in Afghanistan over some rebels with AK 47s? Likewise Vietnam after literally a decade of fighting.
Weapons superiority is one factor in winning wars. Likewise, to address the gp's point, the history of political organization is partly driven by military technology.
There are definitely other factors at play, but have no illusions about it: if the United States didn't mind killing and maiming a large number of innocent civilians, it could just knock down entire cities and wipe out entire populations if it wanted to. The main reason that those conflicts are tough is because the US tries to make a show that they care about human rights instead of just shelling the crap out of insurgents.
And the current struggles of the American military only result in hundreds or maybe thousands of American deaths, which historically, would be a mere rounding error. Afghanistan, Iraq, Syria, et. al. are a mess, but they don't come to a significant human cost to America.
The United States and its voting populace doesn't really care about whether or not developing countries are wartorn, and quality of life is decimated—America and other states have completely destroyed the backbone of several societies in the Middle East and caused the deaths and relocation of hundreds of thousands of innocents, but you don't feel the pain of that when you live states-side. So the country has little incentive to quickly resolve these conflicts besides the bad PR; ongoing conflicts mostly buy time for protracted, proxy diplomacy with other major powers to lay claim to natural resources, and aren't viewed as conflict with a tangible human cost.
And the current struggles of the American military only result in hundreds or maybe thousands of American deaths, which historically, would be a mere rounding error. Afghanistan, Iraq, Syria, et. al. are a mess, but they don't come to a significant human cost to America.
The United States and its voting populace doesn't really care about whether or not developing countries are wartorn, and quality of life is decimated—America and other states have completely destroyed the backbone of several societies in the Middle East and caused the deaths and relocation of hundreds of thousands of innocents, but you don't feel the pain of that when you live states-side. So the country has little incentive to quickly resolve these conflicts besides the bad PR; ongoing conflicts mostly buy time for protracted, proxy diplomacy with other major powers to lay claim to natural resources, and aren't viewed as conflict with a tangible human cost.
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In both those conflict it was mostly not the US being at war with Vietnam or Afghanistan but with them supporting one political faction within the country against another which is a much messier business.
Italy used to be a dozen city states... And before that, Italy, France, Greece, Egypt, Turkey, Israel, Lebanon, a bunch of Baltic nations, England, and a bunch of others were all one state.
The number of states waxes and wanes throughout history, there's not a clear trend.
The number of states waxes and wanes throughout history, there's not a clear trend.
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> Italy alone used to be a dozen+ independent city states. Divided the world 200 ways seems like a lot unless you look at how much it's been divided historically. And in comparison, that's extremely centralized.
What's interesting is to consider that while the world is very centralized in the sense you described, "day-to-day" operations are even more decentralized than ever. That is, (very generally speaking) order is established and maintained, and people go about their lives without huge, burdensome micro-management from "above" in the important aspects of their daily life.
It probably turns out that the most consequential decision-making affecting the modern person's daily life is happening very locally in the social & spatial/temporal sense. So, in that way, authority is effectively decentralized.
What's interesting is to consider that while the world is very centralized in the sense you described, "day-to-day" operations are even more decentralized than ever. That is, (very generally speaking) order is established and maintained, and people go about their lives without huge, burdensome micro-management from "above" in the important aspects of their daily life.
It probably turns out that the most consequential decision-making affecting the modern person's daily life is happening very locally in the social & spatial/temporal sense. So, in that way, authority is effectively decentralized.
~200 nations instead of a single world government
The long run trend is very obviously toward a single government. Consider that until the Sumerians established cities less than 7000 years ago, humanity was just thousands small traveling groups of nomads with no defined borders.
Sovereignty gets a lot of lip service, but in practice most people don't really want it. It's a lot of work.
The long run trend is very obviously toward a single government. Consider that until the Sumerians established cities less than 7000 years ago, humanity was just thousands small traveling groups of nomads with no defined borders.
Sovereignty gets a lot of lip service, but in practice most people don't really want it. It's a lot of work.
> The long run trend is very obviously toward a single government
Is it? I believe there are far more countries now than 30 years ago.
We seem to have some more powerful international organisations now than a century ago, but earlier than that we had world spanning empires, and Europe was less than 10 countries before WW1.
I want to believe that we're heading towards a star trek like unified post scarcity planet, but I'm unsure we're not just seeing a local trend.
Is it? I believe there are far more countries now than 30 years ago.
We seem to have some more powerful international organisations now than a century ago, but earlier than that we had world spanning empires, and Europe was less than 10 countries before WW1.
I want to believe that we're heading towards a star trek like unified post scarcity planet, but I'm unsure we're not just seeing a local trend.
It's misleading actually because unincorporated territories or completely unmanaged or ungoverned groups could be counted in a "sultinate" and it would effectively mean nothing.
Much how King Arthur, Lord of the Britains was not known to the members of the anarcho-syndicalist commune.
Much how King Arthur, Lord of the Britains was not known to the members of the anarcho-syndicalist commune.
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>The long run trend is very obviously toward a single government.
Hmm, I think you will have to justify that statement, rather than simply claim it is a very obvious fact. Generally, there were fewer governments in the past as compared to the modern day.
Hmm, I think you will have to justify that statement, rather than simply claim it is a very obvious fact. Generally, there were fewer governments in the past as compared to the modern day.
That depends very much on how you define government. If you are a band of hunter gatherers does the "Chief" or "Shaman" that your band looks up to for leadership count as your goverment? If the answer is yes then there were way more governments in the past than there are in modern day.
If the answer is no then your point stands. However I tend to think that the answer is in fact yes and the trend does indeed seem to be toward centralized world government given a long enough time period.
If the answer is no then your point stands. However I tend to think that the answer is in fact yes and the trend does indeed seem to be toward centralized world government given a long enough time period.
“The world under heaven, after a long period of division, tends to unite; after a long period of union, tends to divide. This has been so since antiquity.” - Luo Guanzhong, Romance of the Three Kingdoms
our world isn't under heaven though, increasingly a lot of bureaucracy can be automated away - it just ISN'T because a fair deal of automation means taking away control from politicians. add to that the technical illiteracy in general in the political sphere and there is no push for automation apart from authoritarian governments like china
all we need is an event that demonstrates the need for a world government - for eg a massive asteroid headed at earth or a planetary scale food drought to see these systems implemented.
the world is stagnating
all we need is an event that demonstrates the need for a world government - for eg a massive asteroid headed at earth or a planetary scale food drought to see these systems implemented.
the world is stagnating
We don't need a world gov't. We already have the UN, G8, G20. A world gov't means insufficient representation, inability to change.
Technology can automate and organize a lot of it better than a human government, and with no crazy ideological agendas.
That's the fallacy of technocrats. The Soviets used to think that with their centrally planned economy. You should probably see Adam Curtis' Hypernormalisation documentary. It's an eye opener.
AI will declare an independent government, all human will join that government eventually. We will be batteries in exchange of great life styles. No matter how hard we try, we can optimize the resources better than machines.
What's the difference between a single government and a decentralized government? Under a single government there would necessarily be many subgovernments competing over resources, just as we have now under global capitalism.
> why do we have ~200 nations instead of a single world government?
It's easier for powerful central organizations to influence smaller countries which are divided against each other, while believing that they are relatively independent.
Also: latency of information transfer and the speed of light, which lead to local variance and central filtering of changes which are allowed to diffuse elsewhere.
It's easier for powerful central organizations to influence smaller countries which are divided against each other, while believing that they are relatively independent.
Also: latency of information transfer and the speed of light, which lead to local variance and central filtering of changes which are allowed to diffuse elsewhere.
We already have 3 superpowers today with potentially 2 more developing. The others don't matter at scale.
It's more likely that the cities will become the dominant form of a citizen's home sovereignty rather than a nation, with only a few national boundaries around the world. People are inherently tribal and human behavior isn't changing anytime soon but countries are quickly becoming stretched too thin to keep up with all the varied and changing populations and their needs.
It's more likely that the cities will become the dominant form of a citizen's home sovereignty rather than a nation, with only a few national boundaries around the world. People are inherently tribal and human behavior isn't changing anytime soon but countries are quickly becoming stretched too thin to keep up with all the varied and changing populations and their needs.
> why do we have ~200 nations instead of a single world government?
Coase won a Nobel Prize for this. Simply, the trade-off between bureaucratic inefficiency and economies of scale.
Coase won a Nobel Prize for this. Simply, the trade-off between bureaucratic inefficiency and economies of scale.
>In that case, why do we have ~200 nations instead of a single world government?
The correct starting question is "why do we have 200 nations, instead of millions of individuals and families living autonomously?" and the answer is: human beings are basically tribal people, and military conquest.
And then the answer to your question about why 200 is that military conquest never got any farther before the atom bomb eliminated direct warfare between major nations.
The correct starting question is "why do we have 200 nations, instead of millions of individuals and families living autonomously?" and the answer is: human beings are basically tribal people, and military conquest.
And then the answer to your question about why 200 is that military conquest never got any farther before the atom bomb eliminated direct warfare between major nations.
Why don't we have a single registrar for all TLDs? Why don't we have GitHub as the single repository for ALL software in the world?
My point is that sovereignty, innovation etc. are valuables which centralization can't deliver. "Monopolies will maximize profits and therefore, under-supply the product" is Economics 101. So, yes, economics of scale and network effects do encourage centralization but there are counter-balancing forces.
What we need is protocols that allow a sliding scale as opposed to non-interoperable silos. DNS, TCP/IP, Git delivered exactly that. While GitHub has the scale and network effects, plenty of people are happily using GitLab, BitBucket etc.
My point is that sovereignty, innovation etc. are valuables which centralization can't deliver. "Monopolies will maximize profits and therefore, under-supply the product" is Economics 101. So, yes, economics of scale and network effects do encourage centralization but there are counter-balancing forces.
What we need is protocols that allow a sliding scale as opposed to non-interoperable silos. DNS, TCP/IP, Git delivered exactly that. While GitHub has the scale and network effects, plenty of people are happily using GitLab, BitBucket etc.
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Right... but that doesn't address the point that nations in modern day are still decentralized.
> why do we have ~200 nations instead of a single world government
Deltas in space and time plus the fact face to face conversations give you a better idea of the sender's mental state. Comms over the Internet are untrustworthy, if you don't have prior experience with the sender.
Also, language, which is related to deltas in time and space.
Deltas in space and time plus the fact face to face conversations give you a better idea of the sender's mental state. Comms over the Internet are untrustworthy, if you don't have prior experience with the sender.
Also, language, which is related to deltas in time and space.
Yes, 200, but China, India, US, EU (ok, bit of a stretch there), Brazil and Indonesia is about half of the world's population.
The EU will be less of a stretch after the U.K. Brexits out of membership in the next nuclear superpower, in order to complete their transition to an offshore banking haven in the City. Or am I reading the situation wrong?
Only because current level of information technology is not able to support word government (in practice, not in theory). We can see the process of further unification looking at EU, which seems to a be current maximum level of unification.
Further EU unification is already falling apart, because they're trying to do it by dictate rather than voluntarily. And then there are language and cultural barriers.
A subtlety bears mentioning: History favors both centralized and distributed power, at different times, in different places, in quasi-cyclical fashion. Examples of history thwarting centralization include the collapses of: the Roman Empire, the USA in the 1860s, the 3rd Reich, Yugoslavia, the whole Warsaw Pact, and the USSR. Some of these were later "re-centralized" and some weren't. When things get too decentralized, centralization kicks in. When things get too centralized, decentralization kicks in. It's a balance.
I read the fourth turning some years ago and it repeats effectively the same argument. Previously the histories from Polybius.
From my study of it, it's closer to a ratchet. So while dissolution might happen at the highest organizational level, the hierarchies trend toward growing over successive cycles.
From my study of it, it's closer to a ratchet. So while dissolution might happen at the highest organizational level, the hierarchies trend toward growing over successive cycles.
Also, the number of sovereign nations is just one measure of centralization of power. Economic structures are now more centralized than ever (with, in many cases, a handful multinational megacorps controlling most of each sector).
> Politically, there is nothing different about Bitcoin than there was with the confederate states dollar for example.
The big political difference is that Bitcoin transcends borders and national governments.
While the United States could have outlawed the Confederate dollar, the United States cannot outlaw Bitcoin because it can be sustained by miners globally.
Interestingly, the United States didn't have to outlaw the Confederate dollar, or the Texas dollar, because both of them were destroyed by their creators through over-printing.
