Ask HN: Am I going insane or is there genuinely no value in blockchain tech?
573 comments
> I am talking committees formed in parliaments and central banks around the world to discuss its benefits, serious universities dedicating whole programs on the subject, elite investors pouring money into its potential, and the list goes on.
This worries me too. These people don't understand much beyond a 3 minute sales pitch
This worries me too. These people don't understand much beyond a 3 minute sales pitch
True, but there is a long list of "smart" intellectuals/academics/investors who are believers in the space, which is where "am I going insane?" part comes in.
So, how much do you trust your own intelligence? When has it failed you?
I think you have too much hubris. What do these people know that you do not? What non technical things do they know that you do not, that totally change the context and the reasoning behind these solutions?
I think you have too much hubris. What do these people know that you do not? What non technical things do they know that you do not, that totally change the context and the reasoning behind these solutions?
I am not sure if you are trolling, but this is exactly why I posted this... Far from being hubristic, I feel I am missing something and want to figure out what it is.
Agreed.. It's seems like an answer to a question no-one asked. It solves a problem no-one had.
> It solves a problem no-one had
Actually it solves the problem of a lot of money given to VCs by LPs that is just sitting around unspent.
Actually it solves the problem of a lot of money given to VCs by LPs that is just sitting around unspent.
Consulting fees must flow.
The value of blockchains seem so obvious to me, that I wonder if OP can be genuine.
ask_111: How can having a public log that is extremely tamper resistant not have value?
Let's look at a concrete example: Bitcoin.
You can write something into the Bitcoin blockchain and be very sure that the information you wrote into it will stay there pretty much forever.
Is that enough, or do we also have to discuss why having such a tamper proof log has value?
ask_111: How can having a public log that is extremely tamper resistant not have value?
Let's look at a concrete example: Bitcoin.
You can write something into the Bitcoin blockchain and be very sure that the information you wrote into it will stay there pretty much forever.
Is that enough, or do we also have to discuss why having such a tamper proof log has value?
I do agree that tamper proof log is very useful, but I don't believe that it is something you can't achieve using traditional database tech.
I have a question for you that can short-circuit our discussion. You claim that the value is "so obvious" to you, why then one decade in there isn't one serious application of blockchain in the real world (not even in the dark web with early adpaters)? I mean a workflow that has been entirely transformed by it, despite all the investment and smart people working in the space? The lack of examples is the point that I find most baffling at all.
I have a question for you that can short-circuit our discussion. You claim that the value is "so obvious" to you, why then one decade in there isn't one serious application of blockchain in the real world (not even in the dark web with early adpaters)? I mean a workflow that has been entirely transformed by it, despite all the investment and smart people working in the space? The lack of examples is the point that I find most baffling at all.
Selling illicit goods seems to have been transformed by Bitcoin.
A bit of contentious point but I want to distinguish between bitcoin blockchain and blockchain tech.
Even as a bitcion skeptic, its market cap went from $0 to $1T and you can't argue with that. But circa 2012 people started marketing blockchain as an independent technology that can solve all sort of problems. This is the bit I have issues with, there hasn't been a single successful use case sense.
Even as a bitcion skeptic, its market cap went from $0 to $1T and you can't argue with that. But circa 2012 people started marketing blockchain as an independent technology that can solve all sort of problems. This is the bit I have issues with, there hasn't been a single successful use case sense.
This can be a good thing. Just because a government prohibits something doesn't mean it is bad.
(Yes, now we can devolve into a discussion about what "bad" means.)
(Yes, now we can devolve into a discussion about what "bad" means.)
Please provide an example of any database that is tamper resistant. As a DevOps engineer I have setup and configured many different databases, I have yet to come across any that someone with admin credentials (which you always need at one least of), didn’t have the ultimate ability to tamper and do anything they will to database.
I agree that databases on their own are never tamper resistant. But you can certainly set up a process around the database that guarantees tamper resistance. You'll still have to trust said process, and with blockchain you still have to trust the code. You'll never get away from having to trust _something_, but at least it is in theory feasible to have tamper resistance both with a centralised database and with a blockchain.
in practice, there's a difference between "our SREs and management promise to not change anything" and "it would cost x billion dollars to replace this record with a different one, based on previous attacks we've observed"
> "our SREs and management promise to not change anything"
But you can lock a database down to the point where only external auditors have access to the admin keys. It would make debugging challenging for sure, but that's anyway a tricky part of distributed systems such as bitcoin.
But you can lock a database down to the point where only external auditors have access to the admin keys. It would make debugging challenging for sure, but that's anyway a tricky part of distributed systems such as bitcoin.
You can only create "tamper proofness" aka security with social coordination.
Your bankaccount is somewhat secure due to layers and layers of agreements and interdependencies of people. Bitcoin works the same way, but in a much more modern way and achieves much better security.
The git repo you mention elsewhere is something completely different. There is no security baked into git. A git repo is just a bunch of files.
No workflows have been transformed in a decade because workflows do not change that fast. TCP/IP and and the rest of the internet protocol suite was developed the 60s. It started to disrupted workflows 40 years later.
Your bankaccount is somewhat secure due to layers and layers of agreements and interdependencies of people. Bitcoin works the same way, but in a much more modern way and achieves much better security.
The git repo you mention elsewhere is something completely different. There is no security baked into git. A git repo is just a bunch of files.
No workflows have been transformed in a decade because workflows do not change that fast. TCP/IP and and the rest of the internet protocol suite was developed the 60s. It started to disrupted workflows 40 years later.
> Bitcoin works the same way, but in a much more modern way and achieves much better security.
Is this true in practice? Haven't there been multiple massive bitcoin thefts? If these happened to a bank, you'd have a chance to get your money back. With Bitcoin -- it's just gone.
Is this true in practice? Haven't there been multiple massive bitcoin thefts? If these happened to a bank, you'd have a chance to get your money back. With Bitcoin -- it's just gone.
That is not the type of log level security we are discussing.
"Security" here means that a piece of data that was written to the log stays there unaltered.
"Theft" is on a much higher abstraction level. A "Bitcoin theft" is that someone steals your key and then appends a message to the log "Boplicity pays 17 BTC to Joe. Signed: Boblicity". Stealing your private key does not take place on the blockchain. And all previous entries to the log are still there.
"Security" here means that a piece of data that was written to the log stays there unaltered.
"Theft" is on a much higher abstraction level. A "Bitcoin theft" is that someone steals your key and then appends a message to the log "Boplicity pays 17 BTC to Joe. Signed: Boblicity". Stealing your private key does not take place on the blockchain. And all previous entries to the log are still there.
And those goalposts just fly by!
These are the unmoved goalposts from this comment chain.
> You can write something into the Bitcoin blockchain and be very sure that the information you wrote into it will stay there pretty much forever.
Slower than a database and hard to migrate. Check
Slower than a database and hard to migrate. Check
> How can having a public log that is extremely tamper resistant not have value?
Because achieving that tamper resistance the blockchain way is so energy-intensive that it has no value for me.
Because achieving that tamper resistance the blockchain way is so energy-intensive that it has no value for me.
Why is it better than cryptographic signatures using certificates?
How is that something good except from a pure technical perspective?
It is so obvious that we should not have records that cannot be deleted. Specially when talking about freedom. It seems to strange to me that supporters of blockchain talk about freedom while also saying that you can put up records that cannot be deleted.
It is so obvious that we should not have records that cannot be deleted. Specially when talking about freedom. It seems to strange to me that supporters of blockchain talk about freedom while also saying that you can put up records that cannot be deleted.
Let me point out that it will stay there pretty much forever as long as someone is paying for storage and computing. I would think this tied to the possibility of earning real money.
> Is that enough, or do we also have to discuss why having such a tamper proof log has value?
What I wonder is rather are there enough instances where it has value to actually motivate the hype (investment etc)? I can definitely see several dozen people working with this tech a few decades from now…
What I wonder is rather are there enough instances where it has value to actually motivate the hype (investment etc)? I can definitely see several dozen people working with this tech a few decades from now…
Personally I've not yet had any value from knowing that I can make a financial transaction logged on Bitcoin's chain and I don't know anyone who has used Bitcoin for that reason, so... I guess you do need to discuss why that log has value if you want more people to use it.
I find the tech interesting, but that's not the same as useful to me.
I find the tech interesting, but that's not the same as useful to me.
Honestly? To me it sounds like a solution looking for a problem.
How would this affect me in daily applications?
How would this affect me in daily applications?
Yes. I wonder how we know what happened in the 1970s or 1990s, or what the lottery numbers were back then, or what the election result was, or who owned which house. There was no Blockchain back then, so no tamper resistant public log back then, so, I guess we'll never really know.
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Sure it is a tamper resistant log. But what is the use of that? what problems is it solving? Please give me a concrete example!!
As with most things, I think the answer isn’t black or white. DLT has some use. It’s not useless. It’s not here to revolutionise computing or banking. But it has some value such as with trust-less computation tasks.
I agree with this sentiment, I am not calling it useless. In fact I think it makes perfect sense as an "experimentalist technology", it is just the disproportionate attention it is getting by serious people over a long period of time that I find most baffling ("blockchain to fight climate change/ improve vaccination/ ease supply chain bottlenecks/ destroy oligarchs")
Let's assume rich countries of the world (e.g. G7) set up a climate change fund in a smart contract. They could just lockup some funds there to be claimable after x months/years for any country (except the G7) proportionally to how far they managed to reduce their CO2 emissions. This assumes that we can trustlessly get the CO2 emissions for all countries (Let's just assume satellites can provide that data in a trustless way to the blockchain via some clever oracle mechanism).
Instead of having a handwritten weak contract like the Paris climate act, you'd have actual enforceable code that can not be gamed. I'm obviously oversimplifying things here but this is just to give an idea how blockchain tech can improve coordination games in the future.
Instead of having a handwritten weak contract like the Paris climate act, you'd have actual enforceable code that can not be gamed. I'm obviously oversimplifying things here but this is just to give an idea how blockchain tech can improve coordination games in the future.
> This assumes that we can trustlessly get the CO2 emissions for all countries
Classic blockchain advocacy: it works great provided we solve this unsolved problem of communicating "trustlessly" with the real world!
> you'd have actual enforceable code that can not be gamed
People keep "gaming" smart contracts all the time. Just recently there was a defi attack where someone simply flash-borrowed all the tokens, voted themselves a reward, and returned the tokens.
Classic blockchain advocacy: it works great provided we solve this unsolved problem of communicating "trustlessly" with the real world!
> you'd have actual enforceable code that can not be gamed
People keep "gaming" smart contracts all the time. Just recently there was a defi attack where someone simply flash-borrowed all the tokens, voted themselves a reward, and returned the tokens.
There are a lot of well proven live projects that use external oracle data and haven't suffered any serious issues. Just throwing DAI and RAI out as examples.
Let's assume this is true. There are many simpler and smaller-scale coordination games out there. Why hasn't any of these adapted blockchain?
It is quite a stretch to think that you can go from 0 adaptability to 100% adaptability in one of the largest scale coordination games imaginable (tracking carbon consumption).
For example if you told me in 2002 that one day most of the world would be on Facebook I would have been very skeptical, if then you showed me all of Harvard using it like crazy, my scepticism would have decreased significantly.
It is the lack of successful use cases even at smaller scale that I think preventing many people believing in the grand vision.
It is quite a stretch to think that you can go from 0 adaptability to 100% adaptability in one of the largest scale coordination games imaginable (tracking carbon consumption).
For example if you told me in 2002 that one day most of the world would be on Facebook I would have been very skeptical, if then you showed me all of Harvard using it like crazy, my scepticism would have decreased significantly.
It is the lack of successful use cases even at smaller scale that I think preventing many people believing in the grand vision.
There are many smaller scale things happening. Most are financial use cases but I'm trying to stick to non-financial ones here.
There's a platform called royal (https://royal.io/) which lets you fund artists and their albums. You can essentially co-own their song rights and collect a share of the royalties when their music is played. It's getting really interesting once composability comes into play. E.g. you can make indexes of song rights for country, rock, pop, electronic etc. pp. And once you have that you might put other financial derivatives on top and can go 2x long on country music and 2x short on pop music. There interesting aspect is that big music labels always were able to go short on some genre and long on another because they effectively decide which artists to fund. It's just that with these open protocols we the regular people get to do the same directly. And as a fan we get directly rewarded for helping our favorite artist to spread there music.
There are many interesting use cases and platforms emerging in the blockchain world. It just takes time for things to go mainstream.
There's a platform called royal (https://royal.io/) which lets you fund artists and their albums. You can essentially co-own their song rights and collect a share of the royalties when their music is played. It's getting really interesting once composability comes into play. E.g. you can make indexes of song rights for country, rock, pop, electronic etc. pp. And once you have that you might put other financial derivatives on top and can go 2x long on country music and 2x short on pop music. There interesting aspect is that big music labels always were able to go short on some genre and long on another because they effectively decide which artists to fund. It's just that with these open protocols we the regular people get to do the same directly. And as a fan we get directly rewarded for helping our favorite artist to spread there music.
There are many interesting use cases and platforms emerging in the blockchain world. It just takes time for things to go mainstream.
> Let's just assume satellites can provide that data in a trustless way to the blockchain via some clever oracle mechanism).
> Instead of having a handwritten weak contract like the Paris climate act, you'd have actual enforceable code that can not be gamed.
I'm having trouble reconciling these two ideas.
> Instead of having a handwritten weak contract like the Paris climate act, you'd have actual enforceable code that can not be gamed.
I'm having trouble reconciling these two ideas.
On the one hand, I guess we could imagine that the block chain plays an integral role in the "clever oracle mechanism". On the other hand, I think that turns this discussion into "imagine it's useful; in that case, it's useful!"
You’re not going wrong. For the most part, blockchain is snake oil, at least in how it’s positioned.
A centralized database of fungible and useful assets is going to eventually be hacked. Just ask OKTA about that.
Whereas there is no central point of hack for a well designed and tested blockchain. Distributed custody in an adversarial environment with mutual trust and dis-trust.
Yes it's not everything, but tradfi solutions are not 150% bulletproof either - they may only seem that way to the outside, but there are massive hazards lying just under the surface waiting to blow up. See: GME settlement risk end of Jan 2020.
EDIT: I used to be a huge skeptic of Eth and smart contracts. But I knew basically nothing about how they actually worked in practice. I learned a lot more and now I am a big believer.
The reality is you just likely do not know enough. Your skepticism of the space prevents you from learning and seeing the value that's sitting right in front of your eyes. You also have baked in presumptions that existing systems are somehow... workable or great, when they are not.
Whereas there is no central point of hack for a well designed and tested blockchain. Distributed custody in an adversarial environment with mutual trust and dis-trust.
Yes it's not everything, but tradfi solutions are not 150% bulletproof either - they may only seem that way to the outside, but there are massive hazards lying just under the surface waiting to blow up. See: GME settlement risk end of Jan 2020.
EDIT: I used to be a huge skeptic of Eth and smart contracts. But I knew basically nothing about how they actually worked in practice. I learned a lot more and now I am a big believer.
The reality is you just likely do not know enough. Your skepticism of the space prevents you from learning and seeing the value that's sitting right in front of your eyes. You also have baked in presumptions that existing systems are somehow... workable or great, when they are not.
* Centralised database is eventually going to be hacked.
* Decentralised blockchain can't be hacked because it's well designed and tested.
Problem is neither of these statements are always true.
* Decentralised blockchain can't be hacked because it's well designed and tested.
Problem is neither of these statements are always true.
Yet if they are true often enough, then the use case makes sense.
Also don't forget insider problems. Every major financial institution has massive insider threat problemss.
Also don't forget insider problems. Every major financial institution has massive insider threat problemss.
I work at a major financial institution and there is no insider threat problem.
There are systems in place built over decades and regulated by the government that audit and monitor the behaviour of all employees. In particular those who have a higher ability to conduct fraudulent activities.
If you really want to see an insider threat issue you should look at the pump/dump schemes in the NFT world. That sort of immorality (and hopefully soon to be illegality) is truly shocking.
There are systems in place built over decades and regulated by the government that audit and monitor the behaviour of all employees. In particular those who have a higher ability to conduct fraudulent activities.
If you really want to see an insider threat issue you should look at the pump/dump schemes in the NFT world. That sort of immorality (and hopefully soon to be illegality) is truly shocking.
Does anyone want or need “bulletproof” anything? The one feature of any transaction or contractual framework that I’d be most reluctant to give up is the one where they are fungible and reversible e.g in courts. Features luge secrecy, resistance to hacking, corruption, and so on seem to be second to this in nearly every case in the regular/legal economy of open democracy (I.e the part of the economy that matters).
Solutions exist to this that can respect the distributed nature and not rely upon a single authority. Multisig wallets that require N of M where the participants are chosen from a broad swath of the relevant community is popular. That way you can go in and change transactions after the fact, all without requiring the blockchain to (a) know about it and (b) everyone gets to choose their own relevant security model.
It even exists now, if you mis-send USDC/USDT you can petition Circle or Tether to reverse or change a balance. Commonly required when sending USD* to an address that can't move it out or handle it.
But ALSO a lot of payment systems that people like are in fact not reversible, even by courts. And people like them that way - it prevents fraud. Fedwires, Swift wires. Consider selling a high value item: there are few ways of electronically transferring amounts that can't be frauded out later. This is why many used car sales are done via cash - can't undo cash!
It even exists now, if you mis-send USDC/USDT you can petition Circle or Tether to reverse or change a balance. Commonly required when sending USD* to an address that can't move it out or handle it.
But ALSO a lot of payment systems that people like are in fact not reversible, even by courts. And people like them that way - it prevents fraud. Fedwires, Swift wires. Consider selling a high value item: there are few ways of electronically transferring amounts that can't be frauded out later. This is why many used car sales are done via cash - can't undo cash!
> This is why many used car sales are done via cash - can't undo cash!
If there is some shenanigans going on then the buyer/seller can just take it to a court. Cash or not isn’t really relevant to the legality of a transaction it’s just a means of payment.
It’s just like the deed to a house, it’s not really relevant to the purchase of a house. It’s that the buyer and seller respects the legal framework surrounding the transfer. A blockchain storing house ownerships doesn’t add much?
If there is some shenanigans going on then the buyer/seller can just take it to a court. Cash or not isn’t really relevant to the legality of a transaction it’s just a means of payment.
It’s just like the deed to a house, it’s not really relevant to the purchase of a house. It’s that the buyer and seller respects the legal framework surrounding the transfer. A blockchain storing house ownerships doesn’t add much?
do you want your laptop bulletproof from hacking by members of this forum?
what about your bank account?
what about your bank account?
Neither I think? But I must admit I have no idea how blockchain tech would apply to the hacking of a computer. My bank account I want handled by humans and courts in the end.
There is nothing wrong with having public immutable ledgers making tampering visible. This is useful. But the question there is: what is the drawback of centralized ledgers, e.g like the ones for interbank transfers? Even git a git repo represents a kind of public ledger like that.
There is nothing wrong with having public immutable ledgers making tampering visible. This is useful. But the question there is: what is the drawback of centralized ledgers, e.g like the ones for interbank transfers? Even git a git repo represents a kind of public ledger like that.
Public writable block chains seem to be a dead end due to the cost of 'proof of x' in any Sibyl safe way.
Private blockchains, such as for cross company account clearances, complex asset exchanges (planes, land) may help dislodge the rent seeking lawyers.
They can be publically readable also which could be useful, e.g. For querying a land registry.
Private blockchains, such as for cross company account clearances, complex asset exchanges (planes, land) may help dislodge the rent seeking lawyers.
They can be publically readable also which could be useful, e.g. For querying a land registry.
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By the way, as far as I understand, git is an example of a private blockchain.
How so?
With git, you have to manually resolve merge conflicts.
With blockchain, the general point is to use PoW (or something equivalent) to automatically do a vote on which is the correct version. Isn't that also the case in a private blockchain?
With git, you have to manually resolve merge conflicts.
With blockchain, the general point is to use PoW (or something equivalent) to automatically do a vote on which is the correct version. Isn't that also the case in a private blockchain?
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I think git has:
1. A chain of blocks referencing its parents by hash, thus verifying their validity and immutability
2. A rules for consensus on choosing what blocks can be appended (both technically and organizationally through each company’s PR review process)
That makes git a blockchain.
1. A chain of blocks referencing its parents by hash, thus verifying their validity and immutability
2. A rules for consensus on choosing what blocks can be appended (both technically and organizationally through each company’s PR review process)
That makes git a blockchain.
Good point, had not thought of it in this way before!
>Private blockchains, such as for cross company account clearances, complex asset exchanges (planes, land) may help dislodge the rent seeking lawyers.
I've heard this one before and I am little hesitant about it.
I imagine if you want to sell planes or land, you may want the seller to make certain assurances. So a lot of what M&A lawyers do, I understand, is work out what assurances need to be obtained and how to best enforce them in the contract.
How does a private blockchain ensure enforcement of such a term? Seems like a human arbitrator may always be needed (judge or arbitrator), and an intermediary to give effect to any decision. So what advantage is there to gain from blockchain as opposed to other financial platforms?
I've heard this one before and I am little hesitant about it.
I imagine if you want to sell planes or land, you may want the seller to make certain assurances. So a lot of what M&A lawyers do, I understand, is work out what assurances need to be obtained and how to best enforce them in the contract.
How does a private blockchain ensure enforcement of such a term? Seems like a human arbitrator may always be needed (judge or arbitrator), and an intermediary to give effect to any decision. So what advantage is there to gain from blockchain as opposed to other financial platforms?
Currency exchange settlement/escrow is a possible use-case for a private chain, currently handled by a specialized bank.
Under land ownership, a lawyer might decide someone else owned land for the past 2 years, and history must be re-written. Also, that patch must be applied regardless of what the current land-owner wants.
At this point, it feels like you just have a git repository with a single controller. That's probably useful, but feels a long way from a blockchain.
At this point, it feels like you just have a git repository with a single controller. That's probably useful, but feels a long way from a blockchain.
The sole purpose of blockchain is to prevent double spending without a trusted party
Other proposed applications are mostly dumb / misguided, like immutable storage, social network posts, etc, these can be done with hashing or digital signatures alone
If you have a better way to avoid double spending than blockchain folks woukd get very excited. Traditional database can’t do that (requires a trusted party)
Other proposed applications are mostly dumb / misguided, like immutable storage, social network posts, etc, these can be done with hashing or digital signatures alone
If you have a better way to avoid double spending than blockchain folks woukd get very excited. Traditional database can’t do that (requires a trusted party)
Without a single trusted party. You're trading trust for one entity for trust for many entities.
I dunno, the good thing about single entities is that it’s fairly easy to determine if you should trust them.
A web of entities of varying integrity, not so much.
A web of entities of varying integrity, not so much.
I don't think I have to trust anyone when I run my own Bitcoin node and sign transactions. What entities do you mean?
Your hardware and software vendors, and the people who secured your OS and your physical premises.
You have to trust the people who figured out the math, when they say "this math is secure". Then you have to trust the people who programmed that math, when they say "this code implements this math correctly". And then you have to trust the binary, unless you compiled it yourself, when it says "this binary compiles this code correctly", and finally you have to trust the machines when they say "this computer executes this binary correctly", all the while trusting youself not to have made any mistakes at any step which will quickly cost you everything you put into the system.
If you are an expert mathematician, programmer, electrical engineer, and white hat you might not have to trust anyone else. How many people are all of these though?
If you are an expert mathematician, programmer, electrical engineer, and white hat you might not have to trust anyone else. How many people are all of these though?
> You have to trust the people who figured out the math, when they say "this math is secure".
Not really. I'm convinced the math is secure given the current knowledge, because there's a massive financial incentive to break it. I don't have to trust anyone.
Not really. I'm convinced the math is secure given the current knowledge, because there's a massive financial incentive to break it. I don't have to trust anyone.
Similarly, I'm convinced my bank is secure, because there's a massive financial incentive to break it. I don't have to trust anyone.
Don't you need to also trust all of the other nodes on the network to come to consensus?
No, I wouldn't need to trust any other nodes. Each Bitcoin node checks all blocks for validity from scratch.
If majority of the nodes or the miners suddenly conspire to change the rules, my node will simply ignore those blocks as invalid.
If majority of the nodes or the miners suddenly conspire to change the rules, my node will simply ignore those blocks as invalid.
> Without a single trusted party. You're trading trust for one entity for trust for many entities.
The notion of “single” entities in society is, I think, flawed. A bank is not a single entity, for instance—they are not just a single actor—they are governed by a board and bylaws and shareholders and government regulations and judges, etc. If something goes wrong, which is expected and built into the system process,there is due process. And the strength of that due process is governed by the self interest of all the parties at play.
The main purpose of blockchain is to attempt to replace the messiness of human governance with the certainty of algorithmic governance. But it is an illusion in many ways and dangerous, in a sense, to put so much trust in an algorithm. I think that much of the philosophy around blockchain comes from the lack of faith in human governance—which is to say, a certain kind of misanthropy.
The notion of “single” entities in society is, I think, flawed. A bank is not a single entity, for instance—they are not just a single actor—they are governed by a board and bylaws and shareholders and government regulations and judges, etc. If something goes wrong, which is expected and built into the system process,there is due process. And the strength of that due process is governed by the self interest of all the parties at play.
The main purpose of blockchain is to attempt to replace the messiness of human governance with the certainty of algorithmic governance. But it is an illusion in many ways and dangerous, in a sense, to put so much trust in an algorithm. I think that much of the philosophy around blockchain comes from the lack of faith in human governance—which is to say, a certain kind of misanthropy.
> The main purpose of blockchain is to attempt to replace the messiness of human governance with the certainty of algorithmic governance.
Right, and as is shown inevitably in real life (The DAO, BTC 0.7/0.8 fork, censoring of scam or Russia related BTC addresses, ...), the messiness of reasonably well understood and regulated human governance (law, elections, ...) is replaced by governance of the algorithm plus a bunch of unelected, unaccountable, and largely even unknown humans.
Right, and as is shown inevitably in real life (The DAO, BTC 0.7/0.8 fork, censoring of scam or Russia related BTC addresses, ...), the messiness of reasonably well understood and regulated human governance (law, elections, ...) is replaced by governance of the algorithm plus a bunch of unelected, unaccountable, and largely even unknown humans.
> I think that much of the philosophy around blockchain comes from the lack of faith in human governance—which is to say, a certain kind of misanthropy.
So the blockchain gets two things right: avoiding double-spending and an honest assessment on human nature.
So the blockchain gets two things right: avoiding double-spending and an honest assessment on human nature.
Replacing trust in humanity with trust in an algorithm created by humanity doesn't really get you anywhere. Like it or not, you are human, I am human, and we live a society of humans! Everything in society is created and run by humans! The blockchain cannot change this fundamental fact, it can only obscure it.
Hard to tamper with data loggers also benefit from the Blockchain.
There are lots of industries where tamper proof records are valuable and record keeping is distributed.
There are lots of industries where tamper proof records are valuable and record keeping is distributed.
I get the value of having a chain of "blocks" of data, but that could also describe git. I don't see the added value of proof of work or proof of stake here.
Why isn't putting that data (or a hash of it) in a publicly available git repository just as good? You can even publish the newest branch hash in the newspaper everyday if you want.
Why isn't putting that data (or a hash of it) in a publicly available git repository just as good? You can even publish the newest branch hash in the newspaper everyday if you want.
Oh in this instance it's not about having a public record. It's about every transaction having a hash of the previous. Then it gets hard to forge old data without altering all records after the forgery. It's still possible but takes more work and can make the tampering easier to discover.
And for data loggers not connected to the internet this helps. It would be just as good to put it in a central repo if there was an internet connection available. But if you're logging a refrigerator temp on a container traveling between countries there isn't going to be a cheap option for internet.
And for data loggers not connected to the internet this helps. It would be just as good to put it in a central repo if there was an internet connection available. But if you're logging a refrigerator temp on a container traveling between countries there isn't going to be a cheap option for internet.
> It's about every transaction having a hash of the previous.
We understand that... GP even said:
>> I get the value of having a chain of "blocks" of data
We understand that... GP even said:
>> I get the value of having a chain of "blocks" of data
Wait, you never did a git rebase?
How does a consensus algorithm help when the nodes are not connected to the p2p network?
How does a consensus algorithm help when the nodes are not connected to the p2p network?
It's transactional anyway so it's possible to make the file/dir structure as merge friendly as possible. In the simplest case just 1 file per operation with unique filenames.
Speaking of trusted parties, (multiple) of those could be set up using a chain of trust in every network segment that do as much cross-signing/-verification as deemed necessary. Once it goes online again, the performed operations could go on-chain.
Speaking of trusted parties, (multiple) of those could be set up using a chain of trust in every network segment that do as much cross-signing/-verification as deemed necessary. Once it goes online again, the performed operations could go on-chain.
That's why I mentioned git, not just putting it in a text file.
Every git commit contains a hash of all the previous commits, and is itself referred to by a hash. So if you change an old commit, all commits descending from that get a new hash, and so a new identity.
If you publish the latest hash in the newspaper, you've locked down all the previous commits also.
Every git commit contains a hash of all the previous commits, and is itself referred to by a hash. So if you change an old commit, all commits descending from that get a new hash, and so a new identity.
If you publish the latest hash in the newspaper, you've locked down all the previous commits also.
Sorry my mistake. I missed that. I was only thinking of the utility of publishing to an external source as a means of verifying history.
You are correct.
You are correct.
Such usecases actually run into an economic problem.
You can't just create a proof-of-work blockchain to hold your records. That blockchain also have to be a functioning economy with a large enough market cap to pay out mining rewards that are large enough to make a 51% attack economically nonviable. If you fail to do so, or the economy falls apart, all tamper-resistance just disappears.
It actually ends up being cheaper just to trust a group of authorities, and pay auditors to make sure they are being trustworthy.
You can't just create a proof-of-work blockchain to hold your records. That blockchain also have to be a functioning economy with a large enough market cap to pay out mining rewards that are large enough to make a 51% attack economically nonviable. If you fail to do so, or the economy falls apart, all tamper-resistance just disappears.
It actually ends up being cheaper just to trust a group of authorities, and pay auditors to make sure they are being trustworthy.
> The sole purpose of blockchain is to prevent double spending without a trusted party.
Yes, and avoiding the trusted party makes it more inefficient by a factor of around 100,000,000 (-ish), if you consider that BTC uses around 23 GW and can do no more (5 transactions a second) than a single trusted PC could do.
What are use cases were you actually need this and the high cost is worth it?
Yes, and avoiding the trusted party makes it more inefficient by a factor of around 100,000,000 (-ish), if you consider that BTC uses around 23 GW and can do no more (5 transactions a second) than a single trusted PC could do.
What are use cases were you actually need this and the high cost is worth it?
The power is used to secure the system, not to perform transactions. The transaction rate has always been the same, the power use has gone up with the value of the contents (to resist a 51% attack)
Some people feel strongly this security is worth it. Some feel strongly that it isn’t (but one suspects their objection is really to the lack of central control)
Some people feel strongly this security is worth it. Some feel strongly that it isn’t (but one suspects their objection is really to the lack of central control)
Climate change may be the problem that defines our generation.
In that light, and given the ludicrous power estimates that blockchains use, are we not morally obligated to kill all the blockchain projects if these estimates are in the right ballpark?
In that light, and given the ludicrous power estimates that blockchains use, are we not morally obligated to kill all the blockchain projects if these estimates are in the right ballpark?
At most we might be obliged to kill the worst (and a lot of other non-crypto things) but killing all makes no sense when there's many with fairly neglible impact.
Nature abhors a vacuum: if you kill the most popular PoW scheme, the little ones will dutifully step up and use just as much power. I don’t think there’s any world we can live in where PoW schemes will have “negligible impact,” which only heartens the justification for banning all of them, now.
Only if you believe climate change defines this generation.
To the extent that blocks are assembled and validated not by one node (which is all that would be necessary), but by (tens? hundreds? of) thousands, there is massive duplication of the actual work by a factor of 1e4 or 1e5 or more.
But, you are right, even that enormous inefficiency is peanuts compared to the Proof of Waste, which ramps it up to unimaginable proportions. (A single BTC transaction uses up as much electricity as a 2 person household in Germany in a year, and produces 2 iPhones worth of electronic waste.)
But, you are right, even that enormous inefficiency is peanuts compared to the Proof of Waste, which ramps it up to unimaginable proportions. (A single BTC transaction uses up as much electricity as a 2 person household in Germany in a year, and produces 2 iPhones worth of electronic waste.)
The transactions don’t use the power, the power is used to protect the contents of the chain
(sorry i intended this as a reply to a different comment, not yours, not sure how i did that!)
(sorry i intended this as a reply to a different comment, not yours, not sure how i did that!)
> The power is used to secure the system, not to perform transactions.
This looks to be the case now, with block reward being dominated by the block subsidy. But by design, the latter reduces exponentially over time, so that within a few decades, the security will have to come predominantly from transaction fees.
This looks to be the case now, with block reward being dominated by the block subsidy. But by design, the latter reduces exponentially over time, so that within a few decades, the security will have to come predominantly from transaction fees.
Cardano is a cryptocurrency that offers ~250 transactions per second but should soon scale without a layer 2 solution. I mention this as I run a validator on a 8gb raspberry pi with ZRAM swap enabled with no issues consuming ~5W the whole network could run this way if needed. This is lower power due to a mechanism called proof of stake. BTC uses proof of work. Ethereum has been 'trying' to migrate to POS for some time.
As for layer 2's this could partly be the solution to some high costs. But risks sacrificing decentralization.
As for layer 2's this could partly be the solution to some high costs. But risks sacrificing decentralization.
Proof of stake is useless.
It just give all the powers to the current stakeholders.
So it’s not trustless by definition since you need to trust the stakeholders.
Well, PoW needs to assume that 51% of miners is honest, while PoS needs to assume that 51% of stakers is honest. The bigger downsides of PoS to me are that
1) a pure PoS system starts with the creators holding all supply and can keep an arbitrary portion for themselves while selling the rest as they please
2) the truth in PoS is subjective (nodes need to rely on other nodes to determine what is the current state of the system).
1) a pure PoS system starts with the creators holding all supply and can keep an arbitrary portion for themselves while selling the rest as they please
2) the truth in PoS is subjective (nodes need to rely on other nodes to determine what is the current state of the system).
In PoS systems validators can vote for both chains in case of a fork, as there is nothing at stake. It's not about honesty. It's about resources being committed.
Exactly. The ETH PoS FAQ is a good introduction to the problem. In a nutshell, when there are two competing chains,
A) in PoW you
A1) either put all your resources (hash power) behind one chain, and get the block, thus the mining reward, with probability equal to your proportion of the total hash power (as before) assuming that chain ends up the longest chain (so you have a strong incentive to pick the "correct" one), or
A2) distribute your hash power between the two competing chains, but then each of them only gets half the hash power, and you reduce your probability of getting the mining reward to half, thus halving your expected reward.
At any rate, as soon as one of the chains is ahead, there is a very strong incentive to fall in line with the LCR (longest chain rule) and place all your bets on the putative winner, rather than diluting your expensive hash power.
B) In PoS, you can just continue staking on both competing chains, and whichever wins, you got get your mining reward (as usual, with probability equal to your proportion of the total stake). No incentive to settle on a winner early ("nothing at stake"), so just keep your options open by supporting both chains, and thus no incentive to congeal on a winner quickly.
https://eth.wiki/en/concepts/proof-of-stake-faqs
A) in PoW you
A1) either put all your resources (hash power) behind one chain, and get the block, thus the mining reward, with probability equal to your proportion of the total hash power (as before) assuming that chain ends up the longest chain (so you have a strong incentive to pick the "correct" one), or
A2) distribute your hash power between the two competing chains, but then each of them only gets half the hash power, and you reduce your probability of getting the mining reward to half, thus halving your expected reward.
At any rate, as soon as one of the chains is ahead, there is a very strong incentive to fall in line with the LCR (longest chain rule) and place all your bets on the putative winner, rather than diluting your expensive hash power.
B) In PoS, you can just continue staking on both competing chains, and whichever wins, you got get your mining reward (as usual, with probability equal to your proportion of the total stake). No incentive to settle on a winner early ("nothing at stake"), so just keep your options open by supporting both chains, and thus no incentive to congeal on a winner quickly.
https://eth.wiki/en/concepts/proof-of-stake-faqs
Indeed. I fail to see how validators in PoS systems are any different to eg shareholders of Visa.
Why use bitcoin, the slowest blockchain and most inefficient blockchain, as an example? Blockchains like Sui offer basically unlimited transactions/s
Fundamentally the transaction rate is limited by how much data you're willing to store. Bitcoin's 5tx/sec translates to ~5gb/month added to the blockchain - improving upon this requires either making the data stored per transaction smaller, increasing the blockchain growth rate, or moving transactions off-chain.
That’s true only if you care about storing historical data
When the balance of every address can only be calculated by executing the total transaction graph, as in Bitcoin, then you need to store the history.
If you have a solution for this that does not require trusting anyone, I'm sure that people would love to hear it.
If you have a solution for this that does not require trusting anyone, I'm sure that people would love to hear it.
Longs long solved problem.
You only need to store the last state of the ledger and the chain of hashes that lead there to validate that any give block actually did happen.
If you dont care about validating past block you dont even need the chain of hashes but just the last state.
Instead of huge transaction chains to get to the balance people use snapshots where they basically sum up everything in the past to a give point in time and add new transaction from there on.
More "modern" systems like the XRPL or ETH directly use accounts with balances. If you have the last state so all accounts and all balances you can move (subtract from one and add to the other) you dont have to sum past transaction to know if someone actually has a balance to move. You can also easily sum all balances which must give the total (if the supply is fixed).
>"If you have a solution for this that does not require trusting anyone...."
You do not need to trust anyone you need to trust EVERYONE at one point in time exactly when you want to join and use the system. If you decide to use for example the XRPL today maybe even run a node and validate transaction yourself, then at the time "now()" the last state that everyone else agrees on that is what you need to "trust" or rather accept.
You need to accept that to this date the people who ran it before you didn't never collude to "fix" or manipulate the ledger state of the past. If you think they colluded in the past and the current state is not how it should be then the system is useless to you. It doesn't matter if you can point to the exact event in some historical data. And you dont need the historical data to know such an event happen because it obviously would be hugely controversial and well documented outside of the transaction history (probably would result in a fork etc. so you could pick the chain you agree on).
If you are worried about a mistake in the past that no one even noticed then that is not a problem since by definition the code everyone runs is the rules. A bug is a bug in the rules and if everyone agrees on the current state it doesn't matter that something went wrong somewhere in the past, its only important that the current state is agreed on. If you assume the past is immutable then a past bug has no effect on the future function of the system (Exception ofc is when the past was changed then you need to assume that people collude again to do it again).