The big political difference is that Bitcoin transcends borders and national governments.
While the United States could have outlawed the Confederate dollar, the United States cannot outlaw Bitcoin because it can be sustained by miners globally.
Interestingly, the United States didn't have to outlaw the Confederate dollar, or the Texas dollar, because both of them were destroyed by their creators through over-printing.
A great book about all this if you want to dig in more is "Debt: the first 5000 years".
>> whatever sovereign is most impacted, will then either outlaw commerce by crypto by force or require parity with the sovereign currency and control of the crypto currency through tax payments
That's not possible. Even if all the governments of the developed world coordinated to ban cryptocurrencies or impose taxes on them, this will be an opportunity for developing countries to use cryptocurrencies as a competitive advantage to catch up financially.
That's not possible. Even if all the governments of the developed world coordinated to ban cryptocurrencies or impose taxes on them, this will be an opportunity for developing countries to use cryptocurrencies as a competitive advantage to catch up financially.
Very curious about how you foresee "developing countries to use cryptocurrencies as a competitive advantage to catch up financially" working if the cryptocurrencies are unusable in larger economies.
I suppose you could hitch your wagon to the Marshall Islands economy and see how that goes.
Why the downvotes? "traditional" cryptocurrencies are more useful in absence of a stable and reliable banking system and political system.
As smartphones spread across developing countries, hypothetical non-minable cryptocurrencies that works well on intermittent or local networking might become relevant.
As smartphones spread across developing countries, hypothetical non-minable cryptocurrencies that works well on intermittent or local networking might become relevant.
Uh, how?
> Economics. Blockchain technologists seem to overestimate the extent to which new insights in economics are needed to understand cryptocurrencies and blockchains, as opposed to applying basic principles from economics and game theory. For example, a recent paper shows that thinking about miners and attackers in terms of stock and flow exposes important limitations of the security of Proof of Work. [1] I learnt of many other such examples at a recent conference on the economics of blockchains. [2] So I think a lot of the "cryptoeconomics" hype is misplaced.
Are people suggesting that new economics are needed? I don't think most people are suggesting that. They are suggesting that blockchains allow you to implement economic incentive schemes that weren't previously feasible.
> Privacy. It's often taken for granted that decentralized architectures will improve privacy. This seems obvious given everything we've learnt about Facebook, but a better way to think about it is that decentralized systems exchange one set of privacy problems with another. I coauthored a paper a few years ago skeptical of the "decentralization ==> privacy" story in the context of social networks [3], but I think many of the arguments in that paper apply to blockchain/dApps that are being built today.
Nobody serious says that decentralization == privacy. However, decentralization does allow you to to implement strong privacy systems, like Monero/Zcash.
Are people suggesting that new economics are needed? I don't think most people are suggesting that. They are suggesting that blockchains allow you to implement economic incentive schemes that weren't previously feasible.
> Privacy. It's often taken for granted that decentralized architectures will improve privacy. This seems obvious given everything we've learnt about Facebook, but a better way to think about it is that decentralized systems exchange one set of privacy problems with another. I coauthored a paper a few years ago skeptical of the "decentralization ==> privacy" story in the context of social networks [3], but I think many of the arguments in that paper apply to blockchain/dApps that are being built today.
Nobody serious says that decentralization == privacy. However, decentralization does allow you to to implement strong privacy systems, like Monero/Zcash.
To a certain degree, like with many wildly held beliefs, dispelling biggest cryptocurrency zealotry becomes a whack-a-mole game: of the thousand disprovable beliefs, any given person presented with any given disproof will claim "Well I certainly don't believe that, so you've not done anything against my specific (possibly shifting) 17 beliefs".
In particular, re: "Nobody serious says that decentralization == privacy" -- this is presented as tautology on regular basis, by people that certainly hold themselves as serious and I'm willing to take as such, on Hacker News and other IT-related forums, as well as many other venues.
"Are people suggesting that new economics are needed? I don't think most people are suggesting that" - a lot of more zealous cryptocurrency supporters are very much on the "this is like nothing we've ever seen before" bandwagon, and/or are explicitly desiring as a goal/hope a massive disruption of economic and financial systems.
Just like, if there are N Christians, there are in my experience N+1 Christian belief systems, so it appears to be the case for cryptocurrencies. People more patient than myself are trying to make a dent by tackling those N+1 arguments, hopefully cognizant that for any set of believes P, they'll be presented with those exclaiming set of beliefs Q which obviously has nothing to do with P, those people into P are deluded/irrelevant, and they would never agree with them (unless it offered them temporary advantage:).
In particular, re: "Nobody serious says that decentralization == privacy" -- this is presented as tautology on regular basis, by people that certainly hold themselves as serious and I'm willing to take as such, on Hacker News and other IT-related forums, as well as many other venues.
"Are people suggesting that new economics are needed? I don't think most people are suggesting that" - a lot of more zealous cryptocurrency supporters are very much on the "this is like nothing we've ever seen before" bandwagon, and/or are explicitly desiring as a goal/hope a massive disruption of economic and financial systems.
Just like, if there are N Christians, there are in my experience N+1 Christian belief systems, so it appears to be the case for cryptocurrencies. People more patient than myself are trying to make a dent by tackling those N+1 arguments, hopefully cognizant that for any set of believes P, they'll be presented with those exclaiming set of beliefs Q which obviously has nothing to do with P, those people into P are deluded/irrelevant, and they would never agree with them (unless it offered them temporary advantage:).
> In particular, re: "Nobody serious says that decentralization == privacy" -- this is presented as tautology on regular basis, by people that certainly hold themselves as serious and I'm willing to take as such, on Hacker News and other IT-related forums, as well as many other venues.
I think maybe you're reading them uncharitably. Decentralization does enable privacy. But it isn't identical and equivalent to it.
I think maybe you're reading them uncharitably. Decentralization does enable privacy. But it isn't identical and equivalent to it.
Are people suggesting that new economics are needed?
That's a mantra I've heard non-stop for as long as I've been paying attention to cryptos.
To be fair, though, I hear it almost exclusively from the evangelists and traders, who have an economic interest in pushing that narrative.
That's a mantra I've heard non-stop for as long as I've been paying attention to cryptos.
To be fair, though, I hear it almost exclusively from the evangelists and traders, who have an economic interest in pushing that narrative.
I don't think those people are saying a new economics is needed. I think they're saying that crypto allows you to do new things, many of which traditional economics would have liked to have done, but didn't have the technical tools to do. Though maybe we're listening to different people.
I've been trying to tell people similar things for about a year now. Most people just think I haven't grasped how truly amazing and revolutionary blockchain is.
Thanks Arvind for all your work. You're doing some of my favorite work in CS. Every time I hear about an awesome project in privacy/security it turns out you're involved.
Thanks Arvind for all your work. You're doing some of my favorite work in CS. Every time I hear about an awesome project in privacy/security it turns out you're involved.
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Full disclosure I started the intercoin.org project. So I am speaking from about 2 years experience working on and thinking hard about these problems, such as doublespending and distributed hash timestamping.
There have been very interesting PARALLELIZABLE distributed byzantine fault tolerant systems being built, like MaidSAFE and Holochain. They are based around Distributed Hash Tables and have no centralized bottlenecks unlike the miners in proof of work. This is much older than cryptocurrency, we are talking 2002 - Kademlia and Merkle Trees, used in eg BitTorrent.
That is the key. Any technology, like a blockchain, where the entire network has to store all the data, scales ridiculously poorly. To coin a phrase, it’s EMBARASSINGLY UNSCALABLE.
You can call the opposite of that sharding, but I will call it PARALLELIZABLE. The good news is future is simply to take EXISTING systems (eg the Web) and INCREMENTALLY make them end to end encrypted and make the backend into a DHT where each activity or token is watched by SOME but not all computers.
The current Web topology is scalable but TERRIBLE for security, as evidenced by the steady stream of hacks and leaks and untrustworthy behavior by platforms. We throw up our hands like after every school shooting, as if there is nothing we can do. We can, and blockchains are not necessary.
More details can be found here, including mathematical results from 2009 on the probability of a successful double-spend attack as a function of how many computers watch each token. The results are perhaps surprising: https://forum.intercoin.org/t/intercoin-technology-the-ledge...
Debates about consensus: https://forum.intercoin.org/t/intercoin-technology-consensus
If you want to discuss architecture of DLTs in detail, you are welcome to post in our forum. (The guy arguing in that particular thread is the chief crytographer of Ripple, he signed up to debate ideas of the architecture.)
Anyway the short story is that any “blockchain” system with global consensus simply can’t scale, not enough to support actual transactions. Has a single ETHEREUM token been used for its intended purpose in daily transactions? (Cryptokitties is the closest and it nearly brought the whole system to a halt.) It’s all been relegated to speculation on upcoming things, and this is what killed the dream. The exchanges are centralized databases. The actual ledger they post to when you cash out can handle 10 transactions per second regardless of the number of computers on the network. The same is NOT true of almost any other distributed protocol (email, web, etc.)
There have been very interesting PARALLELIZABLE distributed byzantine fault tolerant systems being built, like MaidSAFE and Holochain. They are based around Distributed Hash Tables and have no centralized bottlenecks unlike the miners in proof of work. This is much older than cryptocurrency, we are talking 2002 - Kademlia and Merkle Trees, used in eg BitTorrent.
That is the key. Any technology, like a blockchain, where the entire network has to store all the data, scales ridiculously poorly. To coin a phrase, it’s EMBARASSINGLY UNSCALABLE.
You can call the opposite of that sharding, but I will call it PARALLELIZABLE. The good news is future is simply to take EXISTING systems (eg the Web) and INCREMENTALLY make them end to end encrypted and make the backend into a DHT where each activity or token is watched by SOME but not all computers.
The current Web topology is scalable but TERRIBLE for security, as evidenced by the steady stream of hacks and leaks and untrustworthy behavior by platforms. We throw up our hands like after every school shooting, as if there is nothing we can do. We can, and blockchains are not necessary.
More details can be found here, including mathematical results from 2009 on the probability of a successful double-spend attack as a function of how many computers watch each token. The results are perhaps surprising: https://forum.intercoin.org/t/intercoin-technology-the-ledge...
Debates about consensus: https://forum.intercoin.org/t/intercoin-technology-consensus
If you want to discuss architecture of DLTs in detail, you are welcome to post in our forum. (The guy arguing in that particular thread is the chief crytographer of Ripple, he signed up to debate ideas of the architecture.)
Anyway the short story is that any “blockchain” system with global consensus simply can’t scale, not enough to support actual transactions. Has a single ETHEREUM token been used for its intended purpose in daily transactions? (Cryptokitties is the closest and it nearly brought the whole system to a halt.) It’s all been relegated to speculation on upcoming things, and this is what killed the dream. The exchanges are centralized databases. The actual ledger they post to when you cash out can handle 10 transactions per second regardless of the number of computers on the network. The same is NOT true of almost any other distributed protocol (email, web, etc.)
> there are some legitimate criticisms of the Register piece that I cited in the first tweet, but I merely cited it as an example of why I think the hype is calming down.
On the one extreme, you've got the evangelicals who insist that everybody will benefit from cryptocurrency today and the only reason it hasn't replaced all of modern finance is because of a conspiracy. These people ignore anyone's attempt at a rational counterargument.
On the other extreme you've got people who are very strongly against the idea of cryptocurrencies. They see that tremendous harm can come to individuals who jump into this system unprepared and who aren't aware of the security or privacy implications (for example), because the previous group doesn't admit that there are any. They are also able to see through the greed and the overhype and as a result dismiss Bitcoin for being nothing.
The thing to recognize is that these are both extremes. They both contain some truth, but it feels that the public discourse is largely just a fight between the extremes rather than any meaningful discussion.
If you want to contribute something meaningful to the discussion, be honest. You have some good points in this followup and in your twitter comments, but your opening line is just blatantly dishonest.
> For example, a study of 43 use cases found a 0% success rate
So, apparently nobody is buying drugs with cryptocurrency anymore. Seriously! This line is demonstrated to be blatantly misleading if you give it TEN SECONDS of thought. Did you? In truth, I think you did give it thought, and then you dismissed it because it's a good line that supports the way you want things to be and supports the message you want to push.
> but I merely cited it as an example of why I think the hype is calming down.