People think the past is immutable if we have it recorded but actual it is immutable if there is agreement on the current states finality.
Think of the whole system like a closed room with people who together hold a fix number of coins. Once everyone knows the balance of everyone and there is no dispute on the balances everyone can transact with everyone. There is zero need to know the past transactions that took place. If someone has 5 coins he can give you 3 and everyone sees that he now has 2 and you 3 more. If a new person enters the room he must have zero coins else the total increased. He can then instantly accept coins from anyone once he know the current undisputed balances of everyone. Again he does not need to know from whom you got your coins just that everyone agrees that you own them.
Instead of huge transaction chains to get to the balance people use snapshots where they basically sum up everything in the past to a give point in time and add new transaction from there on.
More "modern" systems like the XRPL or ETH directly use accounts with balances. If you have the last state so all accounts and all balances you can move (subtract from one and add to the other) you dont have to sum past transaction to know if someone actually has a balance to move. You can also easily sum all balances which must give the total (if the supply is fixed).
>"If you have a solution for this that does not require trusting anyone...."
You do not need to trust anyone you need to trust EVERYONE at one point in time exactly when you want to join and use the system. If you decide to use for example the XRPL today maybe even run a node and validate transaction yourself, then at the time "now()" the last state that everyone else agrees on that is what you need to "trust" or rather accept.
You need to accept that to this date the people who ran it before you didn't never collude to "fix" or manipulate the ledger state of the past. If you think they colluded in the past and the current state is not how it should be then the system is useless to you. It doesn't matter if you can point to the exact event in some historical data. And you dont need the historical data to know such an event happen because it obviously would be hugely controversial and well documented outside of the transaction history (probably would result in a fork etc. so you could pick the chain you agree on).
If you are worried about a mistake in the past that no one even noticed then that is not a problem since by definition the code everyone runs is the rules. A bug is a bug in the rules and if everyone agrees on the current state it doesn't matter that something went wrong somewhere in the past, its only important that the current state is agreed on. If you assume the past is immutable then a past bug has no effect on the future function of the system (Exception ofc is when the past was changed then you need to assume that people collude again to do it again).
People think the past is immutable if we have it recorded but actual it is immutable if there is agreement on the current states finality.
Think of the whole system like a closed room with people who together hold a fix number of coins. Once everyone knows the balance of everyone and there is no dispute on the balances everyone can transact with everyone. There is zero need to know the past transactions that took place. If someone has 5 coins he can give you 3 and everyone sees that he now has 2 and you 3 more. If a new person enters the room he must have zero coins else the total increased. He can then instantly accept coins from anyone once he know the current undisputed balances of everyone. Again he does not need to know from whom you got your coins just that everyone agrees that you own them.
I do. Check out Mina. It uses recursive zero knowledge proofs to give you a proof of all state transitions since genesis.
For the curious: https://minaprotocol.com/
A 22kb fixed size reads like transparent bullshit to me. Fundamentally you cannot store infinite information within such a block, and "participant X has the right to send Y amount" is information. To me this implies that either there is a limit to the number of participants, that there is information stored off-chain, or that there will be data loss over time - possibly all three.
And the fact that you've mentioned one cryptocurrency to fix the transaction rate issue, and another to fix the blockchain size issue, but not one to fix both issues at the same time, has not escaped me.
And the fact that you've mentioned one cryptocurrency to fix the transaction rate issue, and another to fix the blockchain size issue, but not one to fix both issues at the same time, has not escaped me.
It's funny how people keep moving the goal post :) read more about it instead of spending 5min on a page and finding negative things to say about it. If you want to hate on the technology for the sake of hating it then you won't go far in life
If it takes more than 5 minutes to even mention how you're sidestepping some very basic information theory concepts, then it's probably a scam.
And speaking of moving the goalposts... You recommended Sui as a blockchain with "basically unlimited transactions per second", and then recommended Mina when I commented about chain sizes. It sure seems like you have a mutually-exclusive blockchain for each set of goalposts to me.
And speaking of moving the goalposts... You recommended Sui as a blockchain with "basically unlimited transactions per second", and then recommended Mina when I commented about chain sizes. It sure seems like you have a mutually-exclusive blockchain for each set of goalposts to me.
"Why use the most popular and most well-known and most used and most heavily-invested-in example of this technology, when I know of this obscure one that promises something that it certainly hasn't demonstrated yet?"
Kind of like taking a paper plane to prove that you can’t fly humans from point A to point B
More like pointing at Concorde to express skepticism about the claims of economic viability of some new faster-than-sound flight start-up.
Or using addictive drugs to say that all medicine is useless
Preventing double spending is possible even without trust. A centralised authority could publish the transactions in a signed append only log. Independent verifiers could pull the log with some frequency and verify that no one spent twice.
Good point - blockchain also prevents transaction censorship (your proposal prevents double spend but allows the central authority to block transactions)
Central authorities might do wild stuff like block Folks They Don’t Like (certain truck drivers, etc). Some people think that’s really good, others feel the opposite
(edited for clarity)
Central authorities might do wild stuff like block Folks They Don’t Like (certain truck drivers, etc). Some people think that’s really good, others feel the opposite
(edited for clarity)
Can you expand on this a bit? Which element regarding censorship does Blockchain help prevent?
I ask earnestly as it feels like a forgone conclusion but depending on what you refer to I'm not sure it is.
My initial thought is about freedom of spending and transactions as a concept of the chain but I guess it's not exactly censorship in the most common sense.
I ask earnestly as it feels like a forgone conclusion but depending on what you refer to I'm not sure it is.
My initial thought is about freedom of spending and transactions as a concept of the chain but I guess it's not exactly censorship in the most common sense.
In this case, censorship as in blocking/refusing transactions.
Any miner can decide that they won't include your transaction in a block, but as long as any one miner that occasionally mines a block is willing to include your transaction, your transaction will eventually make it onto the blockchain.
A majority of miners (by hashpower) could still decide to censor (orphan) the entire block, but unless a majority of the hashpower is willing to do that, your transaction will stay there.
Any miner can decide that they won't include your transaction in a block, but as long as any one miner that occasionally mines a block is willing to include your transaction, your transaction will eventually make it onto the blockchain.
A majority of miners (by hashpower) could still decide to censor (orphan) the entire block, but unless a majority of the hashpower is willing to do that, your transaction will stay there.
> blockchain also prevents censorship
well... sort of. Naturally, government can regulate and censor the on- and off-ramps [0], exchanges can censor [1a - Coinbase blocking Russian addresses][1b - Coinbase blocking scammer addresses], and developers or "the community", ie other unelected players, can decree a software change if something happens on chain that they don't like [2a - The DAO/ETH/ETC][2b - BTC 0.7/0.8 accidental fork].
[0] https://cryptonews.com/guides/countries-in-which-bitcoin-is-...
[1a] https://decrypt.co/94513/coinbase-blocks-25000-addresses-lin...
[1b] https://beincrypto.com/freedom-vs-protection-should-crypto-e...
[2a] https://www.crypto-news-flash.com/what-is-ethereum-classic-e...
[2b] https://bitcoinmagazine.com/technical/bitcoin-network-shaken...
well... sort of. Naturally, government can regulate and censor the on- and off-ramps [0], exchanges can censor [1a - Coinbase blocking Russian addresses][1b - Coinbase blocking scammer addresses], and developers or "the community", ie other unelected players, can decree a software change if something happens on chain that they don't like [2a - The DAO/ETH/ETC][2b - BTC 0.7/0.8 accidental fork].
[0] https://cryptonews.com/guides/countries-in-which-bitcoin-is-...
[1a] https://decrypt.co/94513/coinbase-blocks-25000-addresses-lin...
[1b] https://beincrypto.com/freedom-vs-protection-should-crypto-e...
[2a] https://www.crypto-news-flash.com/what-is-ethereum-classic-e...
[2b] https://bitcoinmagazine.com/technical/bitcoin-network-shaken...
Another example:
Juno Blockchain Community Officially Votes to Revoke Whale’s Tokens
https://www.coindesk.com/layer2/2022/04/29/juno-blockchain-c...
Juno Blockchain Community Officially Votes to Revoke Whale’s Tokens
https://www.coindesk.com/layer2/2022/04/29/juno-blockchain-c...
If the miners don’t like you what stops them from not including your transactions in the chain?
It is my understanding that if a large enough pool of miners decides they don’t like you (>50%) they can completely prevent your ability to spend money.
It is my understanding that if a large enough pool of miners decides they don’t like you (>50%) they can completely prevent your ability to spend money.
> what stops them from not including your transactions in the chain
The only thing that could stop them is being unable to identify what outputs belong to you. Which generally requires a more privacy focussed design than what Bitcoin offers.
The only thing that could stop them is being unable to identify what outputs belong to you. Which generally requires a more privacy focussed design than what Bitcoin offers.
In practice, I'm not sure this is entirely true. Banks largely don't care who they're dealing with and are glad to sponsor transactions among terrorists and Nazis and what not, just like a blockchain. Governments lean on them by spot checking records and punishing when they can identify transgressions of law. Even with a blockchain, the same governments can tell anyone within the reach of its gun or goons that it is going to punish you if you transact with some forbidden party. Not having a single narrow waist at which they can stop it doesn't mean they can't stop it, just that it got harder. Further, the transaction that is censorship resistant, not censorship proof, is the public mapping of wallet id to coin id. Usually, supplier and purchaser are really interested in the movement of physical goods at some point, not just the transfer of digital coin. Whether that be drugs, slaves, or just food, governments can still find ways to stop delivery of those goods even if an immutable ledger somewhere says the party that currently possesses them is supposed to give them to you.
[deleted]
Your example is implemented in Certificate Transparency to monitor certificate authorities on the web. It does not help you prevent attacks, it merely helps you detect them after the fact.
Wouldn't you have to trust the centralized authority?
You might argue this as a theoretical possibility, but it's never going to happen in practice. In practice the trusted entity is always going to selectively allow certain double-spends, and even though it will get caught doing that, people will accept its current revision of the ledger and the world goes on.
For example, the trusted entity might reverse a donation to Canadian truckers due to political reasons (allowing the donator to "double spend" by doing something else with the money later).
For example, the trusted entity might reverse a donation to Canadian truckers due to political reasons (allowing the donator to "double spend" by doing something else with the money later).
>The sole purpose of blockchain is to prevent double spending without a trusted party
That is most accurate description of blockchain I have read.
Unfortunately, the mechanism for that (Proof-of-work) is slow, expensive and planet destroying at scale. And while we may remove a trust provider third party, we aren't getting rid of centralization with blockchain anyway.
That is most accurate description of blockchain I have read.
Unfortunately, the mechanism for that (Proof-of-work) is slow, expensive and planet destroying at scale. And while we may remove a trust provider third party, we aren't getting rid of centralization with blockchain anyway.
Planet destroying is a bit extreme. The traditional finance system is no more energy efficient overall. It’s certainly not environmentally friendly, but that’s more a function of the dirty power we use for anything and everything. We just need to fix our methods of generating energy, not criticize everything that uses a lot of it.
preposterous. financial transaction processing is and always has been vastly more efficient and quick.
> The traditional finance system is no more energy efficient overall.
Using more power[1] to process vastly more transactions makes it more efficient. There are over a billion credit card transactions per day as it is, and that doesn't include debit cards, wire transfers, BACS, Swift, PayPal, WU, AliPay, WeChat and all the others. And cash while we're at it, that's part of the system too.
[1]: Lets say it does, though transaction processing is only a small part of the financial industries. I don't even know how much the whole industry uses, let alone what fraction is transaction handling.
Using more power[1] to process vastly more transactions makes it more efficient. There are over a billion credit card transactions per day as it is, and that doesn't include debit cards, wire transfers, BACS, Swift, PayPal, WU, AliPay, WeChat and all the others. And cash while we're at it, that's part of the system too.
[1]: Lets say it does, though transaction processing is only a small part of the financial industries. I don't even know how much the whole industry uses, let alone what fraction is transaction handling.
> We just need to fix our methods of generating energy, not criticize everything that uses a lot of it.
The problem isn't that proof-of-work "uses a lot of [energy]"; the problem is that proof-of-work only exists to waste energy.
"Fix[ing] our methods of generating energy" is a red herring, since proof-of-work will automatically scale to consume any difference. It's a Red Queen's Race, which cannot be won.
The problem isn't that proof-of-work "uses a lot of [energy]"; the problem is that proof-of-work only exists to waste energy.
"Fix[ing] our methods of generating energy" is a red herring, since proof-of-work will automatically scale to consume any difference. It's a Red Queen's Race, which cannot be won.
No PoW is done so that the blockchain can be trustless. That is a valuable property. No other system has that property.
Bitcoin uses PoW to be "trustless", which is precisely why it's designed to waste energy.
Bitcoin is a distributed consensus algorithm, and the way it establishes consensus is simple: pick the longest chain. Spamming dummy blocks on to an old chain will cause that consensus to switch, allowing double-spends, so Bitcoin requires PoW as an anti-spam mechanism to slow everything down by wasting energy ( https://en.wikipedia.org/wiki/Hashcash ).
I wouldn't go so far as calling blockchains "trustless", since PoW has its own vulnerabilities, e.g.
- Lottery-like incentives for mining favours centralisation, to reduce volatility. That gives mining pools a lot of control, e.g. whether to back forks or not.
- Centralised mining is vulnerable to existing power structures, e.g. those with deep pockets can purchase warehouse-sized mining rigs, can launch legal or physical attacks on the rigs of others, etc.
Bitcoin is a distributed consensus algorithm, and the way it establishes consensus is simple: pick the longest chain. Spamming dummy blocks on to an old chain will cause that consensus to switch, allowing double-spends, so Bitcoin requires PoW as an anti-spam mechanism to slow everything down by wasting energy ( https://en.wikipedia.org/wiki/Hashcash ).
I wouldn't go so far as calling blockchains "trustless", since PoW has its own vulnerabilities, e.g.
- Lottery-like incentives for mining favours centralisation, to reduce volatility. That gives mining pools a lot of control, e.g. whether to back forks or not.
- Centralised mining is vulnerable to existing power structures, e.g. those with deep pockets can purchase warehouse-sized mining rigs, can launch legal or physical attacks on the rigs of others, etc.
Trustless means you don't have to trust anybody to know that a transaction you initiate will happen as you expect. No one can block or alter a transaction you make. This is achieved through multiple cryptographic mechanisms - one of them is PoW.
PoW makes it expensive to attempt a double spend. You can't practically double spend because it is too expensive to do. The high cost of PoW is what gives the network security from double spend. Therefore it is not wasted energy. It is energy spent to secure against double spends.
You could use PoS but that is centralized and vulnerable to manipulation just like fiat.
Slow depends on what you are needing the system to do. If you need to pay for groceries, then Bitcoin is slow. If you need to do remittances or settlement then Bitcoin is extremely fast - much faster to reach finality than anything else. Therefore Bitcoin is only really useful as a base layer of the financial world. But that is also extremely useful. Faster layers like Lightning can be built on top.
PoW makes it expensive to attempt a double spend. You can't practically double spend because it is too expensive to do. The high cost of PoW is what gives the network security from double spend. Therefore it is not wasted energy. It is energy spent to secure against double spends.
You could use PoS but that is centralized and vulnerable to manipulation just like fiat.
Slow depends on what you are needing the system to do. If you need to pay for groceries, then Bitcoin is slow. If you need to do remittances or settlement then Bitcoin is extremely fast - much faster to reach finality than anything else. Therefore Bitcoin is only really useful as a base layer of the financial world. But that is also extremely useful. Faster layers like Lightning can be built on top.
What do you think needs more energy: several systems (2, with some intermediaries) that talk to each other, one decrementing a number in a bank account, and another incrementing a number in another bank account, vs. thousands of systems that compete with each other trying to find some hash the fastest by guessing?
Both need to talk to each other over the network, but in the second, it's thousands of systems needing to synchronize the information.
What a stupid lie you're telling yourself to justify that "this is fine!".
Both need to talk to each other over the network, but in the second, it's thousands of systems needing to synchronize the information.
What a stupid lie you're telling yourself to justify that "this is fine!".
> The traditional finance system is no more energy efficient overall.
The traditional finance system easily does tens of thousands of times more transactions than cryptocurrencies. Visa alone does a thousand times more transactions than Bitcoin.
Cryptocurrency uses over 0.5% of the world's electricity to do less than 0.01% of the world's transactions.
So, no, your statement is wildly wrong. I have zero problem calling it a lie, because you made it up out of your head and made no attempt to justify it with facts.
The traditional finance system easily does tens of thousands of times more transactions than cryptocurrencies. Visa alone does a thousand times more transactions than Bitcoin.
Cryptocurrency uses over 0.5% of the world's electricity to do less than 0.01% of the world's transactions.
So, no, your statement is wildly wrong. I have zero problem calling it a lie, because you made it up out of your head and made no attempt to justify it with facts.
There are many "cryptocurrencies" that have vastly more number of transactions than visa. They aren't being bought at the same rate and therefore don't have the same market cap as Bitcoin. The market has chosen Bitcoin as their favorite, because it aligns with the wants of the free market. The free market wants secure distributed and _trustless_ store of value. That's the thing that Bitcoin does better than anything.
Also you can transfer any amount in a single transaction, so the transaction value throughput in Bitcoin is still infinite. This makes Bitcoin useful as a secure settlement layer for other systems.
Also you can transfer any amount in a single transaction, so the transaction value throughput in Bitcoin is still infinite. This makes Bitcoin useful as a secure settlement layer for other systems.
> That is most accurate description of blockchain I have read.
It might interest you to know then that the short, digestible 8 page whitepaper on Bitcoin, which originally described the blockchain, specifically used this definition. It's the most accurate because it is what a blockchain was designed for. I recommend giving it a read and ignoring any project which doesn't follow its core tenants.
https://bitcoin.org/bitcoin.pdf
It might interest you to know then that the short, digestible 8 page whitepaper on Bitcoin, which originally described the blockchain, specifically used this definition. It's the most accurate because it is what a blockchain was designed for. I recommend giving it a read and ignoring any project which doesn't follow its core tenants.
https://bitcoin.org/bitcoin.pdf
I have read that whitepaper. That was the first think I read when I started researching about the whole crypto and blockchain space. And this is the culmination of my research https://bit.ly/3OB5G18
I'm sure that that is a wonderful paper, behind a paywall.
No it's on Btcoin.org. Free to download. https://bitcoin.org/en/bitcoin-paper
Tenets! Tenants pay rent.
Latin "He holds"; imported to English, if refers to a belief (which is something you hold), e.g. tenets of the Catholic Church.
Whoops! Nice catch. Don't ignore your tenants.
It's supposed to be slow. That's what secures it. The production speed comes from layer 2 solutions built on top of it (analogous to how a secure VM can go faster with a JIT while still maintaining security).
It's not expensive. Transaction fees are just fine and getting cheaper over time.
It doesn't destroy the planet. You're thinking of the fossil-fuel industry.
It's not expensive. Transaction fees are just fine and getting cheaper over time.
It doesn't destroy the planet. You're thinking of the fossil-fuel industry.
> It doesn't destroy the planet. You're thinking of the fossil-fuel industry.
But the fossil-fuel industry has had very real benefits (whether we like it our not!). It's surely debateable whether fuelling crime, scams, and what is tantamount to a massive casino is of any benefit to humanity. Especially when running it consumes more energy than Argentina [1]
Of course there are plenty of other aspects of human existence that requires energy, and therefore has an impact on our home. That doesn't give individuals who are engaged in this casino an 'out'. It is an entirely greed driven exercise right now.
Perhaps something will come along that makes blockchain and other crypto concepts viable and valuable to society, it ain't here yet though. So I don't see how anybody can justify an Argentina's worth off energy usage.
[1] https://www.bbc.co.uk/news/technology-56012952
But the fossil-fuel industry has had very real benefits (whether we like it our not!). It's surely debateable whether fuelling crime, scams, and what is tantamount to a massive casino is of any benefit to humanity. Especially when running it consumes more energy than Argentina [1]
Of course there are plenty of other aspects of human existence that requires energy, and therefore has an impact on our home. That doesn't give individuals who are engaged in this casino an 'out'. It is an entirely greed driven exercise right now.
Perhaps something will come along that makes blockchain and other crypto concepts viable and valuable to society, it ain't here yet though. So I don't see how anybody can justify an Argentina's worth off energy usage.
[1] https://www.bbc.co.uk/news/technology-56012952
>Perhaps something will come along that makes blockchain and other crypto concepts viable and valuable to society, it ain't here yet though. So I don't see how anybody can justify an Argentina's worth off energy usage.
Central banking finally has a freer market and you can choose (or create) an asset with your preferred monetary policy...
Avoiding or atleast limiting exposure to global currency debasement is now a possibility when you choose the right product/chain/coin. That's a problem that costs workers around the world 100s of trillions of dollars and it's being solved.
Central banking finally has a freer market and you can choose (or create) an asset with your preferred monetary policy...
Avoiding or atleast limiting exposure to global currency debasement is now a possibility when you choose the right product/chain/coin. That's a problem that costs workers around the world 100s of trillions of dollars and it's being solved.
> analogous to how a secure VM can go faster with a JIT while still maintaining security
…what? You can’t JIT your way out of the underlying machine being slow. The machine is a watch; JITs typically achieve performance by speeding up an interpreter running on the machine (in other words, taking advantage of missed performance opportunities).
This analogy doesn’t work for POW schemes, since wasting energy is the entire point. My understanding of “L2” solutions is that they’re really just pseudo-verified batching techniques, where transactions are rolled up off-chain and settled in bulk. That doesn’t “solve” PoW; it fundamentally undermines the original integrity promise.
…what? You can’t JIT your way out of the underlying machine being slow. The machine is a watch; JITs typically achieve performance by speeding up an interpreter running on the machine (in other words, taking advantage of missed performance opportunities).
This analogy doesn’t work for POW schemes, since wasting energy is the entire point. My understanding of “L2” solutions is that they’re really just pseudo-verified batching techniques, where transactions are rolled up off-chain and settled in bulk. That doesn’t “solve” PoW; it fundamentally undermines the original integrity promise.
Previously retired coal power plants are being brought back into service just to power bitcoin. https://www.datacenterdynamics.com/en/news/ameren-deploys-bi...
PoW is not needed at all its just a puzzle do "randomizes" who can write the next block. Its comically inefficient and p much the worst known working solution.
Some BTC devs realized this and created Federated Byzantine Agreement (FBA) which used Byzantine Agreement rather than a puzzle to created the consensus and then federated the whole system to prevent 51%-like attacks.
Obviously if the peers work together with the goal to reach consensus based on fix rules it becames way more efficient. Only a few year after bitcoin this was already invented theoretically and shortly after build an went online 2012/13. It essentially depreciated PoW (and Bitcoin) long before all the BTC clones existed and even before ETH. People just tend to stick to "the first of something" and fight whatever comes after.
tl;dr The secret sauce of blockchain is not PoW, its a public state of a ledger that can be verified to be correct by anyone without trusting anyone simply by applying the rules of the system yourself.
Obviously if the peers work together with the goal to reach consensus based on fix rules it becames way more efficient. Only a few year after bitcoin this was already invented theoretically and shortly after build an went online 2012/13. It essentially depreciated PoW (and Bitcoin) long before all the BTC clones existed and even before ETH. People just tend to stick to "the first of something" and fight whatever comes after.
tl;dr The secret sauce of blockchain is not PoW, its a public state of a ledger that can be verified to be correct by anyone without trusting anyone simply by applying the rules of the system yourself.
PoW is needed for the "trustless" qualifier. Other schemes like PoS can be very low trust but not fully trustless. They also tend towards ever increasing centralization.
No, its really not. It is literally just a puzzle which solves the "problem" as to who gets to write the next block.
Instead if you define the rules for the next block as strict as possible so it essentially eliminates a huge variety of possible blocks, participants can instead easily agree on one (the best) block (one that follows all rules and is objectionably better than all other possible blocks). There is no need to "fight" over who can add that block, agreeing is way more efficient. And Consequentially the puzzle is no longer needed.
PoS is not what I'm talking about at all. PoS just replaces the PoW puzzle with a "virtual puzzle" that acts as if higher stakes are higher hash power thus more chance to win the puzzle. Other than that its still the same "fight" over who gets to write the next block.
PoW and PoS at scale leads to more centralization over time because of the economy of scale principle. While FBA (Federated Byzantine Agreement) leads to more decentralization because its in everyones interest to increase the number of participants, they are helping the system not competing.
Instead if you define the rules for the next block as strict as possible so it essentially eliminates a huge variety of possible blocks, participants can instead easily agree on one (the best) block (one that follows all rules and is objectionably better than all other possible blocks). There is no need to "fight" over who can add that block, agreeing is way more efficient. And Consequentially the puzzle is no longer needed.
PoS is not what I'm talking about at all. PoS just replaces the PoW puzzle with a "virtual puzzle" that acts as if higher stakes are higher hash power thus more chance to win the puzzle. Other than that its still the same "fight" over who gets to write the next block.
PoW and PoS at scale leads to more centralization over time because of the economy of scale principle. While FBA (Federated Byzantine Agreement) leads to more decentralization because its in everyones interest to increase the number of participants, they are helping the system not competing.
"agreeing is way more efficient"
Then it's not trustless is it?
Then it's not trustless is it?
People mean different things with "trustless".
Its trustless in the sense that you yourself can apply the rules and verify that each block follows the public rules. The "agreeing" is only within the rules and the rules are in the code. So you have to trust (or verify) that the code actually does implement the rules the way you want them to be.
Its trustless in the sense that you yourself can apply the rules and verify that each block follows the public rules. The "agreeing" is only within the rules and the rules are in the code. So you have to trust (or verify) that the code actually does implement the rules the way you want them to be.
How do you solve double spend?
So you make your objective rules as to what is the best block by defining some measure of quality (maybe include the most transactions that fit in, maybe sorted by fee-per-byte or so).
Now all the good nodes agree on the next block B1 and then start working on B2 (not much work to do, because no PoW, but whatever, they build the next block B2.) Meanwhile, evil actor Eve has transferred a lot of money in B1 to Alice, and received something worthwhile. Now she makes an alternative block B1', transferring the money to her friend Bob instead of Alice, where B1' has even higher quality (higher fee, say), and quickly creates B2' and then B3'.
How is a new node coming in to decide between the chain B1->B2, and the chain B1'->B2'->B3'? The latter chain is longer and has higher quality.
So you make your objective rules as to what is the best block by defining some measure of quality (maybe include the most transactions that fit in, maybe sorted by fee-per-byte or so).
Now all the good nodes agree on the next block B1 and then start working on B2 (not much work to do, because no PoW, but whatever, they build the next block B2.) Meanwhile, evil actor Eve has transferred a lot of money in B1 to Alice, and received something worthwhile. Now she makes an alternative block B1', transferring the money to her friend Bob instead of Alice, where B1' has even higher quality (higher fee, say), and quickly creates B2' and then B3'.
How is a new node coming in to decide between the chain B1->B2, and the chain B1'->B2'->B3'? The latter chain is longer and has higher quality.
There is no block 2 created if block 1 is not final. Once consensus is reached on what is in B1 it doesn't matter anymore if someone comes around with a different idea what should be in B1. So by the time the nodes "debate" over B2, Alice has the money and its final. There can not be a double spend with time delay in between because the second transaction ties to move already moved funds so its objectively invalid.
A double spend would need to happen in the same block but all transaction are ordered sequentially so the second one will fail anyway as it still tries to moved funds that are already moved. The nodes just have to agree on one, it doesn't matter which one. If someone internationally tries to send the same funds to Bob an Alice he's just flipping a coin as to who will get it. Alice doesn't care and Bob doesn't care either. They only care about it being final if they see the funds in their account. And the rest of the network doesn't care that Eve is being a bit silly and wants a "decentral coin flip" to decide where the money goes.
A double spend would need to happen in the same block but all transaction are ordered sequentially so the second one will fail anyway as it still tries to moved funds that are already moved. The nodes just have to agree on one, it doesn't matter which one. If someone internationally tries to send the same funds to Bob an Alice he's just flipping a coin as to who will get it. Alice doesn't care and Bob doesn't care either. They only care about it being final if they see the funds in their account. And the rest of the network doesn't care that Eve is being a bit silly and wants a "decentral coin flip" to decide where the money goes.
> Once consensus is reached on what is in B1 it doesn't matter anymore if someone comes around with a different idea what should be in B1.
So, when a new node comes online, and some of the existing nodes say that they've agreed on B1 and B2, and some other nodes say that they've agreed on B1' and B2', how does that new node decide which is the consensus? [0] With PoW, the decision criterion is easy: the longest chain rule (LCR) [1]. In your system, what's the rule?
[0] This is trivial with a central authority. But remember, here we have an open public blockchain, where anyone can join as a node, and they might be malicious.
[1] And as long as there are competing chains of equal length, just pick one randomly. That procedure, rather than picking the first one encountered, improves resistance to the selfish mining attack, IIRC
So, when a new node comes online, and some of the existing nodes say that they've agreed on B1 and B2, and some other nodes say that they've agreed on B1' and B2', how does that new node decide which is the consensus? [0] With PoW, the decision criterion is easy: the longest chain rule (LCR) [1]. In your system, what's the rule?
[0] This is trivial with a central authority. But remember, here we have an open public blockchain, where anyone can join as a node, and they might be malicious.
[1] And as long as there are competing chains of equal length, just pick one randomly. That procedure, rather than picking the first one encountered, improves resistance to the selfish mining attack, IIRC
Well there are no second or different options in reality. Since it can only fork intentionally you will only have the one chain that everyone uses unless there is an intentional fork but then the networks are separated and you pick the one you want. But to answer the question theoretically, it simply boils down to which one you choose.
A new node MUST choose the chain he wants to join and he does so by selecting the nodes he want to connect to. From all the nodes he selects over 80% (hard coded quorum in the code) must be on the same chain if not his node will be in a state where it can not reach consensus and it will force the owner to remove/add nodes until the quorum can be reached.
> the longest chain rule (LCR) [1]. In your system, what's the rule?
There is no direct equivalent to the longest chain rule because blocks are final on every chain. There is no "chain switching" possible (that would directly contradict finality). Instead the system is made so that forks dont happen. The system will produce empty blocks rather than fork if the 80% quorum can not be reached (for example if huge parts of the world are temporary discontented from each-other).
So any actual fork would need to be intentional and thus actually produce 2 immutable chains in 2 different networks with finality. Nodes wont be able to switch between these chains, the intentional fork separates the network. If a nodes wants to switch later on that is the equivalent of turning it off and starting a new one on the other chain.
BTW this is not MY system its been implemented multiple times with the oldest running since 9+ years [1]. It has never forked so this is not an actual problem in the real world. Dude to the quorum of 80% every change (in the code) goes trough an amendment process and will only ever get activated if it has 80% support. If a node is overruled it still is on the same chain. Unless the owner refuses to update in time then his node becomes incompatible with the rest and is ignored.
[1]The oldest running distributed ledger ("blockchain") that uses this system is the XRPL. You can read about its consensus mechanism on xrpl.org/intro-to-consensus.html and xrpl.org/consensus-network.html There are ofc many other projects that build upon the same principles.
> the longest chain rule (LCR) [1]. In your system, what's the rule?
There is no direct equivalent to the longest chain rule because blocks are final on every chain. There is no "chain switching" possible (that would directly contradict finality). Instead the system is made so that forks dont happen. The system will produce empty blocks rather than fork if the 80% quorum can not be reached (for example if huge parts of the world are temporary discontented from each-other).
So any actual fork would need to be intentional and thus actually produce 2 immutable chains in 2 different networks with finality. Nodes wont be able to switch between these chains, the intentional fork separates the network. If a nodes wants to switch later on that is the equivalent of turning it off and starting a new one on the other chain.
BTW this is not MY system its been implemented multiple times with the oldest running since 9+ years [1]. It has never forked so this is not an actual problem in the real world. Dude to the quorum of 80% every change (in the code) goes trough an amendment process and will only ever get activated if it has 80% support. If a node is overruled it still is on the same chain. Unless the owner refuses to update in time then his node becomes incompatible with the rest and is ignored.
[1]The oldest running distributed ledger ("blockchain") that uses this system is the XRPL. You can read about its consensus mechanism on xrpl.org/intro-to-consensus.html and xrpl.org/consensus-network.html There are ofc many other projects that build upon the same principles.
> planet destroying at scale
This has been repeated often.
I usually think everytime I read this: what if the price of electric power included the price of destroying the planet?
For me this looks like a market failure that proof of work is allowed to destroy the planet.
You consume a lot of electric power? Then you pay the full price of it!
This has been repeated often.
I usually think everytime I read this: what if the price of electric power included the price of destroying the planet?
For me this looks like a market failure that proof of work is allowed to destroy the planet.
You consume a lot of electric power? Then you pay the full price of it!
I’ve read several technical, non-fluff books on the topic, and I’ve developed smart contracts on Ethereum for decent hourly wage (paid out in fiat).
And I’ve still come to roughly the same conclusion as you. Either my reading comprehension is poor, or there is little actual value in the vast majority of blockchain applications. Digital cash, as defined in the Bitcoin whitepaper, still seems like the only real use case.
Other uses are fun for a developer to read and learn about, but that’s just about the only real value you can extract from them.
Well, and making quick developer buck, which is the equivalent of selling shovels to prospectors in a gold rush. The main difference being that it’s merely a jpeg of a shovel.
And I’ve still come to roughly the same conclusion as you. Either my reading comprehension is poor, or there is little actual value in the vast majority of blockchain applications. Digital cash, as defined in the Bitcoin whitepaper, still seems like the only real use case.
Other uses are fun for a developer to read and learn about, but that’s just about the only real value you can extract from them.
Well, and making quick developer buck, which is the equivalent of selling shovels to prospectors in a gold rush. The main difference being that it’s merely a jpeg of a shovel.
If you've developed smart contracts, I'm surprised you don't consider the capability of trustless financial instruments (peer-to-peer lending and pooled lending, for example) to be pretty useful as well
If you’ve ever written code, and if you’ve ever written a bug, then you will understand that code as law is terrible idea, especially when it comes to finance.
Yikes. Wasn't aware of that one. Thanks for sharing it.
I like smart contracts but you really have to be super careful with them, and ideally they should all be audited by a third party before launch, to help catch stuff like this. But even that's not a guarantee crap like this won't happen sometimes.
I like smart contracts but you really have to be super careful with them, and ideally they should all be audited by a third party before launch, to help catch stuff like this. But even that's not a guarantee crap like this won't happen sometimes.
Smart contracts have two modes of operation:
1) Upgradeable - where an authority has the right to replace the live contact at any time and rug-pull everyone. That's not trustless, and it's no better than running an app in AWS.
2) Non-upgradeable - where you simply have a self-funding bug bounty waiting to get popped. Even if they're audited.
They're not smart, and they're not interesting, to me anyways.
1) Upgradeable - where an authority has the right to replace the live contact at any time and rug-pull everyone. That's not trustless, and it's no better than running an app in AWS.
2) Non-upgradeable - where you simply have a self-funding bug bounty waiting to get popped. Even if they're audited.
They're not smart, and they're not interesting, to me anyways.
Re: Upgradeable contracts, there is often some governance method that removes the power from just one person, but there's usually also a time-delay, so that in theory at least, users of the contract can see that an upgrade has happened and remove their interaction with it if they don't like the new contract.
This is quite different from having money in a bank where policy changes and government seizures or freezes may happen without warning.
This is quite different from having money in a bank where policy changes and government seizures or freezes may happen without warning.
A terrible idea, or just terrible in practice, and in particular with the current state of tooling and understanding etc.?
For every lawyer relishing a loophole there's surely another wishing for a more codified less ambiguous language than even Legalese English.
(I'm no cryptocurrency advocate, hold a small amount, have never written a 'smart contract', I just find it interesting and somewhat compelling. As an idea at least, yes I've written bugs.)
For every lawyer relishing a loophole there's surely another wishing for a more codified less ambiguous language than even Legalese English.
(I'm no cryptocurrency advocate, hold a small amount, have never written a 'smart contract', I just find it interesting and somewhat compelling. As an idea at least, yes I've written bugs.)
^ you will understand that code as law is terrible idea, especially when it comes to finance.
Why are we relying on code for controlling Safety-critical system? e.g. Nuclear Reactors, Autopilot of aircrafts, docking of two separate free-flying space vehicles, and weapon of mass destruction launch and control machines. All of them use "code", is finance more critcal than systems which are kill capable.
Why are we relying on code for controlling Safety-critical system? e.g. Nuclear Reactors, Autopilot of aircrafts, docking of two separate free-flying space vehicles, and weapon of mass destruction launch and control machines. All of them use "code", is finance more critcal than systems which are kill capable.
In the cases of those I'm familiar with, most code in the system does not need to be bug-free for safety, and the code that does is kept simple and heavily reviewed at the binary level.
For most contacts, it is not financially feasible to use the techniques developed for safety-critical software.
For most contacts, it is not financially feasible to use the techniques developed for safety-critical software.
Well, nuclear reactor use dumb electronics overrides, and each time an operation is done inside, each operation is done with human supervision. Override mechanisms are regularly tested and used. If your override is not dumb/simple enough, and you rely on code, you have the 380 max.
What are the override, who are the supervisors for cryptocurrency?
What are the override, who are the supervisors for cryptocurrency?
All of that code usually has a human override, and it can be turned off, fixed and upgraded. Also, it isn't (in the main) in the public and under constant probing attack.
Why are we relying on code for controlling
Safety-critical system? e.g. Nuclear Reactors
Computers work well when there are a finite set of fixed, quantitative inputs and outputs: if x < 20, do y
Many parts of law are a lot more complex and can't be reduced to such formulas. Suppose you're suing an employer for wrongful termination. They say your job performance sucked and that's why you were fired. You say it was a hostile workplace, and when you tried to point that out you were fired in retaliation.
Go write some code to evaluate that. Let us know when you're done. Should be pretty exciting. Hopefully we can retain all of the judges and lawyers now that they're not needed any more.
I'm not sure this is convincing.
If there's some actual benefit, then crappy code that can be iterated is fine. Anything you do today with computer code was likely done worse in the past with worse code.
So what is the actual benefit of "peer-to-peer lending and pooled lending" that blockchain technology provides that makes it worth iterating through these early mistakes?
I'd guess the answer usually involves dodging regulations in some way. Which isn't blockchain specific, lots of 'innovations' in tech or business are basically workarounds that let you dodge taxes or regulations or exploit externalities.