You said a misleading thing; own up. Don't downplay it. Nobody expects an apology or anything, but just admit to yourself that it was to some degree dishonest, and think about whether that's really an attribute you want to preserve in your writing and in the way you present yourself, and whether exaggeration which doesn't present itself as such really does anything to advance the discourse.
On the one extreme, you've got the evangelicals who insist that everybody will benefit from cryptocurrency today and the only reason it hasn't replaced all of modern finance is because of a conspiracy. These people ignore anyone's attempt at a rational counterargument.
On the other extreme you've got people who are very strongly against the idea of cryptocurrencies. They see that tremendous harm can come to individuals who jump into this system unprepared and who aren't aware of the security or privacy implications (for example), because the previous group doesn't admit that there are any. They are also able to see through the greed and the overhype and as a result dismiss Bitcoin for being nothing.
The thing to recognize is that these are both extremes. They both contain some truth, but it feels that the public discourse is largely just a fight between the extremes rather than any meaningful discussion.
If you want to contribute something meaningful to the discussion, be honest. You have some good points in this followup and in your twitter comments, but your opening line is just blatantly dishonest.
> For example, a study of 43 use cases found a 0% success rate
So, apparently nobody is buying drugs with cryptocurrency anymore. Seriously! This line is demonstrated to be blatantly misleading if you give it TEN SECONDS of thought. Did you? In truth, I think you did give it thought, and then you dismissed it because it's a good line that supports the way you want things to be and supports the message you want to push.
> but I merely cited it as an example of why I think the hype is calming down.
You said a misleading thing; own up. Don't downplay it. Nobody expects an apology or anything, but just admit to yourself that it was to some degree dishonest, and think about whether that's really an attribute you want to preserve in your writing and in the way you present yourself, and whether exaggeration which doesn't present itself as such really does anything to advance the discourse.
The 43 cases, 0% success article was about "43 solutions advanced in the international development sector" and not buying drugs etc.
I posted this as a response below but still
I find it interesting that OP says public crypto failed because of both fundamental misunderstandings and immature tech (internet trying to compete with newspapers in the 80s). Eventually, the internet was able to compete with newspapers and I think eventually public blockchain will compete with centralized companies.
Networks can benefit from economies of scale without the rent seeking bottlenecks of centralized agents. I agree with op that in some cases centralization naturally happens but it doesn't follow that this is true in all cases.
On a diff note, has anyone read the Master Switch that OP recommended? Worth reading?
I find it interesting that OP says public crypto failed because of both fundamental misunderstandings and immature tech (internet trying to compete with newspapers in the 80s). Eventually, the internet was able to compete with newspapers and I think eventually public blockchain will compete with centralized companies.
Networks can benefit from economies of scale without the rent seeking bottlenecks of centralized agents. I agree with op that in some cases centralization naturally happens but it doesn't follow that this is true in all cases.
On a diff note, has anyone read the Master Switch that OP recommended? Worth reading?
I'm scratching my head trying to think of any significant distributed and decentralised economic entities.
In fact I think this is the Big Lie of Disruption. The reality is that instead of breaking up existing monopolies, "disruption" simply creates new, bigger, even more centralised and powerful monopolies.
Economic systems are rather like cellular automata. They either splutter around for a while and die out, or they take over the board and assimilate everything.
Although it claims to solve this problem, blockchain doesn't - not even close. You can only solve it by consciously moving entropy around the system to keep it in a permanently metastable state - supporting smaller structures that generate new information, and splitting up large structures that threaten to engulf everything around them.
In fact I think this is the Big Lie of Disruption. The reality is that instead of breaking up existing monopolies, "disruption" simply creates new, bigger, even more centralised and powerful monopolies.
Economic systems are rather like cellular automata. They either splutter around for a while and die out, or they take over the board and assimilate everything.
Although it claims to solve this problem, blockchain doesn't - not even close. You can only solve it by consciously moving entropy around the system to keep it in a permanently metastable state - supporting smaller structures that generate new information, and splitting up large structures that threaten to engulf everything around them.
> Economic systems are rather like cellular automata. They either splutter around for a while and die out, or they take over the board and assimilate everything.
This metaphor is amazing. I wanted to reply that cellular automata can in fact produce highly-localized, stable systems (like glider cannons in Conway's GoL). Then I realized that while those systems are stable, they are also so brittle that a single flipped bit will destroy them incredibly fast. That sounds a lot like economics.
This metaphor is amazing. I wanted to reply that cellular automata can in fact produce highly-localized, stable systems (like glider cannons in Conway's GoL). Then I realized that while those systems are stable, they are also so brittle that a single flipped bit will destroy them incredibly fast. That sounds a lot like economics.
>scratching my head trying to think of any significant distributed and decentralised economic entities
The banking system? Sure it ends up a bit centralised but still most countries have their own ones.
The banking system? Sure it ends up a bit centralised but still most countries have their own ones.
> I find it interesting that OP says public crypto failed because of both fundamental misunderstandings and immature tech (internet trying to compete with newspapers in the 80s). Eventually, the internet was able to compete with newspapers and I think eventually public blockchain will compete with centralized companies.
Keep in mind that both of those technologies took years. TCP started development in 1973. It didn't fully mature for another decade, and then it wasn't mainstream until 1994-1996.
And even then it was the web that drove the adoption of the internet, not the other way around. Until the web, the internet was more of an academic curiosity.
> Networks can benefit from economies of scale without the rent seeking bottlenecks of centralized agents.
But there are side effects of non-centralized agents -- everyone needs to agree upon running the same algorithm (forking, security holes, etc). And immature networks can suffer a majority attack.
Meanwhile from a security perspective, there's greater efficiency with a centralized system. One security hole can be fixed for everyone on the network in one spot.
Keep in mind that both of those technologies took years. TCP started development in 1973. It didn't fully mature for another decade, and then it wasn't mainstream until 1994-1996.
And even then it was the web that drove the adoption of the internet, not the other way around. Until the web, the internet was more of an academic curiosity.
> Networks can benefit from economies of scale without the rent seeking bottlenecks of centralized agents.
But there are side effects of non-centralized agents -- everyone needs to agree upon running the same algorithm (forking, security holes, etc). And immature networks can suffer a majority attack.
Meanwhile from a security perspective, there's greater efficiency with a centralized system. One security hole can be fixed for everyone on the network in one spot.
It is not reasonable to compare Blockchain versus TCP. Only advocates do this because despite Blockchain technology being completely useless, it's a simple line that excuses all lack of progress / usecases, whilst simultaneously implying it will still take over the world.
It's a dishonest line to come out with and people on Hacker News should know better.
It's a dishonest line to come out with and people on Hacker News should know better.
I think if you go over my comment history, you'll not find me a fan of cryptocurrencies nor blockchains.
I'm partial to this comment I made recently.
https://news.ycombinator.com/item?id=18538733
The point wasn't to defend bitcoin and blockchain, but just the opposite, to point out how immature the technology is to something vastly simpler, moving data from point A to B on the internet. And TCP took years to get right.
I'm partial to this comment I made recently.
https://news.ycombinator.com/item?id=18538733
The point wasn't to defend bitcoin and blockchain, but just the opposite, to point out how immature the technology is to something vastly simpler, moving data from point A to B on the internet. And TCP took years to get right.
Agree it took decades for TCP. We might still be a long time away for blockchain and associated technologies (ipfs, zkp, etc.) going mainstream
The privacy use case in blockchain has trade-offs and is not a panacea. There are some situations where the centralized efficiency outweighs the risks
The privacy use case in blockchain has trade-offs and is not a panacea. There are some situations where the centralized efficiency outweighs the risks
"The Master Switch" is a good book to read. If we apply the ideas from that book to the blockchain space, we'd expect large players to eventually dominate, as Apple,Amazon,Facebook,Google... dominate today. I.e. you might expect companies (such as the Consensys conglomerate that invests in the Ethereum ecosystem) to dominate if the space continues to grow. One possible counter to this line of thought is projects such as Ethereum, Augur, 0x, and Gnosis have non-profit foundations behind them and are working on protocols and APIs and thus do not have the same for-profit motive to grow large.
Wu also has a new book "The Curse of Bigness" that I recommend: https://www.amazon.com/gp/product/B07HRLQSLG/ref=dbs_a_def_r...
Wu also has a new book "The Curse of Bigness" that I recommend: https://www.amazon.com/gp/product/B07HRLQSLG/ref=dbs_a_def_r...
Any thoughts on which to start with?
when we were talking about the internet competing with newspapers back in the day.. What we see now isn't what we wanted. It's still mostly the same entities in control. In a sense, the internet lost.
And yet here we are freely discussing the diverse opinions of many involved individuals around the world, around a Twitter thread. Back then the only relevant opinion you'd hear of was the journalists'.
The name for what you're doing here is "argument to moderation" and it's a fallacy.
The fact you're able to imagine two different positions and label them both "extreme" does not in fact mean the truth lies as you'd prefer somewhere in the middle.
"Four is an odd number" and "Four is an even number"
... can be portrayed as two extremes with the option to take some vague bullshit middle ground position like "Maybe four is sometimes an odd number" but actually the situation is just that one of them is right and the other is wrong.
The fact you're able to imagine two different positions and label them both "extreme" does not in fact mean the truth lies as you'd prefer somewhere in the middle.
"Four is an odd number" and "Four is an even number"
... can be portrayed as two extremes with the option to take some vague bullshit middle ground position like "Maybe four is sometimes an odd number" but actually the situation is just that one of them is right and the other is wrong.
> "Four is an odd number" and "Four is an even number"
How on earth is this a good metaphor for the positions being discussed here?
How about "all integers are odd" and "all integers are even"? That's much more similar to the views being discussed above, roughly "all blockchain applications are bullshit" v.s. "all blockchain applications are beneficial".
Is the statement, "some blockchain applications are bullshit" or "some blockchain applications are beneficial [to some group]" really a "bullshit middle ground"?
If your answer is "yes", then what you're doing is exercising willful ignorance -- there are examples of both bullshit and beneficial applications in this thread and that proves both extremes false.
If the answer is "no", then take a break from the ill-fitting metaphors. A metaphor should preserve the novel properties of the thing it mirrors while illustrating things in a way the reader can more easily understand. If it doesn't preserve the properties being emphasized -- say, if it reduces a continuum of possibilities down to a binary option -- then it's not a good metaphor. It's misleading; its author is pursuing some goal other than the truth.
How on earth is this a good metaphor for the positions being discussed here?
How about "all integers are odd" and "all integers are even"? That's much more similar to the views being discussed above, roughly "all blockchain applications are bullshit" v.s. "all blockchain applications are beneficial".
Is the statement, "some blockchain applications are bullshit" or "some blockchain applications are beneficial [to some group]" really a "bullshit middle ground"?
If your answer is "yes", then what you're doing is exercising willful ignorance -- there are examples of both bullshit and beneficial applications in this thread and that proves both extremes false.
If the answer is "no", then take a break from the ill-fitting metaphors. A metaphor should preserve the novel properties of the thing it mirrors while illustrating things in a way the reader can more easily understand. If it doesn't preserve the properties being emphasized -- say, if it reduces a continuum of possibilities down to a binary option -- then it's not a good metaphor. It's misleading; its author is pursuing some goal other than the truth.
So, it might seem that getting so much heat against this one component of your writing is just overreaction. Realize that I'm using the above comment also as a reply to the hundreds of people I see all over HN (and elsewhere) who align themself to one extreme or the other.
Extremism is ruining the discourse in the public sphere. It happens in politics, but now more in tech too. Everybody seems to have an opinion and their goal is to push that opinion at all costs, including blatantly disregarding truths. How is this possibly a good thing for communication? Increasingly if I want to have any meaningful conversation -- one where I might get something from it (e.g. one where I will understand more sides to an argument, one where I might change my opinions, one where I might improve my philosophies), I have to go hunt down the people who I know are truthful. That almost always takes me offline, or at least out of the public sphere. And it seems like an oversight that all the real discussion of a thing has to happen in private. It feels like so many lost opportunities that could have benefited more people.
Extremism is ruining the discourse in the public sphere. It happens in politics, but now more in tech too. Everybody seems to have an opinion and their goal is to push that opinion at all costs, including blatantly disregarding truths. How is this possibly a good thing for communication? Increasingly if I want to have any meaningful conversation -- one where I might get something from it (e.g. one where I will understand more sides to an argument, one where I might change my opinions, one where I might improve my philosophies), I have to go hunt down the people who I know are truthful. That almost always takes me offline, or at least out of the public sphere. And it seems like an oversight that all the real discussion of a thing has to happen in private. It feels like so many lost opportunities that could have benefited more people.