If there's some actual benefit, then crappy code that can be iterated is fine. Anything you do today with computer code was likely done worse in the past with worse code.
So what is the actual benefit of "peer-to-peer lending and pooled lending" that blockchain technology provides that makes it worth iterating through these early mistakes?
I'd guess the answer usually involves dodging regulations in some way. Which isn't blockchain specific, lots of 'innovations' in tech or business are basically workarounds that let you dodge taxes or regulations or exploit externalities.
The whole point of the legal system is that whilst it's defined as clearly as possible, there is always going to be some flexibility and interpretation, and a human element, so if someone finds a technical loophole but is clearly defrauding everyone they can still be put in jail. Of course, it isn't perfect, but the idea of law being absolute (as in code is law) is absurd as we lack the capability to consider every eventuality when we release code.
Yeah, but it's the absolutism that's the issue, not the buggy code.
When designing automated replacments for any business process you have to deal with the same 'exceptions'. You could just accept "computer says no" as the desired outcome in exchange for the efficiency, and let hackers take your money because "hey, they beat the system! It's theirs now" but that's a choice, not a limitation of the tech itself. Unless the tech's only benefit is that "computer says no" or "hacker took your money" is final, which doesn't actually sound like a benefit.
When designing automated replacments for any business process you have to deal with the same 'exceptions'. You could just accept "computer says no" as the desired outcome in exchange for the efficiency, and let hackers take your money because "hey, they beat the system! It's theirs now" but that's a choice, not a limitation of the tech itself. Unless the tech's only benefit is that "computer says no" or "hacker took your money" is final, which doesn't actually sound like a benefit.
The problem is that if you allow overrides in the computer absolutism, corrupt governments will use these overrides to their benefit. And you’re back to the square one.
If the government is corrupt, then you've got problems regardless.
The general solution to this issue has been more and better democracy, which despite a lot of effort being spent undermining it, still seems to be the best solution available today.
The general solution to this issue has been more and better democracy, which despite a lot of effort being spent undermining it, still seems to be the best solution available today.
"If you’ve ever written code, and if you’ve ever written a bug, then you will understand that code as law is terrible idea, especially when it comes to finance."
If your argument is that there could be bugs in the code, then how is this different from the law today? The legal system is rife with abuses and injustices. It most certainly has bugs as-is.
If your argument is that there could be bugs in the code, then how is this different from the law today? The legal system is rife with abuses and injustices. It most certainly has bugs as-is.
The difference is the judge that applies the law and looks at the context. Not that it is perfect.
You could still have judges looking at the context. The blockchain would only be for the written statutes and code.
Judges can also be incompetent. Just look at how magistrates don't even need a law degree nor pass the Bar.
Judges can also be incompetent. Just look at how magistrates don't even need a law degree nor pass the Bar.
> code as law is terrible idea
I don't know exactly what you mean by 'code as law', and I'm sure there are extremists that think smart contracts make law obsolete, but they are just wrong. Fraud via smart contract is still fraud. Theft via smart contract is still theft.
There's nothing about having automatic processing of transactions that means you get to just ignore the legal system in your country.
And that's fine, proper and good. Automatic processing of complex transactions is phenomenally useful, even if it doesn't make legal systems obsolete.
Simplest example - with smart contracts transacting assets where the canonical record of ownership is on the blockchain, you can have a smart contract act as escrow for you, making sure that the transaction happens atomically without having to pay someone to hold the assets for you and release them once they have both. It is a better, more efficient solution than any that the traditional financial system has been able to come up with.
In fact, it is exactly linking the legal world and the blockchain world that means that you can apply some of the same benefits of immediacy and atomicity to more assets in the real world. All that is needed is for the legal system to recognise blockchains as the canonical record of ownership of real assets. The real world legal system makes blockchain technology more useful, not less.
I don't know exactly what you mean by 'code as law', and I'm sure there are extremists that think smart contracts make law obsolete, but they are just wrong. Fraud via smart contract is still fraud. Theft via smart contract is still theft.
There's nothing about having automatic processing of transactions that means you get to just ignore the legal system in your country.
And that's fine, proper and good. Automatic processing of complex transactions is phenomenally useful, even if it doesn't make legal systems obsolete.
Simplest example - with smart contracts transacting assets where the canonical record of ownership is on the blockchain, you can have a smart contract act as escrow for you, making sure that the transaction happens atomically without having to pay someone to hold the assets for you and release them once they have both. It is a better, more efficient solution than any that the traditional financial system has been able to come up with.
In fact, it is exactly linking the legal world and the blockchain world that means that you can apply some of the same benefits of immediacy and atomicity to more assets in the real world. All that is needed is for the legal system to recognise blockchains as the canonical record of ownership of real assets. The real world legal system makes blockchain technology more useful, not less.
With smart contracts there is only the code. There is no external trusted documentation that says what the intention of the code is. If the contract allows for an action to occur, then that action is permissible.
It's the old quote taken to an extreme, "The good news about computers is that they do what you tell them to do. The bad news is that they do what you tell them to do."
If there is a 'bug' that allows anybody to empty a smart contract, well it turns out that you were just hosting a complex coding competition with a prize.
It's the old quote taken to an extreme, "The good news about computers is that they do what you tell them to do. The bad news is that they do what you tell them to do."
If there is a 'bug' that allows anybody to empty a smart contract, well it turns out that you were just hosting a complex coding competition with a prize.
> There is no external trusted documentation that says what the intention of the code is.
Working out what both parties intended a contract to mean and what it should mean, sometimes in contradiction of what it actually says is exactly what the legal system does.
You can't evade the legal system by writing your contract in a different form. Weirdly I think this idea comes from thinking law is code when it isn't.
Working out what both parties intended a contract to mean and what it should mean, sometimes in contradiction of what it actually says is exactly what the legal system does.
You can't evade the legal system by writing your contract in a different form. Weirdly I think this idea comes from thinking law is code when it isn't.
A judge is supposed to read the smart contract source code and determine the intent?
The parties are frequently anonymous and have never interacted outside of the publication the smart contract to the blockchain and another party interacting with it. There is no basis for determining intent besides the code itself.
Are you thinking that the contracts have analogs to legal contracts? Usually (exclusively?) they only mediate transactions and behavior that is contained within the blockchain itself. There isn't an exchanging of assets that exist externally to the blockchain like real estate.
Although I think crypto fanatics think that the world will trend that way. Truly programmable money has never existed before. If more of our monetary infrastructure migrates to blockchains it will be interesting to see how current contract law adapts and is applied.
If you want to argue with 'code is law' proponent, ask them how they feel about the DAO hack and ensuing hard fork of Ethereum. That was an interesting case where the ETH community as a whole decided that code was not in fact law.
The parties are frequently anonymous and have never interacted outside of the publication the smart contract to the blockchain and another party interacting with it. There is no basis for determining intent besides the code itself.
Are you thinking that the contracts have analogs to legal contracts? Usually (exclusively?) they only mediate transactions and behavior that is contained within the blockchain itself. There isn't an exchanging of assets that exist externally to the blockchain like real estate.
Although I think crypto fanatics think that the world will trend that way. Truly programmable money has never existed before. If more of our monetary infrastructure migrates to blockchains it will be interesting to see how current contract law adapts and is applied.
If you want to argue with 'code is law' proponent, ask them how they feel about the DAO hack and ensuing hard fork of Ethereum. That was an interesting case where the ETH community as a whole decided that code was not in fact law.
>A judge is supposed to read the smart contract source code and determine the intent?
If it's hard for a judge, it's presumably also hard for anyone using the smart contract.
>There is no basis for determining intent besides the code itself.
I'll bet you any frequently used contract has an associated website.
Basically, conducting your business on a blockchain doesn't exempt you from the law. You - the squishy human at the end of the transaction - are not on the blockchain, and neither is the author of any smart contract you might use. As long as the law recognizes blockchain assets as valid consideration in contracts, contract law trumps blockchain law.
If it's hard for a judge, it's presumably also hard for anyone using the smart contract.
>There is no basis for determining intent besides the code itself.
I'll bet you any frequently used contract has an associated website.
Basically, conducting your business on a blockchain doesn't exempt you from the law. You - the squishy human at the end of the transaction - are not on the blockchain, and neither is the author of any smart contract you might use. As long as the law recognizes blockchain assets as valid consideration in contracts, contract law trumps blockchain law.
Does participation in a smart contract imply any kind of legal agreement? You're essentially interacting with an api/bot that's being hosted by whatever blockchain community at large. Anybody can publish anything, and any unrelated parties can interact with it.
Here's a thought experiment for you.
If I were to publish a public webpage where you entered a routing number into a textbox and money was immediately transferred from my account to the specified account for the purpose of sending money to a friend of mine, but somebody else found the website and entered their routing number and drained my account. Would I have legal recourse?
This is essentially the Parity wallet exploit. The API was only slightly more complicated than the example above, initWallet().
It's an interesting paradigm shift. If contracts are automatically enforced, what features of the existing legal system are obsolete? If monetary/financial contracts are completely logically unambiguous in their execution and there is no need to appeal to a designated wielder of physical force to ensure their execution...
I think that notion, which sounds unrealistic to me, is what appeals to lot of crypto absolutists. It fails in a lot of the ways that smart contracts currently struggle, how to computationally, and in an unbiased way, relate crypto to the world outside of the blockchain. A good example of this is oracles, which are so flimsy in so many situations.
As you said we don't exist on the blockchain, the physical world doesn't exist on the blockchain, so how can we do away with our existing systems for mediating disputes, determining intent etc?
Here's a thought experiment for you.
If I were to publish a public webpage where you entered a routing number into a textbox and money was immediately transferred from my account to the specified account for the purpose of sending money to a friend of mine, but somebody else found the website and entered their routing number and drained my account. Would I have legal recourse?
This is essentially the Parity wallet exploit. The API was only slightly more complicated than the example above, initWallet().
It's an interesting paradigm shift. If contracts are automatically enforced, what features of the existing legal system are obsolete? If monetary/financial contracts are completely logically unambiguous in their execution and there is no need to appeal to a designated wielder of physical force to ensure their execution...
I think that notion, which sounds unrealistic to me, is what appeals to lot of crypto absolutists. It fails in a lot of the ways that smart contracts currently struggle, how to computationally, and in an unbiased way, relate crypto to the world outside of the blockchain. A good example of this is oracles, which are so flimsy in so many situations.
As you said we don't exist on the blockchain, the physical world doesn't exist on the blockchain, so how can we do away with our existing systems for mediating disputes, determining intent etc?
> how can we do away with our existing systems for mediating disputes, determining intent etc?
I think everyone in this conversation fully agrees on this point. As I said earlier, "I'm sure there are extremists that think smart contracts make law obsolete, but they are just wrong." We absolutely shouldn't do away with our existing systems for mediating disputes and determining intent.
I think perhaps the crux of the disagreement is that I think we need to apply those systems to smart contract systems in a sensible way and I take it that you think that the fact that we won't do away with our existing systems means there's no reason to use blockchain at all.
I think everyone in this conversation fully agrees on this point. As I said earlier, "I'm sure there are extremists that think smart contracts make law obsolete, but they are just wrong." We absolutely shouldn't do away with our existing systems for mediating disputes and determining intent.
I think perhaps the crux of the disagreement is that I think we need to apply those systems to smart contract systems in a sensible way and I take it that you think that the fact that we won't do away with our existing systems means there's no reason to use blockchain at all.
I don't think we're in disagreement; I'm more or less agnostic on the points I brought up, just thinking out loud. My original intent was to explain what I think the ethos is behind, 'code is law', which was in response to your statement, "I don't know exactly what you mean by 'code as law'".
But I do think there will be technical difficulties in applying the existing legal system to smart contract execution if there is no other artifact related to its execution (e.g. website, documentation, communication b/w parties etc.), which probably represents the vast majority of such contracts.
I've seen contracts representing complex derivatives, and some insane things like collateralized NFTs. The financial ecosystem within crypto is becoming incredibly complex. Many grey area strategies within traditional finance have been recreated within crypto, e.g. HFT and front-running, and there are some complex strategies like vampire attacks a la sushiswap that I don't think have analogs.
If one participates in complex smart contracts and get hosed, in a lot of cases I think it will be essentially impossible to differentiate between fraud vs. speculation, bugs vs. proper execution, exploitation vs poorly understood secondary effects. I'm curious to see how the legal system will try to keep up. Then again, I'm not sure it has kept up that well with the traditional financial system to begin with.
But I do think there will be technical difficulties in applying the existing legal system to smart contract execution if there is no other artifact related to its execution (e.g. website, documentation, communication b/w parties etc.), which probably represents the vast majority of such contracts.
I've seen contracts representing complex derivatives, and some insane things like collateralized NFTs. The financial ecosystem within crypto is becoming incredibly complex. Many grey area strategies within traditional finance have been recreated within crypto, e.g. HFT and front-running, and there are some complex strategies like vampire attacks a la sushiswap that I don't think have analogs.
If one participates in complex smart contracts and get hosed, in a lot of cases I think it will be essentially impossible to differentiate between fraud vs. speculation, bugs vs. proper execution, exploitation vs poorly understood secondary effects. I'm curious to see how the legal system will try to keep up. Then again, I'm not sure it has kept up that well with the traditional financial system to begin with.
> A judge is supposed to read the smart contract source code and determine the intent?
If necessary, they can call on experts to provide testimony in such cases. It's probably not necessary all that often though because there's usually more relevant auxillary information to help work this stuff out. Who wrote this smart contract? Why are the parties using it? What information persuaded them to use it? Was the outcome of using the smart contract different to what a reasonable person would have expected?
This is exactly what courts are for! The fact that some of the procedure of the interaction has been mechanised does not mean the participants get to ignore the law.
If necessary, they can call on experts to provide testimony in such cases. It's probably not necessary all that often though because there's usually more relevant auxillary information to help work this stuff out. Who wrote this smart contract? Why are the parties using it? What information persuaded them to use it? Was the outcome of using the smart contract different to what a reasonable person would have expected?
This is exactly what courts are for! The fact that some of the procedure of the interaction has been mechanised does not mean the participants get to ignore the law.
>All that is needed is for the legal system to recognise blockchains as the canonical record of ownership of real assets.
Then theft via smart contract can't be theft because it acted on the canonical record of ownership. This also causes tons of other problems. What happens if someone loses access to their wallet? Now there's a house that simply can't ever be sold?
Then theft via smart contract can't be theft because it acted on the canonical record of ownership. This also causes tons of other problems. What happens if someone loses access to their wallet? Now there's a house that simply can't ever be sold?
> There is no external trusted documentation that says what the intention of the code is.
No, if someone fraudulently updated a canonical record of ownership, then the legal system can provide remedies. If it were me, I'd write the smart contract to enable corrections in case of a legal decision but that's at the choice of whomever sets up the smart contract that provides the canonical record of ownership.
Same situation for if someone loses their keys. All these problems can be solved with appropriately written smart contacts.
No, if someone fraudulently updated a canonical record of ownership, then the legal system can provide remedies. If it were me, I'd write the smart contract to enable corrections in case of a legal decision but that's at the choice of whomever sets up the smart contract that provides the canonical record of ownership.
Same situation for if someone loses their keys. All these problems can be solved with appropriately written smart contacts.
OK, so ... which courts of which legal jurisdictions can correct which contracts? Are courts in Guinea-Bissau allowed to correct contracts between counterparties in the US?
This stuff is all normal when you're dealing with international contracts - it's not like nobody thought of doing international deals before satoshi.
Some of the answers do depend on the specifics of course. If the asset being traded is US real estate for example I would expect the smart contract to be set up so it requires a US court decision to correct the register.
Some of the answers do depend on the specifics of course. If the asset being traded is US real estate for example I would expect the smart contract to be set up so it requires a US court decision to correct the register.
My point is that there's an entire subbranch of the law, generally called private international law, that has been created to deal with conflict of laws and jurisdictional issues. You're implying that there are simple deterministic rules to determine those kinds of questions but in fact it's a meta-problem.
It sounds like we agree then. I'm not saying it's simple or deterministic, I'm saying it's not new and it's not made inapplicable just because the systems we're using have changed.
The problems that are raised as if they are uniquely issues to blockchain solutions are not in fact specific to blockchains at all. We can and should apply the same rules to blockchain transactions and smart contracts give us a fantastic way of encoding those rules. For example you can have a token that represents proof that you have been kycd by a particular authority and you can restrict transactions of particular assets to those between addresses holding one of those tokens.
The problems that are raised as if they are uniquely issues to blockchain solutions are not in fact specific to blockchains at all. We can and should apply the same rules to blockchain transactions and smart contracts give us a fantastic way of encoding those rules. For example you can have a token that represents proof that you have been kycd by a particular authority and you can restrict transactions of particular assets to those between addresses holding one of those tokens.
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I am a laymen who is skeptical of cryptocurrency tech, mostly because of what I'm seeing (hype, greed, fomo, and apparently no real use-cases).
If... crypto were to be able to reverse transactions... would that completely undermine the whole point of it and make it look absolutely stupid?
Do you think the solution to irreversible transactions would be to then have some kind of algo that would then send back a mistaken transaction after getting checked by some intermediary checkpoint? Would that then make the whole point of cryptocurrency also completely pointless?
What on earth are people dumping resources into all this as digital currency or even investment/ speculation vehicles if they don't address the irreversible transaction part, or try to compensate for it somehow? It seems utterly anxiety inducing otherwise, where you'd have to quadruple check, then quadruple check again, and then sleep on it and then quadruple check 4 more times before you do any kind of sizable transaction.
If... crypto were to be able to reverse transactions... would that completely undermine the whole point of it and make it look absolutely stupid?
Do you think the solution to irreversible transactions would be to then have some kind of algo that would then send back a mistaken transaction after getting checked by some intermediary checkpoint? Would that then make the whole point of cryptocurrency also completely pointless?
What on earth are people dumping resources into all this as digital currency or even investment/ speculation vehicles if they don't address the irreversible transaction part, or try to compensate for it somehow? It seems utterly anxiety inducing otherwise, where you'd have to quadruple check, then quadruple check again, and then sleep on it and then quadruple check 4 more times before you do any kind of sizable transaction.
> It seems utterly anxiety inducing otherwise, where you'd have to quadruple check, then quadruple check again, and then sleep on it and then quadruple check 4 more times before you do any kind of sizable transaction.
That's mostly due to transactions being non-interactive. If the receiver has to prove their ability to spend the received funds before being allowed to receive them, then most of this anxiety disappears. Certain blockchain designs require transactions to be interactive in this way.
That's mostly due to transactions being non-interactive. If the receiver has to prove their ability to spend the received funds before being allowed to receive them, then most of this anxiety disappears. Certain blockchain designs require transactions to be interactive in this way.
> If the receiver has to prove their ability to spend the received funds before being allowed to receive them
If I want to send you some crypto money in exchange for you mowing my lawn, how do you prove that you can spend the received funds? And if I accidentally send it twice, why would I care that you can spend them twice, unless I have some way to compel you to send half back?
If I want to send you some crypto money in exchange for you mowing my lawn, how do you prove that you can spend the received funds? And if I accidentally send it twice, why would I care that you can spend them twice, unless I have some way to compel you to send half back?
> how do you prove that you can spend the received funds?
You prove it by producing a partial signature for the transaction (a transaction essentially requires a multisig by both sender and receiver).
> And if I accidentally send it twice
You couldn't send it twice because the transaction consumes an input utxo. Paying twice would require two different transactions with two different multisignatures.
You prove it by producing a partial signature for the transaction (a transaction essentially requires a multisig by both sender and receiver).
> And if I accidentally send it twice
You couldn't send it twice because the transaction consumes an input utxo. Paying twice would require two different transactions with two different multisignatures.
> You prove it by producing a partial signature for the transaction (a transaction essentially requires a multisig by both sender and receiver).
Oh, ok, I misunderstood what this meant.
> You couldn't send it twice because the transaction consumes an input utxo. Paying twice would require two different transactions with two different multisignatures.
This assumes the receiver is trust-worthy, that they counter-sign the transaction if it was accidental. So if I accidentally pay twice for a single item, the seller can just sign both transactions and send me only one item, and I can't do much about it. Of course, they can also send 0 items, which is why blockchains can't secure transactions in a useful sense - you need the law and insurance and other social mechanisms for that.
Oh, ok, I misunderstood what this meant.
> You couldn't send it twice because the transaction consumes an input utxo. Paying twice would require two different transactions with two different multisignatures.
This assumes the receiver is trust-worthy, that they counter-sign the transaction if it was accidental. So if I accidentally pay twice for a single item, the seller can just sign both transactions and send me only one item, and I can't do much about it. Of course, they can also send 0 items, which is why blockchains can't secure transactions in a useful sense - you need the law and insurance and other social mechanisms for that.
Also, if you've ever been let off with a warning for some minor infraction, or had a generous client who ignored a late-by-a-few-hours delivery, or...
Trustless financial instruments are not very useful to begin with, because finance requires trust (as does any economic activity). For example, there is no way to actually do financing (that is, trading future consumption for present consumption) without a trusted authority that has the power to re-allocate assets.
Your smart contract is only smart inside your Blockchain.
As soon as you use it for anything outside of it, you have the same issue.
How do I proof to someone else that I did what I should have done to get paid? By trust. Your smart contract can't verify that I did my part of the contract if it is outside of the Blockchain.
So what did you win?
Nothing.
Now you can work up a network of trust but you know this concept is much older than crypto and doesn't need a Blockchain.
And certain blockchains are looking for trust worthy entities to decentralize their own blockchains.
Now you even splitting up your trust in independent trust areas.
Do you know what trust system already exist? Which unites a lot of people? And is based on PoS?
Our current fiat and geopolitical system. Is it perfect? No. But we develop this system for a long time now
As soon as you use it for anything outside of it, you have the same issue.
How do I proof to someone else that I did what I should have done to get paid? By trust. Your smart contract can't verify that I did my part of the contract if it is outside of the Blockchain.
So what did you win?
Nothing.
Now you can work up a network of trust but you know this concept is much older than crypto and doesn't need a Blockchain.
And certain blockchains are looking for trust worthy entities to decentralize their own blockchains.
Now you even splitting up your trust in independent trust areas.
Do you know what trust system already exist? Which unites a lot of people? And is based on PoS?
Our current fiat and geopolitical system. Is it perfect? No. But we develop this system for a long time now
The current state is, roughly: Government-backed contracts are ultimately enforced by litigation, which is judged by a judge, who is appointed and judged by the state government, who are appointed and judged by the governor, who is appointed and judged by democratic elections.
A couple factors make the current system powerful: - Each decision-maker is roughly motivated to seek truth and behave honestly by the judgement of the next level up, so i.e. impeachment of judges should be rare - The hierarchical structure makes enforcement exponentially cheaper than every human voting on every contract outcome.
Neither government contracts nor smart contracts can offer 100% correct validation of every contract. All they can do is attempt to set up a structure which tries to motivate the right thing and tries to make litigation somewhat cheap.
It seems a bit silly, though, to think there's no room for improvement there, both in performance and correctness. 1) By making all decisions public, you can make judging those decisions easier 2) By making all decisions public, you can easily reuse a single judgement in many decisions 3) By using machines instead of humans, there is dramatically more bandwidth for a much broader range of contracts 4) The topology of this network only really lets people vote at a single point – where a governor is elected every n years, which is hardly robust feedback. etc.
I mostly agree with your conclusion on most parts of crypto but we shouldn't thing that "government is a solved problem" is a sweeping rebuttal of all smart contracts.
A couple factors make the current system powerful: - Each decision-maker is roughly motivated to seek truth and behave honestly by the judgement of the next level up, so i.e. impeachment of judges should be rare - The hierarchical structure makes enforcement exponentially cheaper than every human voting on every contract outcome.
Neither government contracts nor smart contracts can offer 100% correct validation of every contract. All they can do is attempt to set up a structure which tries to motivate the right thing and tries to make litigation somewhat cheap.
It seems a bit silly, though, to think there's no room for improvement there, both in performance and correctness. 1) By making all decisions public, you can make judging those decisions easier 2) By making all decisions public, you can easily reuse a single judgement in many decisions 3) By using machines instead of humans, there is dramatically more bandwidth for a much broader range of contracts 4) The topology of this network only really lets people vote at a single point – where a governor is elected every n years, which is hardly robust feedback. etc.
I mostly agree with your conclusion on most parts of crypto but we shouldn't thing that "government is a solved problem" is a sweeping rebuttal of all smart contracts.
Of course there's room for improvement, what's silly is thinking a coal-powered linked list is an improvement :)
You don't want true decentralization for state level activities such as voting. If it's truly decentralized and permission less, allowing anyone to control the ledger, your adversaries will take control. If you have to build a system that accounts for that, you rely on a central authority to switch you over, which invalidates the permissionless and decentralized premise.
There's a reason we've been talking about killer applications of the blockchain for 14 years and zero of them have taken hold - they're all fundamentally flawed. Like concert tickets! Should be easy, everyone hates Ticketmaster. Killer NFT use case right? Of course not, because the venues are owned by LiveNation, the performers are managed by LiveNation and TicketMaster is owned by, wait for it, LiveNation. You can throw up a ticketing system on AWS in like 5 minutes flat, that's not the reason TicketMaster has been successful.
You don't want true decentralization for state level activities such as voting. If it's truly decentralized and permission less, allowing anyone to control the ledger, your adversaries will take control. If you have to build a system that accounts for that, you rely on a central authority to switch you over, which invalidates the permissionless and decentralized premise.
There's a reason we've been talking about killer applications of the blockchain for 14 years and zero of them have taken hold - they're all fundamentally flawed. Like concert tickets! Should be easy, everyone hates Ticketmaster. Killer NFT use case right? Of course not, because the venues are owned by LiveNation, the performers are managed by LiveNation and TicketMaster is owned by, wait for it, LiveNation. You can throw up a ticketing system on AWS in like 5 minutes flat, that's not the reason TicketMaster has been successful.
> Of course there's room for improvement, what's silly is thinking a coal-powered linked list is an improvement :)
Again, Proof of Work is not the only consensus model for blockchains (and while I dislike PoW, it's worth noting that while there's a lot of "greenwashing", many mining farms have legitimately been moving towards using more renewable energy)
Again, Proof of Work is not the only consensus model for blockchains (and while I dislike PoW, it's worth noting that while there's a lot of "greenwashing", many mining farms have legitimately been moving towards using more renewable energy)
That renewable energy is still a net negative for society because it’s not being used to decarbonize the actual grid we do productive things with - while generating mountains of ewaste.
You know 97% of all bitcoin mining hardware will be thrown out without ever mining a single block in its entire useful life? Just heating up the ol planet.
It’s an embarrassment that we even try to justify any aspect of it as a profession. Society needs us to step up and call this emperor nude.
You know every time the price goes up, the waste budget does too, and the perverse incentive is miners are rewarded for wasting more.
You know 97% of all bitcoin mining hardware will be thrown out without ever mining a single block in its entire useful life? Just heating up the ol planet.
It’s an embarrassment that we even try to justify any aspect of it as a profession. Society needs us to step up and call this emperor nude.
You know every time the price goes up, the waste budget does too, and the perverse incentive is miners are rewarded for wasting more.
Nice theory you have there. It'd be a shame if real world legal issues got in the way.
But even 'digital cash' doesn't need this, for most definitions and use cases.
Even if we're talking about smuggling money out of authoritarian regimes, or buying soft drugs, or hiring hitmen online, I'm not sure it makes any actual sense compared with alternatives.
Feels like a way for people who've been convinced that government doesn't work to feel like they're re-inventing government with extra steps, mixed with a cult/mlm/ponzi scheme.
Even if we're talking about smuggling money out of authoritarian regimes, or buying soft drugs, or hiring hitmen online, I'm not sure it makes any actual sense compared with alternatives.
Feels like a way for people who've been convinced that government doesn't work to feel like they're re-inventing government with extra steps, mixed with a cult/mlm/ponzi scheme.
I was convinced government doesn't work and indeed that is the only reason I am interested in blockchain applications. Watching first hand how badly the entire affair has gone has been very useful into getting insight into why government doesn't work, which I still firmly believe. However I am no longer under the illusion doing away with it and replacing it with a blockchain based substitute is either cheap or easy, and if we skipped a hundred years into the future and it turned out that the end result looked almost indistinguishable from what is presently described as government I would not be altogether shocked. I would however consider that amongst the worst possible outcomes.
It may well be that there is a necessary deadweight economic loss to pay based on the nature of human social interaction at scale and this loss cannot be avoided entirely, only minimised to a certain extent.
It may well be that there is a necessary deadweight economic loss to pay based on the nature of human social interaction at scale and this loss cannot be avoided entirely, only minimised to a certain extent.
So, at no point did you consider that you were wrong in your base assumption and government does in fact work? Because it looks like you examined anarchistic alternatives to government, found them all worse than government, and then didn't do the (to me) obvious thing if updating your "government can be good" possibility.
> So, at no point did you consider that you were wrong in your base assumption and government does in fact work?
Of course, many dozens of thousands of times throughout my life, desperately wished for that to be the case. Unfortunately there is no evidence for this and immense amounts of evidence for the contrary.
> Because it looks like you examined anarchistic alternatives to government, found them all worse than government
I didn't say I found them worse than government at all, I said the first hand experience was very useful for seeing directly why government is as broken as it is, because all the same "incentive of last resort" mechanisms are typically in play in blockchains. It still turns out to be much better so far if measured by deadweight economic loss for economic coordination between a given transaction volume.
This is also why I said I would not be too surprised if it just becomes the next iteration of government. People who think that the government is desirable and its political structures are useful, parliamentary democracy, voting, departments that run projects and are accountable to elected officials, all of that kind of thing. You could clone it with a blockchain much more reliably and with much more auditability than you have with the multi-century old variations thereof running on some variant of "trust me" that we have currently.
Thus you could at least say "Yeah sure this is bad, but at least we can prove that everybody is following the rules on all elections, transactions, etc, and we have all the signed blocks to prove that from genesis" rather than the current trust-free alternative of an endless propaganda machine spinning whatever it wants people to believe at any given point in time with zero proof whatsoever.
Of course, many dozens of thousands of times throughout my life, desperately wished for that to be the case. Unfortunately there is no evidence for this and immense amounts of evidence for the contrary.
> Because it looks like you examined anarchistic alternatives to government, found them all worse than government
I didn't say I found them worse than government at all, I said the first hand experience was very useful for seeing directly why government is as broken as it is, because all the same "incentive of last resort" mechanisms are typically in play in blockchains. It still turns out to be much better so far if measured by deadweight economic loss for economic coordination between a given transaction volume.
This is also why I said I would not be too surprised if it just becomes the next iteration of government. People who think that the government is desirable and its political structures are useful, parliamentary democracy, voting, departments that run projects and are accountable to elected officials, all of that kind of thing. You could clone it with a blockchain much more reliably and with much more auditability than you have with the multi-century old variations thereof running on some variant of "trust me" that we have currently.
Thus you could at least say "Yeah sure this is bad, but at least we can prove that everybody is following the rules on all elections, transactions, etc, and we have all the signed blocks to prove that from genesis" rather than the current trust-free alternative of an endless propaganda machine spinning whatever it wants people to believe at any given point in time with zero proof whatsoever.
I believe audits and transparency are amongst the tools that can and do improve 'government' / 'democracy'. I can see ways that crypto (in it's old generic sense) can help but I don't particularly see any way that blockchain tech can help though?
Probably much the same way you can see that crypto in its old generic sense could do these things, with the additional security of the applications running on a blockchain, and the assurances about transaction integrity, censorship resistance, availability etc.
You can have a cryptographically secure platform for whatever governance platform you like, but if it's running on a traditional centralised server infrastructure within a political jurisdiction, it's completely vulnerable to tampering of government agencies within that political jurisdiction. This is a well acknowledged issue referred to as "data sovereignty" with the limitation that the way to ensure it's handled is to pick a reliable jurisdiction.
If we acknowledge that no jurisdiction is reliable, however, blockchains are the only choice.
You can have a cryptographically secure platform for whatever governance platform you like, but if it's running on a traditional centralised server infrastructure within a political jurisdiction, it's completely vulnerable to tampering of government agencies within that political jurisdiction. This is a well acknowledged issue referred to as "data sovereignty" with the limitation that the way to ensure it's handled is to pick a reliable jurisdiction.
If we acknowledge that no jurisdiction is reliable, however, blockchains are the only choice.
That seems a bit of an unwarranted leap and very hand-wavy.
Why would blockchain be better than a decentralized, non-blockchain tech, hosted in multiple jurisdictions for transaction integrity, censorship resistance, availability and so on?
And why is a blockchain a better alternative? If the blockchain assumptions fall (51% control) then it's game over. Even the founding fathers were a step ahead of that and trying to prevent tyranny of the majority (probably code for "the rich staying rich", but that makes it an even better analogy) It all feels a bit like wishful thinking to me.
Why would blockchain be better than a decentralized, non-blockchain tech, hosted in multiple jurisdictions for transaction integrity, censorship resistance, availability and so on?
And why is a blockchain a better alternative? If the blockchain assumptions fall (51% control) then it's game over. Even the founding fathers were a step ahead of that and trying to prevent tyranny of the majority (probably code for "the rich staying rich", but that makes it an even better analogy) It all feels a bit like wishful thinking to me.
No matter where FAANG host their infrastructure, if a particular set of states want to tamper with, censor, or surveil that infrastructure, they will be able to do it.
The legal structures and the ability to identify ultimate beneficiaries guarantees this for pretty much any legal corporate structure organised under a state. The only chance this has of not being true is a blockchain, the ultimate beneficiaries can't be identified, the infrastructure is not linked to a particular legal structure. There is no guarantee the state can identify the appropriate necks to apply the appropriate boots to.
If an organisational unit is to exist that will destroy the state, at the moment the only candidate for its infrastructure is blockchain.
The legal structures and the ability to identify ultimate beneficiaries guarantees this for pretty much any legal corporate structure organised under a state. The only chance this has of not being true is a blockchain, the ultimate beneficiaries can't be identified, the infrastructure is not linked to a particular legal structure. There is no guarantee the state can identify the appropriate necks to apply the appropriate boots to.
If an organisational unit is to exist that will destroy the state, at the moment the only candidate for its infrastructure is blockchain.
It was you that claimed blockchain could improve the state, now you've switched to only blockchain can destroy it? And replace it with "an organisational unit" which is apparently, not a state/government/democracy?
None of this sounds like a good idea, even in theory.
None of this sounds like a good idea, even in theory.
Monarchy was an improvement on despotism, maybe constitutional republics were an improvement on democracy, etc etc etc. The organisational units could be considered destroyed, or they could be considered reconstituted, the point is that the functions handled by the OUs in question went to another ostensibly more efficient instance thereof. This is much easier if the new OU does not rely on its underlying infrastructure from the old OU.
Things should improve somewhat is a pretty hard ask for something that doesn't sound like a good idea, letalone in theory. Of course, it's an open question as to what the end result of all of this will actually be, and maybe it will indeed be the worst catastrophic case of making the largest cause of non natural death in the past century even worse, but you'll excuse me if I find that hard to believe and think clearing that particular hurdle ought to be pretty easy, especially because this would be a non violent form of revolution, and the only competition is war. In a world of weapons of mass destruction that's a horrendous problem space to be working with.
Things should improve somewhat is a pretty hard ask for something that doesn't sound like a good idea, letalone in theory. Of course, it's an open question as to what the end result of all of this will actually be, and maybe it will indeed be the worst catastrophic case of making the largest cause of non natural death in the past century even worse, but you'll excuse me if I find that hard to believe and think clearing that particular hurdle ought to be pretty easy, especially because this would be a non violent form of revolution, and the only competition is war. In a world of weapons of mass destruction that's a horrendous problem space to be working with.
You don't want a national system to be truly decentralized because if it is, adversaries can simply co-opt and control it. If you have to look out for that and roll off onto a different system (and have a mechanism to do so) then its by definition centralized and you can skip the whole blockchain chicanery.
You can just throw up a tamper-evident log based system. [1]
[1] https://transparency.dev
You can just throw up a tamper-evident log based system. [1]
[1] https://transparency.dev
> Of course, many dozens of thousands of times throughout my life, desperately wished for that to be the case. Unfortunately there is no evidence for this and immense amounts of evidence for the contrary.
I think the fact that 7 billion people live overwhelmingly under a multi-hundred-year improving standard of living [1], leveraging low-friction global trade, commerce and communication in among the most peaceful period in human history [2] is a pretty clear indication that government does in fact work.
Is it perfect? No, nobody will say that. But of course the solution to problems in any overwhelmingly complex system with a long track record is not re-invention but continued optimization. [3] Takes a long time to turn a big boat, and anyone promising you otherwise is selling you a crock.
[1] https://ourworldindata.org/extreme-poverty-in-brief
[2] https://towardsdatascience.com/has-global-violence-declined-...
[3] https://www.joelonsoftware.com/2000/04/06/things-you-should-...
I think the fact that 7 billion people live overwhelmingly under a multi-hundred-year improving standard of living [1], leveraging low-friction global trade, commerce and communication in among the most peaceful period in human history [2] is a pretty clear indication that government does in fact work.
Is it perfect? No, nobody will say that. But of course the solution to problems in any overwhelmingly complex system with a long track record is not re-invention but continued optimization. [3] Takes a long time to turn a big boat, and anyone promising you otherwise is selling you a crock.
[1] https://ourworldindata.org/extreme-poverty-in-brief
[2] https://towardsdatascience.com/has-global-violence-declined-...
[3] https://www.joelonsoftware.com/2000/04/06/things-you-should-...
Nothing that is the largest cause of unnatural death in the last century should be considered as "working".
https://en.m.wikipedia.org/wiki/Democide
https://mises.org/library/anatomy-state
https://en.m.wikipedia.org/wiki/The_Problem_of_Political_Aut....
Blockchain based systems over the duration of their existence by contrast have killed nowhere near as many no matter how you scale it, and although I believe the system to be rife with fraud and inefficiency, the amount of capital growth that has taken place is breathtaking pretty much any way you look at it.
I believe the state as a structure needs to die and blockchains so far look like the obvious sword. Nothing else has even come close.
https://en.m.wikipedia.org/wiki/Democide
https://mises.org/library/anatomy-state
https://en.m.wikipedia.org/wiki/The_Problem_of_Political_Aut....
Blockchain based systems over the duration of their existence by contrast have killed nowhere near as many no matter how you scale it, and although I believe the system to be rife with fraud and inefficiency, the amount of capital growth that has taken place is breathtaking pretty much any way you look at it.
I believe the state as a structure needs to die and blockchains so far look like the obvious sword. Nothing else has even come close.
It’s the largest preventer of death lol. Citation needed there. People will always die. Government minimizes this to the best of our abilities. How many do not die each year because of government?
As in software testing we don’t often measure the impact of our work in terms of things that don’t happen because our system exists. It is far easier to count instead the failures. But this misses the whole point. Count the deaths that don’t happen.
Meanwhile bitcoins thirst for coal kills thousands per year and achieves literally nothing.
Blockchains can only represent true state of things wholly representable on chain, which is why only currencies actually work. As soon as you try and ledger things off chain reality gets in the way and reality supersedes the chain.
As in software testing we don’t often measure the impact of our work in terms of things that don’t happen because our system exists. It is far easier to count instead the failures. But this misses the whole point. Count the deaths that don’t happen.
Meanwhile bitcoins thirst for coal kills thousands per year and achieves literally nothing.
Blockchains can only represent true state of things wholly representable on chain, which is why only currencies actually work. As soon as you try and ledger things off chain reality gets in the way and reality supersedes the chain.
Citation originally provided.
https://en.m.wikipedia.org/wiki/Democide
> How many do not die each year because of government?
I'd honestly like to see any kind of attempt to quantify that, I've seen a few for example that gave credit for removing lead from fuel to the government and then tried to by extension say that the positive externalities from that should be attributed to government. Which of course runs afoul of the point that the government was responsible for promoting leaded fuel to begin with, right up to the point of suppressing alternatives. Which in turn begs the question, what will the government actually do generally speaking? And as far as I can tell the answer is work in its own interests and accrue benefits to those on the inside at the expense of those on the outside, and that's all. If hundreds of millions die in the process, that's totally fine.
That almost everybody accepts that entity should have a monopoly on violence and basically unlimited power strikes me as increasingly crazy as every year goes by and it does progressively more insane stuff and we slide closer and closer to the possibility of an extinction level event war.
> Meanwhile bitcoins thirst for coal kills thousands per year and achieves literally nothing.
I'm not interested in defending BTC generally speaking, as I despise it. I should however point out that proof of work has no intrinsic "thirst for coal". Merely the lowest possible cost of energy, right up to the point of subsidising alternative renewable low cost energy projects, which many POW miners have done and why hydroelectric power is such an oft-constituted part of their energy supplies.
> How many do not die each year because of government?
I'd honestly like to see any kind of attempt to quantify that, I've seen a few for example that gave credit for removing lead from fuel to the government and then tried to by extension say that the positive externalities from that should be attributed to government. Which of course runs afoul of the point that the government was responsible for promoting leaded fuel to begin with, right up to the point of suppressing alternatives. Which in turn begs the question, what will the government actually do generally speaking? And as far as I can tell the answer is work in its own interests and accrue benefits to those on the inside at the expense of those on the outside, and that's all. If hundreds of millions die in the process, that's totally fine.
That almost everybody accepts that entity should have a monopoly on violence and basically unlimited power strikes me as increasingly crazy as every year goes by and it does progressively more insane stuff and we slide closer and closer to the possibility of an extinction level event war.
> Meanwhile bitcoins thirst for coal kills thousands per year and achieves literally nothing.
I'm not interested in defending BTC generally speaking, as I despise it. I should however point out that proof of work has no intrinsic "thirst for coal". Merely the lowest possible cost of energy, right up to the point of subsidising alternative renewable low cost energy projects, which many POW miners have done and why hydroelectric power is such an oft-constituted part of their energy supplies.
My point in the first half is that you can’t look solely at the costs without looking at the benefits - unless you evaluate both you can’t make a meaningful judgement on the efficacy of a system. Yes for sure the government is the largest source of death — but only because the government stamped out all other sources of death. Removing the government would shift that death to elsewhere and not remove it. And if history is anything to go by, dramatically amplify it. That’s why government needs to be iterated on not removed.
Re: renewables in bitcoin, it’s all greenwashing. Every kWh wasted guessing nonces on renewables isn’t spent decarbonizing the grid where we do actual productive things. While generating inordinate quantities of e-waste. I mentioned in another reply 97% of all bitcoin mining hardware will be thrown out, burned, crushed or buried all without ever mining a block successfully in its entire useful life.
I know there are other consensus mechanisms but they just rely on feudalistic control of the supply and just create systemic inequality without accountability.
There’s no good that comes of this. In basically every case decentralization and permissionlessness is not what anyone actually wants or needs.
Re: renewables in bitcoin, it’s all greenwashing. Every kWh wasted guessing nonces on renewables isn’t spent decarbonizing the grid where we do actual productive things. While generating inordinate quantities of e-waste. I mentioned in another reply 97% of all bitcoin mining hardware will be thrown out, burned, crushed or buried all without ever mining a block successfully in its entire useful life.
I know there are other consensus mechanisms but they just rely on feudalistic control of the supply and just create systemic inequality without accountability.
There’s no good that comes of this. In basically every case decentralization and permissionlessness is not what anyone actually wants or needs.
> My point in the first half is that you can’t look solely at the costs without looking at the benefits
There is no benefit from a political authority wielding entity which has not been provided by an entity that does not wield political authority. Therefore the political authority is not necessary for those benefits.
> Removing the government would shift that death to elsewhere and not remove it.
Removing the hundreds of millions of people who were killed in the name of national security and the maintenance of political authority would not magically make them die for some other reason instead.
> That’s why government needs to be iterated on not removed.
Whether you call providing the benefits of typical governments without their horrendous costs an iteration or a removal is semantics. My concern is that it gets done.
> Every kWh wasted guessing nonces on renewables isn’t spent decarbonizing the grid where we do actual productive things.
This would assume that those energy forms restricted to specific geographic locations are not so restricted. This is not true.
> I mentioned in another reply 97% of all bitcoin mining hardware will be thrown out, burned, crushed or buried all without ever mining a block successfully in its entire useful life.
Most e-waste won't mine a block successfully in its entire life. If it could contribute to the peaceful destruction of the state, hard to imagine a better use it could've been put to, given the statistics.
> I know there are other consensus mechanisms but they just rely on feudalistic control of the supply and just create systemic inequality without accountability.
You mean like being born economically so deep underwater it's impossible to ever even break even because of the economic mismanagement of your political authority wielding organisational unit? At least ledgers using those consensus mechanisms only levy debt on people who choose to participate.
> There’s no good that comes of this. In basically every case decentralization and permissionlessness is not what anyone actually wants or needs.
It's clearly what a whole lot of people want, as to whether they need it or not, time will tell. For all the aforementioned reasons, I think the case couldn't be clearer that they do, however.
There is no benefit from a political authority wielding entity which has not been provided by an entity that does not wield political authority. Therefore the political authority is not necessary for those benefits.
> Removing the government would shift that death to elsewhere and not remove it.
Removing the hundreds of millions of people who were killed in the name of national security and the maintenance of political authority would not magically make them die for some other reason instead.
> That’s why government needs to be iterated on not removed.
Whether you call providing the benefits of typical governments without their horrendous costs an iteration or a removal is semantics. My concern is that it gets done.
> Every kWh wasted guessing nonces on renewables isn’t spent decarbonizing the grid where we do actual productive things.
This would assume that those energy forms restricted to specific geographic locations are not so restricted. This is not true.
> I mentioned in another reply 97% of all bitcoin mining hardware will be thrown out, burned, crushed or buried all without ever mining a block successfully in its entire useful life.
Most e-waste won't mine a block successfully in its entire life. If it could contribute to the peaceful destruction of the state, hard to imagine a better use it could've been put to, given the statistics.
> I know there are other consensus mechanisms but they just rely on feudalistic control of the supply and just create systemic inequality without accountability.
You mean like being born economically so deep underwater it's impossible to ever even break even because of the economic mismanagement of your political authority wielding organisational unit? At least ledgers using those consensus mechanisms only levy debt on people who choose to participate.
> There’s no good that comes of this. In basically every case decentralization and permissionlessness is not what anyone actually wants or needs.
It's clearly what a whole lot of people want, as to whether they need it or not, time will tell. For all the aforementioned reasons, I think the case couldn't be clearer that they do, however.
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I dont think its much of a selling point in favor of government that the considered so far "anarchistic alternatives" are worse. That is by no means a recommendation
“I don’t think something is good just because every alternative is worse.”
"What is a lose-lose situation?" Seriously, the idea that every option available is a bad one is not that difficult. Hell, even voting in the US is sometimes described as picking the lesser of two evils by those who don't feel well represented by the de facto realistic candidates.
That’s the marketing pitch.
The nihilist position that e everything is broken, except for a highly volatile system of digital signatures that require massive “fiat” capital investments to function.
The nihilist position that e everything is broken, except for a highly volatile system of digital signatures that require massive “fiat” capital investments to function.
Government is formed as a way to manage a society/community of people, if blockchain/crypto gets big enough to have hundreds of thousands of adherents, you'll also need a way to manage that "society". Some people think "the algorithm rules all", but as we've seen the algorithm is messy and has bugs and allow for thefts where you lose everything in a split second. It'd be like joining a society where muggers are free to roam and mug you, and to mug them back you have to find a cleverer exploit as your knife.
A blogger I read once laughed that an exchange/crypto-coin who suffered such a hack decided, to get their money back, they would contact... the police/FBI. Yeah, so much for that "We can't trust the government!" mentality.
A blogger I read once laughed that an exchange/crypto-coin who suffered such a hack decided, to get their money back, they would contact... the police/FBI. Yeah, so much for that "We can't trust the government!" mentality.
You can also use it to buy goods from oversea retailers without paying exorbitant fees, bad conversion rate. If you live outside of America and Europe, banks charge a hefty amount of fees for international transactions.
The world is volatile. Syria, Afghanistan, Ukraine, Russia, and in the future who know if China and Taiwan won't become a crappy place to be. The needs to store your wealth and get out of the country quickly is very real. You can't just queue for ATM and holding dollars and gold bars come with significant risk of confiscation or being robbed.
The world is volatile. Syria, Afghanistan, Ukraine, Russia, and in the future who know if China and Taiwan won't become a crappy place to be. The needs to store your wealth and get out of the country quickly is very real. You can't just queue for ATM and holding dollars and gold bars come with significant risk of confiscation or being robbed.
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> without paying exorbitant fees, bad conversion rate
What the hell would you call gas fees, then? And if you don't already have assets in the crypto coin of your vendor's choice, you're going to pay conversion fees, too.
What the hell would you call gas fees, then? And if you don't already have assets in the crypto coin of your vendor's choice, you're going to pay conversion fees, too.
Which is great, unless the “fees” include taxes. In which case the short version of this comment is “you can use it for tax evasion.”
We're not talking about tax evasion. If you don't have hundreds of thousands of dollars in assets, then banks have all sorts of fees that they ding you for just like the phone company when you travel, and they won't waive them as they have no incentive to keep your business. Folks with lots of money who track every penny are often unaware of the landscape for these fees, because banks actually do have an incentive to keep your business and they do waive them without even asking.
If you think there's something illicit about seeking to pay the least in fees and with the broadest reach, or if you think that paying fees to every company who comes along that gets to play middle-man is exactly the same as paying your fair share in taxes then I'm not sure what I can do to dissuade you of this notion.
If you think there's something illicit about seeking to pay the least in fees and with the broadest reach, or if you think that paying fees to every company who comes along that gets to play middle-man is exactly the same as paying your fair share in taxes then I'm not sure what I can do to dissuade you of this notion.
You know I would not actually mind seeing all the gov budget spending get tracked on a blockchain. I often wonder where the trillions in budget spending goes.
So totally very much this, yes!
*spam-click the parent comment up-vote button …*
*spam-click the parent comment up-vote button …*
A great example of something that does not need a blockchain. You're just asking for the relevant government departments to publish their books.
Don't you want some verifiable continuity in those books?
How do you guarantee that continuity breaches are easy to spot when they're "books" and you can publish as many of them as you want, or skip one if it turns out we don't want transparency somewhere because of "national security"?
This argument always seems to start with "there is no application for blockchain" and then moves the goal post to "that application doesn't NEED a blockchain" when we didn't even want ONLY that one application, we came for the whole package.
Do you really trust the government to publish accurate data if there is no transparent mechanism to keep them accountable for their accuracy? What is your alternative proposed mechanism for ensuring that the books are not cooked? (Is it another law, this time that says "books SHALL be balanced" and links to the RFC that provides specific definitions for modal verbs like MUST, SHALL, MAY, COULD?)
We certainly COULD invent another system that all tax money passes through, which ties out and all tax revenue is required to pass through, but how far will you stretch the spec in the opposite direction just to make sure that we didn't use "blockchain" which I'm assuming you consider as "scam tech" and you are apparently convinced that we don't need?
How do you guarantee that continuity breaches are easy to spot when they're "books" and you can publish as many of them as you want, or skip one if it turns out we don't want transparency somewhere because of "national security"?
This argument always seems to start with "there is no application for blockchain" and then moves the goal post to "that application doesn't NEED a blockchain" when we didn't even want ONLY that one application, we came for the whole package.
Do you really trust the government to publish accurate data if there is no transparent mechanism to keep them accountable for their accuracy? What is your alternative proposed mechanism for ensuring that the books are not cooked? (Is it another law, this time that says "books SHALL be balanced" and links to the RFC that provides specific definitions for modal verbs like MUST, SHALL, MAY, COULD?)
We certainly COULD invent another system that all tax money passes through, which ties out and all tax revenue is required to pass through, but how far will you stretch the spec in the opposite direction just to make sure that we didn't use "blockchain" which I'm assuming you consider as "scam tech" and you are apparently convinced that we don't need?
What's realistic is a policy of "no backsies". You can't prevent a party from lying (without remaking the world so that everything happens on your favorite blockchain, which ain't gonna happen), so what you do is you catch them in their lies.
This problem is already solved for TLS, with no bitcoin-style blockchain and no climate destruction: https://certificate.transparency.dev/
This problem is already solved for TLS, with no bitcoin-style blockchain and no climate destruction: https://certificate.transparency.dev/
Just so you understand me, I have basically zero expectation that anyone is going to choose "my favorite blockchain" for their next big project and send the price soaring. It's just not going to happen.
With that out of the way, what stops the government from implementing their own CBDC and saying "tax revenues SHALL be paid downstream via the US-CBDC Token" and requiring approved vendors to implement it for their US-Gov Receivables? This seems very likely to happen. I would actually bet on it.
You're telling me on one hand, the problem is solved (example TLS) and on the other hand, I need to be realistic about my expectations, since it doesn't solve the whole problem... which seems to indicate to me that your solution is actually not solving the problem you expected me to have, which is there is no effective or continuous transparency about how much money our institutions have in-flight and where it's going or gone, and there is no sponsored route for institutions to "opt in" to such transparency and actually enforce it permanently.
That's what the blockchain is for.
What's un-fixably wrong with the blockchain solution exactly? I fully expect this US-CBDC is going to look nothing like I wanted my blockchain to look (it won't be in any way decentralized at all, it will have some government-sponsored "oracles" instead of user-sponsored nodes, so that it will be a blockchain in name and in function, but you won't be able to mine it, and it won't be "ours" – it might actually go on Ethereum, but I doubt it will and I definitely won't hold my breath. It will probably be super green for the environment, whatever it is.)
So how can you simultaneously believe this is a solved problem, which can't be solved, and yet already has been solved by Blockchain (but we don't need it?)
With that out of the way, what stops the government from implementing their own CBDC and saying "tax revenues SHALL be paid downstream via the US-CBDC Token" and requiring approved vendors to implement it for their US-Gov Receivables? This seems very likely to happen. I would actually bet on it.
You're telling me on one hand, the problem is solved (example TLS) and on the other hand, I need to be realistic about my expectations, since it doesn't solve the whole problem... which seems to indicate to me that your solution is actually not solving the problem you expected me to have, which is there is no effective or continuous transparency about how much money our institutions have in-flight and where it's going or gone, and there is no sponsored route for institutions to "opt in" to such transparency and actually enforce it permanently.
That's what the blockchain is for.
What's un-fixably wrong with the blockchain solution exactly? I fully expect this US-CBDC is going to look nothing like I wanted my blockchain to look (it won't be in any way decentralized at all, it will have some government-sponsored "oracles" instead of user-sponsored nodes, so that it will be a blockchain in name and in function, but you won't be able to mine it, and it won't be "ours" – it might actually go on Ethereum, but I doubt it will and I definitely won't hold my breath. It will probably be super green for the environment, whatever it is.)
So how can you simultaneously believe this is a solved problem, which can't be solved, and yet already has been solved by Blockchain (but we don't need it?)
The latest trillion $peso$ spending "package" has less of a direct impact on $globalrupee$. Hurricane $Chucky$ in $greentown$ does not as directly impact the $globalrupee$. If that is starting to sound more like an insurance policy, and less like a bunch of tin-foil hat wearing conspiracy theorists talking about "muh freedoms", well maybe that's because it is.
That sounds an awful lot like a bunch of tin-foil hat conspiracy talk.
> Digital cash, as defined in the Bitcoin whitepaper, still seems like the only real use case.
IMO the big breakthrough of crypto past bitcoin is that we figured out that cryptocurrencies can use money incentives to run other applications than just payments. People are doing all sorts if things, many scams but also many useful applications.
IMO the big breakthrough of crypto past bitcoin is that we figured out that cryptocurrencies can use money incentives to run other applications than just payments. People are doing all sorts if things, many scams but also many useful applications.
I don’t believe the OP was asking if people are doing things or if there are useful applications, but rather if there are useful applications that can only be done, or done better, in crypto.
When I first heard about Ethereum I figured the value it would bring was incentivising everyone to create a worldwide supercomputer of the sorts we've never even seen before that can do really amazing computational work as opposed to bitcoin which just seems to crunch numbers entirely pointlessly. Any ideas why that never happened?
For one, the computational work for checking everyone's transactions on everyone's computer (i.e. blockchain) is consuming the computing power of the people interested.
Until sharding provides a tunable level of security, we will see this waste of computing power.
Then, that might enable more payments for cheaper, which might let you pay by the minute and such.
But the second main brake in adoption is legal. Many countries' jurisdictions require lots of bureaucracy to earn money from various places of the world. For example, EU has VAT, which requires bureaucracy for EU country-to-country payments even if you are exempt (Register of Intra-Community Operators). This negates pretty much all the advantage of trustless/decentralized businesses (ease of payments).
Until sharding provides a tunable level of security, we will see this waste of computing power.
Then, that might enable more payments for cheaper, which might let you pay by the minute and such.
But the second main brake in adoption is legal. Many countries' jurisdictions require lots of bureaucracy to earn money from various places of the world. For example, EU has VAT, which requires bureaucracy for EU country-to-country payments even if you are exempt (Register of Intra-Community Operators). This negates pretty much all the advantage of trustless/decentralized businesses (ease of payments).
>For one, the computational work for checking everyone's transactions on everyone's computer (i.e. blockchain) is consuming the computing power of the people interested.
With ZKP there won't be a need to run every transaction on everyone's computer
With ZKP there won't be a need to run every transaction on everyone's computer
I think electronic cash such as Bitcoin indeed has value. A decentralized world computer such as Ethereum imo can also have tremendous value, but NFTs are.. pretty dumb. The ecosystem is still in its infancy. Whenever a new technology appears, it takes a while for people to discover good use cases. This process involves a lot of trial and error. I believe most crypto projects out there today will be dead within a few years. Similar to what happened with the internet around the dot-com bubble.
If you have digital cash, you might want to spend it somewhere.
Services tailored to work with the system from the ground up, then later they can be absorbed into conventional companies.
(where blockchain here is used in the sense of a public blockchain plus a consensus mechanism such as PoW)
This is sensible take, and arguably backed by the fact that apart from bitcoin there are no other examples of practical blockchain tech.
> The sole purpose of blockchain is to prevent double spending without a trusted party
I would add that in nearly all cases it is totally reasonable to have a trusted party, and therefore that the value of the blockchain collapses down to a very, very small number of use cases (the ones that we all know about - fraud, extortion, money laundering, tax avoidance).
I would add that in nearly all cases it is totally reasonable to have a trusted party, and therefore that the value of the blockchain collapses down to a very, very small number of use cases (the ones that we all know about - fraud, extortion, money laundering, tax avoidance).
To be fair, also asset transfer out of authoritarian monetary regimes.
If I may inquire... could there be a better way to do this that's not blockchain tech? It's a noble cause, for sure. Like, viscerally most people will automatically agree with this cause.
But to prop up the entirety of cryptocurrency's shortcomings for this one thing... seems like.. it would make more sense... to just make a product/ technology that simply addresses this one use case that everyone by and large agrees is a good thing... nah?
But to prop up the entirety of cryptocurrency's shortcomings for this one thing... seems like.. it would make more sense... to just make a product/ technology that simply addresses this one use case that everyone by and large agrees is a good thing... nah?
It tracks double spends of cryptocurrency on the blockchain, which is only as useful as the currency itself is.
Since BTC/ETH/etc is only “valuable” because of wild speculation and greater fools, the “value” part kind of collapses, leaving the “currency” aspect moot. Which brings us back to “no value”.
Since BTC/ETH/etc is only “valuable” because of wild speculation and greater fools, the “value” part kind of collapses, leaving the “currency” aspect moot. Which brings us back to “no value”.
Stablecoins
A database does this. The trusted party isn't eliminated by blockchain, because someone has to code the implementation of the software. Unless you checked the software for bugs or backdoors camouflaged as bugs and compile it yourself, you trust someone else.
The trust 'problem' is overrated, because nothing in this world works without trust.
The trust 'problem' is overrated, because nothing in this world works without trust.
You’re wrong because you’re talking about database when we’re talking about distributed databases.
> You're wrong
Can I just say, on a rather unrelated note, that this just sounds very toxic and will trigger most people into "defense mode". I understand that "wrong" thoughts and opinions don't come out of nowhere, someone must have produced them, but it just reads so much nicer when the attack is explicitly targeting the opinion, and not the author.
In your other comments in this very thread you're using "Your comment goes in all directions...", "Your example is implemented in...". This is so much nicer! Thanks for going the extra mile! Let's keep the discussion going and reduce the chances of someone getting triggered and starting a flame war.
Can I just say, on a rather unrelated note, that this just sounds very toxic and will trigger most people into "defense mode". I understand that "wrong" thoughts and opinions don't come out of nowhere, someone must have produced them, but it just reads so much nicer when the attack is explicitly targeting the opinion, and not the author.
In your other comments in this very thread you're using "Your comment goes in all directions...", "Your example is implemented in...". This is so much nicer! Thanks for going the extra mile! Let's keep the discussion going and reduce the chances of someone getting triggered and starting a flame war.
Reading all the comments here is infuriating
I'm blockchain skeptical, but I think you're slightly throwing out the baby with the bathwater here.
> the trusted party isn't eliminated by blockchain, because someone has to code the implementation of the software
I don't think is relevant in practice, and I think the blockchain does solve this problem regarding double-spending. Yes, there's a centralized set of developers, but that does not seem to be a problem in practice, 13 years in
> The trust 'problem' is overrated, because nothing in this world works without trust.
Bingo, this is the real problem. The world has very few problems where a trusted authority / arbitrator isn't a massive benefit.
> the trusted party isn't eliminated by blockchain, because someone has to code the implementation of the software
I don't think is relevant in practice, and I think the blockchain does solve this problem regarding double-spending. Yes, there's a centralized set of developers, but that does not seem to be a problem in practice, 13 years in
> The trust 'problem' is overrated, because nothing in this world works without trust.
Bingo, this is the real problem. The world has very few problems where a trusted authority / arbitrator isn't a massive benefit.
Why the set of developers is considered centralised? I can write an implementation according to the specification and have no relationship with developers of another implementation.
My understanding is that the specification changes over time, and if your implementation doesn't match the central one, then the rest of the network stops interacting with you. That is: there is a massive network effect of people using github.com/bitcoin/bitcoin as canon, and there is a central group of devs with write-access there. While you can fork it, unless the rest of the network gets in on it, you've just created some altcoin that nobody cares about.
You can write an implementation according to what specification? Bitcoin? Where is the specification for Bitcoin? There isn't one.
Maybe you can, but have you? Has anyone? Are there any nodes on the bitcoin network not running the same code written by the same handful of people?
Also, saying that "all you have to do to participate in this new trustless economy is to read the spec and implement your own validation node and client, and maintain it as the protocol changes" is a pretty different promise than "just download this app".
Also, saying that "all you have to do to participate in this new trustless economy is to read the spec and implement your own validation node and client, and maintain it as the protocol changes" is a pretty different promise than "just download this app".
Machine 2 machine payments are a massive problem you can solve with a blockchain. Which can solve a whole lot of other problems, like automation. Which can solve another set of problems.
> Machine 2 machine payments are a massive problem you can solve with a blockchain
Right but you can also solve these with a government regulated exchange and it’s not clear what a blockchain adds
Right but you can also solve these with a government regulated exchange and it’s not clear what a blockchain adds
To be more precise, the nature of trust shifts. In case of a central database, one must trust the organization running the database. In case of blockchain you need to trust the math behind it, its implementation _and_ that the network structure preserves the assumptions the math makes. This might be preferable for some but not for others.
The trust shift to a lower layer, which is always what you want to unless this adds a huge amount of overhead or complexity that leads to security issues. In our case it looks like blockchains are solving real world problems.
you keep repeating this mantra, but this is exactly what Op is asking... what problem is it really solving. Its not solving a tech problem, because the tech exists.
It is solving a tech problem because the tech exist you mean
"The sole purpose of blockchain is to prevent double spending without a trusted party"
I agree with this. I would add that by removing the need for a trusted party, it can increase speed.
For example, stock trades are currently T+2 to handle settlement through the various institutions. There is a push to start using blockchain to speed it up to T+1 or faster.
I agree with this. I would add that by removing the need for a trusted party, it can increase speed.
For example, stock trades are currently T+2 to handle settlement through the various institutions. There is a push to start using blockchain to speed it up to T+1 or faster.
immutable storage must come with an incentive layer or no one would serve the files.
for piracy, it was private tracker seed ratio. for web3, it's either on a blockchain or ipfs/arweave.
it's not a good fit for most applications, but when you want a file to probabilistically last forever, now there are options.
for piracy, it was private tracker seed ratio. for web3, it's either on a blockchain or ipfs/arweave.
it's not a good fit for most applications, but when you want a file to probabilistically last forever, now there are options.
> The sole purpose of blockchain is to prevent double spending without a trusted party
NIST's Blockchain Technology Overview is really good explainer:
* https://csrc.nist.gov/publications/detail/nistir/8202/final
See especially Figure 6 ("p. 42", 53 of the PDF), which is a flow chart to help you decide on whether blockchain matches one's use case. Extracted:
* https://imgur.com/a/RlUj9Ed
NIST's Blockchain Technology Overview is really good explainer:
* https://csrc.nist.gov/publications/detail/nistir/8202/final
See especially Figure 6 ("p. 42", 53 of the PDF), which is a flow chart to help you decide on whether blockchain matches one's use case. Extracted:
* https://imgur.com/a/RlUj9Ed
>> Other proposed applications are mostly dumb / misguided,
That is the key. Crypto currency is a thing. I don't think that has a future either but whatever. All other uses are just hype and those applications make no sense except to fool investors.
That is the key. Crypto currency is a thing. I don't think that has a future either but whatever. All other uses are just hype and those applications make no sense except to fool investors.
I thought that the blockchain (itself) afforded some anonymity, while still preserving trust, through cryptographic signing.
Which sounded beautiful, until I realized that there must needs still be some other market around the blockchain, in order to interface with reality and older currency systems. There, all privacy bets are off.
Thus, even if one wanted to conduct and election, and put all votes on a block chain, maintaining a secret ballot seems impossible, as far as I can tell.
Sometimes, a primitive solution like a paper ballot has crucial superior aspects.
Which sounded beautiful, until I realized that there must needs still be some other market around the blockchain, in order to interface with reality and older currency systems. There, all privacy bets are off.
Thus, even if one wanted to conduct and election, and put all votes on a block chain, maintaining a secret ballot seems impossible, as far as I can tell.
Sometimes, a primitive solution like a paper ballot has crucial superior aspects.
Blockchain (or more correctly "hashchain"[1] data structure) doesn't solve the double spend problem, because anyone can create a new entry with a hashpointer pointing to the last entry (aka "block") with transactions.
This problem is inherent in all Nakamoto Consensus style implementations (basically Leader Election algorithms), not just Bitcoin's PoW.
Simpler: anyone can fork the blockchain and over-write the ledger with the new transactions. So in reality the double spend solved by the social consensus on the right fork, not by technological solutions.
EDIT: Leaving aside the question of transaction finality and probabilistic nature of the Nakamoto Consensus, which making it even worse.
--
[1] https://en.wikipedia.org/wiki/Hash_chain
This problem is inherent in all Nakamoto Consensus style implementations (basically Leader Election algorithms), not just Bitcoin's PoW.
Simpler: anyone can fork the blockchain and over-write the ledger with the new transactions. So in reality the double spend solved by the social consensus on the right fork, not by technological solutions.
EDIT: Leaving aside the question of transaction finality and probabilistic nature of the Nakamoto Consensus, which making it even worse.
--
[1] https://en.wikipedia.org/wiki/Hash_chain
That is the main purpose. But check SNARKs and STARKs, they have a great future outside of blockchain too.
The current Mexican government is trying to take control of elections, banana republic style, from the INE, the independent institution in charge of those. Our president is suggesting blockchain tech to make votes electronic, and defunding the INE since physical votes won't be needed anymore. A blockchain would not guarantee fair elections, is just a buzzword.
How do you build Alchemix with a hashing / digital signature algorithm? How about Uniswap? Balancer? Curve? Aave?
Don't know these names? Together they hold over $100B in assets. It's crazy how out of touch with what's going on in DeFi HN is. That you can say there is nothing useful meanwhile there are tens of thousands of people using billions of dollars with these apps all of which depend on a Blockchain to function.
Don't know these names? Together they hold over $100B in assets. It's crazy how out of touch with what's going on in DeFi HN is. That you can say there is nothing useful meanwhile there are tens of thousands of people using billions of dollars with these apps all of which depend on a Blockchain to function.
See that's the point. Having a trusted party is a better solution.
I have a better way: with a trusted party. Seriously. And if these suck, then perhaps there's not enough competition between them. I mean, Mastercard and Visa is practically a duopoly, and while a duopoly is better than a monopoly, it still sucks.
I also know a good use case for blockchain: scamming. Practically all the current use cases revolve around that. The trusted party wasn't so bad after all, eh?
But to be honest, I feel like there's one good use case for cryptocurrencies which isn't a use case for me, but is for people who live in oppressed regimes: the ability to not use the currency of the autocratic government. This would be true for some South American countries, but also nowadays for a country like Russia. Other than that, I see no use case.
I also know a good use case for blockchain: scamming. Practically all the current use cases revolve around that. The trusted party wasn't so bad after all, eh?
But to be honest, I feel like there's one good use case for cryptocurrencies which isn't a use case for me, but is for people who live in oppressed regimes: the ability to not use the currency of the autocratic government. This would be true for some South American countries, but also nowadays for a country like Russia. Other than that, I see no use case.
A lot of people pushing Blockchain technology have a vested interest in making it a more pervasive technology. Because Blockchain applications drive up the value of their crypto assets and offer more opportunities for speculation using crypto.
Blockchain applications don't necessarily need to use existing cryptocurrencies. However in that case you need to find some other incentive to get people to mine your blockchain, which is hard. And consequently having a small mining pool makes you vulnerable to a 51% attack defeating the entire purpose of a "tamper-proof" log. Thus it's easier to just use Ethereum, which in turn drives up demand for that cryptocurrency.
Blockchain applications don't necessarily need to use existing cryptocurrencies. However in that case you need to find some other incentive to get people to mine your blockchain, which is hard. And consequently having a small mining pool makes you vulnerable to a 51% attack defeating the entire purpose of a "tamper-proof" log. Thus it's easier to just use Ethereum, which in turn drives up demand for that cryptocurrency.
The funny thing is that I don't believe there is a "blockchain lobby" that is driving hype similar to bitcoin and other fads, that would at least make it more compressible. In fact it is not clear who benefits if it gets "adapted", whatever that means.
It just seems collective delusion in pushing the technology by people who have little stake in it if at all, and sensible people have just given up trying to point out that it is vapourware, but the attention seems to be increasing year on year if anything...
It just seems collective delusion in pushing the technology by people who have little stake in it if at all, and sensible people have just given up trying to point out that it is vapourware, but the attention seems to be increasing year on year if anything...
> In fact it is not clear who benefits if it gets "adapted", whatever that means.
People who hold cryptocurrency benefit from increased demand and hype around it. It drives up the value of their assets even if indirectly.
Not everyone may even be aware that they have this conflict of interest. They may genuinely buy into the hype, which is why they hold cryptocurrency in the first place. However as always we should be skeptical of technology advice from people who stand to make money from you choosing one technology over the other.
People who hold cryptocurrency benefit from increased demand and hype around it. It drives up the value of their assets even if indirectly.
Not everyone may even be aware that they have this conflict of interest. They may genuinely buy into the hype, which is why they hold cryptocurrency in the first place. However as always we should be skeptical of technology advice from people who stand to make money from you choosing one technology over the other.
Adaption benefits those who adapted earlier.
It’s always funny to see early adopters’ criticisms of inflation politics and power to the 99% rhetoric when all they want to do is flip the curve around and apply the same “upward distribution” to their monetary system, but in reverse (timewise) and worse (distribution wise).
It’s always funny to see early adopters’ criticisms of inflation politics and power to the 99% rhetoric when all they want to do is flip the curve around and apply the same “upward distribution” to their monetary system, but in reverse (timewise) and worse (distribution wise).
You are confused. The distributed ledger described in whitepaper is valuable when you need to form a consensus about past events under dispute (or which could possible be disputed). Also the ponzi-space of cryptocurrency / blockchain is clearly valuable since you can generate 1000% moons in there for joke coins, it's valued by real money and you can earn real money by trading them.
Por que no los dos?
Unless government regulates something, that thing is not going to have proper value. This is true for everything, and this is true for blockchain.
Society needs to officially recognizes something through government and law.
Libertarians don't like this, but it's true.
Society needs to officially recognizes something through government and law.
Libertarians don't like this, but it's true.
It's all in Timothy May's email signature from the cypherpunks mailing list:
Crypto Anarchy: encryption, digital money,
anonymous networks, digital pseudonyms, zero
knowledge, reputations, information markets,
black markets, collapse of governments.
Expecting the nation state to just sit there and watch seems naive. When it becomes a big enough threat to make them notice, the nation state will regulate it stone dead.
you mean, fully embrace it to front-run the laggards, like El Salvador did?
A journalist that went to El Salvador and tried to use BTC to pay begs to differ:
> By Friday the final tally looks grim for crypto fans. Only 10 of almost 50 businesses had taken Bitcoin, amounting to $485 out of $1,700 I’ve spent. And only four crypto transactions—at the pool hall, the peanut vendor, a Starbucks, and a Caterpillar-brand T-shirt store—had been entirely seamless. My experience isn’t a fluke. In a recent Chamber of Commerce survey of 337 businesses, only 14% said they’d transacted in Bitcoin since September.
https://www.bloomberg.com/features/2022-bitcoin-travel-probl...
> By Friday the final tally looks grim for crypto fans. Only 10 of almost 50 businesses had taken Bitcoin, amounting to $485 out of $1,700 I’ve spent. And only four crypto transactions—at the pool hall, the peanut vendor, a Starbucks, and a Caterpillar-brand T-shirt store—had been entirely seamless. My experience isn’t a fluke. In a recent Chamber of Commerce survey of 337 businesses, only 14% said they’d transacted in Bitcoin since September.
https://www.bloomberg.com/features/2022-bitcoin-travel-probl...
What percentage of the businesses, in any country, use your software?
15%, in a few months, is an astounding penetration rate for a brand new currency with 50% fluctuations.
Looking forward to the list of your global achievements.
15%, in a few months, is an astounding penetration rate for a brand new currency with 50% fluctuations.
Looking forward to the list of your global achievements.
I doubt it, because it's global. The frog will heat slowly enough that it won't notice until it becomes necessary for global competitiveness—and for the United States, ongoing dominance. It will also be a game of whack-a-mole. We're only 10 years in. In another 10 years, many things we can't imagine now will happen.
But we shall see!
Another possibility is that current cryptos are regulated and more state-compliant ones emerge (see: China).
But we shall see!
Another possibility is that current cryptos are regulated and more state-compliant ones emerge (see: China).
> collapse of governments
If this were true, it would be a reason to sanction bitcoin. As it is, we've yet to see how it pans out as a means of Russia evading the sanctions.
If this were true, it would be a reason to sanction bitcoin. As it is, we've yet to see how it pans out as a means of Russia evading the sanctions.
> this will reshape the nation state
In a worse way, especially if it enables tax evasion.
In a worse way, especially if it enables tax evasion.
It is simply trust reduction/removal through distributed consensus. Any industry or application that depends on trust could be improved through use of blockchain for trust minimization.
But just as easily as a knife can cut a slice of bread, it could be used to slice a jugular. In short, don't confuse the technology with the use cases. It's just a tool, some people will misuse it.
But just as easily as a knife can cut a slice of bread, it could be used to slice a jugular. In short, don't confuse the technology with the use cases. It's just a tool, some people will misuse it.
You don't minimize trust, you greatly increase the complexity of it. There's a lot more entities and processes involved and it becomes harder to understand. You need to trust quite a lot more things now, only that it's much harder, so many don't even try and just assume trusting many through some hard to understand and changing mechanism must be easier, which I don't quite see the logic of.
As far as I can see - and when the blockchain hype started I made an effort and even took courses and did some programming with the new tech - many proposed benefits rely on them being hard to refute without quite a bit of effort for this reason, it's a lot of assertions that are hard to follow, to understand and to prove or disprove. The effort made for an assertion of some alleged benefit always is very low, but trying to disprove the claim without equally resorting to just making the statement is a lot of effort.
I must say though I'm skeptical this discussion, especially with the stated question, is useful on this site and at this point, after it has already been discussed so many times, and now with that kind of question I doubt this leads to any better discussion than what we already had.
As far as I can see - and when the blockchain hype started I made an effort and even took courses and did some programming with the new tech - many proposed benefits rely on them being hard to refute without quite a bit of effort for this reason, it's a lot of assertions that are hard to follow, to understand and to prove or disprove. The effort made for an assertion of some alleged benefit always is very low, but trying to disprove the claim without equally resorting to just making the statement is a lot of effort.