[deleted]
Joel "Nostradamus" Spolsky in 2001:
> Your typical architecture astronaut will take a fact like “Napster is a peer-to-peer service for downloading music” and ignore everything but the architecture, thinking it’s interesting because it’s peer to peer, completely missing the point that it’s interesting because you can type the name of a song and listen to it right away.
> All they’ll talk about is peer-to-peer this, that, and the other thing. Suddenly you have peer-to-peer conferences, peer-to-peer venture capital funds, and even peer-to-peer backlash with the imbecile business journalists dripping with glee as they copy each other’s stories: “Peer To Peer: Dead!”
> The Architecture Astronauts will say things like: “Can you imagine a program like Napster where you can download anything, not just songs?” Then they’ll build applications like Groove that they think are more general than Napster, but which seem to have neglected that wee little feature that lets you type the name of a song and then listen to it — the feature we wanted in the first place. Talk about missing the point. If Napster wasn’t peer-to-peer but it did let you type the name of a song and then listen to it, it would have been just as popular.
I've thought about that essay a lot in the past couple of years. For all of the merits of ＢＬＯＣＫＣＨＡＩＮ I never found it very useful for conducting transactions. Sure, that's the machinations of the federal deep state lizard illuminati, but also it always felt like architecture and ideology were the point, and serving an actual need was an afterthought.
> Your typical architecture astronaut will take a fact like “Napster is a peer-to-peer service for downloading music” and ignore everything but the architecture, thinking it’s interesting because it’s peer to peer, completely missing the point that it’s interesting because you can type the name of a song and listen to it right away.
> All they’ll talk about is peer-to-peer this, that, and the other thing. Suddenly you have peer-to-peer conferences, peer-to-peer venture capital funds, and even peer-to-peer backlash with the imbecile business journalists dripping with glee as they copy each other’s stories: “Peer To Peer: Dead!”
> The Architecture Astronauts will say things like: “Can you imagine a program like Napster where you can download anything, not just songs?” Then they’ll build applications like Groove that they think are more general than Napster, but which seem to have neglected that wee little feature that lets you type the name of a song and then listen to it — the feature we wanted in the first place. Talk about missing the point. If Napster wasn’t peer-to-peer but it did let you type the name of a song and then listen to it, it would have been just as popular.
I've thought about that essay a lot in the past couple of years. For all of the merits of ＢＬＯＣＫＣＨＡＩＮ I never found it very useful for conducting transactions. Sure, that's the machinations of the federal deep state lizard illuminati, but also it always felt like architecture and ideology were the point, and serving an actual need was an afterthought.
Today's most popular blockchain application is centralized exchanges. The main use case is to send fiat, play with the markets and then hopefully withdraw more fiat than you put in. The improvement over traditional online gambling is minimal.
The Silk Road, which kickstarted Bitcoin adoption, brought a much more interesting improvement over the status-quo. Suddenly, acquiring illegal drugs was easy and safe(r). That was the Napster of blockchain.
We will talk about blockchain again when a similarly disruptive use case is found/created. We're missing a couple of crucial pieces of infrastructure before the "people's money" use case can even be put to the test (decentralized fiat on ramps, convenient wallets, scalable price stability, fast confirmations).
The Silk Road, which kickstarted Bitcoin adoption, brought a much more interesting improvement over the status-quo. Suddenly, acquiring illegal drugs was easy and safe(r). That was the Napster of blockchain.
We will talk about blockchain again when a similarly disruptive use case is found/created. We're missing a couple of crucial pieces of infrastructure before the "people's money" use case can even be put to the test (decentralized fiat on ramps, convenient wallets, scalable price stability, fast confirmations).
His points about blockchain are compelling but I disagree with “blockchain/decentralisation” part. Blockchain is a decentralised ideal, but so is BitTorrent, so is Tor, and so on, to some significant extent. To say that decentralisation failed because blockchain failed ignores all the other technologies which are serving people well.
I think the distinction between “decentralised” (i.e. federated) and “distributed” is important (as decentralised is often used as an umbrella term to cover both).[0] There are tons of federated projects out there from Matrix to Mastodon, and there are initiatives to make federated networks more decentralised (such as the integration of Kademlia DHT in BitTorrent).
No need for pessimism I think. :)
[0]: https://www.researchgate.net/profile/Jason_Hoelscher/publica...
I think the distinction between “decentralised” (i.e. federated) and “distributed” is important (as decentralised is often used as an umbrella term to cover both).[0] There are tons of federated projects out there from Matrix to Mastodon, and there are initiatives to make federated networks more decentralised (such as the integration of Kademlia DHT in BitTorrent).
No need for pessimism I think. :)
[0]: https://www.researchgate.net/profile/Jason_Hoelscher/publica...
> Blockchain is a decentralised ideal, but so is BitTorrent, so is Tor, and so on, to some significant extent.
So is internet. Most people use centralized services but no one prevents you from setting up your DNS servers, with your own domains, servers, website etc.
So is internet. Most people use centralized services but no one prevents you from setting up your DNS servers, with your own domains, servers, website etc.
DNS is probably a bad example here. While DNS does have federated servers in the end the entire system is controlled by whoever controls the root name servers. It's pretty much the definition of centralized control.
DNS is just a glorified search engine that’s controlled top-down by ICANN.
Anyone can build a different, distributed search engine where things are looked up on a DHT by their hash.
I have come to the conclusion, and have since then ofted said, that URLs do NOT need to be human-readable, and the idea of hostnames and domains tied to IP ranges will eventually give way to far lighter weight things
Anyone can build a different, distributed search engine where things are looked up on a DHT by their hash.
I have come to the conclusion, and have since then ofted said, that URLs do NOT need to be human-readable, and the idea of hostnames and domains tied to IP ranges will eventually give way to far lighter weight things
I keep hoping content-addressed hashes will take off but even IPFS had to invent IPNS so we're probably not collectively ready as a species to move away from name->technical_ID mappings.
I do not think your assumption is correct here. If you and I and 1,000,000 of our friends decided to create our own root name servers and co-opt the .com domain for our own purposes then there is nothing that would/could stop us and all existing software would work as expected (modulo the fact that DNS mappings would use a different source of truth than that used by most other participants on the network.) The fact that we all tend to agree upon the same root servers means that we share the same source of truth regarding tld mappings, but there is nothing that says we all need to use these same root servers.
The same goes for inventing your own paper currency, no?
Except that even if you use your own paper currency, you have to pay taxes in your country's oficial currency. Taxes are usually a significant amount of every transaction. So, the new system will very quickly bleed out.
Because of that and other reasons, it is in practice impossible to make your own paper currency.
Because of that and other reasons, it is in practice impossible to make your own paper currency.
Close. There is nothing illegal (in the US) about creating your own currency as long as it is convertible to USD. With domain names there is no such requirement to interoperate with the existing root nameservers and ICAAN tlds. In your private .com there is no requirement that the facebook.com A record map to facebook IP addresses so you could collectively decide to map it to 127.0.0.1 and no one could do anything to stop you.
That's like saying anyone could open their own Facebook, and therefore Facebook is not centralized.
The DNS is centralized, even if domain names are used in conjunction with decentralized protocols like TCP/IP, and even if anyone is free to create their own instance of a DNS.
The only sense in which it's decentralized is in relation to the legal right to operate one. It is a free market institution, instead of government-instituted monopoly.
The DNS is centralized, even if domain names are used in conjunction with decentralized protocols like TCP/IP, and even if anyone is free to create their own instance of a DNS.
The only sense in which it's decentralized is in relation to the legal right to operate one. It is a free market institution, instead of government-instituted monopoly.
Handshake is building a decentralized DNS layer to address this. TLDR; it's a blockchain anyone can use to register a TLD on and it improves the security model by getting rid of CAs.
Disclaimer: building a company on top of Handshake
Disclaimer: building a company on top of Handshake
It’s possible to set up your own servers different than root. The ability to have multiple roots and how they swap info is really decentralized.
It’s like saying bitcoin is centralized because there’s only a single blockchain.
Sure there’s a single DNS root, but not all countries and network follow it. And the assignment of names is not centralized.
It’s like saying bitcoin is centralized because there’s only a single blockchain.
Sure there’s a single DNS root, but not all countries and network follow it. And the assignment of names is not centralized.
Well sure, you can set up your own servers but no-one else will know about them and you won't be part of the "the DNS system" as such.
On a semi-related note, I don't know if torrents are successful outside of piracy.
In the last week or two I went back and downloaded all of my years worth of Humble Bundle ebooks/videos. I downloaded the torrent versions as they were easier to track failures with and the HB store does limit simultaneous downloads.
I'm still wondering if I'm going to get an automated scaremail letter about using torrents from my ISP. I already received one for downloading Ubuntu years back, though IIRC that was a different provider.
In the last week or two I went back and downloaded all of my years worth of Humble Bundle ebooks/videos. I downloaded the torrent versions as they were easier to track failures with and the HB store does limit simultaneous downloads.
I'm still wondering if I'm going to get an automated scaremail letter about using torrents from my ISP. I already received one for downloading Ubuntu years back, though IIRC that was a different provider.
> On a semi-related note, I don't know if torrents are successful outside of piracy.
Regardless of the cause, they've been successful don't they? :)
I think partially it was because you had to download a separate piece of software -a BitTorrent client- to utilise the network. This is also changing thanks to WebTorrent[0] and IPFS.js[1] which works right in our web browsers without even requiring an add-on! They enable initiatives such as PeerTube[2] -a decentralised video-hosting platform- and distributed (NoSQL) databases such as OrbitDB[3].
Convenience is the key and huge advancements have been made in that direction!
[0]: https://github.com/webtorrent/webtorrent
[1]: https://github.com/ipfs/js-ipfs
[2]: https://joinpeertube.org/en/
[3]: https://github.com/orbitdb/orbit-db
Regardless of the cause, they've been successful don't they? :)
I think partially it was because you had to download a separate piece of software -a BitTorrent client- to utilise the network. This is also changing thanks to WebTorrent[0] and IPFS.js[1] which works right in our web browsers without even requiring an add-on! They enable initiatives such as PeerTube[2] -a decentralised video-hosting platform- and distributed (NoSQL) databases such as OrbitDB[3].
Convenience is the key and huge advancements have been made in that direction!
[0]: https://github.com/webtorrent/webtorrent
[1]: https://github.com/ipfs/js-ipfs
[2]: https://joinpeertube.org/en/
[3]: https://github.com/orbitdb/orbit-db
Computer game launchers and updaters, such as the one used by Blizzard, have used BitTorrent under the hood for years, for large downloads.
The Blizzard client even used to have a window you could open where it would show the status of all the BitTorrent connections. I think they got rid of that some time ago though.
They stopped using BitTorrent due to issues with home firewalls, antiviruses misdetecting malware, etc.
Does anyone if windows update use some DHT protocol too? It has an option to share windows updates with other computers.
Have you ever downloaded a Linux distro installer from a torrent? They are lightning compared to not only all of the other torrents but even direct downloads from the hosting sites.
> Have you ever downloaded a Linux distro installer from a torrent?
> > I already received one for downloading Ubuntu years back
> > I already received one for downloading Ubuntu years back
Ah whoops. Still it highlights a clear legitimate if relatively niche use.
Another example is the success of DVCS like Git in open-source development (despite GitHub / Gitlab being dominant hosts).
That's a pretty big "despite." It's definitely notable that the first thing people did when decentralized VCSes started to take off was find a way to centralize them.
And yet, GitHub hasn't become (and is unlikely to become) the single repository of ALL software in the world. Clearly, there's a counter-balancing force (sovereignty, innovation etc). To call centralization as "efficient" is to ignore these valuables.
If we think about the Tor consensus mechanism as the part of Tor infrastructure which aspires to decentralization, then Tor is probably about as decentralized as Certificate Transparency—"kinda"!
Maybe I2P would be better example but it hasn't gained as much traction as Tor unfortunately.
Also, the blockchain has introduced (AFAIK) the idea of using append-only databases to build decentralized applications, and this is currently used in very interesting new techs which have nothing to do with currencies or economics (like secure-scuttlebutt). The "dweb" is becoming a thing, IMO.
Ironically I guess, your bank has been keeping your account balance as an append only ledger since literally the introduction of banking.
That the word 'decentralised' is tacked onto the idea is really a red herring.
That the word 'decentralised' is tacked onto the idea is really a red herring.
That is very not new - even transaction based decentralized databases technically date back to the 1980s - even if they received less practical use. The theory of databases are pretty old and practically ancient in computing terms.
Before blockchain was a thing much less a hyped one cloud computing used it and before that some databases practiced 'tombstones' for databases. The easiest way to maintain absolute consistency has been known to be not really deleting things but marking them as 'deleted' and leaving them to be ignored by default until consistency can be achieved. That was the approach when cloud computing dawned to make things scaleable and avoid the bottlenecks and load-balancing server overhead.
Transaction based databases are logically equivalent to an append only database. If you have a list of transactions that add up to the same resulting database state - with the option of more versatility if you don't constrain things to be operational order insensitive.
Before blockchain was a thing much less a hyped one cloud computing used it and before that some databases practiced 'tombstones' for databases. The easiest way to maintain absolute consistency has been known to be not really deleting things but marking them as 'deleted' and leaving them to be ignored by default until consistency can be achieved. That was the approach when cloud computing dawned to make things scaleable and avoid the bottlenecks and load-balancing server overhead.
Transaction based databases are logically equivalent to an append only database. If you have a list of transactions that add up to the same resulting database state - with the option of more versatility if you don't constrain things to be operational order insensitive.
I see, thanks to you and @weego for historical context.
It makes me realize that git is probably some kind of append-only database too (and used for decentralization too).
I guess I can still thank blockchain for having introduced the idea to me.
It makes me realize that git is probably some kind of append-only database too (and used for decentralization too).
I guess I can still thank blockchain for having introduced the idea to me.
The similarity goes deeper than that, given that git uses Merkle trees as does Bitcoin. There's hashing and in the typical use case there is even some distributed consensus process involved although often in git human decision making takes the place of an algorithm.
Some good discussion here: https://stackoverflow.com/questions/46192377/why-is-git-not-...
I think the water gets muddied by people who know very little and yet have an opinion as well as by people who know so much they can't see the forest for the trees (if you'll allow the pun).
Some good discussion here: https://stackoverflow.com/questions/46192377/why-is-git-not-...
I think the water gets muddied by people who know very little and yet have an opinion as well as by people who know so much they can't see the forest for the trees (if you'll allow the pun).
> the idea of using append-only databases to build decentralized applications
The ideas of a write-ahead log, appended event identifiers as analogous to a monotonic clock, and of state/integrity checking by having log items "check" (-sum, usually) each other have underpinned the most popular databases for decades.
The ideas of a write-ahead log, appended event identifiers as analogous to a monotonic clock, and of state/integrity checking by having log items "check" (-sum, usually) each other have underpinned the most popular databases for decades.
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The part I found especially compelling: "Blockchain proponents have a vision of _society_ in which centralized entities are weakened/eliminated. But blockchain tech is a way to build _software_ without centralized servers. Why would the latter enable the former? It’s a leap of logic that’s left unexplained."
How so?
Cryptocurrencies is about divorcing money and state. Seems pretty clear to me.
Cryptocurrencies is about divorcing money and state. Seems pretty clear to me.
> Cryptocurrencies is about divorcing money and state. Seems pretty clear to me.
No, they don't. There is no technological or cryptographic answer to the state's monopoly on legitimate force, its duty to execute the law, or any of its other functions that create and maintain the business environment.
It occurs to me that much of what crypto-lovers want is actually radically undemocratic. Vestigial states that can't do the bidding of the electorate because they're unable to hold companies to account and so on. People of this inclination are the death throes of the globalist dream: it is a fine thing indeed that the nation state looks to be reasserting itself in the face of one of California's more embarrassing wet dreams.
No, they don't. There is no technological or cryptographic answer to the state's monopoly on legitimate force, its duty to execute the law, or any of its other functions that create and maintain the business environment.
It occurs to me that much of what crypto-lovers want is actually radically undemocratic. Vestigial states that can't do the bidding of the electorate because they're unable to hold companies to account and so on. People of this inclination are the death throes of the globalist dream: it is a fine thing indeed that the nation state looks to be reasserting itself in the face of one of California's more embarrassing wet dreams.
If you rob the state of its monopoly over money, it's ability to exert force is greatly diminished.
Except the state can exert force to protect its monopoly over money.
>It occurs to me that much of what crypto-lovers want is actually radically undemocratic.
It's just the latest iteration of the libertarian fallacy, embodied in code - that a market can exist without a governing body to make sure it doesn't get sold.
It's just the latest iteration of the libertarian fallacy, embodied in code - that a market can exist without a governing body to make sure it doesn't get sold.
Basically whenever you create a vacuum of power, it gets filled eventually by a few individual actors - i.e. Bitcoin miners being predominantly Chinese at this point.
And what exactly are they able to do?
People love to talk about how many miners are in China without mentioning that they really can't do much, even if they get over 51%.
People love to talk about how many miners are in China without mentioning that they really can't do much, even if they get over 51%.
Exactly. I used to work for financial traders, so I got to see some highly effective markets up close. Those markets were heavily regulated. Not just by governments, who were from my perspective almost irrelevant, but by the exchanges themselves.
I think markets are amazing, and have a lot of sympathy for the more thoughtful sort of libertarian and their concerns about state power. But there's what I think of as fundamentalist libertarians, who seem to worship an abstract idea of "market" that has very little to do with my real-life experience of markets, financial or otherwise.
I think markets are amazing, and have a lot of sympathy for the more thoughtful sort of libertarian and their concerns about state power. But there's what I think of as fundamentalist libertarians, who seem to worship an abstract idea of "market" that has very little to do with my real-life experience of markets, financial or otherwise.
For anyone interested in this extremely important point (that markets need a lot more than just enforcing contracts to work), two book recommendations:
* Rob Reich, _Saving Capitalism_ [1]
* Steven K Vogel, _Marketcraft_ [2]
What kinds of contracts can be enforced? How much personal liability people should have? Is bankruptcy allowed? and so on. All trade-offs between different groups, and there’s no one “free market” answer to any of them.
[1] https://www.penguinrandomhouse.com/books/227780/saving-capit...
[2] https://global.oup.com/academic/product/marketcraft-97801906...
* Rob Reich, _Saving Capitalism_ [1]
* Steven K Vogel, _Marketcraft_ [2]
What kinds of contracts can be enforced? How much personal liability people should have? Is bankruptcy allowed? and so on. All trade-offs between different groups, and there’s no one “free market” answer to any of them.
[1] https://www.penguinrandomhouse.com/books/227780/saving-capit...
[2] https://global.oup.com/academic/product/marketcraft-97801906...
Because proponents have never demonstrated a viable path to linking those. It always comes back to depending on the state (e.g. courts, police) or reinventing banks, with huge hand-waves about how the details could possibly work for a non-trivial scale.
> Cryptocurrencies is about divorcing money and state.
Is it though? I used to think that, but over the past couple years I've seen plenty of politics around governance of the future of cryptocurrency. Seems like everyone tried divorcing the two and ended up just creating a new state.
Is it though? I used to think that, but over the past couple years I've seen plenty of politics around governance of the future of cryptocurrency. Seems like everyone tried divorcing the two and ended up just creating a new state.
"Cryptocurrencies is about divorcing money and state."
How so?
Despite the misleading term cryptocurrency is a type of commodity, not money. A heavily speculated one. It's really quite terrible at being a money substitute. With the exception of some very fringe use cases.
How so?
Despite the misleading term cryptocurrency is a type of commodity, not money. A heavily speculated one. It's really quite terrible at being a money substitute. With the exception of some very fringe use cases.
Just thinking that a success in that might be more likely if the plan did not include giving seigniorage from the state (i.e. people) to a bunch of cryptonerds. Also, a monetary policy not from medieval times might help.
Not really. It's a difference between necessary and sufficient. Decentralization might be necessary component, but what is lacking is proof or argument that it is also sufficient for this change to happen.
The original statement: “Why would the latter enable the former” sounds like it’s arguing against necessary as well. If the original post contained “imply” instead of “enable,” this line of reasoning would be sound.
> "Blockchain proponents have a vision of _society_ in which centralized entities are weakened/eliminated. But blockchain tech is a way to build _software_ without centralized servers. Why would the latter enable the former? It’s a leap of logic that’s left unexplained."
The leap of logic is not unexplained, it's called libertarian ideology: government policies that work relatively well (healthcare, social security, Central Banks,...) are the most dangerous because they might (and do) give people the wrong idea. Bitcoin is an incredibly wasteful technology compared to the supposed obsolete paradigm, so you need the ideological element to understand why some take this "leap of logic".
Personal opinion: the crypto currency/Blockchain movement is no less ideologue than say the Free software foundation. But Stallman has the merit to be very explicit about it, instead of hiding it under a tech logorrhea.
The leap of logic is not unexplained, it's called libertarian ideology: government policies that work relatively well (healthcare, social security, Central Banks,...) are the most dangerous because they might (and do) give people the wrong idea. Bitcoin is an incredibly wasteful technology compared to the supposed obsolete paradigm, so you need the ideological element to understand why some take this "leap of logic".
Personal opinion: the crypto currency/Blockchain movement is no less ideologue than say the Free software foundation. But Stallman has the merit to be very explicit about it, instead of hiding it under a tech logorrhea.
>Bitcoin is an incredibly wasteful technology
The first computer was also incredibly wasteful. Subsequent iterations proved to be less wasteful and more usefull.
The first computer was also incredibly wasteful. Subsequent iterations proved to be less wasteful and more usefull.
Software is eating the world and it's almost finished.
Decentralized software decentralized world
Decentralized software decentralized world
The blockchain hype fell apart. Which is good, given that it bears no resemblance to reality, and came less from practical applications of the idea and more the one that blockchain tech was 'magic' and was going to magically fix every industry in existence. Companies sprung up based on blockchains and crypotcurrencies and what not that didn't need them in the slightest, and where their only reason for existence was 'get VCs to invest/hype up gulliable people on Reddit'.
But blockchains have their uses, and those where they do work well will hopefully be done better without the lunacy. Decentralisation isn't dead/falling apart either, and in that sense... well I think its time is still coming.
After all, privacy is a hot topic now. Facebook and Google are getting lots of bad press. Mastodon is (somewhat slowly) taking off. The ingredients are there for change, and at the end of the day, it's really just UI + network effect holding it back now. If someone made a good decentralised Facebook/Reddit/YouTube alternative, I definitely feel it could capture the market. Anger is building up with these sites, and the more they force ideologies/censor/shut down people and groups for corporations the more popular an alternative will be. Heck, I feel the time may be right for a decentralised Patreon competitor right now. Imagine a way to support creators which VISA/Mastercard have no easy way to stop, which makes PayPal and co irrelevant and cannot be shut down by angry Twitter posts. That may come up in a few years or so.
But yeah, blockchain hype fell apart, some decentralisation hype fell apart, but blockchain as a concept still has its uses and decentralisation could still have its time to shine.
But blockchains have their uses, and those where they do work well will hopefully be done better without the lunacy. Decentralisation isn't dead/falling apart either, and in that sense... well I think its time is still coming.
After all, privacy is a hot topic now. Facebook and Google are getting lots of bad press. Mastodon is (somewhat slowly) taking off. The ingredients are there for change, and at the end of the day, it's really just UI + network effect holding it back now. If someone made a good decentralised Facebook/Reddit/YouTube alternative, I definitely feel it could capture the market. Anger is building up with these sites, and the more they force ideologies/censor/shut down people and groups for corporations the more popular an alternative will be. Heck, I feel the time may be right for a decentralised Patreon competitor right now. Imagine a way to support creators which VISA/Mastercard have no easy way to stop, which makes PayPal and co irrelevant and cannot be shut down by angry Twitter posts. That may come up in a few years or so.
But yeah, blockchain hype fell apart, some decentralisation hype fell apart, but blockchain as a concept still has its uses and decentralisation could still have its time to shine.
OP used an argument I see too often: that the (current) market success of centralization is evidence of centralization's superiority with consumers. For instance:
> Open platforms can’t win by directly appealing to users on philosophical grounds, or even cost (see Linux on the desktop). Mainstream users have no good reason to directly interact with blockchain technology—or any piece of code—without intermediaries involved. Openness and decentralization matter to _developers_.