I must say though I'm skeptical this discussion, especially with the stated question, is useful on this site and at this point, after it has already been discussed so many times, and now with that kind of question I doubt this leads to any better discussion than what we already had.
> There's a lot more entities
Yes. That's decentralization. Rather than trusting one person irrevocably, you trust cryptographic security and the rational economics that emerge from alignment of incentive. Minimal trust in all other actors in the system, rather than maximum trust in one entity.
> it becomes harder to understand
Not really.. The general principles underlying blockchain are relatively simple. I'd agree that the finer implementation details can be complex, especially when it comes to consensus, sharding, or cryptography. But that varies between protocols.
Do you have any examples of the assertions you find hard to follow?
Yes. That's decentralization. Rather than trusting one person irrevocably, you trust cryptographic security and the rational economics that emerge from alignment of incentive. Minimal trust in all other actors in the system, rather than maximum trust in one entity.
> it becomes harder to understand
Not really.. The general principles underlying blockchain are relatively simple. I'd agree that the finer implementation details can be complex, especially when it comes to consensus, sharding, or cryptography. But that varies between protocols.
Do you have any examples of the assertions you find hard to follow?
>> it becomes harder to understand
> Not really..
Oh Yes!
As usual in blockchain defense, you must make a lot of assertions.
> Yes. That's decentralization.
Please not that tone. You don't assume you need to teach me, I even did some programming when this was new to try out the new tech. The proponents always only ever have a lot of hot air and a lot of faith, but never anything real.
> Not really..
Oh Yes!
As usual in blockchain defense, you must make a lot of assertions.
> Yes. That's decentralization.
Please not that tone. You don't assume you need to teach me, I even did some programming when this was new to try out the new tech. The proponents always only ever have a lot of hot air and a lot of faith, but never anything real.
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People transacting large amounts of an economy in a currency not controllable by central banks or sovereign bond inssuance is a really serious issue. Parliaments and regulators absolutely need to get a handle on this.
Don't worry, governments and centrals banks won't let go of one of the fundamental powers of a sovereign. The anarcho-capitalist dream of being your own bank isn't sustainable in real life anyway.
https://www.youtube.com/watch?v=15RTC22Z2xI sums it up nicely.
Blockchain reminds me a lot of peer to peer e.g. Bitorrent.
At the time people thought it was also going to change the world and usher in a new era of decentralisation.
At the time people thought it was also going to change the world and usher in a new era of decentralisation.
Maybe in terms of concept, but in terms of real life cases and adaptability Bitorrent was arguably and still is a very successful technology that many people have engaged with.
There are many great uses of the technology e.g. asset distribution.
But in its hey day it was going to change everything like Web3 claims it will do.
But in its hey day it was going to change everything like Web3 claims it will do.
Well it very well could have if things went a little different. Bittorrent was revolutionary, but slow to adapt. Maybe if it was more user friendly, or had more browser integration earlier on, and the protocol had more development, you'd see it more widely used. Imagine if "the cloud" was just bittorrent swarms. It could have happened. As for blockchain...decentralized databases have their place, the problem is that centralized organizations are trying to make a use for them when a centralized db already did what they wanted just fine.
Blockchain has no use other than to store tokens for speculative gambling.
Take a look at this presentation - https://bit.ly/3OB5G18
Proof-of-work - the USP of blockchain makes it slow and expensive and planet destroying at scale. But it's not a bug, it's a feature. You take it out and the blockchain is neither public not permission-less. A private, trusted, permissioned blockchain is pointless.
The whole blockchain, web3, crypto, NFT, DeFi, DAO ecosystem is a massive ponzi scheme. The proponents keep cooking up new buzzwords to keep the pot boiling and to attract new starry eyed idiots who will bring in real money into the system to keep the ponzi going.
Blockchain is a hammer in search of nail. A solution for problems that do not exist.
Proof-of-work - the USP of blockchain makes it slow and expensive and planet destroying at scale. But it's not a bug, it's a feature. You take it out and the blockchain is neither public not permission-less. A private, trusted, permissioned blockchain is pointless.
The whole blockchain, web3, crypto, NFT, DeFi, DAO ecosystem is a massive ponzi scheme. The proponents keep cooking up new buzzwords to keep the pot boiling and to attract new starry eyed idiots who will bring in real money into the system to keep the ponzi going.
Blockchain is a hammer in search of nail. A solution for problems that do not exist.
I wonder whether one can postulate an impossibility theorem (call it SEV, similar to CAP) for public blockchains (at least using PoW, and whether one can overcome it with PoS or similar is an open question):
You can't have a (PoW) public blockchain that is Secure, Efficient (=not planet destroyingly wasteful), and Valuable. Pick any two.
You can't have a (PoW) public blockchain that is Secure, Efficient (=not planet destroyingly wasteful), and Valuable. Pick any two.
Secure and efficient. Money should be a medium of transfer, not a store of value. The fact remains that you can't really get "efficient" with proof of work, and claims about "secure" are dubious with proof of stake.
Someone forgot to read Marx.
Money is both a means of transfer and a store of value. The reason for those conditional properties in crypto (secure and efficient but not valuable) is because currencies have value embedded in them, it is an abstract presentation of value, it abstracts work. In this case, hash power.
Real paper money and its digital representation, like the USD, is also proof of work currency, in this casw, human power. And it's distribution evidences exploitation, not effort.
Money is both a means of transfer and a store of value. The reason for those conditional properties in crypto (secure and efficient but not valuable) is because currencies have value embedded in them, it is an abstract presentation of value, it abstracts work. In this case, hash power.
Real paper money and its digital representation, like the USD, is also proof of work currency, in this casw, human power. And it's distribution evidences exploitation, not effort.
I think maybe "valuable" meant "scalable" or something? I can't speak for the OP though.
I think there's something to the idea of some proof of an efficiency-security tradeoff or lack thereof though. Seems like something that should be out there in the literature.
I think there's something to the idea of some proof of an efficiency-security tradeoff or lack thereof though. Seems like something that should be out there in the literature.
With “Valuable” I meant that a lot of value is on-chain (in terms of market cap or transactions - basically whatever makes it worth stealing it).
Nobody would bother mounting an attack on some random shitcoin, so it can be secure (for all practical purposes) without wasting massive amounts of energy.
A public blockchain that carries a lot of value must burn a significant proportion of available hash power to guard against interference, so it’s either wasteful or insecure.
Nobody would bother mounting an attack on some random shitcoin, so it can be secure (for all practical purposes) without wasting massive amounts of energy.
A public blockchain that carries a lot of value must burn a significant proportion of available hash power to guard against interference, so it’s either wasteful or insecure.
That makes sense, but I still don't think you want "valuable." In practice, most of the value of real economic systems is not held in money, but in assets. In the crypto universe, Bitcoin is more of an asset than a currency (although a valueless one if you don't consider it a currency). All you need now is a good currency.
From my economics training, Money needs to have all 3 of the following characteristics.
1. A medium of transfer
2. A unit of account
3. A store of value
Cryptocurrency generally does well on the first and not at the others.
Cryptocurrency generally does well on the first and not at the others.
Modern monetary theory disagrees with the third one, and so do I. I don't think a currency needs to be a store of value, just a medium of exchange. In practice, we store value in a lot of things that are not money (stocks, bonds, commodities, real estate, etc).
For example, if you had a system of money with guaranteed inflation at a certain level, you could produce a synthetic store of value that is not the money.
For example, if you had a system of money with guaranteed inflation at a certain level, you could produce a synthetic store of value that is not the money.
Agreed; one major reason Bitcoin became so valuable is its capped emission with the majority of supply taken up by early adopters due to Fear Of Missing Out.
Tt would be less valuable when undesirable for speculators, which can be achieved with a more equitable emission such as a pure linear one.
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> A private, trusted, permissioned blockchain is pointless
Not at all - it's a verifiable audit log. Git is an example of exactly this.
Not at all - it's a verifiable audit log. Git is an example of exactly this.
Git is not a blockchain. An audit log doesn't need to be blockchain. The whole point of blockchain is that is is decentralized, trust-less and permission-less. You take it away and what is left?
That is largely an issue of nomenclature, but there is a school of thought that distinguishes between public, open, trust-less blockchains (which then need a consensus mechanism), and private, permissioned blockchains (which have a central authority and thus don't need a consensus mechanism).
Whether the latter has many use cases is a good question, but git certainly fits the definition.
Whether the latter has many use cases is a good question, but git certainly fits the definition.
I’m not sure any efficient use for cheap energy is going to be less destructive than blockchain
Where did you get the notion that the energy usage is planet destroying? Current Bitcoin usage is literally a rounding error of global energy usage (0.1%) and if wildly successful would still be < 1% of energy usage.
https://www.lynalden.com/bitcoin-energy/
https://www.lynalden.com/bitcoin-energy/
> Current Bitcoin usage is literally a rounding error of global energy usage
I'd say that BTC + ETC use up about 1% of world electricity. That is significant, given that the main value is to make a few miners rich ($50m a day).
> and won’t increase too much.
The energy usage (more precisely: the amount of money spent on energy and electro waste) is roughly proportional to BTC price, I posit (until the next halving), and so would go up dramatically if BTC went up dramatically (like 100x, as Peter Thiel suggested at Bitcoin 2022 in Miami recently).
I'd say that BTC + ETC use up about 1% of world electricity. That is significant, given that the main value is to make a few miners rich ($50m a day).
> and won’t increase too much.
The energy usage (more precisely: the amount of money spent on energy and electro waste) is roughly proportional to BTC price, I posit (until the next halving), and so would go up dramatically if BTC went up dramatically (like 100x, as Peter Thiel suggested at Bitcoin 2022 in Miami recently).
> I'd say that BTC + ETC use up about 1% of world electricity
Where did you get that figure? If you read the researched article I linked, the estimate is around 0.1%.
> would go up dramatically if BTC went up dramatically
Not as dramatically as you think: if BTC goes up to 1 million per coin it will still be using less than 1% of global energy consumption (again relying on the article I previously cited as my source). 1% is no longer a rounding error that we can just dismiss, but a price of 1 million per coin would imply that Bitcoin-based financial systems have become incredibly valuable and are displacing other financial systems.
Where did you get that figure? If you read the researched article I linked, the estimate is around 0.1%.
> would go up dramatically if BTC went up dramatically
Not as dramatically as you think: if BTC goes up to 1 million per coin it will still be using less than 1% of global energy consumption (again relying on the article I previously cited as my source). 1% is no longer a rounding error that we can just dismiss, but a price of 1 million per coin would imply that Bitcoin-based financial systems have become incredibly valuable and are displacing other financial systems.
Despite all the hype. Very few people use Crypto. It doesn't matter if it's "just" 0.1% what matters is how much do all the banking and credit card systems in the world consume by comparison. I would bet it's less than that.
So it's not tenable as a currency.
It's also not very valuable as a commodity since it fluctuates too much and has no intrinsic value.
It has no value to "disconnect from the banks/government" since you need to convert it to "real currency" for usage.
There's the claim that green is possible with Crypto but I don't see how. Without turning it into a centralized system. The wastefulness is the system designed to discourage bad actors from taking over. Without it, what will stop the hacks? (not that it helps with all the robberies anyway).
So it's not tenable as a currency.
It's also not very valuable as a commodity since it fluctuates too much and has no intrinsic value.
It has no value to "disconnect from the banks/government" since you need to convert it to "real currency" for usage.
There's the claim that green is possible with Crypto but I don't see how. Without turning it into a centralized system. The wastefulness is the system designed to discourage bad actors from taking over. Without it, what will stop the hacks? (not that it helps with all the robberies anyway).
> So it's not tenable as a currency.
Did you read the article that I linked to? It's helpful also to read this one about Bitcoin: https://www.lynalden.com/gold-and-bitcoin/
Bitcoin's usage is not as currency, but as money (read this article about what money is: https://www.lynalden.com/what-is-money/. So Bitcoin is useful as a store of value, rather than a currency. The ability to transact like a currency is being built in layers on top of it (Lightning Network, etc), somewhat similar to how currencies used to be backed by gold.
Did you read the article that I linked to? It's helpful also to read this one about Bitcoin: https://www.lynalden.com/gold-and-bitcoin/
Bitcoin's usage is not as currency, but as money (read this article about what money is: https://www.lynalden.com/what-is-money/. So Bitcoin is useful as a store of value, rather than a currency. The ability to transact like a currency is being built in layers on top of it (Lightning Network, etc), somewhat similar to how currencies used to be backed by gold.
> what matters is how much do all the banking and credit card systems in the world consume by comparison. I would bet it's less than that.
Thing is, with bitcoin the energy consumption is easily quantifiable and it's a single number. The banking system also uses a lot of energy to heat/cool the employees, builds lots of office buildings, and does many things which could be considered wasteful. It really is a little tricky to compare.
The banking system employs a lot of people. Depending on your point of view, this can be a bad thing (they could be doing something more productive instead!) or a good thing (the people are getting jobs, employment is good!).
Thing is, with bitcoin the energy consumption is easily quantifiable and it's a single number. The banking system also uses a lot of energy to heat/cool the employees, builds lots of office buildings, and does many things which could be considered wasteful. It really is a little tricky to compare.
The banking system employs a lot of people. Depending on your point of view, this can be a bad thing (they could be doing something more productive instead!) or a good thing (the people are getting jobs, employment is good!).
This is a good point, and the banking system is certainly bloated - just before the GFC more than a third of US GDP went to the financial sector, WTF.
However, the traditional banking system also performs way more functions than crypto and DeFi, and I very much doubt that DeFi can provide them.
Lastly, disrupting banking with good old Fintech would be great, as it is vastly more efficient than blockchain.
However, the traditional banking system also performs way more functions than crypto and DeFi, and I very much doubt that DeFi can provide them.
Lastly, disrupting banking with good old Fintech would be great, as it is vastly more efficient than blockchain.
I said electricity, not energy. Energy use encompasses industry, transport (oil), heating, and electricity.
As for the rise, as I said, I think money spent on energy and electro waste is largely proportional to BTC price, since unscrupulous miners will be incentivised to come in and mine if mining profits become larger due to a higher price (since they are unconcerned about the externalities. Private gain, socialised costs).
As for the rise, as I said, I think money spent on energy and electro waste is largely proportional to BTC price, since unscrupulous miners will be incentivised to come in and mine if mining profits become larger due to a higher price (since they are unconcerned about the externalities. Private gain, socialised costs).
Do you have a source for the electricity usage? 26% of US energy usage is for transportation. For your math to work, 90% of energy usage would have to be non-electrical.
If you read the article I linked about Bitcoin, it explains how Bitcoin mining stops producing coins over time and instead miners have to make their money in transaction fees- this is a very different model for mining incentive. Again, it would be great to see some sources or math contradicting the researched article that I linked to.
If you read the article I linked about Bitcoin, it explains how Bitcoin mining stops producing coins over time and instead miners have to make their money in transaction fees- this is a very different model for mining incentive. Again, it would be great to see some sources or math contradicting the researched article that I linked to.
Sorry, no complete source, I’ve calculated it myself.
The discrepancy arises from several issues:
1. The article you quote is from last year. Current estimates for BTC are around 200 TWh/a, not 140 as in the article.
2. The article looks at BTC only. My statement was BTC + ETH.
3. Energy vs electricity
4. There is also the issue of energy production vs consumption (differences arise from energy used for the production of energy, as well as transport losses).
5. It is plausible that electricity is “just” 10% to 35% of energy usage, would need to look that up.
With all that, I stand by my statement that crypto uses 1% or more of the world electricity consumption.
The discrepancy arises from several issues:
1. The article you quote is from last year. Current estimates for BTC are around 200 TWh/a, not 140 as in the article.
2. The article looks at BTC only. My statement was BTC + ETH.
3. Energy vs electricity
4. There is also the issue of energy production vs consumption (differences arise from energy used for the production of energy, as well as transport losses).
5. It is plausible that electricity is “just” 10% to 35% of energy usage, would need to look that up.
With all that, I stand by my statement that crypto uses 1% or more of the world electricity consumption.
Your comment goes in all directions so it’s hard to answer. Perhaps it’s useful to point that proof of work is not ubiquitously used in blockchains and much greener alternatives have been preferred in pretty much any crypto that’s been released in the past 5 years
Proof of work is still what powers the vast majority of block chains by value. Perhaps if ETH goes to PoS in some future this will change, but until then, all of the big permission-less crypto curencies are proof of work.
We’re talking about what the technology can do, not what the bottom of the tech is not doing
Sure, but those alternatives are not yet proven technologies. It's unclear for example if PoS is actually trust-worthy at scale, and we can't use Bitcoin or Ethereum's success so far to check that.
What makes you say that? PoS coins have been running without issues for almost as long as PoW coins and as far as I know there’s been no attacks. On the other hand there’s been many 51% attacks on PoW coins.
No major PoS coin (well, Ripple is PoS, but centralized in other ways) exists, so it may be that they haven't been attacked simply because they are too small.
Algorand, dfinity, celo, avalanche, solana, shall I go on?
I moved the whole fortune out of Russia with that "speculative gambling tokens", while both Putin's regime and outside world tried to cut out russians of the possibility to move their money out of dictatorship control (almost any payment systems are now banned for russians).
Maybe that's not that obvious from some first-world countries perspective, but money with enforced property right over any governments decisions is pretty much important.
Some people gambling in NFTs, sitting in developed countries. Others try to save their life's work from thiefs, wars, inflation and other things. Your view depends on what you crowd in.
Maybe that's not that obvious from some first-world countries perspective, but money with enforced property right over any governments decisions is pretty much important.
Some people gambling in NFTs, sitting in developed countries. Others try to save their life's work from thiefs, wars, inflation and other things. Your view depends on what you crowd in.
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Good for you.
Also, taking your money elsewhere is imo a valid way to hinder the Putin regime.
Also, taking your money elsewhere is imo a valid way to hinder the Putin regime.
What exactly is fiat based financial system to you? Can you say it's abs. not a ponzi scheme for baby boomers and corporate America?
Because I can't. It's wealth oppur. destrying system only to create wealth for certain age group with assets and their friends.
Millennials and newer gener. are out of most of the "real "financial oppr. by design. So they create their system. It's that simple.
Because I can't. It's wealth oppur. destrying system only to create wealth for certain age group with assets and their friends.
Millennials and newer gener. are out of most of the "real "financial oppr. by design. So they create their system. It's that simple.
I suggest you read about history of money. How it came to be, why humans needed money and what all things have been used as money and why eventually we ended up with money being issued by a sovereign (by a fiat). Then read up on the history of banking. The idea of cryptocurrency and its underlying ideology goes against the fundamental principles of finance and economics that have evolved naturally over past thousands of years ever since humans stopped being hunter gatherers.
Yes but "crypto" is also can be put under entire new asset class. It's slowly growing along with fiat based financial system.
Blockchains are excellent for logging that uses trustable peer participation, distributed append, and tamper resistance. For example, each peer can add their own chain links, and also see all the chain links added by other peers, and also be sure that the log hasn't been corrupted by any of the peers.
Some examples IMHO are logs of participation (e.g. voting), agreements (e.g. contracts), exchange (e.g. payments), and auditing (e.g. compliance).
A blockchain can be public or protected i.e. private just to the participants. A blockchain can store plain text information or access-controlled information i.e. encrypted information or links to sign in systems.
All of these capabilities provide massive trust advantages over a traditional database as managed by a central administrative entity, which requires the participants must trust the central administrative entity to be truthful, unbiased, secure, and with sufficient high availability and disaster recoverability.
Some examples IMHO are logs of participation (e.g. voting), agreements (e.g. contracts), exchange (e.g. payments), and auditing (e.g. compliance).
A blockchain can be public or protected i.e. private just to the participants. A blockchain can store plain text information or access-controlled information i.e. encrypted information or links to sign in systems.
All of these capabilities provide massive trust advantages over a traditional database as managed by a central administrative entity, which requires the participants must trust the central administrative entity to be truthful, unbiased, secure, and with sufficient high availability and disaster recoverability.
"Blockchains are excellent for logging with peer participation, distributed append, and tamper resistance. For example, each peer can add their own chain links, and also see all the chain links added by other peers, and also be sure that the log hasn't been corrupted by any of the peers."
This sounds very close to a git repository, which Linus wrote using only SHA libraries.
This sounds very close to a git repository, which Linus wrote using only SHA libraries.
It is. Except if you used SHA libraries for mission critical logging, it would be insecure by default, since it's demonstrably possible to force SHA-1 collisions. git is moving (slowly) to SHA-256, which is also the hashing function of Bitcoin.
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Edit: if you are saying blockchain allows non-tech people the benefit of something like a git repo to run there everyday business, then this is a view I sympathetic to but it is arguably failing in this aspect as well since there is no non-tech people using it.
Except with git repositories there's no built-in consensus mechanism, and we have the potential for a double spend.
Say we're assuming the git repo includes gpg signing and users can make commits attesting that they've sent some amount of their balance to another user.
John makes a commit saying he sends his entire balance to Alice.
John pushes that to a central repository, and Alice gives him her house in return.
John then pushes another commit with an older date saying he actually sent his entire balance to Bob.
Which commit does the network trust?
Aside from that, there are also smart contracts which (to my knowledge) are the first example of code that can be run in an open distributed manner with verifiable source.
It's pretty interesting stuff.
Say we're assuming the git repo includes gpg signing and users can make commits attesting that they've sent some amount of their balance to another user.
John makes a commit saying he sends his entire balance to Alice.
John pushes that to a central repository, and Alice gives him her house in return.
John then pushes another commit with an older date saying he actually sent his entire balance to Bob.
Which commit does the network trust?
Aside from that, there are also smart contracts which (to my knowledge) are the first example of code that can be run in an open distributed manner with verifiable source.
It's pretty interesting stuff.
No it's not. If you run a trust based economy without clear property rights, this whole scenario doesn't exist. If you have property rights, you have a state to enforce them, so that state has a court, sues Alice (or Bob), sues John, the state punishes John, done. If you try to establish property rights without a state, then ans only then does it become interesting, but why would you do that? Establishing a democratic "state" is so simple and cheap that people do it all the time (associations, shareholder agreements), and in the end you need to physically enforce the property rights anyway, so why bother with the whole decentralised, anonymous rigamarole?
Establishing a pure democracy is never easy and when you get the centralization of power that a representative democracy (or democratic republic) brings it can create incentive structures that don't represent the electing population. When you have the power to hide something as a political representative and the general population don't have the means to provide an attestation to whether something is true or not, it starts creating room for elected actors to work against the interest of the people in scenarios where they could reliably hide malpractice. The blockchain isn't converting democratic republics outright, but it does give more power to the people by allowing them to attach their unit of account to what is now considered to be an apolitical monetary system that can be participated in by anyone.
Could it make the whole court process of suing more efficient? Determinations prior to enforcement are very intensive.
Still the Git concept works using a different trust model (i.e. repository maintainer).
That's github more than git, isn't it. Anyone can maintain their own fork of a repository. Much like with blockchain, it comes down to a community decision which one to accept as "canonical".
The difference is a lack of consensus at the protocol level for git. The network's only 'canonical' version of things is at the whim of the maintainer (who can also rewrite history)
The difference is a lack of consensus at the protocol level for git. The network's only 'canonical' version of things is at the whim of the maintainer (who can also rewrite history)
Fair enough, but what I meant to say is that in practice Git is always used in combination with a centralized service such as GitHub, GitLab or Bitbucket. There is no cryptographic consensus, that is true, but the model still works exceptionally well. All modern software engineering depends on it, successfully. I never heard someone ask for a more robust trust model with network protocol consensus. I don't think anyone actually needs it.
> Some examples IMHO are logs of participation (e.g. voting), agreements (e.g. contracts), exchange (e.g. payments), and auditing (e.g. compliance).
many of these things require privacy (and/or secrecy), which blockchain cannot guarantee (nor offer)
a private blockchain is simply a slower centralized database
> which requires the participants must trust the central administrative entity to be truthful, unbiased, secure, and with sufficient high availability and disaster recoverability.
that is exactly how voting, agreements (e.g. contracts), exchange (e.g. payments), and auditing (e.g. compliance) work.
You trust the regulator/intermediator/notary/government/bank etc.
many of these things require privacy (and/or secrecy), which blockchain cannot guarantee (nor offer)
a private blockchain is simply a slower centralized database
> which requires the participants must trust the central administrative entity to be truthful, unbiased, secure, and with sufficient high availability and disaster recoverability.
that is exactly how voting, agreements (e.g. contracts), exchange (e.g. payments), and auditing (e.g. compliance) work.
You trust the regulator/intermediator/notary/government/bank etc.
> many of these things require privacy (and/or secrecy), which blockchain cannot guarantee (nor offer)
Note that not everything needs to be public. One can (and in many cases should) save the transaction details in a private chain (or database for that matter) and publish only its signature publicly, so that any change can always be detected. But of course there still need to be the usual society safeguards present, otherwise no technical mean will solve anything.
Note that not everything needs to be public. One can (and in many cases should) save the transaction details in a private chain (or database for that matter) and publish only its signature publicly, so that any change can always be detected. But of course there still need to be the usual society safeguards present, otherwise no technical mean will solve anything.
I understand what you are saying, but you cannot say they provide trust advantages as a factual claim. The trust model is _different_, not better. There's value in centralized trust as well.
Yes and: tamper evident.
> Some examples are logs of participation
Yes and: Medical records.
While working in healthcare IT, mid-2000s, our records would be used to show who knew what when. There was a general uneasiness that our source of truth was just database entries and log files. I had somehow heard about using rolling hashes in log files. As you well know, then if any entries had errors (bad code, tampering, whatever), we'd be more likely to spot them. I managed to implement a prototype, before our startup was acquihired and our products shutdown (sniff). Sadly, none of the new PHBs understood or were interested in all the cool tech we had created.
Then some time later people started talking about slapping RFID and QR onto everything. Because hospitals are like a fight pit, with belligerents from different orgs and corps, coming and going, we thought to use a shared (tamper evident) audit log. aka blockchain. Sadly, that too didn't come to pass on our watch.
Beyond shared audit logs -- stuff like PoW/PoS, currency, whatever -- doesn't made any sense to me. I eventually decided it's all grift, though I'd be happy to proven wrong.
> Some examples are logs of participation
Yes and: Medical records.
While working in healthcare IT, mid-2000s, our records would be used to show who knew what when. There was a general uneasiness that our source of truth was just database entries and log files. I had somehow heard about using rolling hashes in log files. As you well know, then if any entries had errors (bad code, tampering, whatever), we'd be more likely to spot them. I managed to implement a prototype, before our startup was acquihired and our products shutdown (sniff). Sadly, none of the new PHBs understood or were interested in all the cool tech we had created.
Then some time later people started talking about slapping RFID and QR onto everything. Because hospitals are like a fight pit, with belligerents from different orgs and corps, coming and going, we thought to use a shared (tamper evident) audit log. aka blockchain. Sadly, that too didn't come to pass on our watch.
Beyond shared audit logs -- stuff like PoW/PoS, currency, whatever -- doesn't made any sense to me. I eventually decided it's all grift, though I'd be happy to proven wrong.
>> I am talking committees formed in parliaments and central banks around the world to discuss its benefits, serious universities dedicating whole programs on the subject, elite investors pouring money into its potential, and the list goes on.
Most of this is indeed nonsensical. However, I think you may be letting the hype train move the goalposts in your mind.
The vast majority of "blockchain tech" out there is indeed a scam, useless, and of no value. The same was true about what people promised about the Internet. Pets.com and all that. This is nothing new.
I've owned a small amount of cryptocurrency for a long time, because to own $0 in a modern portfolio is probably not too smart if you're an index-type investor, given the market cap of BTC + ETH. However, I am no zealot of the tech and was very skeptical for a long time. I still am skeptical, but the thing that convinced me to give cryptocurrency a bit more run was the concept of decentralized financial instruments. I know the HN poster reading this can't wait to reply with any number of links of scams and rugpulls after I mention this, and it's true, scams abound. This happened on the Internet big time when people would "never put their credit card online," for example.
All I can say is that the applications of decentralizing financial instruments and methods appeals to me in a way no other derived technology from cryptocurrency/blockchain has. Maybe it won't ring true for you, but I can see some novel services and products coming out of this area of blockchain technologies that will be a benefit for global payments and humans in general.
Plenty will disagree, and that's fine. I'm not saying I am definitively correct. Just saying I was in a similar spot to you, and with an open mind, eventually found something.
Most of this is indeed nonsensical. However, I think you may be letting the hype train move the goalposts in your mind.
The vast majority of "blockchain tech" out there is indeed a scam, useless, and of no value. The same was true about what people promised about the Internet. Pets.com and all that. This is nothing new.
I've owned a small amount of cryptocurrency for a long time, because to own $0 in a modern portfolio is probably not too smart if you're an index-type investor, given the market cap of BTC + ETH. However, I am no zealot of the tech and was very skeptical for a long time. I still am skeptical, but the thing that convinced me to give cryptocurrency a bit more run was the concept of decentralized financial instruments. I know the HN poster reading this can't wait to reply with any number of links of scams and rugpulls after I mention this, and it's true, scams abound. This happened on the Internet big time when people would "never put their credit card online," for example.
All I can say is that the applications of decentralizing financial instruments and methods appeals to me in a way no other derived technology from cryptocurrency/blockchain has. Maybe it won't ring true for you, but I can see some novel services and products coming out of this area of blockchain technologies that will be a benefit for global payments and humans in general.
Plenty will disagree, and that's fine. I'm not saying I am definitively correct. Just saying I was in a similar spot to you, and with an open mind, eventually found something.
You’re right.
There is for sure some value in blockchain technology, but you’re not insane for being baffled by the attention being paid to it. The whole space is riddled with nonsense, with very few concrete and practical use-cases being put forward. Cryptocurrencies in particular are awash with outright scams that just drown out the interesting and useful stuff.
I like this well-know NIST flowchart as a starting point: https://images.app.goo.gl/wsK2e2zPUnQW5agRA
It’s a bit pessimistic perhaps, but it kind of gets to the point: a blockchain is an interesting technology for solving problems where you need to achieve some sort of shared, trustless ledger. That’s useful in some cases, including the implementation of digital currencies.
I like this well-know NIST flowchart as a starting point: https://images.app.goo.gl/wsK2e2zPUnQW5agRA
It’s a bit pessimistic perhaps, but it kind of gets to the point: a blockchain is an interesting technology for solving problems where you need to achieve some sort of shared, trustless ledger. That’s useful in some cases, including the implementation of digital currencies.
You say you've done research, i'm curious how you did the research? The standard go to reference from people who don't like crypto is now is a 2 hour video that makes zero effort to look for any good. It's not alone, there are hundreds of videos that make bad faith effort to "investigate" crypto. On the progressive left, for some reason it is becoming part of their culture to hate crypto (which is ironic considering a huge amount of their goals could be achieved easier using it)
I will say though, the more I dug into crypto the more I see a lot of actually amazing things. I moved into the Avalanche chain, and it's a radically differenent experience from Bitcoin and ETH frankly. I don't think ETH or Bitcoin got close to accomplishing their vision, but AVAX is different. I'm making transactions all the time (I made almost 700 transactions last year... the taxes part absolutely sucks). I'm not going to try enumerate the ways I think crypto is useful but i'd question the sources you're using.
One big thing i'd point out, the vision of crypto is still pretty far out. There are many infrastructure pieces missing. DAPP's Development seems WAY slower than centralized services. A smart contract is like hardware development. You basically want to get it perfect before you release it. Move fast and break things could mean a 50 million dollar hack in crypto. That doesn't make crypto useless or bad. Just a thing you need to think about.
EDIT: I went back about 3 seconds after positing this to fix a spelling mistake, and I was downvoted. It would be nice to get a comment with each of your downvotes. In the past upvotes and downvotes were signal of quality (not agreement)
I will say though, the more I dug into crypto the more I see a lot of actually amazing things. I moved into the Avalanche chain, and it's a radically differenent experience from Bitcoin and ETH frankly. I don't think ETH or Bitcoin got close to accomplishing their vision, but AVAX is different. I'm making transactions all the time (I made almost 700 transactions last year... the taxes part absolutely sucks). I'm not going to try enumerate the ways I think crypto is useful but i'd question the sources you're using.
One big thing i'd point out, the vision of crypto is still pretty far out. There are many infrastructure pieces missing. DAPP's Development seems WAY slower than centralized services. A smart contract is like hardware development. You basically want to get it perfect before you release it. Move fast and break things could mean a 50 million dollar hack in crypto. That doesn't make crypto useless or bad. Just a thing you need to think about.
EDIT: I went back about 3 seconds after positing this to fix a spelling mistake, and I was downvoted. It would be nice to get a comment with each of your downvotes. In the past upvotes and downvotes were signal of quality (not agreement)
How is it a different experience? How is it actually amazing? I don't want you to enumerate the ways crypto is useful, I want you to give me one or two concrete use cases that aren't money laundering or buying illegal things.
Bitcoin has no unique use cases. It's simply a form of money that's secure, a worldwide trading economy that works.
The reason that's interesting is because as humanity we never had one of those before.
The reason that's interesting is because as humanity we never had one of those before.
I won't attempt to enumerate the ways that crypto is useful. But i'll tell you how I want to use it.
But first, it's important to understand this. The actual foundations for what crypto can enable is still being built, so if you're expecting me to show you some "killer app"... i'm not going to show you a working version today. Is that because Crypto is vaporware? No, i'm seeing important stuff deployed all the time. It's because the underlying infrastructure is being built as we speak. One example, today ETH transactions are expensive. I bought an ENS domain (which hey, that's cool) the domain cost $5, but the gas cost $200. That's a problem. Fortunately, that's a problem people are working on. ETH is building out L2. AVAX (the chain I am most heavily invested in) is using something called subnets. A subnet for example allows you to have a custom VM, and isolate chain traffic (gas cost is a function of supply and demand for blockspace, if you both increase supply of blockspace, and decrease demand for specific blockspace you can reduce gas prices). The early examples of subnets are demonstrating this theory is true.
With cheaper transactions, and custom VM's the application space will widen. On my preferred chain AVAX, that's stuff that is JUST now being released (like first one was deployed a few weeks ago). The stuff that is becoming popular today (Defi, NFT's etc) are foundational components.
So with that laid out, here's my use case. I want to run a SaaS. How is a blockchain superior to "traditional" methods? A saas managed by a DAO has a central advantage. No employees. As a corporation i'm limited by the resources I have employed for me. Need a feature? Let me prioritize it, add it to a sprint etc. Corporations have employees, and they can only move as fast as those employees allow it. A DAO with zero employees has the entire internet as a potential contribution source. But unlike open source development, it's not done by "good will". You can pay people for their contributions in a trustless way that allows ANYONE to contribute and earn. Also, and this IS a benefit, in a future of GPT3 and AI assisted coding. There's probably going to be swarms of bots searching the space for work. Posting work, providing a way to pick it up, and integrate it into your project is going to be WAY faster in the blockchain space, than what corps will be able to acheive. But there's a few missing pieces before this can work. We have services like Akash, so throwing services into the blockchain is possible today. But managing a repository on the chain is not. I was contemplating using stateful precompiles in a Subnet VM to do this. The next problem is bridging SUCKS, but all these raw components are scattered around. That makes it difficult, even with the pieces defined to be combined. Solvable problems, but things that need to be solved.
But first, it's important to understand this. The actual foundations for what crypto can enable is still being built, so if you're expecting me to show you some "killer app"... i'm not going to show you a working version today. Is that because Crypto is vaporware? No, i'm seeing important stuff deployed all the time. It's because the underlying infrastructure is being built as we speak. One example, today ETH transactions are expensive. I bought an ENS domain (which hey, that's cool) the domain cost $5, but the gas cost $200. That's a problem. Fortunately, that's a problem people are working on. ETH is building out L2. AVAX (the chain I am most heavily invested in) is using something called subnets. A subnet for example allows you to have a custom VM, and isolate chain traffic (gas cost is a function of supply and demand for blockspace, if you both increase supply of blockspace, and decrease demand for specific blockspace you can reduce gas prices). The early examples of subnets are demonstrating this theory is true.
With cheaper transactions, and custom VM's the application space will widen. On my preferred chain AVAX, that's stuff that is JUST now being released (like first one was deployed a few weeks ago). The stuff that is becoming popular today (Defi, NFT's etc) are foundational components.
So with that laid out, here's my use case. I want to run a SaaS. How is a blockchain superior to "traditional" methods? A saas managed by a DAO has a central advantage. No employees. As a corporation i'm limited by the resources I have employed for me. Need a feature? Let me prioritize it, add it to a sprint etc. Corporations have employees, and they can only move as fast as those employees allow it. A DAO with zero employees has the entire internet as a potential contribution source. But unlike open source development, it's not done by "good will". You can pay people for their contributions in a trustless way that allows ANYONE to contribute and earn. Also, and this IS a benefit, in a future of GPT3 and AI assisted coding. There's probably going to be swarms of bots searching the space for work. Posting work, providing a way to pick it up, and integrate it into your project is going to be WAY faster in the blockchain space, than what corps will be able to acheive. But there's a few missing pieces before this can work. We have services like Akash, so throwing services into the blockchain is possible today. But managing a repository on the chain is not. I was contemplating using stateful precompiles in a Subnet VM to do this. The next problem is bridging SUCKS, but all these raw components are scattered around. That makes it difficult, even with the pieces defined to be combined. Solvable problems, but things that need to be solved.
in my experience volunteering at a dao, daos increase coordination effort required and have yet to yield additional productivity.
i wonder which pieces we are missing to get to your theoretical world of increased efficiency.
i wonder which pieces we are missing to get to your theoretical world of increased efficiency.
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Frankly I haven't seen a DAO that operates the way I'd assume a DAO should operate. Today they seem like little developer collectives. It doesn't surprise me that it's less effecient. I think I explained in my previous post what I think needs to be built.
There does exist gitcoin today, but that is not a repository attached to a smart contract. The idea of smart contracts governing a repository is POWERFUL and critical to making it work IMO.
There does exist gitcoin today, but that is not a repository attached to a smart contract. The idea of smart contracts governing a repository is POWERFUL and critical to making it work IMO.
> But unlike open source development, it's not done by "good will". You can pay people for their contributions in a trustless way that allows ANYONE to contribute and earn.
You can pay people for open source work now. You can even pay them in crypto.
A DAO doesn't make any of the hard work of developing a system (eg, specifying what you need, arguing if it has or hasn't been developed correctly) any easier.
You can pay people for open source work now. You can even pay them in crypto.