I think both centralization and decentralization can appealing to consumers, depending on the case and on zeitgeist.
For instance, personal computers were decentralization of computing power, back in the days when the Mainframe (centralization) was dominating. Apple is a decentralized computing company. Often decentralization can become businesses through products, read more https://staltz.com/layers-of-the-internet-economy.html
There are also other "stealth" success examples of decentralized software and protocols that are directly appealing to consumers, such as the Camera and Gallery apps on smartphones and the use of JPEG (open standard) and Bluetooth (open protocol) to create (offline-first) and socially share pictures.
The problem with "decentralization" in 2018 is that it was a buzzword related mostly to blockchain technologies, and software built with those were often shadowing and imitating the recent success that tech giants have accumulated. But decentralization goes way back and its success cases are so ubiquitous that we take them for granted and leave them out of the discussion.
> Open platforms can’t win by directly appealing to users on philosophical grounds, or even cost (see Linux on the desktop). Mainstream users have no good reason to directly interact with blockchain technology—or any piece of code—without intermediaries involved. Openness and decentralization matter to _developers_.
I think both centralization and decentralization can appealing to consumers, depending on the case and on zeitgeist.
For instance, personal computers were decentralization of computing power, back in the days when the Mainframe (centralization) was dominating. Apple is a decentralized computing company. Often decentralization can become businesses through products, read more https://staltz.com/layers-of-the-internet-economy.html
There are also other "stealth" success examples of decentralized software and protocols that are directly appealing to consumers, such as the Camera and Gallery apps on smartphones and the use of JPEG (open standard) and Bluetooth (open protocol) to create (offline-first) and socially share pictures.
The problem with "decentralization" in 2018 is that it was a buzzword related mostly to blockchain technologies, and software built with those were often shadowing and imitating the recent success that tech giants have accumulated. But decentralization goes way back and its success cases are so ubiquitous that we take them for granted and leave them out of the discussion.
> personal computers were decentralization of computing power, back in the days when the Mainframe (centralization) was dominating
This "decentralized" computing power as an accidental side effect. Personal computers (and open protocols) caught on because they were thought, by consumers, to fulfill a need. The number of people for whom that need was "decentralize $x" is a rounding error.
This "decentralized" computing power as an accidental side effect. Personal computers (and open protocols) caught on because they were thought, by consumers, to fulfill a need. The number of people for whom that need was "decentralize $x" is a rounding error.
One very basic value proposition of decentralization for consumers in the context of the internet is offline usage. When you're in an airplane, that's when the need to have the capability at the end device becomes most obvious, and decentralization directly fulfills that need.
Blockchain isn't decentralized in that sense is it? What can you do offline with BTC or other crypto?
Local caches fulfil that need just as well. Otherwise cloud products would not have been as successful as they are.
Indeed, it's possible that if Multics had caught on with its apparent long-term vision, personal computing could have been delayed for a decade or more because people's needs could have been met.
Bitcoin itself is a pretty good example of centralization caused by economies of scale. Most miners do not run a full node, instead they opt to use a centralized full node called a "pool" and only calculate hashes on behalf of that node with the hope that they end up getting paid.
I wouldn't read too much into this. The authors don't want to release neither the report or even which the 43 use cases are: http://merltech.org/blockchain-for-international-development...
> The purpose of this blog was NOT to address the use of blockchain, or any DLT, for digital crypto-currency or even financial applications, nor was it to disparage, debunk, or dispel ANYTHING. We were, and remain, technology neutral. If anything, we would say that more testing is warranted, but would advocate that the results of those tests be publicly and fully available.
> There is no report. The only product that resulted from our research process is this blog, as Linda Raftree correctly pointed out.
> A “use-case” is very different from a “case-study”, the former being more conceptual and the latter requiring significant data for research purposes.
> Regarding sharing the list of the 43 use cases, Linda was also correct that the purpose of the this blog was not to “name and shame” and doing so risks distracting from the work we felt has achieved its goal, to motivate conversation around these issues.
Two projects are linked from the blog post:
https://exonum.com/napr
http://www.amply.tech/
I have not heard of either before.
This tells us nothing. Basically they have randomly picked 43 out of thousands of projects and won't even publicize which these projects are, or the methodology they used.
> The purpose of this blog was NOT to address the use of blockchain, or any DLT, for digital crypto-currency or even financial applications, nor was it to disparage, debunk, or dispel ANYTHING. We were, and remain, technology neutral. If anything, we would say that more testing is warranted, but would advocate that the results of those tests be publicly and fully available.
> There is no report. The only product that resulted from our research process is this blog, as Linda Raftree correctly pointed out.
> A “use-case” is very different from a “case-study”, the former being more conceptual and the latter requiring significant data for research purposes.
> Regarding sharing the list of the 43 use cases, Linda was also correct that the purpose of the this blog was not to “name and shame” and doing so risks distracting from the work we felt has achieved its goal, to motivate conversation around these issues.
Two projects are linked from the blog post:
https://exonum.com/napr
http://www.amply.tech/
I have not heard of either before.
This tells us nothing. Basically they have randomly picked 43 out of thousands of projects and won't even publicize which these projects are, or the methodology they used.
Sure it is true - the "business cases" for blockchain are all rubbish.
But it is not for the reasons listed; there are no parallels to airlines or gold mining and so on.
Decentralization for cryptocurrency is about making them resistant to legislation: With properly decentralized cc you can pay your druglord, terrorist, launder money, gamble, insider trade, hype pump and dump a scam ... and the government can't shut it down or prove that you own any.
That is the killer use case. And the only one.
But it is not for the reasons listed; there are no parallels to airlines or gold mining and so on.
Decentralization for cryptocurrency is about making them resistant to legislation: With properly decentralized cc you can pay your druglord, terrorist, launder money, gamble, insider trade, hype pump and dump a scam ... and the government can't shut it down or prove that you own any.
That is the killer use case. And the only one.
I'm not at all convinced by the argument about centralization happening because that's what people want. In Israel, for example, there is, in fact, a conspiracy. Though not a hidden one at all - just one which is very hard to defeat.
Israel has a very centralized market controlled by just a handful of oligarch families. The same guys control the insurance companies, pension, the fuel supply, the banks, etc. The prices are too high and the service isn't great not because that's what people want, but because competition is stifled, in cooperation with the politicians, who need the oligarchs to keep funding them.
I don't think a decentralized currency would be a magic trick which would instantly solve this larger problem of economic centralization, which people most certainly do not want - but it could certainly help break the existing cycle by taking away power from the politicians.
Israel has a very centralized market controlled by just a handful of oligarch families. The same guys control the insurance companies, pension, the fuel supply, the banks, etc. The prices are too high and the service isn't great not because that's what people want, but because competition is stifled, in cooperation with the politicians, who need the oligarchs to keep funding them.
I don't think a decentralized currency would be a magic trick which would instantly solve this larger problem of economic centralization, which people most certainly do not want - but it could certainly help break the existing cycle by taking away power from the politicians.
That is just capitalism, Marx wrote about this a long, long time ago. Lenin came along with a solution to this a century ago however that revolution resulted in a different type of centralisation with the 'workers of the world' not uniting into the cooperatives that could have prevented the surpluses of capitalism ending up in the hands of the few. Instead there was dubious central planning with party officials calling the shots rather than these mythical worker heroes. Socialism and communism was an existential threat to international finance capital nonetheless, hence the Cold War.
The cryptocurrency boom was greed driven with the fig leaf of 'smash the Fed and fiat currency'. The people that got into it were not that smart, a case of 'fools rush in'. Nowhere in the cryptocurrency discussion was there any appreciation of the history of capitalism, which requires considerable study to get any meaningful knowledge of. If you are studying graphs of alt-coin fluctuations all day and gambling on these things then you aren't going to take time to read all the required texts (or even the 'white papers' on how these silly coins are supposed to work).
There are ways to address the evils of capitalism, for instance we haven't heard of the 'Tobin Tax' in a long, long time and discussion of how much capital banks should have in reserve hasn't happened even though the crash of 2008 revealed problems in that area.
Despite everyone working so hard for this money stuff we, as a society, are remarkably unconcerned with figuring out how it all works and how we can build a currency system that works for everyone with liquidity to make money work for us instead of us working for money.
I would be very interested in further reading on how the economy of Israel works, if you have any links then do share. I am detecting more antisemitism going on in the world at the moment with the polarised views that have not served us well historically. People muttering about international finance being a Jewish conspiracy tend to have no idea about Jewish history or how we got here. Hence I would quite like to know more about the story of the rich getting richer in modern day Israel.
The cryptocurrency boom was greed driven with the fig leaf of 'smash the Fed and fiat currency'. The people that got into it were not that smart, a case of 'fools rush in'. Nowhere in the cryptocurrency discussion was there any appreciation of the history of capitalism, which requires considerable study to get any meaningful knowledge of. If you are studying graphs of alt-coin fluctuations all day and gambling on these things then you aren't going to take time to read all the required texts (or even the 'white papers' on how these silly coins are supposed to work).
There are ways to address the evils of capitalism, for instance we haven't heard of the 'Tobin Tax' in a long, long time and discussion of how much capital banks should have in reserve hasn't happened even though the crash of 2008 revealed problems in that area.
Despite everyone working so hard for this money stuff we, as a society, are remarkably unconcerned with figuring out how it all works and how we can build a currency system that works for everyone with liquidity to make money work for us instead of us working for money.
I would be very interested in further reading on how the economy of Israel works, if you have any links then do share. I am detecting more antisemitism going on in the world at the moment with the polarised views that have not served us well historically. People muttering about international finance being a Jewish conspiracy tend to have no idea about Jewish history or how we got here. Hence I would quite like to know more about the story of the rich getting richer in modern day Israel.
> Nowhere in the cryptocurrency discussion was there any appreciation of the history of capitalism, which requires considerable study to get any meaningful knowledge of.
This is false. I recommend listening to Trace Mayer, for example.
> I would be very interested in further reading on how the economy of Israel works, if you have any links then do share.
I recommend Guy Rolnik[1] and Yaron Zelekha[2].
[1] https://www.haaretz.com/misc/writers/WRITER-1.4968179 [2] https://www.haaretz.com/.premium-yaron-zelekha-s-crusade-to-...
This is false. I recommend listening to Trace Mayer, for example.
> I would be very interested in further reading on how the economy of Israel works, if you have any links then do share.
I recommend Guy Rolnik[1] and Yaron Zelekha[2].
[1] https://www.haaretz.com/misc/writers/WRITER-1.4968179 [2] https://www.haaretz.com/.premium-yaron-zelekha-s-crusade-to-...
Thank you so much. I clearly over-generalised regarding the cryptocurrency crowd and their knowledge of capitalism, glad I did as I now have Trace Mayer to read properly.
I keep forgetting about Haaretz, again thanks for the quality reading material.
I keep forgetting about Haaretz, again thanks for the quality reading material.
It's a mistake to conflate "decentralization" with "blockchain". One is not necessary for the other and decentralization has not fallen apart. I'm not even talking talking about mastodon either. I don't use it. The many to many relationship that torrenting is the epitome of decentralization, is very effective and has been around for nearly two decades at this point.
I'm just a random guy on the internet but who is this guy to talk about these subjects in such broad terms? Lay off the misused hyped up tech, please.
I'm just a random guy on the internet but who is this guy to talk about these subjects in such broad terms? Lay off the misused hyped up tech, please.
> I'm just a random guy on the internet but who is this guy to talk about these subjects in such broad terms? Lay off the misused hyped up tech, please.
He's a Princeton professor who's written a book about blockchain technology and taught several university courses about it. And he's been studying decentralization issues for a long time.
I don't think that Prof. Narayanan means to say here that decentralization requires blockchains, but rather than the optimism that blockchains provide a comprehensive solution to incentive, coordination, and scalability problems in decentralized systems has run up against very serious problems and counterexamples.
If you want to see some of his broader concerns about the tradeoffs of decentralization in other contexts, you should ask him, since he's reading this HN thread. :-) (edit: and he posted it himself)
He's a Princeton professor who's written a book about blockchain technology and taught several university courses about it. And he's been studying decentralization issues for a long time.
I don't think that Prof. Narayanan means to say here that decentralization requires blockchains, but rather than the optimism that blockchains provide a comprehensive solution to incentive, coordination, and scalability problems in decentralized systems has run up against very serious problems and counterexamples.