A DAO doesn't make any of the hard work of developing a system (eg, specifying what you need, arguing if it has or hasn't been developed correctly) any easier.
I hear what you're saying, and I agree given your framework of constraints its true. I'd argue the constraints are wrong on chain. If you're engineering a "system" you're thinking like a corporation.
The magic of crypto are the various protocols are like legos. I think a DAO should be a simple single capability like a unix process. It should strive to do one thing well.
The magic of crypto are the various protocols are like legos. I think a DAO should be a simple single capability like a unix process. It should strive to do one thing well.
"money lego" works well when it's specific technical capabilities that need to be stuck together.
That makes no sense at all when it's a complex process with human interactions.
I think DAOs are interesting things. But the completely naive way people talk about them (like what you are saying here) is completely unrealistic and shows the lack of technical experience that so much of crypto suffers from.
That makes no sense at all when it's a complex process with human interactions.
I think DAOs are interesting things. But the completely naive way people talk about them (like what you are saying here) is completely unrealistic and shows the lack of technical experience that so much of crypto suffers from.
You say you've done research, i'm curious how you did the research? The standard go to reference from people who don't like crypto is now is a 2 hour video that makes zero effort to look for any good.
Responses such as this one make me think of the crypto-scene as some sort of weird techno-religion.
Imagine writing something like this about using REST, a relational database, or a high-level language vs assembly.
Imagine talking about a certain political faction “hating” dynamic typing.
I’ll admit I had to stop reading your comment after the first paragraph.
Responses such as this one make me think of the crypto-scene as some sort of weird techno-religion.
Imagine writing something like this about using REST, a relational database, or a high-level language vs assembly.
Imagine talking about a certain political faction “hating” dynamic typing.
I’ll admit I had to stop reading your comment after the first paragraph.
What people have to understand is blockchain is more than just about coins. Blockchain is a way for everyone to have a global, universal database that anyone can read and write data to. That has value.
Drug trade, tax avoidance, banking for the unbanked and sanctioned. I'm currently living from airbnb to airbnb, with all my Russian banks banned from SWIFT, and crypto is the only way I'm abe to access my money.
I recently watched this video (Line Goes Up) and it covers a lot of ground, from crypto to NFTs to DAOs.
https://www.youtube.com/watch?v=YQ_xWvX1n9g
https://www.youtube.com/watch?v=YQ_xWvX1n9g
You're missing the fact that it enabled purely online/digital money people will actually use.
You could build an online currency with a database much more easily than blockchain but people won't use it because it relies on a central authority to maintain the database and not enough people will trust that central authority not to misuse their power. It was tried a bunch of times in the past and never worked.
Fundamentally though it isn't about the technology it's about the transition. It's about money transitioning to a purely digital form which people will use.
In the past entire industries have been revolutionised multiple times by such transitions. Music moved to digital via mp3. TV, Movies via efficient video codecs and streaming. In both cases those shifts caused massive and unpredictable changes to how we consume and buy music/tv.
Now that money is making the same transition, people are jumping on it hoping to profit from it and money is much much more important a technology than music or tv/movies, it's the fundamental technology of society.
You could build an online currency with a database much more easily than blockchain but people won't use it because it relies on a central authority to maintain the database and not enough people will trust that central authority not to misuse their power. It was tried a bunch of times in the past and never worked.
Fundamentally though it isn't about the technology it's about the transition. It's about money transitioning to a purely digital form which people will use.
In the past entire industries have been revolutionised multiple times by such transitions. Music moved to digital via mp3. TV, Movies via efficient video codecs and streaming. In both cases those shifts caused massive and unpredictable changes to how we consume and buy music/tv.
Now that money is making the same transition, people are jumping on it hoping to profit from it and money is much much more important a technology than music or tv/movies, it's the fundamental technology of society.
People were using money online just fine well before Bitcoin, and even today, actually using BTC for non-investment purposes is a tiny minority. What exactly makes a dollar or euro less "online/digital" than a bitcoin?
Speed of iteration/development/experimentation. You can't fork EUR/USD, experiment with it and see if it works better than the existing EUR/USD. You can with online currencies and people are doing just that.
Most will be failures in the same way that most new businesses/startups are ultimately failures. BUT the difference is there is actual experimentation with money now in a way that there never was before.
Most will be failures in the same way that most new businesses/startups are ultimately failures. BUT the difference is there is actual experimentation with money now in a way that there never was before.
None of these are experiments with the concept of money. You still transact in the exact same fundamental way as with traditional online payments, just 1000x worse.
99.9% of this "experimentation" is simply companies tying ownership of a token to a permission to access a web service. And the remainder of it are clueless tech brained morons finding ways to re-invent financial instruments (like residuals, profit splitting, and derivation) that have been around for hundreds of years. You don't have any new insights into financial systems, you just want to be at the top of the financial system and collect rents
99.9% of this "experimentation" is simply companies tying ownership of a token to a permission to access a web service. And the remainder of it are clueless tech brained morons finding ways to re-invent financial instruments (like residuals, profit splitting, and derivation) that have been around for hundreds of years. You don't have any new insights into financial systems, you just want to be at the top of the financial system and collect rents
Yeah and mp3 didn't fundamentally change the fact that you still listen to music with your ears. Video codecs didn't change the fact you watch moving pictures with your eyes. But they did change an awful lot about existing industries and invented new ones.
I personally have never been involved in crypto or bought anything crypto related. I have no incentive either way in its success or failure. I've just lived long enough to see what happens when stuff suddenly goes 100% digital, the pace of iteration, exploration and adoption rapidly speeds up while the costs of doing all three decreases.
I think something interesting will come of it, even if I cannot say what that will be.
I personally have never been involved in crypto or bought anything crypto related. I have no incentive either way in its success or failure. I've just lived long enough to see what happens when stuff suddenly goes 100% digital, the pace of iteration, exploration and adoption rapidly speeds up while the costs of doing all three decreases.
I think something interesting will come of it, even if I cannot say what that will be.
For the average person there is no difference between entering credit card info into a web page and using a wallet manager to enter your crypto info into an app, except that the wallet manager is infinitely more insecure and much more cumbersome. Going from a walkman to an ipod/itunes was an actual improvement in storage capacity, usability, accessibility etc.
As for holding out hope something will come out of crypto, using your example of mp3s and digital video, as soon as those were available to the general public they were RAPIDLY and enthusiastically adopted by the entire public. In the last 10+ years the crypto audience has gone from libertarians and fans of illicit drugs to libertarians, gambling addicts, and developers hoping to skill into the "next big thing".
As for holding out hope something will come out of crypto, using your example of mp3s and digital video, as soon as those were available to the general public they were RAPIDLY and enthusiastically adopted by the entire public. In the last 10+ years the crypto audience has gone from libertarians and fans of illicit drugs to libertarians, gambling addicts, and developers hoping to skill into the "next big thing".
And before I get a response about the insecurity of metamask: https://twitter.com/wakaflocka/status/1475709903184412675
> None of these are experiments with the concept of money. You still transact in the exact same fundamental way as with traditional online payments, just 1000x worse.
How involved are you in the space to make this claim? Are you staying informed? What is your highly confident language based on?
Can you tease out how you come to "1000x worse"?
You are incredibly confident, it leads me to believe you have some big blind points.
How involved are you in the space to make this claim? Are you staying informed? What is your highly confident language based on?
Can you tease out how you come to "1000x worse"?
You are incredibly confident, it leads me to believe you have some big blind points.
Fiat aren't less "online/digital" than crypto, they're less "cash" than crypto in the sense that no third party can prevent you from receiving or sending it.
If you use something like Monero it's also much less traceable than digital fiat.
If you use something like Monero it's also much less traceable than digital fiat.
> Fiat aren't less "online/digital" than crypto, they're less "cash" than crypto in the sense that no third party can prevent you from receiving or sending it.
That's not what the GP was claiming, but even this is debatable. With in-person cash, it's generally impossible for anyone to prevent your from doing a transaction.
But with BTC, it's not that hard to prevent a vendor from shipping the item to you, even if they can't prevent the transfer from going through. Perhaps Monero is indeed untraceable, but as long as your buying physical goods, those need to be delivered to some physical address, and can be traced that way.
That's not what the GP was claiming, but even this is debatable. With in-person cash, it's generally impossible for anyone to prevent your from doing a transaction.
But with BTC, it's not that hard to prevent a vendor from shipping the item to you, even if they can't prevent the transfer from going through. Perhaps Monero is indeed untraceable, but as long as your buying physical goods, those need to be delivered to some physical address, and can be traced that way.
tl;dr: Nothing. But there are some big caveats to that.
Sure, we already have tons of currency transactions going on digitally and on-line, but Bitcoin offers something that the centralized entities cannot, and these are (in no particular order):
Unconfiscatable: Because nobody can take your bitcoins away from you unless you give away your keys.
Regulation resistant: Because nobody can stop you from trading or transacting with your bitcoins at any point if you own the keys. Bitcoin does not care about which borders it goes over, or the regulation therein. (But if you break the laws of your country by making illegal transactions, then you're of course taking a huge risk.)
Crime resistance: Granted, you can be coerced into giving up your keys, but then you have the option to flag your own account for all other parties. Since all transactions are public on the ledger, it will prevent criminal parties from using your funds with full anonymity, thus making them a lot easier to catch.
Relative privacy (but not 100% anonymity): Because nobody can really know who owns an address or a transaction unless they have access to special intel that they usually will only be privy to if they own a ton of third party hardware, software and skill (i.e. if they're operating for a totalitarian surveillance state). Or if you willingly give it up your anonymity to some central authority that promises to safekeep that information, which most buyers do, btw, which decreases regulation resistance while it increases crime resistance.
Corruption resistance: Honestly, if you want to commit crimes or corruption, then cash is a way better vessel for value, since all transactions with cash are near 100% anonymous (barring widespread bank note ID code control which is also limited), and there are several superior ways in which cash may be whitewashed if you have the infrastructure for it. Meanwhile it's surprisingly hard to whitewash Bitcoin given that all transactions are public.
I might even have missed a few value propositions, but those are the most important.
> and even today, actually using BTC for non-investment purposes is a tiny minority
This is increasingly untrue. Take the countries now adopting Bitcoin as legal tender (with the Lightning Network), for example, and the many stories of people using it to make bigger purchases.
Sure, we already have tons of currency transactions going on digitally and on-line, but Bitcoin offers something that the centralized entities cannot, and these are (in no particular order):
Unconfiscatable: Because nobody can take your bitcoins away from you unless you give away your keys.
Regulation resistant: Because nobody can stop you from trading or transacting with your bitcoins at any point if you own the keys. Bitcoin does not care about which borders it goes over, or the regulation therein. (But if you break the laws of your country by making illegal transactions, then you're of course taking a huge risk.)
Crime resistance: Granted, you can be coerced into giving up your keys, but then you have the option to flag your own account for all other parties. Since all transactions are public on the ledger, it will prevent criminal parties from using your funds with full anonymity, thus making them a lot easier to catch.
Relative privacy (but not 100% anonymity): Because nobody can really know who owns an address or a transaction unless they have access to special intel that they usually will only be privy to if they own a ton of third party hardware, software and skill (i.e. if they're operating for a totalitarian surveillance state). Or if you willingly give it up your anonymity to some central authority that promises to safekeep that information, which most buyers do, btw, which decreases regulation resistance while it increases crime resistance.
Corruption resistance: Honestly, if you want to commit crimes or corruption, then cash is a way better vessel for value, since all transactions with cash are near 100% anonymous (barring widespread bank note ID code control which is also limited), and there are several superior ways in which cash may be whitewashed if you have the infrastructure for it. Meanwhile it's surprisingly hard to whitewash Bitcoin given that all transactions are public.
I might even have missed a few value propositions, but those are the most important.
> and even today, actually using BTC for non-investment purposes is a tiny minority
This is increasingly untrue. Take the countries now adopting Bitcoin as legal tender (with the Lightning Network), for example, and the many stories of people using it to make bigger purchases.
None of your examples work as easily as you say.
Unconfiscatable: a judge may order you to hand over your bitcoin, or face jail time for contempt of court etc.
Regulation resistant: see above. Also, depends crucially on anonimity, which doesn't hold up either.
Crime resitance: much worse than digital money, which is insured and much better protected by the state.
Relative privacy: only works for btc-to-btc transactions, or if you spend significant effort. Otherwise, the moment you order somethibg at home using BTC, the entity that you ordered from knows exactly whose wallet this is, and everything else they do or have done with their money.
Corruption resistance: maybe, since privacy is really bad.
And the heyday of people using BTC for actual transactions I think has mostly gone. It used to be that you could buy games on Steam or a Tesla with BTC, but no more.
Note as well that Lightning Network is not BTC - it rarely touches the BTC block chain and offers much weaker guarantees than BTC (in particular, it's easy to double spend on LN if your node is unreliable). And lots of people in El Salvador (the only country that has been crazy enough to do this) are not even using the LN, they are using an app which does most transfers on their own servers, and only used LN for interoperation with other apps.
Unconfiscatable: a judge may order you to hand over your bitcoin, or face jail time for contempt of court etc.
Regulation resistant: see above. Also, depends crucially on anonimity, which doesn't hold up either.
Crime resitance: much worse than digital money, which is insured and much better protected by the state.
Relative privacy: only works for btc-to-btc transactions, or if you spend significant effort. Otherwise, the moment you order somethibg at home using BTC, the entity that you ordered from knows exactly whose wallet this is, and everything else they do or have done with their money.
Corruption resistance: maybe, since privacy is really bad.
And the heyday of people using BTC for actual transactions I think has mostly gone. It used to be that you could buy games on Steam or a Tesla with BTC, but no more.
Note as well that Lightning Network is not BTC - it rarely touches the BTC block chain and offers much weaker guarantees than BTC (in particular, it's easy to double spend on LN if your node is unreliable). And lots of people in El Salvador (the only country that has been crazy enough to do this) are not even using the LN, they are using an app which does most transfers on their own servers, and only used LN for interoperation with other apps.
> a judge may order you to hand over your bitcoin, or face jail time for contempt of court etc.
First the judge must establish that you indeed own the coins within reasonable doubt, which is hard enough on its own considering that Bitcoin doesn't store personal data. Then she must pry the keys from your brain, while proving within reasonable doubt that you haven't forgotten them. And if you have forgotten them, then she can't prove whether or not it's on purpose, so your sentence will likely be commuted. Because at that point there's a higher chance that it's the state committing a crime than you. Meanwhile if you had a bank account full of cash, all the bank would have to do is to freeze it, just like in Canada. You just can't do that with Bitcoin unless you keep the coins on a centralized exchange. And most smart owners don't.
As for bandits and robbers, they exist everywhere, but most of them won't know that you have crypto in the first place, because it can't be readily seen. And so it would be unreasonable of them to risk life in prison just for the off chance that you might own it. Cash or gold, on the other hand... Either way, that's not a reasonable argument against the unconfiscatableness of Bitcoin. It's certainly far less confiscatable than cash, digital or otherwise, and its unconfiscatableness is far superior to that of physical valuables. That's the point, and not that it's stored in some fictional fortress or No-Room (see Dune lore if you don't know what the latter is).
> Regulation resistant: see above. Also, depends crucially on anonimity, which doesn't hold up either.
The argument holds up just fine, because giving up your anonymity is voluntary and not required for Bitcoin to work. Digital cash, on the other hand... And even if the state suspects you of crossing their regulations, they would #1. have to know about it, which isn't likely, #2. they'd have to have good reason to believe you broke their regulations intentionally, and #3. they'd have to spend an enormous amount of resources to get all the evidence, and push the case, which means they'd more likely focus on bigger fish. But if they do spend all those resources on you, it increases the chance that you're living in a horrible surveillance state, and so your best course of action is really to move to a better place, and countries like that do exist. And so the argument still holds perfectly, that Bitcoin is indeed regulation resistant. The reason for that is because state actors (or criminals) cannot in any meaningful way stop transactions that go in and out of different jurisdictions, even if those states are adversarial to Bitcoin or not. In order for them to do that, they'd basically have to shut down the Internet entirely, and not even China does that!
Also please take note of the word resistant. As you may know that doesn't mean airtight or 100%. Most people willingly give up KYC information to central exchanges to trade it, for example. Well, then you voluntarily comply with regulation, so it still holds that it's coercion and crime resistant. And in giving up personal information, it can also be argued that you in fact increase crime resistance as a trade-off, so doing it isn't even a bad trade, say if you want to do it in order to trade on a centralized exchange!
> Crime resitance: much worse than digital money, which is insured and much better protected by the state.
Oh, so your state pays back money that has been robbed from you? Neat! :) Sorry for the sarcasm, but I really expected better from you... Where I'm from, state sanctioned insurance funds sadly only covers bankruptcy. With that said, insurance of self custodied coins is of course quite possible though completely voluntary. And as if that isn't enough, most exchanges also insure your crypto by default, thus voiding the latter half of your argument.
Even so, insurance is a completely different matter to crime! Because when it comes to crime, police everywhere are obliged to investigate any criminal theft of value, no matter if it's cash or otherwise. So I don't see how somehow owning crypto suddenly makes you any less protected by the state. If not, the New York couple who stole billions in crypto this year would be set free.
In fact, since the ledger is public and accessible to all, there is a really great argument for crypto owners being better protected than if they merely lost cash. Especially since you can stop criminals by publishing the ownership of your wallet to exchanges. The police are thus far more likely to catch crypto robbers than if you lost cash.
> Relative privacy: only works for btc-to-btc transactions, or if you spend significant effort.
The neat thing here is that you actually don't have to spend significant efforts to keep Bitcoin private, especially if you generate a new address for each new coin received or sent, which is pretty trivial within this technology. And it's only getting more secure with the Lightning Network. So in sum Bitcoin is moving towards becoming even more private and secure. Either way, nobody's forcing you to buy crypto on centralized exchanges. It's entirely possible to exchange it privately, and many do.
> Corruption resistance: maybe, since privacy is really bad.
Quite the opposite, privacy on Bitcoin is pretty good. Although central exchanges do store KYC data, they won't give it out nilly-willy. It's really up to you whether you want to sacrifice convenience for anonymity though. The same isn't true for most other payment methods, unless you are somehow able to get your hands on large amounts of cash without showing your ID at some point. Outside of that, there is of course a theoretical possibility of losing your privacy if you practise really poor operational security, such as transacting over unsecured channels on what you think is airport wifi.
But even though you keep your anonymity air tight, Bitcoin is still corruption resistant. It stays corruption resistant because the ledger is public, and because bad transactions can be flagged. Thus even though the exchanges or institutions might not know your name, you'll still be prevented from using the coins in your wallet if it's found that they are from illicit activity, thus incentivizing good behaviour. And so even though privacy is really good, it's still corruption resistant.
> the heyday of people using BTC for actual transactions I think has mostly gone.
So entire countries using it as legal tender doesn't impress you? Man, you're hard to please! As for El Salvador, nobody's forcing them to use the Chiva wallet. And afaik you can also transact with it with both through the legacy system and with the Lightning Network.
First the judge must establish that you indeed own the coins within reasonable doubt, which is hard enough on its own considering that Bitcoin doesn't store personal data. Then she must pry the keys from your brain, while proving within reasonable doubt that you haven't forgotten them. And if you have forgotten them, then she can't prove whether or not it's on purpose, so your sentence will likely be commuted. Because at that point there's a higher chance that it's the state committing a crime than you. Meanwhile if you had a bank account full of cash, all the bank would have to do is to freeze it, just like in Canada. You just can't do that with Bitcoin unless you keep the coins on a centralized exchange. And most smart owners don't.
As for bandits and robbers, they exist everywhere, but most of them won't know that you have crypto in the first place, because it can't be readily seen. And so it would be unreasonable of them to risk life in prison just for the off chance that you might own it. Cash or gold, on the other hand... Either way, that's not a reasonable argument against the unconfiscatableness of Bitcoin. It's certainly far less confiscatable than cash, digital or otherwise, and its unconfiscatableness is far superior to that of physical valuables. That's the point, and not that it's stored in some fictional fortress or No-Room (see Dune lore if you don't know what the latter is).
> Regulation resistant: see above. Also, depends crucially on anonimity, which doesn't hold up either.
The argument holds up just fine, because giving up your anonymity is voluntary and not required for Bitcoin to work. Digital cash, on the other hand... And even if the state suspects you of crossing their regulations, they would #1. have to know about it, which isn't likely, #2. they'd have to have good reason to believe you broke their regulations intentionally, and #3. they'd have to spend an enormous amount of resources to get all the evidence, and push the case, which means they'd more likely focus on bigger fish. But if they do spend all those resources on you, it increases the chance that you're living in a horrible surveillance state, and so your best course of action is really to move to a better place, and countries like that do exist. And so the argument still holds perfectly, that Bitcoin is indeed regulation resistant. The reason for that is because state actors (or criminals) cannot in any meaningful way stop transactions that go in and out of different jurisdictions, even if those states are adversarial to Bitcoin or not. In order for them to do that, they'd basically have to shut down the Internet entirely, and not even China does that!
Also please take note of the word resistant. As you may know that doesn't mean airtight or 100%. Most people willingly give up KYC information to central exchanges to trade it, for example. Well, then you voluntarily comply with regulation, so it still holds that it's coercion and crime resistant. And in giving up personal information, it can also be argued that you in fact increase crime resistance as a trade-off, so doing it isn't even a bad trade, say if you want to do it in order to trade on a centralized exchange!
> Crime resitance: much worse than digital money, which is insured and much better protected by the state.
Oh, so your state pays back money that has been robbed from you? Neat! :) Sorry for the sarcasm, but I really expected better from you... Where I'm from, state sanctioned insurance funds sadly only covers bankruptcy. With that said, insurance of self custodied coins is of course quite possible though completely voluntary. And as if that isn't enough, most exchanges also insure your crypto by default, thus voiding the latter half of your argument.
Even so, insurance is a completely different matter to crime! Because when it comes to crime, police everywhere are obliged to investigate any criminal theft of value, no matter if it's cash or otherwise. So I don't see how somehow owning crypto suddenly makes you any less protected by the state. If not, the New York couple who stole billions in crypto this year would be set free.
In fact, since the ledger is public and accessible to all, there is a really great argument for crypto owners being better protected than if they merely lost cash. Especially since you can stop criminals by publishing the ownership of your wallet to exchanges. The police are thus far more likely to catch crypto robbers than if you lost cash.
> Relative privacy: only works for btc-to-btc transactions, or if you spend significant effort.
The neat thing here is that you actually don't have to spend significant efforts to keep Bitcoin private, especially if you generate a new address for each new coin received or sent, which is pretty trivial within this technology. And it's only getting more secure with the Lightning Network. So in sum Bitcoin is moving towards becoming even more private and secure. Either way, nobody's forcing you to buy crypto on centralized exchanges. It's entirely possible to exchange it privately, and many do.
> Corruption resistance: maybe, since privacy is really bad.
Quite the opposite, privacy on Bitcoin is pretty good. Although central exchanges do store KYC data, they won't give it out nilly-willy. It's really up to you whether you want to sacrifice convenience for anonymity though. The same isn't true for most other payment methods, unless you are somehow able to get your hands on large amounts of cash without showing your ID at some point. Outside of that, there is of course a theoretical possibility of losing your privacy if you practise really poor operational security, such as transacting over unsecured channels on what you think is airport wifi.
But even though you keep your anonymity air tight, Bitcoin is still corruption resistant. It stays corruption resistant because the ledger is public, and because bad transactions can be flagged. Thus even though the exchanges or institutions might not know your name, you'll still be prevented from using the coins in your wallet if it's found that they are from illicit activity, thus incentivizing good behaviour. And so even though privacy is really good, it's still corruption resistant.
> the heyday of people using BTC for actual transactions I think has mostly gone.
So entire countries using it as legal tender doesn't impress you? Man, you're hard to please! As for El Salvador, nobody's forcing them to use the Chiva wallet. And afaik you can also transact with it with both through the legacy system and with the Lightning Network.
Serious answer: The supply of the digital currency. For euro/dollars that supply is dictated by a handful of individuals. For Bitcoin and other cryptocurrencies, that supply is dictated by code and consensus that anybody can participate in.
> For euro/dollars that supply is dictated by a handful of individuals.
The supply is dictated by the country's government (or a complex web of governments and the EU, in the case of the euro), which is ultimately controlled by the people who live in that country, at least to some extent. If the US government and the Fed decided to issue 100 new trillion dollars tomorrow, devaluing everyone's money, there would be rioting in the streets. The politicians who participated or allowed it to happen would never see office again.
In contrast, the supply of Bitcoin is dictated by the programmers that actually do the work of writing the node software, in collaboration with the largest miners. Currently I believe they are respecting the protocol laid out by Satoshi, but they are free do decide to do otherwise at some point in the future. If they decided to issue new Bitcoin, Bitcoin may or may not collapse, but they would face no personal repercussions.
So I would say I personally, and I believe you as well, have a much bigger (though minuscule, of course) say about the supply of euro/dollars than we do in the supply of Bitcoin.
The supply is dictated by the country's government (or a complex web of governments and the EU, in the case of the euro), which is ultimately controlled by the people who live in that country, at least to some extent. If the US government and the Fed decided to issue 100 new trillion dollars tomorrow, devaluing everyone's money, there would be rioting in the streets. The politicians who participated or allowed it to happen would never see office again.
In contrast, the supply of Bitcoin is dictated by the programmers that actually do the work of writing the node software, in collaboration with the largest miners. Currently I believe they are respecting the protocol laid out by Satoshi, but they are free do decide to do otherwise at some point in the future. If they decided to issue new Bitcoin, Bitcoin may or may not collapse, but they would face no personal repercussions.
So I would say I personally, and I believe you as well, have a much bigger (though minuscule, of course) say about the supply of euro/dollars than we do in the supply of Bitcoin.
To your first point, they haven’t gone to 100 trillion at a time yet but we sure look like we are getting there.
To your second point, there are other parts of the Bitcoin ecosystem besides miners and developers that have a say in which version of the code ends up being run. It isn’t as simple as largest miners and it definitely isn’t as simple as issuing new Bitcoin without facing personal repercussions. Look into the block size debate to see how contentious any changes to the core protocol actually are and which players actually made a difference.
Let’s agree to agree. The average person has minuscule impact on their chosen money’s supply. To quantify which one would take more impact by the Average Joe in this day and age is going to have to be judged by history in decades - not by us now.
To your second point, there are other parts of the Bitcoin ecosystem besides miners and developers that have a say in which version of the code ends up being run. It isn’t as simple as largest miners and it definitely isn’t as simple as issuing new Bitcoin without facing personal repercussions. Look into the block size debate to see how contentious any changes to the core protocol actually are and which players actually made a difference.
Let’s agree to agree. The average person has minuscule impact on their chosen money’s supply. To quantify which one would take more impact by the Average Joe in this day and age is going to have to be judged by history in decades - not by us now.
> It was tried a bunch of times in the past and never worked.
Sorry, EUR and USD and KES (Kenyan shilling, uses a great cheap payment system on mobile phones called M-Pesa) and XRP (Ripple, a "crypto currency" with a central authority) don't work? I hadn't noticed.
Sorry, EUR and USD and KES (Kenyan shilling, uses a great cheap payment system on mobile phones called M-Pesa) and XRP (Ripple, a "crypto currency" with a central authority) don't work? I hadn't noticed.
XRP is special in that it's distributed, but I wouldn't call it decentralized (so you're completely correct in calling it a crypto with a centralized authority). For instance it's possible for nodes to block other nodes at their whim. This is a very attractive trait for banks or groups of banks. But similarly it's a very bad trait for any smaller actor. So sure, it works, but it also gives up huge amounts of control to central authorities. I mean, if you're OK with giving up your freedom to uncontrollable inflation, then go right ahead and use it!
And then US government prints trillions of dollars and inflate your savings. Or Russian government locks you USDs while Visa, Mastercard and sanctions make it impossible to move money out of the country. Or ask Belorussians and Argentinians how much they like double digit inflation that goes year after year after year while government limits ability to buy a more stable currency.
Above is just about money but there is another perspective. Think about a car sale and how would you automate it. To date most car sales require some paperwork to register the right transfer. This happens behind the scenes and you may not know but it happens and occupies some people. You simply cannot automate a car same with just a database. There must be a trust component in the system and a way to maintain it. Trust maintenance typically means audits, licensees, etc and they do not come for free.
Above is just about money but there is another perspective. Think about a car sale and how would you automate it. To date most car sales require some paperwork to register the right transfer. This happens behind the scenes and you may not know but it happens and occupies some people. You simply cannot automate a car same with just a database. There must be a trust component in the system and a way to maintain it. Trust maintenance typically means audits, licensees, etc and they do not come for free.
No, BTC is not functionally a currency and hasn't been since the silk road era. Effectively no one is buying goods and services with BTC, it is a speculative asset. Even Musk stopped taking BTC payments for Tesla because of the astronomical fees and incredible long settle times.
"You could build an online currency with a database much more easily than blockchain but people won't use it because it relies on a central authority to maintain the database and not enough people will trust that central authority not to misuse their power." Credit cards run 100% of online transactions and do a fantastic, quick, and cheap job of it. Crypto isn't creating something wholly new, it is attempting to compete with a network that charges 1-2% fees, works in seconds, and handles 1 BILLION transactions a day. With BTC you can't predict the fees or the transaction time and the network handles ~40k transactions a day, at extreme cost. Crypto currencies get more inefficient as more nodes come online (hence the proliferation of "side-chains" for games that need to actually, you know, make a non trivial number of transactions per second) and so they fundamentally break at scale. And don't try to spout some line about Proof of Stake, Ethereum will continue to push back the migration until the heat death of the universe.
Now you will probably respond that credit cards use existing currencies and the fundamental shift here is that this is an "online currency" vs "online payments". To the average person this is a distinction without a difference. Really this is fundamentally political, an (openly stated!) war on the Dollar, the Euro, the Yen, etc and the associated governments by anarcho capitalist Libertarians who want to trade bureaucratic government services with profit-driven corporate services
"You could build an online currency with a database much more easily than blockchain but people won't use it because it relies on a central authority to maintain the database and not enough people will trust that central authority not to misuse their power." Credit cards run 100% of online transactions and do a fantastic, quick, and cheap job of it. Crypto isn't creating something wholly new, it is attempting to compete with a network that charges 1-2% fees, works in seconds, and handles 1 BILLION transactions a day. With BTC you can't predict the fees or the transaction time and the network handles ~40k transactions a day, at extreme cost. Crypto currencies get more inefficient as more nodes come online (hence the proliferation of "side-chains" for games that need to actually, you know, make a non trivial number of transactions per second) and so they fundamentally break at scale. And don't try to spout some line about Proof of Stake, Ethereum will continue to push back the migration until the heat death of the universe.
Now you will probably respond that credit cards use existing currencies and the fundamental shift here is that this is an "online currency" vs "online payments". To the average person this is a distinction without a difference. Really this is fundamentally political, an (openly stated!) war on the Dollar, the Euro, the Yen, etc and the associated governments by anarcho capitalist Libertarians who want to trade bureaucratic government services with profit-driven corporate services
1. 2% is not low.
2. Crypto is mostly open source software. Most open source software gets better quickly. Writing off crypto completely because of its current state is a bit short sighted.
3. Could you say more about proof of stake? Vitalik[1] supports it and so do most eth devs. Seems to be a matter of time and implementation.
1 - https://vitalik.ca/general/2020/11/06/pos2020.html
2. Crypto is mostly open source software. Most open source software gets better quickly. Writing off crypto completely because of its current state is a bit short sighted.
3. Could you say more about proof of stake? Vitalik[1] supports it and so do most eth devs. Seems to be a matter of time and implementation.
1 - https://vitalik.ca/general/2020/11/06/pos2020.html
1. At current fees, if you were to attempt to send less than ~$85 worth of btc then you are paying more than 2%. A year ago, fees skyrocketed such that you would need to transfer ~$3000 to have the fees amount to less than 2%. Not to mention the implicit potential fee of how much the price of BTC may change from when the transaction is started to when it is completed.
2. BTC, created in 2009. Eth, created in 2013. The projects have made little meaningful technical improvements and no actually-useful-outside-of-the-crypto-sphere projects have been launched on top of them. Open source software that is attempting to solve real problems move so much faster than crypto. This attempted justification is simply embarrassing
3. What more is there to say about POS? It isn't actually happening. It has been talked about forever, put on the official roadmap for eth in 2020 and has had been delayed every couple of months since then, including literally last week https://coingeek.com/ethereum-forever-new-protocol-launch-de....
2. BTC, created in 2009. Eth, created in 2013. The projects have made little meaningful technical improvements and no actually-useful-outside-of-the-crypto-sphere projects have been launched on top of them. Open source software that is attempting to solve real problems move so much faster than crypto. This attempted justification is simply embarrassing
3. What more is there to say about POS? It isn't actually happening. It has been talked about forever, put on the official roadmap for eth in 2020 and has had been delayed every couple of months since then, including literally last week https://coingeek.com/ethereum-forever-new-protocol-launch-de....
1. Fees on chains made for transactions are pennies (Google "X transaction fees" where x = solana, polygon, bitcoin lightning, etc.)
2. I'd expect a project trying to create digital money to take a bit more time then a JS framework[1]. Does that seem reasonable? It took React 6 years to "go mainstream" and had the backing of Facebook. It's hard to do consequential things in the real world, it will take time.
3. Why do you think it won't happen? Just because it's taking a long time? It's a big change with a ton at risk if it goes wrong. It's going to take a while to happen.
1 - https://blog.risingstack.com/the-history-of-react-js-on-a-ti...
2. I'd expect a project trying to create digital money to take a bit more time then a JS framework[1]. Does that seem reasonable? It took React 6 years to "go mainstream" and had the backing of Facebook. It's hard to do consequential things in the real world, it will take time.
3. Why do you think it won't happen? Just because it's taking a long time? It's a big change with a ton at risk if it goes wrong. It's going to take a while to happen.
1 - https://blog.risingstack.com/the-history-of-react-js-on-a-ti...
1. I looked up bitcoin transaction fees dog, that's where those numbers came from (just converting the btc cost into dollars for ease of discussion). And yeah I don't care about whichever "low cost" blockchain is being talked about this week. Every single time one of those begins to become popular the scale problem shows itself and transaction times or fees (or both) go up as more nodes are added. Even proof of stake suffers from this.
2. Sure but none of these projects are run by reputable people and have shown deep misunderstandings of financial systems and human nature. Why would I trust any of these to be a replacement for my bank? And like, just from a tech perspective, doesn't the Hacker News community love talking about solving problems at scale, maximizing transactions per second at the minimum cost? How can you look at how absolutely, nightmarishly dog shit crypto networks are by design at handling high throughput and think that they are cool? You have traded every single engineering best practice away and are using brute computing power to solve the distributed double spend problem. I'm frankly deeply ashamed at how many engineers are willing to put up with this.
3. There is a fundamental difference between a 3 year planned migration and a migration that is stalled for 3 years with a fresh delay announcement every couple of months. You can say I'm being overly harsh but given how 95-99% of people in crypto are scammers and vaporware vendors I am forced to have a default pessimistic view of everything in the scene.
2. Sure but none of these projects are run by reputable people and have shown deep misunderstandings of financial systems and human nature. Why would I trust any of these to be a replacement for my bank? And like, just from a tech perspective, doesn't the Hacker News community love talking about solving problems at scale, maximizing transactions per second at the minimum cost? How can you look at how absolutely, nightmarishly dog shit crypto networks are by design at handling high throughput and think that they are cool? You have traded every single engineering best practice away and are using brute computing power to solve the distributed double spend problem. I'm frankly deeply ashamed at how many engineers are willing to put up with this.
3. There is a fundamental difference between a 3 year planned migration and a migration that is stalled for 3 years with a fresh delay announcement every couple of months. You can say I'm being overly harsh but given how 95-99% of people in crypto are scammers and vaporware vendors I am forced to have a default pessimistic view of everything in the scene.
The “Silk Road era” is not over. It never has been and it never will.
Speculation may have become the reason for a large portion of blockchain transaction volume but don’t for a second doubt that the actual velocity of money on dark net markets has been steadily growing.
Put in an extreme way, if all the speculators left tomorrow, Bitcoin isn’t going to 0 because people are actually using it.
Speculation may have become the reason for a large portion of blockchain transaction volume but don’t for a second doubt that the actual velocity of money on dark net markets has been steadily growing.
Put in an extreme way, if all the speculators left tomorrow, Bitcoin isn’t going to 0 because people are actually using it.
Haha so that was never my game but if crypto crashes and all the web3 and speculator people leave and it just reverts to a means to get research chemicals in the mail, fine by me :)
Money is just accounting. Making sure balances are in sync on sender and receiver's end. People don't have problems sending money from A to B. I fail to see the application here. I don't think money is going through a transformation at all.
> People don't have problems sending money from A to B.
Respectfully, this is a deeply ignorant and factually incorrect sentence.
This indicates to me that: you have never travelled outside a limited set of highly-developed countries; never met anyone from a developing country; never had to send anyone more than $10,000; never had to send or receive money from another country; never met anyone who sends or receives remittances; never done any cross-border business transaction requiring FX conversions.
In some of the above instances, it is technically possible to send money from A to B, but only at very high cost, slowly, and with serious privacy and, at times, physical safety tradeoffs.
I would encourage you to look into how those usecases currently function, in a nuts-and-bolts way. It is ugly. A decent book on this subject is "Check Your Financial Privilege", by Alex Gladstein.
Respectfully, this is a deeply ignorant and factually incorrect sentence.
This indicates to me that: you have never travelled outside a limited set of highly-developed countries; never met anyone from a developing country; never had to send anyone more than $10,000; never had to send or receive money from another country; never met anyone who sends or receives remittances; never done any cross-border business transaction requiring FX conversions.
In some of the above instances, it is technically possible to send money from A to B, but only at very high cost, slowly, and with serious privacy and, at times, physical safety tradeoffs.
I would encourage you to look into how those usecases currently function, in a nuts-and-bolts way. It is ugly. A decent book on this subject is "Check Your Financial Privilege", by Alex Gladstein.
So one of YC's finest and most valuable startup, Stripe that needs no introduction here, also thinks there is 'no value' in using it for payments then? Right then why did they announce this then? [0]
Also just yesterday, a very low turn out in discussion about it [1], even less when they announced their Stripe Crypto post [2]. Why? Where is the scam? How exactly is Stripe scamming? Or is it because Stripe is spared somehow?
Or most likely, they waited for regulations to be clearer first and then re-entered back in with their crypto payouts products. Perhaps they still see some value in it.