If you want to see some of his broader concerns about the tradeoffs of decentralization in other contexts, you should ask him, since he's reading this HN thread. :-) (edit: and he posted it himself)
If blog posts published as Twitter threads make you as impotently outraged as they do me, try this: https://threadreaderapp.com/thread/1079759096272818178.html
The irrational blockchain/decentralization hype story fell apart and good riddance!
The technology trudges along, a lot slower than the hype beasts would like you to believe.
The technology trudges along, a lot slower than the hype beasts would like you to believe.
For me, when technology trudges along it's in response to some sort of use. E.g. solid-state data storage started out being used in exotic situations like flight recorders. Later came camera usage. It evolved over the decades to become dominant in phone and laptop storage; perhaps eventually it will drive spinning-rust storage out of existence.
What are the equivalent real-world use cases for blockchain tech that are a) delivering economic value not achievable by other technologies, and b) are paying for sustained innovation?
What are the equivalent real-world use cases for blockchain tech that are a) delivering economic value not achievable by other technologies, and b) are paying for sustained innovation?
I’ll address the elephant in the room:
Primary use case currently: moving money/value to somewhere or someone that some centralized entity doesn’t want you to move it to.
That covers real world uses from skirting high remittance fees to the infamous dark net markets.
Primary use case currently: moving money/value to somewhere or someone that some centralized entity doesn’t want you to move it to.
That covers real world uses from skirting high remittance fees to the infamous dark net markets.
Thanks! I appreciate the frankness.
Regarding remittances, I don't believe any blockchain technology has made a significant dent in the market. If you have data otherwise, I'd be interested to see it. But I live in a neighborhood where there are a lot of money transfer places, and all of them seem to be conventional.
As to the rest, I think we're talking about light financial crime. (Light because the heavier sort isn't big on having a permanent public record.) It's hard to know, of course, but is this usage going up or down? I had the impression that KYC/AML efforts were putting a big crimp in it. Either way, it seems self-limiting to me, in that significant success invites more attention from various authorities, which strongly discourages participation from people who would like to remain on the right side of the law.
Regarding remittances, I don't believe any blockchain technology has made a significant dent in the market. If you have data otherwise, I'd be interested to see it. But I live in a neighborhood where there are a lot of money transfer places, and all of them seem to be conventional.
As to the rest, I think we're talking about light financial crime. (Light because the heavier sort isn't big on having a permanent public record.) It's hard to know, of course, but is this usage going up or down? I had the impression that KYC/AML efforts were putting a big crimp in it. Either way, it seems self-limiting to me, in that significant success invites more attention from various authorities, which strongly discourages participation from people who would like to remain on the right side of the law.
Micropayments is a strong real-world use case. Basically, pay half a cent to each website you visit or for each news article you read. Transaction fees are too high for this to be viable with traditional payment systems, however solutions like lightning network solve for this.
Gambling is another big one, trust is a problem with online gambling but with blockchain it is possible to make it provably fair by basing randomization seeds on blockchain data. There are many sites running similar setups, and these sites cause a large number of on-chain txns, arguably already paying for sustained innovation.
Smart contracts have a lot of potential but are still in their infancy, and bugs have caused significant financial losses, however, those problems are solvable.
Gambling is another big one, trust is a problem with online gambling but with blockchain it is possible to make it provably fair by basing randomization seeds on blockchain data. There are many sites running similar setups, and these sites cause a large number of on-chain txns, arguably already paying for sustained innovation.
Smart contracts have a lot of potential but are still in their infancy, and bugs have caused significant financial losses, however, those problems are solvable.
The few non-hyped uses for blockchain I have seen are specifically as alternatives for diverse supply chain tracking. You can in fact use other alternatives for it. They may even be cheaper in some situation but there could be other requirements that make it more or less viable like say standardization.
It should be viewed as a specialized tool and not a golden hammer like many of its proponents think.
It should be viewed as a specialized tool and not a golden hammer like many of its proponents think.
I have not actually seen a supply-chain use case in production that doesn't involve a central authority. Have you?
It seems to me that for anything involving a central authority, there are much better technologies.
It seems to me that for anything involving a central authority, there are much better technologies.
There isn't currently a huge demand for public crypto currencies but I see a lot of demand from enterprises (particularly in financial services and supply chains) for blockchain. The tech is iterating to solve for these needs.
I don't think that means public crypto has failed or will go away. It just needs time to mature as a technology.
Fwiw, I find it interesting that OP says public crypto failed because of both fundamental misunderstandings and immature tech (internet trying to compete with newspapers in the 80s). Eventually, the internet was able to compete with newspapers and I think eventually public blockchain will compete with centralized companies.
Networks can benefit from economies of scale without the rent seeking bottlenecks.
I don't think that means public crypto has failed or will go away. It just needs time to mature as a technology.
Fwiw, I find it interesting that OP says public crypto failed because of both fundamental misunderstandings and immature tech (internet trying to compete with newspapers in the 80s). Eventually, the internet was able to compete with newspapers and I think eventually public blockchain will compete with centralized companies.
Networks can benefit from economies of scale without the rent seeking bottlenecks.
> I see a lot of demand from enterprises (particularly in financial services and supply chains) for blockchain.
Sorry if I wasn't clear. I understand that's the claim. What I'm asking for is not general areas, but specific examples of where a blockchain is actually in use and delivering value.
As far as I've seen, all of the examples in those areas are at best pilot projects. Actual utility seems to be somewhere close to zero. E.g.: https://www.theregister.co.uk/2018/11/30/blockchain_study_fi...
Sorry if I wasn't clear. I understand that's the claim. What I'm asking for is not general areas, but specific examples of where a blockchain is actually in use and delivering value.
As far as I've seen, all of the examples in those areas are at best pilot projects. Actual utility seems to be somewhere close to zero. E.g.: https://www.theregister.co.uk/2018/11/30/blockchain_study_fi...
The Fediverse is a successful case of decentralization.
You can't say that decentralization as a whole is a failure or, worse, that blockchain is synonymous to decentralization; saying so would be an insult to e.g. the original World Wide Web.
You can't say that decentralization as a whole is a failure or, worse, that blockchain is synonymous to decentralization; saying so would be an insult to e.g. the original World Wide Web.
I think we are entering a cryptocurrency winter for much the same reason the first AI winter happened: too much promised too fast, and hand waving away really massive unsolved problems.
I still have trouble understanding how a system designed to facilitate global consensus can be considered decentralized. Sure maybe the hardware is decentralized but the resulting data structure is just like the centralized systems it aims to replace. Call me when your cryptocurrency is offline first.
There must be some law or corollary to the effect of "In any decentralized network, 20% of the nodes will control 80% of the transaction value (Pareto Principle)."
Critical mass adoption of blockchain will just trigger major capital investments by existing centralized agencies.
Critical mass adoption of blockchain will just trigger major capital investments by existing centralized agencies.
FYI: I've collected the best of tweets from two top crypto / blockchain critics. See Best of Bitcoin Maximalist - Scammers, Morons, Clowns, Shills & BagHODLers - Inside The New New Crypto Ponzi Economics [1] by Trolly McTrollface and Crypto Facts - Decentralize Payments - Efficient, Low Cost, Fair, Clean - True or False? [2] by Nouriel Roubini
[1]: https://bitsblocks.github.io/bitcoin-maximalist [2]: https://bitsblocks.github.io/crypto-facts
[1]: https://bitsblocks.github.io/bitcoin-maximalist [2]: https://bitsblocks.github.io/crypto-facts
The 'blockchain decentralization' story is hurting, but the 'decentralization' itself, as a concept, is still gaining momentum, though it has few real vectors of enablement, i.e. few vanguard products.
There is a very basic argument, not against decentralization per se but about its real power: even imagining a future where you can decentralized social networks like Facebook, at the end people interacts with the service through an application and this application dictates what the user sees beyond the protocol.
For example, OpenBazaar is a decentralized marketplace but if people search for products in the GoogleBazaar site, GoogleBazaar can sort or hide the items as they wish not matter how perfect the decentralization protocol is.
For example, OpenBazaar is a decentralized marketplace but if people search for products in the GoogleBazaar site, GoogleBazaar can sort or hide the items as they wish not matter how perfect the decentralization protocol is.
Would blockchain have evolved differently if it’s first major implementation was not Bitcoin? BTC generated a huge amount of wealth from nowhere, and it seems like most blockchain ideas where just trying to duplicate it’s success. To the general public blockchain and BTC are synonymous.
It didn't generate it. It moved it from elsewhere.
Can you explain what you mean?
If the blockchain issues 1000 BTC to various miners who sell them to 1000 people for USD$1 each, and then some time later 100 of those people are able to sell their coins for USD$100, then the total amount of money that's been moved out of other investments is USD$11,000, but the total market cap of Bitcoin is USD$100,000 so can't I say that USD$89,000 was "generated"?
Although really none of that USD ever disappeared, it's ostensibly still going into USD denominated assets, so... well I don't know what to say about any of this.
If the blockchain issues 1000 BTC to various miners who sell them to 1000 people for USD$1 each, and then some time later 100 of those people are able to sell their coins for USD$100, then the total amount of money that's been moved out of other investments is USD$11,000, but the total market cap of Bitcoin is USD$100,000 so can't I say that USD$89,000 was "generated"?
Although really none of that USD ever disappeared, it's ostensibly still going into USD denominated assets, so... well I don't know what to say about any of this.
Crypto is not even zero sum, it's negative sum, because whilst the value is set by people trading to each other, real USD has to come out of the system every day to pay for the electricity to support it.
The reason it hasn't "generated" wealth and has merely "moved" it, is because it doesn't allow everyone to succeed. Say in your case, person A bought at $1 and sold at $100, so he is up $99. But someone else had to buy the bitcoin he sold, so that person is currently sitting at -$100. For one person to profit, another necessarily has to lose.
The price of bitcoin could increase almost indefinitely, since the whole "hodl" meme is about reducing the supply and reducing the float, which allows it to continue to pump upwards and for people to get rich on paper. But it will never be possible for all of them to actually cash out, there isn't enough real USD in the crypto economy to allow that.
The reason it hasn't "generated" wealth and has merely "moved" it, is because it doesn't allow everyone to succeed. Say in your case, person A bought at $1 and sold at $100, so he is up $99. But someone else had to buy the bitcoin he sold, so that person is currently sitting at -$100. For one person to profit, another necessarily has to lose.
The price of bitcoin could increase almost indefinitely, since the whole "hodl" meme is about reducing the supply and reducing the float, which allows it to continue to pump upwards and for people to get rich on paper. But it will never be possible for all of them to actually cash out, there isn't enough real USD in the crypto economy to allow that.
It depends on what you mean by “generated”. Sure, in that scenario some people made money off of bitcoin. But did it actually generate anything of value?
Properly conceived, currency is a proxy for genuine economic value. Bitcoin mining generates nothing but bitcoins, which then are valuable because... other people say they’re valuable? I fail to see how this differs from a pyramid scheme.
Properly conceived, currency is a proxy for genuine economic value. Bitcoin mining generates nothing but bitcoins, which then are valuable because... other people say they’re valuable? I fail to see how this differs from a pyramid scheme.
So by the same token, would you say banks don’t generate any economic value?
What other useful implementation of it was there been? It's been over ten years and nobody has thought of a better use for blockchain
This is an extreme "we told you so" moment, isn't it? But then successful completion of the project was never the goal, just selling blockchain tech to enterprises to generate BTC price rises.
Actually this happened 5 or 6 times already and crypto rebounded within a couple years every single time.
So, there was no “told you so” moment for me at least. If you're apt to invest in new technologies and don't invest in crypto soon, there will be a big “I told you so” moment for yourself I think.
(imo people being forced to admit they were wrong and missed a golden opportunity is part of the reason for the extreme hatred of cryptocurrencies. As a counterexample, there isn't any hatred of Linux, for not conquering the desktop, which is a technology which also failed to meet expectations. The funny part of it is, is that the negative feelings towards themselves for not investing get projected onto the technology itself, meaning they are blind to the positive sides of it. This manifests as the boom/crash cycle as we see it, since most people are blind to the progress of the technology until it is in their face. Then everyone rushes in, and due to the rapid increase in price, the “buy because it's going up, fast” mentality springs up, recreating the same bubble for the 8th time, the same crash, the same outwardly projected self hatred and the same cycle repeats, yet again. And people never see their own role in it... It amazes me how this human trait manifests itself and plainly laid out for everybody and yet no one is able to see it.)