So when it is Stripe that actually releases something, there is zero instant extreme outrage of predictable 'crypto is scam', 'snake oil' comments to be found like the ones I see here.
[0] https://stripe.com/blog/expanding-global-payouts-with-crypto
[1] https://news.ycombinator.com/item?id=31121177
[2] https://news.ycombinator.com/item?id=30628677
Also just yesterday, a very low turn out in discussion about it [1], even less when they announced their Stripe Crypto post [2]. Why? Where is the scam? How exactly is Stripe scamming? Or is it because Stripe is spared somehow?
Or most likely, they waited for regulations to be clearer first and then re-entered back in with their crypto payouts products. Perhaps they still see some value in it.
So when it is Stripe that actually releases something, there is zero instant extreme outrage of predictable 'crypto is scam', 'snake oil' comments to be found like the ones I see here.
[0] https://stripe.com/blog/expanding-global-payouts-with-crypto
[1] https://news.ycombinator.com/item?id=31121177
[2] https://news.ycombinator.com/item?id=30628677
Crypto is scam. Some people at Stripe are trying to capitalize on the hype. We'll see how it goes.
Something can't be both a currency as well as a speculative asset. Bitcoin was conceived as a currency. It promised fast transaction, low fees and no central trust provider authority like a government or a bank. But it and countless other cryptos have morphed into something people speculate on for gains. There is still very little you can actually buy using crypto. It's useless as a medium of exchange (volatility, high fees, non-reversible, slow etc). The high volatility and lack of any underlying utility whic can give it a value means it is a ponzi scheme and only those who got in early will come out richer. Late entrants will end up holding bags of worthless digital tokens.
Something can't be both a currency as well as a speculative asset. Bitcoin was conceived as a currency. It promised fast transaction, low fees and no central trust provider authority like a government or a bank. But it and countless other cryptos have morphed into something people speculate on for gains. There is still very little you can actually buy using crypto. It's useless as a medium of exchange (volatility, high fees, non-reversible, slow etc). The high volatility and lack of any underlying utility whic can give it a value means it is a ponzi scheme and only those who got in early will come out richer. Late entrants will end up holding bags of worthless digital tokens.
Assuming you have read the whole article that I have linked [0], did it say or mention anything about 'Bitcoin' being used for payments there?
[0] https://stripe.com/blog/expanding-global-payouts-with-crypto
[0] https://stripe.com/blog/expanding-global-payouts-with-crypto
Bitcoin is flag bearer for crypto and the first one in the long line of crypto "currencies"
We both know that it is the first, but that doesn't answer my question as that is irrelevant to my question:
Did the article [0] say or mention anything about Stripe USING 'Bitcoin' for payments? [0]
Or have you just admitted that YOU haven't even bothered to read beyond the headline of the article or even my comment and just quickly rushed to reply with a predictable 'CRYpTO iS sCAm' comment?
[0] https://stripe.com/blog/expanding-global-payouts-with-crypto
Did the article [0] say or mention anything about Stripe USING 'Bitcoin' for payments? [0]
Or have you just admitted that YOU haven't even bothered to read beyond the headline of the article or even my comment and just quickly rushed to reply with a predictable 'CRYpTO iS sCAm' comment?
[0] https://stripe.com/blog/expanding-global-payouts-with-crypto
There might be something in it with regards to reshaping the debt (fixed income) markets.
Starting with issuance process then secondary trading.
On secondary trading side the economic value comes from participants being able to transact with each other, with instant settlement and no delivery risk.
Still exploring this concept with a few others but. Email me if interested in this use case.
Starting with issuance process then secondary trading.
On secondary trading side the economic value comes from participants being able to transact with each other, with instant settlement and no delivery risk.
Still exploring this concept with a few others but. Email me if interested in this use case.
There is genuinely no value in blockchain tech. However, I regret that I am not qualified to help you with the other part of your question.
Your post reminded me, I had a meeting with Amazon when they first started offering a Blockchain technology.
The rep said they had implemented it, but didn't have a clear use case and were interested in seeing what customers might use it for.
I've heard that Audi have a Blockchain to record car service history, so I believe we'll see more niche applications like that in future.
The rep said they had implemented it, but didn't have a clear use case and were interested in seeing what customers might use it for.
I've heard that Audi have a Blockchain to record car service history, so I believe we'll see more niche applications like that in future.
I could see smart contracts revolutionizing PBM's. There's so much infrastructure around looking for violations, auditing dumb contracts, and executing them etc. If the contract was a smart contract that the manufacturer, and payer, and retailer interact with the whole process would be easier, more reliable, and faster.
I'm not sure if you're pushing back on cryptocurrency in general and using blockchain as proxy or if you're actually pushing back against blockchain as a technology buzzword that is being used by businesses.
In the case it's digital currency: Saying blockchain technology is nothing more a distributed database is like saying TCP/IP is nothing more than flipping voltages on a wire. It misses the point of what the technology can be used for.
Blockchain technology is the underylying mechanism for digital currency. Digital currency in the short term will allow less friction for online payments and has the potential to allow for easier banking options and a unifying global currency in the long term.
For places that have a strong banking system, the need for digital currency isn't so apparent. For places that have failing banking infrastructure or are building new banking infrastructure, digital currency is an attractive option as we're steadily becoming more connected and "wired".
There's a lot of hype, much of which is unwarranted, but behind that hype is the realization that digital currency and the implications of implementing it worldwide and having it widely available will have far reaching consequences for many aspects of our digital lives.
In the case you're talking about blockchain without the digital currency aspect then I agree with you to a certain extent. My generous read on the situation is that businesses want to modernize their supply chain infrastructure and are looking for some standard to adopt that will provide them with guidance and "best practices". This could allow them to use something that can be implemented and maintained with lower costs and potentially even be used for outside audits and federation/communication with other entities.
Personally, I think this is more akin to the Java/XML "craze". XML was adopted as a sort of standard but the underlying reason wasn't that XML was any panacea, it just happened to be the technology that was in vogue for businesses and was an excuse to modernize/digitize their infrastructure. The move to digitize data instead of either having a hap-hazard scheme or using paper was the motivation, not that XML was any great technology. Using XML also created it's own hap-hazard data schema realizations and, in the end, JSON provides more of the spirit of what XML promised but the move from pre-digitization to post-digitization provided such a strong incentive that it didn't really matter.
In other words, we're seeing businesses try to modernize different aspects of logistics. The current trend is blockchain because it provides enough key words that they can rally around it. The motivation, in my opinion, is more that they want to modernize/digitize their supply chain so they're looking for something/anything that provides guidance, standards or other infrastructure to that effect.
In the case it's digital currency: Saying blockchain technology is nothing more a distributed database is like saying TCP/IP is nothing more than flipping voltages on a wire. It misses the point of what the technology can be used for.
Blockchain technology is the underylying mechanism for digital currency. Digital currency in the short term will allow less friction for online payments and has the potential to allow for easier banking options and a unifying global currency in the long term.
For places that have a strong banking system, the need for digital currency isn't so apparent. For places that have failing banking infrastructure or are building new banking infrastructure, digital currency is an attractive option as we're steadily becoming more connected and "wired".
There's a lot of hype, much of which is unwarranted, but behind that hype is the realization that digital currency and the implications of implementing it worldwide and having it widely available will have far reaching consequences for many aspects of our digital lives.
In the case you're talking about blockchain without the digital currency aspect then I agree with you to a certain extent. My generous read on the situation is that businesses want to modernize their supply chain infrastructure and are looking for some standard to adopt that will provide them with guidance and "best practices". This could allow them to use something that can be implemented and maintained with lower costs and potentially even be used for outside audits and federation/communication with other entities.
Personally, I think this is more akin to the Java/XML "craze". XML was adopted as a sort of standard but the underlying reason wasn't that XML was any panacea, it just happened to be the technology that was in vogue for businesses and was an excuse to modernize/digitize their infrastructure. The move to digitize data instead of either having a hap-hazard scheme or using paper was the motivation, not that XML was any great technology. Using XML also created it's own hap-hazard data schema realizations and, in the end, JSON provides more of the spirit of what XML promised but the move from pre-digitization to post-digitization provided such a strong incentive that it didn't really matter.
In other words, we're seeing businesses try to modernize different aspects of logistics. The current trend is blockchain because it provides enough key words that they can rally around it. The motivation, in my opinion, is more that they want to modernize/digitize their supply chain so they're looking for something/anything that provides guidance, standards or other infrastructure to that effect.
Noob question: Can anyone explain storage concerns of the blockchain? Right now the BTC blockchain is 320GB in size. Won’t this get too big at some point for speedy lookups of ledgers and all that?
BTC is nice tech on the paper (solving the consensus problem in a decentralised way) but it's kinda slow and unpractical for real world usage. If it's meant to be used only by some banks while you do other transactions off chains - then you reintroduce trust and lose the benefits.
The value is all baseless speculation and hoping a central government won't class it as illegal once they get to do their own "crypto" to control their citizens better.
The main value in BTC is that it's at the moment less regulated than the financial mess we have in the standard market.
I think a better model would be to have tons of small private banks without a central banks and use a currency 100% backed by a basket of goods of prime necessity (wood, wheat, iron, gold).
That said, I hope will somehow they will succeed in replacing central banks and I hope some of the revolutionaries who got rich with crypto will topple governments and create a decentralised society without (or better - with less) central points of failures.
The value is all baseless speculation and hoping a central government won't class it as illegal once they get to do their own "crypto" to control their citizens better.
The main value in BTC is that it's at the moment less regulated than the financial mess we have in the standard market.
I think a better model would be to have tons of small private banks without a central banks and use a currency 100% backed by a basket of goods of prime necessity (wood, wheat, iron, gold).
That said, I hope will somehow they will succeed in replacing central banks and I hope some of the revolutionaries who got rich with crypto will topple governments and create a decentralised society without (or better - with less) central points of failures.
Tulips. Speculative value and nothing more.
There is a blockchain based system for doing podcast updates called PodPing.
It reduces the overhead of checking hundreds of thousands of RSS feeds, and cuts down the time it takes for notification of new episode of a show. It can currently update everyone in the system in under 40 seconds from hitting publish.
You can watch new podcasts get published live at podping.watch.
It reduces the overhead of checking hundreds of thousands of RSS feeds, and cuts down the time it takes for notification of new episode of a show. It can currently update everyone in the system in under 40 seconds from hitting publish.
You can watch new podcasts get published live at podping.watch.
A single message queue piping to Google notification service can do that for podcast apps with simpler setup / more efficiency. The sad state of podcast feeds doesn't make podping a particularly good system.
One of the most hyped use cases of blockchains is event ticketing.
We had a close look. It cannot solve most problems it claims to solve. The only thing it might be useful for is digital collectible tickets. This may be interesting for a tiny fraction of events and attendees.
Full detailed analysis here:
https://medium.com/@ticketpark/nft-tickets-a-realistic-look-...
We had a close look. It cannot solve most problems it claims to solve. The only thing it might be useful for is digital collectible tickets. This may be interesting for a tiny fraction of events and attendees.
Full detailed analysis here:
https://medium.com/@ticketpark/nft-tickets-a-realistic-look-...
We do ticketing, no need for blockchain. Ownership of the tickets is in a regular mysql db.
How do I resell my ticket? How can a company give lifetime tickets to all future shows? Do you have an API so I as a new indie startup can find people who have bought tickets to similar shows and give them special offers?
These are the benefits NFT tickets unlock.
These are the benefits NFT tickets unlock.
I would tend to agree with you. I believe that payments is probably the major driving force here but we have yet to see anything that rivals the Visa network for example.
Having some concept of money that isn't tied to a government is compelling. Take Lebanon for example which has seen 90% inflation in the last 2 years, the worst economic collapse in modern history... People's savings have been wiped out. This may not have been the case had there been a global alternative to keeping your money safe.
Big trading firms now make billions of dollars trading crypto. In some sense they are "keeping the networks alive"...
There's a ton of creativity in the entire space. I think maybe 98% of it goes away and we're left with the few gems that are useful or truly change society. In that sense there's a benefit.
Having some concept of money that isn't tied to a government is compelling. Take Lebanon for example which has seen 90% inflation in the last 2 years, the worst economic collapse in modern history... People's savings have been wiped out. This may not have been the case had there been a global alternative to keeping your money safe.
Big trading firms now make billions of dollars trading crypto. In some sense they are "keeping the networks alive"...
There's a ton of creativity in the entire space. I think maybe 98% of it goes away and we're left with the few gems that are useful or truly change society. In that sense there's a benefit.
Putting my bias at the front, I own crypto and am "pro" crypto if we can boil it down simply. I'm also deeply skeptical of a lot of projects in crypto, most OG's are because there is a lot of vaporware and scams and ponzis.
Nonetheless, the vision of having a shared consensus truth that the whole world can rely on for transacting I find very compelling.
I like the way Anatoly from Solana puts it:
"Global information symmetry"
Source: https://youtu.be/35_rr8Vf-4k?t=28939
Nonetheless, the vision of having a shared consensus truth that the whole world can rely on for transacting I find very compelling.
I like the way Anatoly from Solana puts it:
"Global information symmetry"
Source: https://youtu.be/35_rr8Vf-4k?t=28939
Of course there is nothing. It is just a very valuable scamming tool, just something extremely useful for siphoning money from dumber to smarter people's pockets. It has no actual, practical usages. Was never meant too. All clutter around it is just to conceal it's true nature: scam (oh ok, also money laundering, that's big too).
There is value in blockchain tech, but not necessary in crypto currencies, nfts or fully Byzantine decentralized tech.
Like for example a distributed federate ledger is useful for checking/auditing/simplifying some federated tasks, like around supply-chain or to e.g. make it a bit more viable to interlink to game servers of the same game operated by different entities which have a real-mony related in-game economy (non of this are silver bullets, just make abuse harder).
> At the same time, the amount of coverage and attention it is getting and for a sustained period makes me believe I am missing something.
What you are missing is people gaining money through high risk investments, pyramid schemes. As well as rich people which hope this tech allows them to further avoid state control and taxes. I also have seen a bunch of times that some problems the US has are believed by tech, especially crypto people to be fundamental problems which need tech to be solved, while they pretty clearly are 100% fault of bad politics. Like personal banking in the US is crazy bad (for anyone not wealthy) that some very poor very unstable countries do a better job. I was competently shocked when I realized that in the US it's not the norm for poor people to have a bank accounts and neither is it trivial to safely send money between two private bank accounts in a not too long amount of time. If you either don't want to accept that such problems are caused by politics or accept it but don't think it can't be changed it's not hard to see crypto currencies as a good idea.
Also crypto can be good to avoid government control, in a stable countries this is quite often related to crime but if you life idk. in a autocratic country while still being crime technical it might be ethically "good" from a western point of view. Like sending money into an embargoed country for you family to live from is still technically circumventing an (lets assume for a moment) reasonable embargo, but is ethically ok because you help your family to survive.
Like for example a distributed federate ledger is useful for checking/auditing/simplifying some federated tasks, like around supply-chain or to e.g. make it a bit more viable to interlink to game servers of the same game operated by different entities which have a real-mony related in-game economy (non of this are silver bullets, just make abuse harder).
> At the same time, the amount of coverage and attention it is getting and for a sustained period makes me believe I am missing something.
What you are missing is people gaining money through high risk investments, pyramid schemes. As well as rich people which hope this tech allows them to further avoid state control and taxes. I also have seen a bunch of times that some problems the US has are believed by tech, especially crypto people to be fundamental problems which need tech to be solved, while they pretty clearly are 100% fault of bad politics. Like personal banking in the US is crazy bad (for anyone not wealthy) that some very poor very unstable countries do a better job. I was competently shocked when I realized that in the US it's not the norm for poor people to have a bank accounts and neither is it trivial to safely send money between two private bank accounts in a not too long amount of time. If you either don't want to accept that such problems are caused by politics or accept it but don't think it can't be changed it's not hard to see crypto currencies as a good idea.
Also crypto can be good to avoid government control, in a stable countries this is quite often related to crime but if you life idk. in a autocratic country while still being crime technical it might be ethically "good" from a western point of view. Like sending money into an embargoed country for you family to live from is still technically circumventing an (lets assume for a moment) reasonable embargo, but is ethically ok because you help your family to survive.
> game servers of the same game operated by different entities which have a real-mony related in-game economy
Are you thinking like poker and other traditional card games of chance and skill? I would think the only way a distributed, multi-entity-operated game would work is if the game had very well-established, static rules, with little to no chance of any changes to the rules occurring.
That's one of the major problems I see with NFTs for game assets. Games are ever evolving systems as issues of balance need to be tested and worked out. The higher the stakes (i.e. me competitive, more it involves real money), the more necessary it becomes that the games rules not be unfairly exploitable. A game like poker has the benefit of have ~150 - 200 years of play testing applied to it.
Also, nobody owns the game of poker. There are no licensing agreements to negotiate, no standards bodies purchase specifications from, no gate keeper. Anyone can make their own poker implementation and nobody can say a thing about it.
That is, except your local government. In the US, poker is treated differently than other gambling games, as it's considered a game of skill versus chance. But it's still regulated, just not as regulated as games of chance. So while the whole, global, CryptoPokerStars or whatever network couldn't be shut down, individual entities need to operate somewhere, and users need this entities to operate in jurisdictions they can trust to regulate the entities and make sure they aren't building in back doors and cheats like pocket card x-ray vision for company employees.
Are you thinking like poker and other traditional card games of chance and skill? I would think the only way a distributed, multi-entity-operated game would work is if the game had very well-established, static rules, with little to no chance of any changes to the rules occurring.
That's one of the major problems I see with NFTs for game assets. Games are ever evolving systems as issues of balance need to be tested and worked out. The higher the stakes (i.e. me competitive, more it involves real money), the more necessary it becomes that the games rules not be unfairly exploitable. A game like poker has the benefit of have ~150 - 200 years of play testing applied to it.
Also, nobody owns the game of poker. There are no licensing agreements to negotiate, no standards bodies purchase specifications from, no gate keeper. Anyone can make their own poker implementation and nobody can say a thing about it.
That is, except your local government. In the US, poker is treated differently than other gambling games, as it's considered a game of skill versus chance. But it's still regulated, just not as regulated as games of chance. So while the whole, global, CryptoPokerStars or whatever network couldn't be shut down, individual entities need to operate somewhere, and users need this entities to operate in jurisdictions they can trust to regulate the entities and make sure they aren't building in back doors and cheats like pocket card x-ray vision for company employees.
> Are you thinking like poker and other traditional card games of chance and skill?
More like MMORPGs and similar which have a show allowing players to trade, where the "different entities" are also _legally bound by contract to keep to rules_ set by the game publisher and the ledger is mainly about auditing, automated anomaly detection etc. I.e. not NFTs at all. It also doesn't prevent cheating, just makes it manageable for the publisher.
I don't see a use-case for (crypto currency based) NFTs in gaming tbh. You could put them in, but whatever you do has simpler cheaper solutions (which still might use some of the tech NFTs also use). Like most relevant you probably don't want the "crypto currency based" part. To much loss of control and/or legal liabilities.
For things like poker and online gambling there is no point in adding additional complexity to the system for IMHO no relevant benefit. There is also generally no point to add federation. Online casinos work (technically) quite-well with boring classical web technology. (IMHO too well, I'm not a fan of online gambling).
I guess using some form of federated or state controlled Leger you force online casinos to log all gambles on, for auditing them/undermining tax evasion/preventing money laundering could maybe work. But again while this uses crypto currency/NFT related tech it's not quite the same.
But companies which focus on the tech behind the scene can likely provide whatever is needed.
More like MMORPGs and similar which have a show allowing players to trade, where the "different entities" are also _legally bound by contract to keep to rules_ set by the game publisher and the ledger is mainly about auditing, automated anomaly detection etc. I.e. not NFTs at all. It also doesn't prevent cheating, just makes it manageable for the publisher.
I don't see a use-case for (crypto currency based) NFTs in gaming tbh. You could put them in, but whatever you do has simpler cheaper solutions (which still might use some of the tech NFTs also use). Like most relevant you probably don't want the "crypto currency based" part. To much loss of control and/or legal liabilities.
For things like poker and online gambling there is no point in adding additional complexity to the system for IMHO no relevant benefit. There is also generally no point to add federation. Online casinos work (technically) quite-well with boring classical web technology. (IMHO too well, I'm not a fan of online gambling).
I guess using some form of federated or state controlled Leger you force online casinos to log all gambles on, for auditing them/undermining tax evasion/preventing money laundering could maybe work. But again while this uses crypto currency/NFT related tech it's not quite the same.
But companies which focus on the tech behind the scene can likely provide whatever is needed.
> there is nothing here more than you can get with traditional database technology?
Here are some questions that you can test your hypothesis with:
* Can you get distributed and trust-less settlement mechanisms with a centralized database?
* Can you seamlessly send value across jurisdictions and closed borders without meddlers and middlemen with traditional database technology (regulation resistance and unconfiscatableness)?
* Can you escape coercion and control with a centralized database (regulation and coercion resistance), while at the same time attaining great protection against criminal coercion and theft (resistance against crime and corruption)?
* Can a centralized database offer the same and relative anonymity as cash?
* How would any of the above be valuable without markets and speculation? I.e. how would you know the value of what is being sent or traded with you without something else to compare it to?
If you want to answer without merely saying yes or no, then I'd love to see your answers! Perhaps you can convince me to update some of my beliefs. :)
Here are some questions that you can test your hypothesis with:
* Can you get distributed and trust-less settlement mechanisms with a centralized database?
* Can you seamlessly send value across jurisdictions and closed borders without meddlers and middlemen with traditional database technology (regulation resistance and unconfiscatableness)?
* Can you escape coercion and control with a centralized database (regulation and coercion resistance), while at the same time attaining great protection against criminal coercion and theft (resistance against crime and corruption)?
* Can a centralized database offer the same and relative anonymity as cash?
* How would any of the above be valuable without markets and speculation? I.e. how would you know the value of what is being sent or traded with you without something else to compare it to?
If you want to answer without merely saying yes or no, then I'd love to see your answers! Perhaps you can convince me to update some of my beliefs. :)
>seamlessly send value across jurisdictions
I have money. How can I get some crypto? From a middleman. Need to pay fees. Then I send it to someone. Transaction fees. The receiver wants to buy groceries or pay kid's school fees, so they need to convert the crypto to money. Again fees.
So lots of middlemen and fees are involved. And most of the time, One would need to provide full KYC and need to have a bank account to convert to/from crypto.
Tell me more about how it is better, cheaper and faster than regular banking system.
I have money. How can I get some crypto? From a middleman. Need to pay fees. Then I send it to someone. Transaction fees. The receiver wants to buy groceries or pay kid's school fees, so they need to convert the crypto to money. Again fees.
So lots of middlemen and fees are involved. And most of the time, One would need to provide full KYC and need to have a bank account to convert to/from crypto.
Tell me more about how it is better, cheaper and faster than regular banking system.
Credit cards cost 3% + $.25 per transation (doing this from memory, but I think i'm in the ballpark here). USDC to USD costs .20% + $.50 (and that's per payout, you could aggregate transactions to pay only one fee). If you use a modern chain to do the transactions, the fees are getting increasingly more trivial (like a few cents regardless of size). As scaling solutions come online, they should be even cheaper. Avalanche is the best chain i've used if you want to understand what I consider modern. Solona and NEAR are interesting too, but I haven't used it.
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Card payments solve a different issue (for starters the transaction is not irreversible), and no they don't cost that much in properly regulated markets.
If I want to send money from Europe to the US, many traditional banks and fintechs are cheaper than cryptocurrency exchanges, and if that's still too expensive, for large amounts forex brokers will be under 0.1%.
The fact stablecoins exist and have become so prevalent is really telling. People speculating with cryptocurrencies want to onboard and offboard USD... So now we have these coins, some are even replicating fractional banking, only illegally.
If I want to send money from Europe to the US, many traditional banks and fintechs are cheaper than cryptocurrency exchanges, and if that's still too expensive, for large amounts forex brokers will be under 0.1%.
The fact stablecoins exist and have become so prevalent is really telling. People speculating with cryptocurrencies want to onboard and offboard USD... So now we have these coins, some are even replicating fractional banking, only illegally.
Credit cards are ridiculously overpriced. It is a joke that the credit card oligopoly can siphon of an entire percent or more of a large majority of retail purchases in some jurisdictions (other jurisdictions prudently cap those fees).
But most other methods of transferring money are cheap and fast.
If we compare with worst cases, I had a BTC transaction in 2019, IIRC, with a transaction fee of USD 50 that sat in the mempool for half a day before it was picked up.
But most other methods of transferring money are cheap and fast.
If we compare with worst cases, I had a BTC transaction in 2019, IIRC, with a transaction fee of USD 50 that sat in the mempool for half a day before it was picked up.
Please refrain from putting words in my mouth. I never said that Bitcoin doesn't have fees. Inventing arguments against things I never said is very uncool.
With that said, using Bitcoin to send value across jurisdictions is still seamless and far cheaper than most alternatives, except perhaps for some other cryptos...
As for using Bitcoin to pay for stuff, sure there are fees, but then there are also fees for using banking services, except more of them are conferred to the vendors and to other banking fees, thus making Bitcoin a pretty great alternative anyway. However it's not the fees alone that makes Bitcoin a preferred choice over banks. It's the whole package, of unconfiscatableness, cutting out middlemen, privacy, and so on, and I happen to think the small fee you pay for that package is a lot better than what you get with fiat. Either way, that doesn't take anything away from the fact that you can do a lot more with crypto than you can with transactions stored in a centralized database.
With that said, using Bitcoin to send value across jurisdictions is still seamless and far cheaper than most alternatives, except perhaps for some other cryptos...
As for using Bitcoin to pay for stuff, sure there are fees, but then there are also fees for using banking services, except more of them are conferred to the vendors and to other banking fees, thus making Bitcoin a pretty great alternative anyway. However it's not the fees alone that makes Bitcoin a preferred choice over banks. It's the whole package, of unconfiscatableness, cutting out middlemen, privacy, and so on, and I happen to think the small fee you pay for that package is a lot better than what you get with fiat. Either way, that doesn't take anything away from the fact that you can do a lot more with crypto than you can with transactions stored in a centralized database.
>> I have money. How can I get some crypto? From a middleman.
You can mine it and send to wallets, not exchanges, no KYC, no identity attached, and the fees for major coins are more than competitive with Paypal and Venmo.
You can mine it and send to wallets, not exchanges, no KYC, no identity attached, and the fees for major coins are more than competitive with Paypal and Venmo.
You can buy or swap it directly from someone else who has crypto without a middleman, and there are services that provide this option for free. For instance this guy bought a car for Bitcoin in Ukraine. ^1 And it saved his life! Depending on the country you may also use it directly for groceries.
The technology is kinda like the telephone in 1880's. A lot of peeps were very sceptical towards it and thought of it as merely a toy, not least because it wasn't widespread and thus the use case for it wasn't well known.
^1: https://www.youtube.com/watch?v=-gZtDDaWvPk
The technology is kinda like the telephone in 1880's. A lot of peeps were very sceptical towards it and thought of it as merely a toy, not least because it wasn't widespread and thus the use case for it wasn't well known.
^1: https://www.youtube.com/watch?v=-gZtDDaWvPk
It's 100% deregulated finance and even if regulators want to regulate it, they basically can't because unlike regulators, crypto is global.
All the activities that regulators are designed to prevent are very successful in the crypto world.
I don't think crypto will fail or go bust; but I do think retail investors are completely abandoned by regulators who have a democratic mandate to protect them.
I suppose they don't want to be seen as stifling an innovative technology and politicians don't want to get blowback for efforts that would fail anyway.
Anyway, until we have global governance there will not be global regulation of the space so it will go on for many more decades.
All the activities that regulators are designed to prevent are very successful in the crypto world.
I don't think crypto will fail or go bust; but I do think retail investors are completely abandoned by regulators who have a democratic mandate to protect them.
I suppose they don't want to be seen as stifling an innovative technology and politicians don't want to get blowback for efforts that would fail anyway.
Anyway, until we have global governance there will not be global regulation of the space so it will go on for many more decades.
They can regulate where it counts: in the pockets of constituents. The US regulators don't care if UAE companies are running pump-and-dump schemes on Cameroonian citizens (or whatever other random countries you'd like to insert) as long as they keep US companies and US citizens out of it. So crypto being ungovernable doesn't matter. The people who use crypto are governable.
You don't need global regulation, you need regulation in your local market and currency or you can't actually spend any of the theoretical value you may possess. What's the point of being a crypto millionaire in theory if you can't actually cash out? It is already very hard to, eg., secretly cash out BTC to AUD to spend on something you actually want. It will be reported and it will be taxed. It may as well be actual dollars.
My understanding is that it originally came out of the cyberpunk & anarchist subcultures (e.g. the use of the Japanese nom de plume Satoshi Nakamoto is in my view a call-out to the glamorization of Japan in cyberpunk and cypherpunk culture). I believe Bitcoin really was indeed meant as an anarchist or libertarian way to have something like gold but digital - something that could be used to buy & sell anything forbidden by governments. Illegal online activity has been highly glamorized since before the start of the tech boom in culturally-foundational novels like Neuromancer https://en.wikipedia.org/wiki/Neuromancer - where the main hero is a suicidal amphetamine-addicted criminal hacker and his frenemies / semi-allies are an arms dealer and an assassin.
To be honest, I think this glamorization of digital crime is rather naive. Even if someone takes the very niche position that drugs should be fully decriminalized, Bitcoin is also used for truly fucked up things like human slavery.
In this thread, you can see an example by golergka, who uses bitcoin as I believe it was originally intended:
https://news.ycombinator.com/item?id=31132987 "Drug trade, tax avoidance, banking for the unbanked and sanctioned. I'm currently living from airbnb to airbnb, with all my Russian banks banned from SWIFT, and crypto is the only way I'm abe to access my money."
What is strange and I think you are rightly confused about is why did a very niche crypto-anarchist technology enter mainstream society in a big way? I think it's primarily a speculative bubble BUT there's a chance that it could be a bubble that never pops. Think of diamonds - we now have the technology to very affordably make beautiful synthetic diamonds, so from a first principles standpoint the price of diamonds should collapse any day now but it hasn't, and probably won't. Diamonds being expensive is too deeply baked into our culture, and it is possible that cryptocurrency could similarly become a bubble that never pops if it becomes a point of cultural agreement that crypto "should be" valuable, not for fundamental reasons but because of mass belief that is strong enough that it persists indefinitely, even across centuries.
To be honest, I think this glamorization of digital crime is rather naive. Even if someone takes the very niche position that drugs should be fully decriminalized, Bitcoin is also used for truly fucked up things like human slavery.
In this thread, you can see an example by golergka, who uses bitcoin as I believe it was originally intended:
https://news.ycombinator.com/item?id=31132987 "Drug trade, tax avoidance, banking for the unbanked and sanctioned. I'm currently living from airbnb to airbnb, with all my Russian banks banned from SWIFT, and crypto is the only way I'm abe to access my money."
What is strange and I think you are rightly confused about is why did a very niche crypto-anarchist technology enter mainstream society in a big way? I think it's primarily a speculative bubble BUT there's a chance that it could be a bubble that never pops. Think of diamonds - we now have the technology to very affordably make beautiful synthetic diamonds, so from a first principles standpoint the price of diamonds should collapse any day now but it hasn't, and probably won't. Diamonds being expensive is too deeply baked into our culture, and it is possible that cryptocurrency could similarly become a bubble that never pops if it becomes a point of cultural agreement that crypto "should be" valuable, not for fundamental reasons but because of mass belief that is strong enough that it persists indefinitely, even across centuries.
There's two value for me:
- the possibility to hide some transactions out of the traditional system (monero / zcash). I mean you may disagree, it's mostly ideological for some honest people and practical to some dishonest / drug dealers / evaders.
- the fact they are decentralised currencies that are now an actual alternative to people's national currency. this may look silly to you if you live in europe / usa, but a LOT of less developed countries such as lebanon, turkey, and a lot in south america and africa have seen the value of their currency decrease steadily wrt the dollar. So ANY of this people would have been better of buying either dollars (which may be hard locally / with taxes), and even better off any crypto in the past 10 years instead and they would have better life savings.
tlrd The biggest value of bitcoin now is to be alternative store of value, which you can acess pretty much anywhere in the world in a decentralised fashion. Even if the tech were useless, its DE FACTO an alternative now which doesn't have less value that 80% of local / national currencies.
- the possibility to hide some transactions out of the traditional system (monero / zcash). I mean you may disagree, it's mostly ideological for some honest people and practical to some dishonest / drug dealers / evaders.
- the fact they are decentralised currencies that are now an actual alternative to people's national currency. this may look silly to you if you live in europe / usa, but a LOT of less developed countries such as lebanon, turkey, and a lot in south america and africa have seen the value of their currency decrease steadily wrt the dollar. So ANY of this people would have been better of buying either dollars (which may be hard locally / with taxes), and even better off any crypto in the past 10 years instead and they would have better life savings.
tlrd The biggest value of bitcoin now is to be alternative store of value, which you can acess pretty much anywhere in the world in a decentralised fashion. Even if the tech were useless, its DE FACTO an alternative now which doesn't have less value that 80% of local / national currencies.
I understand the appeal of a currency not controlled by a bad government, but could we honestly expect third world residents to be able to understand and use the technology required for crypto? I have been writing software for a decade and I still can barely keep up with what is going on.
What ? exchanging bitcoin in the street seemed pretty simple last time I checked on localbitcoins. you dont need to know the tech at all.
Plus, you'd be surprised how moder and tech-saavy young people in developing countries are (at least in the major cities).
Plus, you'd be surprised how moder and tech-saavy young people in developing countries are (at least in the major cities).
Ok I just looked at local Bitcoin... I need to select a currency and pick traders, then select one who accepts an actual method I can use to exchange fiat currency such as a specific bank or zelle... How is this easier exactly?
It just seems like a bunch of rigamarole for no benefit, with the added risk of scams
It just seems like a bunch of rigamarole for no benefit, with the added risk of scams
But do you really access them in a decentralised fashion?
Imagine a pariah state where you want to evade heavy inflation by acquiring some trusted and agreed upon “store of value”, let’s say btc.
Assuming you don’t want to run massive covert mining rigs converting your local energy to btc you need an exchange, which can be regulated in the same way the dollar exchanges are regulated.
You could argue that you can onboard people to btc by illegal barter, but for that you need major gatekeepers aquiring the btc or running said mining rigs in the first place. Maybe ransomware extortion might be an alternative. They then have to be willing to distribute those deflationary btc to the people by exchange against goods or inflationary cash without adding a big premium on top.
Of course I am oversimplifying, but it’s not as easy as one would think.
And we haven’t even touched on what a dystopian place this country will be when a completely public and auditable database of cash flows will be the ledger of choice in an autocratic (or any) country.
Also, a question always worth asking when talking about blockchain: Where would you store your unrecoverable password to your life savings-account? Does your hair-dresser might know the amount of your life savings because you paid your last haircut with btc?
Imagine a pariah state where you want to evade heavy inflation by acquiring some trusted and agreed upon “store of value”, let’s say btc.
Assuming you don’t want to run massive covert mining rigs converting your local energy to btc you need an exchange, which can be regulated in the same way the dollar exchanges are regulated.
You could argue that you can onboard people to btc by illegal barter, but for that you need major gatekeepers aquiring the btc or running said mining rigs in the first place. Maybe ransomware extortion might be an alternative. They then have to be willing to distribute those deflationary btc to the people by exchange against goods or inflationary cash without adding a big premium on top.
Of course I am oversimplifying, but it’s not as easy as one would think.
And we haven’t even touched on what a dystopian place this country will be when a completely public and auditable database of cash flows will be the ledger of choice in an autocratic (or any) country.
Also, a question always worth asking when talking about blockchain: Where would you store your unrecoverable password to your life savings-account? Does your hair-dresser might know the amount of your life savings because you paid your last haircut with btc?
Mm what ? As far as i know you dont' need a "exchange" but simply a wallet (which is a key and a bunch of passphrase) and an internet connection, and another person with the same thing willing to exchange.
You may be in a pariah state but the system works because of mining all around the world, not just in your state.
You may be in a pariah state but the system works because of mining all around the world, not just in your state.
Say you have 100 million Turkish lira, and suspect that Erdogan's terrible policies will reduce the value of that, so you want to buy bitcoin with it. How are you going to acquire BTC without access to an exchange (or some equivalent) that agrees to buy your lira? You could buy mining equipment and electricity of course, but then the state may crack down on your operation before you have a chance to recoup your investment.
And even if they don't, if you then want to buy tomatoes at your local market, how are you going to buy lira for your BTC without an exchange (or equivalent)?
And even if they don't, if you then want to buy tomatoes at your local market, how are you going to buy lira for your BTC without an exchange (or equivalent)?
At 100 milion you will have access to people you and I dont who know schemes better than bitcoin to buy massive foreign cureencies..
Such as simple as buying a property in london
And for that:
> And even if they don't, if you then want to buy tomatoes at your local market, how are you going to buy lira for your BTC without an exchange (or equivalent)?
It seems u never heard of localbitcoins.net and equivalents. There IS a market
Such as simple as buying a property in london
And for that:
> And even if they don't, if you then want to buy tomatoes at your local market, how are you going to buy lira for your BTC without an exchange (or equivalent)?
It seems u never heard of localbitcoins.net and equivalents. There IS a market
Blockchain-like distributed concensus mechanisms do have a few practical applications: https://slightknack.dev/blog/chain/.
I've said the same for years. Most blockchain ideas could be better solved with a traditional database, or simple cryptographic signatures.
However, the killer app for blockchain already exists... currency.
The societal benefits and implications from that alone are tremendous.
However, the killer app for blockchain already exists... currency.
The societal benefits and implications from that alone are tremendous.
I was skeptical for many years until it sort of clicked. Blockchain is important because it allows us to solve the issue when a company providing a service goes bankrupt or closes off the service, the service stops being available. This is especially horrible when said service requires a social network to work.
We can't just say "let the users run the servers" because most users can't do that, thats why they trust centralised services. We need to split people to two groups of people: people who simply use a service, and people who can sustain a service.
I'm seeing a potential future where apps and services are run on separate, individual blockchains. It will work similarly like the Tor network except now the permissionless, decentralised network can hold *state*! I envision a world where people running the network can be incentivised within the service itself, this doesnt have even to be tied to fiat money, like "honor" or "trust".
Too bad the current crypto community isn't exploring this much yet, because there's a few cryptographic problems thats yet to be solved, but I see people also trying like this : https://github.com/stellar/slingshot
We can't just say "let the users run the servers" because most users can't do that, thats why they trust centralised services. We need to split people to two groups of people: people who simply use a service, and people who can sustain a service.