So, there was no “told you so” moment for me at least. If you're apt to invest in new technologies and don't invest in crypto soon, there will be a big “I told you so” moment for yourself I think.
(imo people being forced to admit they were wrong and missed a golden opportunity is part of the reason for the extreme hatred of cryptocurrencies. As a counterexample, there isn't any hatred of Linux, for not conquering the desktop, which is a technology which also failed to meet expectations. The funny part of it is, is that the negative feelings towards themselves for not investing get projected onto the technology itself, meaning they are blind to the positive sides of it. This manifests as the boom/crash cycle as we see it, since most people are blind to the progress of the technology until it is in their face. Then everyone rushes in, and due to the rapid increase in price, the “buy because it's going up, fast” mentality springs up, recreating the same bubble for the 8th time, the same crash, the same outwardly projected self hatred and the same cycle repeats, yet again. And people never see their own role in it... It amazes me how this human trait manifests itself and plainly laid out for everybody and yet no one is able to see it.)
One way to look at the decentralisation is to look at what happened to Internet’s first decentralised platforms such as Youtube. It started as anybody can have a channel but what ended up happening is organisations and full time youtubers ended up garnering most attention on the platform.
Centralisation is an inevitable outcome of human groups. I wrote more on this on my blog https://invertedpassion.com/decentralization-continuum/
Centralisation is an inevitable outcome of human groups. I wrote more on this on my blog https://invertedpassion.com/decentralization-continuum/
Blockchain tech and decentralization are orthogonal.
A blockchain running on a single node is uninteresting. Decentralized/distributed consensus is part and parcel of why one would use a blockchain.
I am thinking of a non-public blockchain, say used to clear bank transactions. It might or might not be externally visible, but only authorized entities could add to it. So, not distributed like Bitcoin.
You assume that there is a problem that requires distributed consensus. They aren't common. Bitcoin had to invent a whole new distributed consensus problem so that it could solve it.
This is a very sane and down to earth rebuttal of crypto
ActualMoney sucks for a lot of reasons, crypto is addressing very few of them and adding several problems on top of it
ActualMoney sucks for a lot of reasons, crypto is addressing very few of them and adding several problems on top of it
I've taken a step back from crypto-startup news in 2018. Are there any bright spots? Interesting projects to follow?
Maybe mlbcryptobaseball.com? Baseball cards do seem like one of the few things it would be cool to “tokenize”, and they’ve made a deal with the MLB to do it.
Cryptocurrency is just alchemy for the internet age. Same failures, same etiology, same promise of unexpected insights in another, future form
Please don't post unsubstantive comments here, especially not on divisive topics that have been gone over a million times already.
We detached this subthread from https://news.ycombinator.com/item?id=18802222 and marked it off-topic.
We detached this subthread from https://news.ycombinator.com/item?id=18802222 and marked it off-topic.
Unfortunately it's a misunderstanding of alchemy and it's role in the development of modern science that causes these knee-jerk negative responses to what is in fact a useful and non-pejorative comparison. I suppose next time I'll make my case in more detail.
This looks like trolling.
Blockchain was the first serious attempt at solving the problem of distributed concensus without centralisation. One application of this outside of cryptocurrency is to DNS (see Namecoin).
Cryptocurrencies at the very least make black market trading more efficient. See Silk Road.
Also, the analogy to alchemy needs a lot more explaining. I don't see any connections.
Blockchain was the first serious attempt at solving the problem of distributed concensus without centralisation. One application of this outside of cryptocurrency is to DNS (see Namecoin).
Cryptocurrencies at the very least make black market trading more efficient. See Silk Road.
Also, the analogy to alchemy needs a lot more explaining. I don't see any connections.
Well there are several from the 'get rich quick scheme' aspect vs lead into gold aspects to the fact it is trying to get what they want by properties of analogy. That they can turn processing power into the new gold. Then there is the literal magical thinking like the sun and gold must be connected because of the same color therefor if we create a scarce currency it will be a useful commodity and gold shares properties of the sun, also the sun's rays created gold. Alchemists pursue the same goal obsessively trying to get what they want despite the mechanism for it just plain /not being there/. Similarly Cryptocurrency even if it perfect in security and privacy would run into interchange issues. You would need teleportation to bring commerce beyond government control.
Gold is a very apt comparison given the gold-bug rhetoric they were in pushing deflationary currency despite its history of failures resulting in fiat currency. The gold standard resulted in /many/ wars for the sake of gold just so that they wouldn't have their economy size capped by lack of currency - leading to considerable loss of /real/ value and massive suffering. Ironically having too much gold also created inflation issue. Having currency that can inflate with the economy instead of something else arbitrary is what the strength of fiat currency is.
Gold is a very apt comparison given the gold-bug rhetoric they were in pushing deflationary currency despite its history of failures resulting in fiat currency. The gold standard resulted in /many/ wars for the sake of gold just so that they wouldn't have their economy size capped by lack of currency - leading to considerable loss of /real/ value and massive suffering. Ironically having too much gold also created inflation issue. Having currency that can inflate with the economy instead of something else arbitrary is what the strength of fiat currency is.
"Blockchain was the first serious attempt at solving the problem of distributed concensus without centralisation."
Wow, this is such a wrong statement.
Consensus in general has been in CS since its dawn... How childish a person would think CS scientists wont consider this problem without centralization...
Wow, this is such a wrong statement.
Consensus in general has been in CS since its dawn... How childish a person would think CS scientists wont consider this problem without centralization...
I would like to better understand your but about blockchain being the first serious attempt at consensus without decentralization.
The internet itself is a big movement toward consensus. Just look at tcp/ip and Ethernet and dns and lots of other protocols that reach consensus without centralization. But it’s more of a wet consensus than a dry consensus because the negotiation over routing tables happens between users and admins.
DNS and IP have roots, but there are multiple roots and methods for negotiating.
None are perfect, as blockchain isn’t perfect, but are certainly serious attempts.
Maybe the most successful is the IETF RFC process for decentralized consensus.
There are also good examples like the Apache Foundation for distributed consensus.
The internet itself is a big movement toward consensus. Just look at tcp/ip and Ethernet and dns and lots of other protocols that reach consensus without centralization. But it’s more of a wet consensus than a dry consensus because the negotiation over routing tables happens between users and admins.
DNS and IP have roots, but there are multiple roots and methods for negotiating.
None are perfect, as blockchain isn’t perfect, but are certainly serious attempts.
Maybe the most successful is the IETF RFC process for decentralized consensus.
There are also good examples like the Apache Foundation for distributed consensus.
Alchemy gave birth to science, this is not trolling.
Nothing fell apart, its all part of the process, just like the dot com bubble and bust, crypto/decentralisation is not going away. Economics always wins. Someone will make a better, regulated version, that works.
> Economics always wins.
Yep, supply and demand. Currently there's no demand for crypto/blockchain as appropriate substitutes already exist.
Yep, supply and demand. Currently there's no demand for crypto/blockchain as appropriate substitutes already exist.
> no demand
“No demand”. Isn’t Bitcoin still trading for several thousand dollars? Maybe you, and maybe most people, don’t have any want for cryptocurrency, but don’t let that make you think that nobody has demand for it.
“No demand”. Isn’t Bitcoin still trading for several thousand dollars? Maybe you, and maybe most people, don’t have any want for cryptocurrency, but don’t let that make you think that nobody has demand for it.
Most of the increase in transactions you see now are from HFTs speculating, who generate demand on any high-risk instruments if they think it has a return somewhere. Demand for Bitcoin as an asset isn't that different from any other commodity, but demand for Bitcoin as a currency is not there as many competitive substitutes exist.
https://www.bloomberg.com/news/articles/2017-01-16/high-spee...
https://www.bloomberg.com/news/articles/2017-01-16/high-spee...
And that's when the transactions are even real. There's significant evidence that >80% of volume is wash trades used to drive traffic to fraudulent exchanges.
https://www.blockchaintransparency.org/
https://www.blockchaintransparency.org/
not sure I understand. cryptocurrencies in aggregate still have a market cap in the billions, which points to some demand.
Market cap is misleading as a signal for demand, since it's based only on the last few transaction prices.
That doesn't mean the whole market can be traded at that price, especially for something as volatile as Bitcoin.
That doesn't mean the whole market can be traded at that price, especially for something as volatile as Bitcoin.
Citation needed. Not every country or community has access to your cushy first-world banking system.
I'm not from the first world and yes, there's far better fintech solutions than cryptocurrencies here.
Success rate of blockchain project is not 0%. Many people have became rich this way. Many people use cryptocurrencies actively.
> Many people have became rich this way.
Some people have made money through speculating on cryptocurrencies or tokens. A similar, if not larger, number of people have also lost money this way. More importantly, the "success" of these traders has nothing to do with the underlying technology -- they could have been similarly successful in trading any other financial instrument.
> Many people use cryptocurrencies actively.
Like who? And for what? Mainstream merchants have generally been moving away from accepting cryptocurrencies, often due to price volatility or long transaction times. Some people still use cryptocurrencies to make illegal transactions online, but certainly not "many people", and in any case I'm not sure that's a success...
Some people have made money through speculating on cryptocurrencies or tokens. A similar, if not larger, number of people have also lost money this way. More importantly, the "success" of these traders has nothing to do with the underlying technology -- they could have been similarly successful in trading any other financial instrument.
> Many people use cryptocurrencies actively.
Like who? And for what? Mainstream merchants have generally been moving away from accepting cryptocurrencies, often due to price volatility or long transaction times. Some people still use cryptocurrencies to make illegal transactions online, but certainly not "many people", and in any case I'm not sure that's a success...
> Some people still use cryptocurrencies to make illegal transactions
Illegal ≠ evil. Some countries introduce and enforce ridiculous laws that only benefit the ruling regime and their oligarchy and not the people. AFAIK in countries with crazy governments like Russia and Venezuela cryptocurrencies are considered a relatively reliable (and accessible) investment instrument letting people to save their money when the government does some bullshit to ruin the national currency rate.
There also are legitimate things (e.g. porn sites subscriptions) that people don't want to show up in their official credit card statements as that would be a shame in the context of their society's dominant culture.
It also feels kind of hypocritical to consider whoever smokes weed in e.g. Canada a normal person but whoever does this in Korea (where it's outlawed) a wicked one.
Illegal ≠ evil. Some countries introduce and enforce ridiculous laws that only benefit the ruling regime and their oligarchy and not the people. AFAIK in countries with crazy governments like Russia and Venezuela cryptocurrencies are considered a relatively reliable (and accessible) investment instrument letting people to save their money when the government does some bullshit to ruin the national currency rate.
There also are legitimate things (e.g. porn sites subscriptions) that people don't want to show up in their official credit card statements as that would be a shame in the context of their society's dominant culture.
It also feels kind of hypocritical to consider whoever smokes weed in e.g. Canada a normal person but whoever does this in Korea (where it's outlawed) a wicked one.
Many people have become rich from violating the law or selling to other speculators. It’s much harder to come up with an example of someone who has built a viable business with good long-term potential – it’s like the dotcom bubble with only etoy and cement.com but no Amazon or eBay.
I also wanted to add a couple of points that I didn't get to in the Twitter thread.
Economics. Blockchain technologists seem to overestimate the extent to which new insights in economics are needed to understand cryptocurrencies and blockchains, as opposed to applying basic principles from economics and game theory. For example, a recent paper shows that thinking about miners and attackers in terms of stock and flow exposes important limitations of the security of Proof of Work. [1] I learnt of many other such examples at a recent conference on the economics of blockchains. [2] So I think a lot of the "cryptoeconomics" hype is misplaced.
Privacy. It's often taken for granted that decentralized architectures will improve privacy. This seems obvious given everything we've learnt about Facebook, but a better way to think about it is that decentralized systems exchange one set of privacy problems with another. I coauthored a paper a few years ago skeptical of the "decentralization ==> privacy" story in the context of social networks [3], but I think many of the arguments in that paper apply to blockchain/dApps that are being built today.
[1] http://faculty.chicagobooth.edu/eric.budish/research/Economi...
[2] https://bfi.uchicago.edu/events/cryptocurrencies-and-blockch...
[3] http://randomwalker.info/publications/critical-look-at-decen...