I'm seeing a potential future where apps and services are run on separate, individual blockchains. It will work similarly like the Tor network except now the permissionless, decentralised network can hold *state*! I envision a world where people running the network can be incentivised within the service itself, this doesnt have even to be tied to fiat money, like "honor" or "trust".
Too bad the current crypto community isn't exploring this much yet, because there's a few cryptographic problems thats yet to be solved, but I see people also trying like this : https://github.com/stellar/slingshot
Nice theory. In practice intellectual property goes to someone and that’s it.
See many real world examples such as the recently discontinued F1 game.
See many real world examples such as the recently discontinued F1 game.
Hopefully a sustainable blockchain solution will be the sole currency for a future civilization on another planet.
I’ll paste what I wrote in https://cryptologie.net/#article_555
The simplest abstraction is to see cryptocurrency / blockchain / distributed ledger technology as a database running on a single computer. Everybody can access this database and there’s some simple logic that allows you to debit your account and credit someone else’s account. The computer has a queue to make sure transactions are processed in order.
Blockchains that support smart contracts allow for people to install programs to that computer, which will add a bit more logic than simply debiting/crediting accounts. Others can then just send transactions to this computer to make a function call to any program (smart contract) that was installed on the computer.
The cool thing really is that we’re all using the same computer with the same database and the same programs.
Now in practice, nobody would trust a single point of failure like that. What if the computer crashes, or burns in a fire? Distributed systems to the rescue! We use distributed system protocols to run the same database on many computers distributed around the world. These distributed system protocols effectively simulate a single database/computer so that a few computers failing doesn’t mean the end of the blockchain.
On top of that, we refuse to trust the computers that participate in this protocol. They could be lying about the balance in your account. We want the computers to police one another and agree on the database they are simulating. That’s where consensus protocols are used: to make the distributed database secure even when some of the participants are malicious.
And that’s it. That’s blockchain tech for you. The obvious application is money, as the secure and simulated single computer is useful to simplify a payment system, but really any distributed database that cannot trust some of its participants can benefit from the advances there.
The simplest abstraction is to see cryptocurrency / blockchain / distributed ledger technology as a database running on a single computer. Everybody can access this database and there’s some simple logic that allows you to debit your account and credit someone else’s account. The computer has a queue to make sure transactions are processed in order.
Blockchains that support smart contracts allow for people to install programs to that computer, which will add a bit more logic than simply debiting/crediting accounts. Others can then just send transactions to this computer to make a function call to any program (smart contract) that was installed on the computer.
The cool thing really is that we’re all using the same computer with the same database and the same programs.
Now in practice, nobody would trust a single point of failure like that. What if the computer crashes, or burns in a fire? Distributed systems to the rescue! We use distributed system protocols to run the same database on many computers distributed around the world. These distributed system protocols effectively simulate a single database/computer so that a few computers failing doesn’t mean the end of the blockchain.
On top of that, we refuse to trust the computers that participate in this protocol. They could be lying about the balance in your account. We want the computers to police one another and agree on the database they are simulating. That’s where consensus protocols are used: to make the distributed database secure even when some of the participants are malicious.
And that’s it. That’s blockchain tech for you. The obvious application is money, as the secure and simulated single computer is useful to simplify a payment system, but really any distributed database that cannot trust some of its participants can benefit from the advances there.
Yes, it is a slow computer that uses the resources of about a billion modern computers. (Note that you could achieve basically any desired fault tolerance with a minuscule fraction of that with a trusted central authority.)
Your second statement presupposes central authorities can be trusted. Some presuppose that they cannot.
Let me quote from a 2012 interview with Bruce Schneier about his book Liars and Outliers:
Q: Given the dangers out there, should we trust anyone? Isn’t “trust no one” the first rule of security?
Bruce: It might be the first rule of security, but it’s the worst rule of society. I don’t think I could even total up all the people, institutions and systems I trusted today. I trusted that the gas company would continue to provide the fuel I needed to heat my house, and that the water coming out of my tap was safe to drink. I trusted that the fresh and packaged food in my refrigerator was safe to eat – and that certainly involved trusting people in several countries. I trusted a variety of websites on the Internet. I trusted my automobile manufacturer, as well as all the other drivers on the road.
I am flying to Boston right now, so that requires trusting several major corporations, hundreds of strangers – either working for those corporations, sitting on my plane or just standing around in the airport – and a variety of government agencies. I even had to trust the TSA [US Transportation Security Administration], even though I know it’s doing a lousy job – and so on. And it’s not even 9:30am yet! The number of people each of us trusts every day is astounding. And we trust them so completely that we often don’t even think about it.
We don’t walk into a restaurant and think: “The food vendors might have sold the restaurant tainted food, the cook might poison it, the waiter might clone my credit card, other diners might steal my wallet, the building constructor might have weakened the roof, and terrorists might bomb the place.” We just sit down and eat. And the restaurant trusts that we won’t steal anyone else’s wallet or leave a bomb under our chair, and will pay when we’re done. Without trust, society collapses. And without societal pressures, there’s no trust. The devil is in the details, of course, and that’s what my book is about.
https://www.schneier.com/news/archives/2012/02/bruce_schneie...
Q: Given the dangers out there, should we trust anyone? Isn’t “trust no one” the first rule of security?
Bruce: It might be the first rule of security, but it’s the worst rule of society. I don’t think I could even total up all the people, institutions and systems I trusted today. I trusted that the gas company would continue to provide the fuel I needed to heat my house, and that the water coming out of my tap was safe to drink. I trusted that the fresh and packaged food in my refrigerator was safe to eat – and that certainly involved trusting people in several countries. I trusted a variety of websites on the Internet. I trusted my automobile manufacturer, as well as all the other drivers on the road.
I am flying to Boston right now, so that requires trusting several major corporations, hundreds of strangers – either working for those corporations, sitting on my plane or just standing around in the airport – and a variety of government agencies. I even had to trust the TSA [US Transportation Security Administration], even though I know it’s doing a lousy job – and so on. And it’s not even 9:30am yet! The number of people each of us trusts every day is astounding. And we trust them so completely that we often don’t even think about it.
We don’t walk into a restaurant and think: “The food vendors might have sold the restaurant tainted food, the cook might poison it, the waiter might clone my credit card, other diners might steal my wallet, the building constructor might have weakened the roof, and terrorists might bomb the place.” We just sit down and eat. And the restaurant trusts that we won’t steal anyone else’s wallet or leave a bomb under our chair, and will pay when we’re done. Without trust, society collapses. And without societal pressures, there’s no trust. The devil is in the details, of course, and that’s what my book is about.
https://www.schneier.com/news/archives/2012/02/bruce_schneie...
You can’t generalize that
"trusted central authority"
All that text and still not a single, solid, real world application. Idealistic waffle.
Do you have a question I can help answer perhaps?
[deleted]
Blockchains provide computational integrity across geographic regions and jurisdictions requiring no trusted intermediary. You can run a computation and guarantee that others running that computation are using the same inputs and will get the same result.
Even if Russia or France decide that they no longer allow Ethereum (just an example), this does not affect computations anywhere else.
This is a massive shift in power balance toward participants. No other computational platform before the blockchain has provided all these features at the same time.
Even if Russia or France decide that they no longer allow Ethereum (just an example), this does not affect computations anywhere else.
This is a massive shift in power balance toward participants. No other computational platform before the blockchain has provided all these features at the same time.
> No other computational platform before the blockchain has provided all these features at the same time.
What about PGP/GPG?
What about PGP/GPG?
PGP/GPG provides primitives for managing some sort of PKI but beyond that, I don't follow your argument.
For the sake of concreteness, here's for example how an auction can run on the blockchain:
At time T an asset A owned by an anonymous seller is locked into a smart contract for H hours at minimum price M. Participants are free to enter their bids until time T+H. At the end of the period, the smart contracts examines all bids - if all bids are less than M, no-one gets asset A and ONLY then is asset A released back to original seller. If at least one bid is above M, the highest bid is picked and the asset is automatically transferred to the bidder's address. Everyone else is re-funded automatically. The seller is the only one able to extract the cash from the contract.
Anyone can check the contract code and ascertain:
- the seller can't withdraw their asset and run away with it before auction ends
- the seller cannot reject a valid bid (>M) if the auction is already started
- everyone but the winner will be re-funded their money back
- winner (if any) is the only one who can retrieve the asset after auction is over
... and any other interesting properties. Regardless of whether Alice is from Argentina or from Zimbabwe.
How would you do this on top of PGP/GPG?
Note that source code bugs and hacks happen and are part of the process of working out how to do this stuff safely. There's a recent example of someone messing up a contract and $36M is stuck* forever because the refund functionality had a bug.
For the sake of concreteness, here's for example how an auction can run on the blockchain:
At time T an asset A owned by an anonymous seller is locked into a smart contract for H hours at minimum price M. Participants are free to enter their bids until time T+H. At the end of the period, the smart contracts examines all bids - if all bids are less than M, no-one gets asset A and ONLY then is asset A released back to original seller. If at least one bid is above M, the highest bid is picked and the asset is automatically transferred to the bidder's address. Everyone else is re-funded automatically. The seller is the only one able to extract the cash from the contract.
Anyone can check the contract code and ascertain:
- the seller can't withdraw their asset and run away with it before auction ends
- the seller cannot reject a valid bid (>M) if the auction is already started
- everyone but the winner will be re-funded their money back
- winner (if any) is the only one who can retrieve the asset after auction is over
... and any other interesting properties. Regardless of whether Alice is from Argentina or from Zimbabwe.
How would you do this on top of PGP/GPG?
Note that source code bugs and hacks happen and are part of the process of working out how to do this stuff safely. There's a recent example of someone messing up a contract and $36M is stuck* forever because the refund functionality had a bug.
Even if this is all true what is missing here is self reflection. What exactly has any so called value in the finance or digital industry? Really not much, Finance has literally no value at all.
So what i read here is bitterness that something without value displaces what you do know that has no value.
So what i read here is bitterness that something without value displaces what you do know that has no value.
The best proposal I’ve seen for it is accounting for shares on the stock market, there are some talks by the DTCC about this years ago before the GME fiasco.
This is not a debate that has to be had in the abstract anymore.
It's been more than 10 years. Where's the cool stuff that those supposed technology breakthroughs enabled?
I think we all know what the proponents would point to. Are we really impressed by any of that?
It's been more than 10 years. Where's the cool stuff that those supposed technology breakthroughs enabled?
I think we all know what the proponents would point to. Are we really impressed by any of that?
The stock answer to this question from Crypto proponents is that the internet also took decades to bring about societal changes.
Initially the internet was bulletin boards and poor quality online versions of print shopping catalogues, news articles with no images or low-res images, etc.
It took a while for internet-enabled capabilities to noticeably surpass things you could do by dialing an 800-number or mailing a cheque to a PO Box.
Initially the internet was bulletin boards and poor quality online versions of print shopping catalogues, news articles with no images or low-res images, etc.
It took a while for internet-enabled capabilities to noticeably surpass things you could do by dialing an 800-number or mailing a cheque to a PO Box.
It took decades because people couldn't afford computers, nor could they manufacture at today's modem scale, that's what took long.
In terms of adaptation, once someone had access to a computer, with few exception people found some utility in their daily lives for it.
IMHO, folks who have access to crypto are not finding any immediate use for it in their daily lives. And further, it doesn't seem to scale very well. Sure, enough coins exist, but they can't be transacted without massive fees. Ergo, doesn't scale currently.
If some breakthrough solves the scaling problem while retaining it's decentralized nature, it may gain some utility.
In terms of adaptation, once someone had access to a computer, with few exception people found some utility in their daily lives for it.
IMHO, folks who have access to crypto are not finding any immediate use for it in their daily lives. And further, it doesn't seem to scale very well. Sure, enough coins exist, but they can't be transacted without massive fees. Ergo, doesn't scale currently.
If some breakthrough solves the scaling problem while retaining it's decentralized nature, it may gain some utility.
I work in decentralized finance and use it every single day, so do thousands of other people. It's already scaling with layer 2's. For anyone willing to learn I'm happy to explain more.
The world wide web had caused a global economisch crash just right after its first decade. That's huge.
If you have 15 minutes to spare: https://www.youtube.com/watch?v=o73fWsqJDdY
Automatic market makers, Argent, RAI, multi-sig wallets, Baseline Protocol, Helium, FOAM Space, lending, digital ownership (say of in-game items), anonymity (I donate to Russian opposition in crypto only), improved payment UX.
I bet he'll never look into these either. Crypto haters on here never seem to want to learn, just close their eyes and pretend it doesn't exist.
You're making it too simple for yourself with that label. I'm not a crypto hater.
I am a disillusioned early adopter. The Satoshi paper blew my mind and I still have my letter from the Japanese court liquidating Mt. Gox's assets.
I have in fact looked at all of the things GP mentioned, hoping to find something that might get me interested again, unsuccessfully.
I just can't get excited anymore by people trying to do mundane, perfectly solved things, but this time with Blockchain.
I am a disillusioned early adopter. The Satoshi paper blew my mind and I still have my letter from the Japanese court liquidating Mt. Gox's assets.
I have in fact looked at all of the things GP mentioned, hoping to find something that might get me interested again, unsuccessfully.
I just can't get excited anymore by people trying to do mundane, perfectly solved things, but this time with Blockchain.
You've seriously never heard of DeFi? There are literally hundreds of apps processing billions of dollars now and new innovative things are launching every day. I work 24/7 in this space and can't even keep up.
Defillama had a list of the biggest apps, just work your way through the list. Or listen to the bankless podcast.
Defillama had a list of the biggest apps, just work your way through the list. Or listen to the bankless podcast.
I feel like what you described actually draws people to the tech.
The sense of belonging being one of the hackers trying to fix the current issues with current systems. The issue is that many of them are indeed broken, but decentralization is not an answer to 99% of them.
What I love about the industry is that it really attracts a lot of cool and smart people similar to what 2000s internet used to be. I just hope you guys won't get REKT.
The sense of belonging being one of the hackers trying to fix the current issues with current systems. The issue is that many of them are indeed broken, but decentralization is not an answer to 99% of them.
What I love about the industry is that it really attracts a lot of cool and smart people similar to what 2000s internet used to be. I just hope you guys won't get REKT.
Once everyone gets over the cryptocurrency feature of blockchain tech we may start to have actual interesting technology. Right now - and ever since it started - the scene is filled with financial types who heard they could make a buck or fuck over some neophytes. Just go to a blockchain/crypto conference and you will see exactly what I mean. Once that phase goes away we may get actual technical folks with actual decent ideas.
No, you aren't going insane. Cryptocurrency (block Chain ledger+distributed consensus) so far has no use case that is not covered by better technology. The one thing it facilitates (an online, permissionless, trustless, decentralised,ledger) has no real use case in human society, because in order to run the infrastructure to go online you already need to solve a lot of not-on-chain problems, and we have solved them with the technology of trust facilitation: the rule of law, legitimate authority, checks and balances etc. are all social technologies which are not perfect but have been honed over centuries and when combined with the internet to augment human discussion and decision making are incredibly efficient and low cost. It is pure insanity to try and replace this with cryptocurrency.
What makes sense is for governments and other societal trust anchors to run federated ledgers with cheap APIs, that everyone involved take local backups of and can verify, but go through specialised adapted write APIs (i.e. consensus through regulations, governance, checks and balances etc). Because that is useful and can automate notaries for example.
Everything else so far is either a decentralised Ponzi scheme (no clear owner/central figure, everyone can profit by luring in more suckers, but unlike the trust based economy no actual value is produced and the system would collapse if the trust based economy shut down the inflow of new capital - while even Venezuela and north Korea still produce things under heavy sanctions and could maybe be fine if they got rid of their cleptocrats and went back to an agrarian society, albeit with a lower QOL than the rest of the world) and/or derives it's value from using the Ponzi driven price of the currencies to launder money or provide tools to speculate/keep the game going. It's all recursive and contingent on going to the moon, with no there there. The epitome of default dead.
The market can stay irrational longer than we can bet against it. It is fully possible (and I'm afraid of it happening) that crypto bros get enough lobbying power to regulatory capture and insert themselves as "decentralised middlemen" into governmental processes. If this happens, they might point to the "value added" by Cryptos in the same way TurboTax in the US currently claims its usefulness. Bug we should not believe these lies, cryptocurrency is pure rent seeking.
That's why you're not going insane, nor missing something. There is simply no there there, just a bubble big enough to capture the very state it claims to dislike while it uses energy and IT infrastructure only that state and its society enabled
What makes sense is for governments and other societal trust anchors to run federated ledgers with cheap APIs, that everyone involved take local backups of and can verify, but go through specialised adapted write APIs (i.e. consensus through regulations, governance, checks and balances etc). Because that is useful and can automate notaries for example.
Everything else so far is either a decentralised Ponzi scheme (no clear owner/central figure, everyone can profit by luring in more suckers, but unlike the trust based economy no actual value is produced and the system would collapse if the trust based economy shut down the inflow of new capital - while even Venezuela and north Korea still produce things under heavy sanctions and could maybe be fine if they got rid of their cleptocrats and went back to an agrarian society, albeit with a lower QOL than the rest of the world) and/or derives it's value from using the Ponzi driven price of the currencies to launder money or provide tools to speculate/keep the game going. It's all recursive and contingent on going to the moon, with no there there. The epitome of default dead.
The market can stay irrational longer than we can bet against it. It is fully possible (and I'm afraid of it happening) that crypto bros get enough lobbying power to regulatory capture and insert themselves as "decentralised middlemen" into governmental processes. If this happens, they might point to the "value added" by Cryptos in the same way TurboTax in the US currently claims its usefulness. Bug we should not believe these lies, cryptocurrency is pure rent seeking.
That's why you're not going insane, nor missing something. There is simply no there there, just a bubble big enough to capture the very state it claims to dislike while it uses energy and IT infrastructure only that state and its society enabled
I think "effective rebranding for marketing purposes of database technologies" alone justify all the fuss, business wise.
I'm working in gaming, and in pc gaming today, when you ask 5$ pretax and preplatform fee, customers think you own them to dedicate your entire company to support the product fot the next 10 years for no additional fee, you will never heard of 90% of your customers, 5% will insult you on your steam page for any trouble they encountered, 4% will insult you and your game on youtube and social media for entertainement and self promotion, and maybe 1% will have positive feedback.
Meanwhile with a good marketing, you can potentially sell low effort proceduraly generated random png 30$ to 3000$ piece in blockchain collection/games and each of your customer will probably actually spend time promoting your game even if he disliked it, if nothing to resell that it bought or earn interests.
Of course i'm greatly exaggerating, but no wonder gaming company dream to develop the market.
And I think video game market today is awfull. Every one want everything for free and no one want to actually pay. It's probaly a big part of why VR market is nearly empty : investing what is required to make good content is probably nearly impossible to recover on sales.
It need a way to reinvent itself and allow content maker to make profits, and it may be the blockchain where it's 'normal' to pay around 100$ to try a new game and be ready to see it fail more often than not.
The fact it's purely psychological is irrelevant marketing and business wise. I even think today the console market exist for purely commercial reasons. Console player accept to spend more on video game than computer players. Then developping for console make sense, even if probably today you could probably have exactly the same game on a same price range computer.
I'm working in gaming, and in pc gaming today, when you ask 5$ pretax and preplatform fee, customers think you own them to dedicate your entire company to support the product fot the next 10 years for no additional fee, you will never heard of 90% of your customers, 5% will insult you on your steam page for any trouble they encountered, 4% will insult you and your game on youtube and social media for entertainement and self promotion, and maybe 1% will have positive feedback.
Meanwhile with a good marketing, you can potentially sell low effort proceduraly generated random png 30$ to 3000$ piece in blockchain collection/games and each of your customer will probably actually spend time promoting your game even if he disliked it, if nothing to resell that it bought or earn interests.
Of course i'm greatly exaggerating, but no wonder gaming company dream to develop the market.
And I think video game market today is awfull. Every one want everything for free and no one want to actually pay. It's probaly a big part of why VR market is nearly empty : investing what is required to make good content is probably nearly impossible to recover on sales.
It need a way to reinvent itself and allow content maker to make profits, and it may be the blockchain where it's 'normal' to pay around 100$ to try a new game and be ready to see it fail more often than not.
The fact it's purely psychological is irrelevant marketing and business wise. I even think today the console market exist for purely commercial reasons. Console player accept to spend more on video game than computer players. Then developping for console make sense, even if probably today you could probably have exactly the same game on a same price range computer.
>Meanwhile with a good marketing, you can potentially sell low effort proceduraly generated random png 30$ to 3000$ piece in blockchain collection/games and each of your customer will probably actually spend time promoting your game even if he disliked it, if nothing to resell that it bought or earn interests.
This mechanic works because people have something to gain from promoting the thing, because the mindset is that this "lottery" only works if people hop on their train.
It's gambling on steroids: your perceived odds of success increase with how many players are playing the game. So you better hype it.
>Every one want everything for free and no one want to actually pay.
I think it has always been like that, only now you found ways to monetize on players that wouldn't otherwise play your games. Back in my days it was people that used piracy to play games, because they couldn't afford it. Now with micro-transactions, kids can make purchases that wouldn't make in the past.
The problem might be rooted further down, like the cult of getting rich and famous easy and quickly, even while playing games (imagine).
This mechanic works because people have something to gain from promoting the thing, because the mindset is that this "lottery" only works if people hop on their train.
It's gambling on steroids: your perceived odds of success increase with how many players are playing the game. So you better hype it.
>Every one want everything for free and no one want to actually pay.
I think it has always been like that, only now you found ways to monetize on players that wouldn't otherwise play your games. Back in my days it was people that used piracy to play games, because they couldn't afford it. Now with micro-transactions, kids can make purchases that wouldn't make in the past.
The problem might be rooted further down, like the cult of getting rich and famous easy and quickly, even while playing games (imagine).
I also think the 'client side' mechanic is bad, but why does it should mater for investors and companies ?
Is it morally so different than say an Apple fan (I pick a random exemple of more expensive products than average where not everyone would agree they are technically superior, whoever may be right) who will argue the brand is worth the value, because if he don't, that mean he is an idiot ? (you may say at least here there is a physical good, but in gaming, nft are technically nothing more than DLC).
You are probably right about no one never did wanted to pay, and that's natural. The thing is companies want (and need) you to pay. Making people pay for games is hard and mainly a thing of the past, no wonder they try new things in case they catch up no ?
Is it morally so different than say an Apple fan (I pick a random exemple of more expensive products than average where not everyone would agree they are technically superior, whoever may be right) who will argue the brand is worth the value, because if he don't, that mean he is an idiot ? (you may say at least here there is a physical good, but in gaming, nft are technically nothing more than DLC).
You are probably right about no one never did wanted to pay, and that's natural. The thing is companies want (and need) you to pay. Making people pay for games is hard and mainly a thing of the past, no wonder they try new things in case they catch up no ?
The morality isn't about the perceived value, or the utility, but rather the motivation behind the purchase:
When you buy an Apple product, you aren't speculating on the value of it in the future (unless you're a scalper) - you're not buying it because you'll be able to sell it for more, or because of it's rarity and you'll get some sort of social boost.
You buy the product, and you use it, that's your motivation (could be a tool for work, could be for self expression, you could even choose it because you want to be one of the cool guys as well).
When it comes to NFTs, or some trading card games, or even scratch off tickets with prizes, you're buying it because you're expecting to bank on it later, and you hope what you get is extremely rare... the problem is that the majority of this stuff is "rare" for the sake of being "rare", that has no value.
A Black Lotus is rare and valuable because the kids that were playing the game 20+ years ago, now have buying power and can finally get a piece of nostalgia, the problem is that there aren't that many around because people used/wore off/destroyed the card. There's an organic process in this that sustained itself for decades -> that's valuable, it's a cultural artifact.
Now they want to shorten the length of this organic process to some weeks. How is that sustainable?
>You are probably right about no one never did wanted to pay, and that's natural.
I didn't say people didn't want to pay, I think they simply couldn't afford it. But there's still value in that: if I didn't get a pirate copy for GTA Vice City I would have never become a fan of the series. There's brand value in that, don't you think? Why not offset the "cost of piracy" as part of the marketing budget :) ?
When you buy an Apple product, you aren't speculating on the value of it in the future (unless you're a scalper) - you're not buying it because you'll be able to sell it for more, or because of it's rarity and you'll get some sort of social boost.
You buy the product, and you use it, that's your motivation (could be a tool for work, could be for self expression, you could even choose it because you want to be one of the cool guys as well).
When it comes to NFTs, or some trading card games, or even scratch off tickets with prizes, you're buying it because you're expecting to bank on it later, and you hope what you get is extremely rare... the problem is that the majority of this stuff is "rare" for the sake of being "rare", that has no value.
A Black Lotus is rare and valuable because the kids that were playing the game 20+ years ago, now have buying power and can finally get a piece of nostalgia, the problem is that there aren't that many around because people used/wore off/destroyed the card. There's an organic process in this that sustained itself for decades -> that's valuable, it's a cultural artifact.
Now they want to shorten the length of this organic process to some weeks. How is that sustainable?
>You are probably right about no one never did wanted to pay, and that's natural.
I didn't say people didn't want to pay, I think they simply couldn't afford it. But there's still value in that: if I didn't get a pirate copy for GTA Vice City I would have never become a fan of the series. There's brand value in that, don't you think? Why not offset the "cost of piracy" as part of the marketing budget :) ?
> I am still unable to alleviate my scepticism that this entire space is vapourware, there is nothing here more than you can get with traditional database technology?
Technically, there could be some value in an append-only datastore that can be distributed - such as verifying where some product has come from throughout its supply chain and tracking evolution of various data series over time. Of course, there's nothing to prevent someone from entering malicious data into the chain anyways (e.g. if people did that with COVID vaccinations and recorded someone as vaccinated after taking a bribe, who's to say that someone couldn't do that with "ethically" sourced coffee, for example).
> At the same time, the amount of coverage and attention it is getting and for a sustained period makes me believe I am missing something.
We largely live in a post-factual world, so as soon as there is some supposedly advanced technology (the blockchain, machine learning, AI, serverless, Kubernetes, a while ago cloud computing also fit the bill) that nobody understands all that well, people tend to conflate speculation with fact and claim that every potential problem could be solved with this technology, oftentimes to extract resources from potential investors or other people with decision making powers (e.g. software engineers striving for resume driven development).
To those people, it doesn't actually matter whether the technology will solve the problems or actually even work, even the people that believe that these things will work oftentimes only do so due to deluding themselves, because it's not like you can easily test those claims.
In my eyes:
In our current world, it's really easy to end up in the "Peak of Inflated Expectations" which will also make plenty of millionaires out there, which also should be recognized - so at worst, it doesn't hurt to explore even the improbable technologies and maybe work for a well funded startup every now and then, unless you're not about that life. You might not always solve all of the problems that you chase after, but the money in your bank account will still be very real.
At the same time, it kind of hurts to see speculants get rich off of projects like "Earth 2" and empty promises.
Technically, there could be some value in an append-only datastore that can be distributed - such as verifying where some product has come from throughout its supply chain and tracking evolution of various data series over time. Of course, there's nothing to prevent someone from entering malicious data into the chain anyways (e.g. if people did that with COVID vaccinations and recorded someone as vaccinated after taking a bribe, who's to say that someone couldn't do that with "ethically" sourced coffee, for example).
> At the same time, the amount of coverage and attention it is getting and for a sustained period makes me believe I am missing something.
We largely live in a post-factual world, so as soon as there is some supposedly advanced technology (the blockchain, machine learning, AI, serverless, Kubernetes, a while ago cloud computing also fit the bill) that nobody understands all that well, people tend to conflate speculation with fact and claim that every potential problem could be solved with this technology, oftentimes to extract resources from potential investors or other people with decision making powers (e.g. software engineers striving for resume driven development).
To those people, it doesn't actually matter whether the technology will solve the problems or actually even work, even the people that believe that these things will work oftentimes only do so due to deluding themselves, because it's not like you can easily test those claims.
In my eyes:
- the blockchain (in any its form, excluding event-sourcing which is an architectural pattern and basically a generalization of the approach) isn't preferable to a MariaDB instance most of the time.
- machine learning is good for a few problems but in many cases linear regression and simple algorithms are enough
- we are decades if not centuries away from "true" generalized AI, most of the current progress is simply research, not products that solve complex problems, use cases will be limited for now
- serverless is still someone else's machine, there is merit to the approach, but it's not suited for all systems
- Kubernetes is cool when you have the resources to support it, which is more than many companies out there are willing to spend (many don't even need it)
- cloud computing is cool for certain systems but in the end just boils down to the CapEx/OpEx question, it's just a different set of tradeoffs
- you can apply the same reasoning to other advanced yet hard to "test" technologies, like full self driving cars and the "hyperloop" and other concepts like that
In our current world, it's really easy to end up in the "Peak of Inflated Expectations" which will also make plenty of millionaires out there, which also should be recognized - so at worst, it doesn't hurt to explore even the improbable technologies and maybe work for a well funded startup every now and then, unless you're not about that life. You might not always solve all of the problems that you chase after, but the money in your bank account will still be very real.
At the same time, it kind of hurts to see speculants get rich off of projects like "Earth 2" and empty promises.
One interesting application is the ability prove that something existed at a specific point in time (at scale).
Publish the hash of the content to the chain. This can be scaled by combining an arbitrary number of items into the same hash using a merkel tree (https://petertodd.org/2016/opentimestamps-announcement#how-o...).
It's not a new idea - you could also publish the hash in a bunch of newspapers, but it's not as easily scalable, still relies somewhat on a third party, and the cost of independent verification is much higher.
How useful it actually is and if it's worth the cost is another question.
Publish the hash of the content to the chain. This can be scaled by combining an arbitrary number of items into the same hash using a merkel tree (https://petertodd.org/2016/opentimestamps-announcement#how-o...).
It's not a new idea - you could also publish the hash in a bunch of newspapers, but it's not as easily scalable, still relies somewhat on a third party, and the cost of independent verification is much higher.
How useful it actually is and if it's worth the cost is another question.
[deleted]
I can share my perspective on it. It might not be correct or very popular or even coherent. But here you go.
I want few things from future technology.
I want permissionless payments, including robotic payments, just so I can run several companies worldwide, accepting and reinvesting money with, like, no accounting besides internal, no taxes besides blockchain rewards, no corporations.
You can think of it as of HFT, but for everyone.
I want tamper-proof, censorship-resistant identity built-in my browser. A pseudonim, which enables everything else, like delegation of some rights to another pseudonim. With identification and authorization out of the way, in turn, backend-as-a-service - like cloudflare, but with actual data and state - will be possible. This will enable all kind of global permissionless cooperation, including robotic one. Removal of every login button on the web will be a nice side-effect.
The third thing I want is open secure computing. You can think of it like Intel Management engine, but for everyone. Anti-treacherous computing, if you like it that way. Hardware, which bricks if it detects code running without my signature, down to microcontrollers. With transparent transfer of rights and revocation, of course.
I don't think the last one is possible without some global blockchain of sorts, from my point of view.
I don't know if web3 and blockchain will bring me any of these, but I like where they are moving and their rhetoric and what they did so far.
I want few things from future technology.
I want permissionless payments, including robotic payments, just so I can run several companies worldwide, accepting and reinvesting money with, like, no accounting besides internal, no taxes besides blockchain rewards, no corporations.
You can think of it as of HFT, but for everyone.
I want tamper-proof, censorship-resistant identity built-in my browser. A pseudonim, which enables everything else, like delegation of some rights to another pseudonim. With identification and authorization out of the way, in turn, backend-as-a-service - like cloudflare, but with actual data and state - will be possible. This will enable all kind of global permissionless cooperation, including robotic one. Removal of every login button on the web will be a nice side-effect.
The third thing I want is open secure computing. You can think of it like Intel Management engine, but for everyone. Anti-treacherous computing, if you like it that way. Hardware, which bricks if it detects code running without my signature, down to microcontrollers. With transparent transfer of rights and revocation, of course.
I don't think the last one is possible without some global blockchain of sorts, from my point of view.
I don't know if web3 and blockchain will bring me any of these, but I like where they are moving and their rhetoric and what they did so far.
There will be value when we can break the increasing time and complexity of each transaction on a math level. Not with all the current solutions that really break the whole purpose of the blockchain. Until that not really. Only for special cases and still (like maybe big transfer for banks between banks or to manage gold exchange at a Gov level…) Stuff like this. After that yes sure! For now the ecosystem is really full of greedy people with scammers and criminals…
The most convincing use case for Bitcoin I’ve heard the other day from another post is for the “backpage ladies”.
I'm almost tempted to say that you're wrong on both accounts, that vapourware doesn't get prolonged attention and that blockchain is pure vapourware.
But to focus on the first one: homeopathy was invented in 1796 and is still going strong, with national health systems having committees on how to deal with it, even some accredited universities offer courses at least covering homeopathy too. And that's despite its impressive 200-year record of complete absence of evidence that it has any effects. Various forms of alchemy were complete vapourware and yet courted and sponsored by monarchs. Also in our enlightened days there are people building (and crashing with) rockets to 'prove' that our earth is flat, newspapers print horoscopes and the previous US president touted things worse than vapourware as cures for a global pandemic. Looking at the history of ideas, I'd almost say we're living the exception, with so many ideas that actually work.
Re blockchain, if you take it to include the whole "crypto" (web3) space, it's gone from implementing papers from 20+ years prior (Byzantine Fault Tolerance) to papers from a few years ago (Zero Knowledge Proofs). It's had societal impact in creatig a global subculture of crypto 'bros' that donated (at least) $100m to Ukraine (and also to other causes like India Covid relief), and created outlandish investment returns for early adopters.
In terms of the tech or what it can do, blockchains allow trustless peer-to-peer transactions, and smart contracts allow making trustless binding future commitments. The latter is no small feat if you consider that the difference between cooperative and non-cooperative game theory is precisely the ability to make binding commitments (think of what the rational action in a prisoner's dilemma would be if you had a third move of entering a smart contract that plays the cooperative move on behalf of both parties if and only if both sides committed, and defects on behalf of that player if only one committed - would you still choose to defect unilaterally, or would you rather enter the contract?). You might say that we already have a legal system and courts that can enforce commitments, but in reality not everyone on this planet has equal access to such a system. Smart contracts will always be "beneath" the courts (as in, if someone wants to renege on their commitment, eg because the contract didn't do what they thought it would, the courts will always have the final word), but they can remove a lot of friction, especially for smaller projects and if parties are in muliple countries.
But to focus on the first one: homeopathy was invented in 1796 and is still going strong, with national health systems having committees on how to deal with it, even some accredited universities offer courses at least covering homeopathy too. And that's despite its impressive 200-year record of complete absence of evidence that it has any effects. Various forms of alchemy were complete vapourware and yet courted and sponsored by monarchs. Also in our enlightened days there are people building (and crashing with) rockets to 'prove' that our earth is flat, newspapers print horoscopes and the previous US president touted things worse than vapourware as cures for a global pandemic. Looking at the history of ideas, I'd almost say we're living the exception, with so many ideas that actually work.
Re blockchain, if you take it to include the whole "crypto" (web3) space, it's gone from implementing papers from 20+ years prior (Byzantine Fault Tolerance) to papers from a few years ago (Zero Knowledge Proofs). It's had societal impact in creatig a global subculture of crypto 'bros' that donated (at least) $100m to Ukraine (and also to other causes like India Covid relief), and created outlandish investment returns for early adopters.
In terms of the tech or what it can do, blockchains allow trustless peer-to-peer transactions, and smart contracts allow making trustless binding future commitments. The latter is no small feat if you consider that the difference between cooperative and non-cooperative game theory is precisely the ability to make binding commitments (think of what the rational action in a prisoner's dilemma would be if you had a third move of entering a smart contract that plays the cooperative move on behalf of both parties if and only if both sides committed, and defects on behalf of that player if only one committed - would you still choose to defect unilaterally, or would you rather enter the contract?). You might say that we already have a legal system and courts that can enforce commitments, but in reality not everyone on this planet has equal access to such a system. Smart contracts will always be "beneath" the courts (as in, if someone wants to renege on their commitment, eg because the contract didn't do what they thought it would, the courts will always have the final word), but they can remove a lot of friction, especially for smaller projects and if parties are in muliple countries.
See also "Ask HN: What are real-life useful use-cases for blockchain (not currencies)?" from 2020:
* https://news.ycombinator.com/item?id=24881140
* https://news.ycombinator.com/item?id=24881140
There is a second use-case (outside the "digital cash") that actually makes some technical sense.
It's possible to use a blockchain as a distributed identity store, where people prove their ownership of an address by signing with the private key.
This is an interesting application because it's an ownerless identity system that works because of the distributed consensus mechanism.
It's possible to use a blockchain as a distributed identity store, where people prove their ownership of an address by signing with the private key.
This is an interesting application because it's an ownerless identity system that works because of the distributed consensus mechanism.
The most valuable commodity in the world is trust. You can't buy it, it can't be manufactured, and it can vanish in an instant. Crypto currencies are used to take advantage of trust. Shamans have existed since the beginning of recorded history to take advantage of gullible people. Blockchain technology enables that on a global scale. P. T. Barnum was right.
Bitcoin disrupts fiat money. Having a hard money aligns the incentives for a lower time preference and thus more healthy and sustainable societies.
There's zero value. Trust your instincts.
I think there are theoretically some benefits. If music, movies, or games were sold as nfts then you could resell an album if you didn't want it any more like you can with physical media. But the major labels won't do it since that could eat into their profits.
So right now we are stuck with the scammy nfts of jpgs we have now.
So right now we are stuck with the scammy nfts of jpgs we have now.
Moxie wrote a blog post about a similar topic ("web3") earlier this year which I liked a lot. He echos your sentiment, albeit for different reasons:
https://moxie.org/2022/01/07/web3-first-impressions.html
https://moxie.org/2022/01/07/web3-first-impressions.html
It's programmable and trustless allowing worldwide instant micro-payments with very low fees enabling the automation of machine 2 machine payments, or something like that.
It’s a Ponzi scheme. The crypto people tried to position it as digital gold, but obviously the market doesn’t see it that way.
Blockchains are accounting procedures, not money. The only use I've ever figured out for blockchain is to support a hawala among untrusted partners. But real value (goods/services) must eventually be transferred in the network.
Blockchain "currencies" feature:
- high costs and slow speed of clearing transactions;
- volatility WRT to other stores of value;
- routine abuse and theft (with little chance of being made whole);
- association with criminal enterprise
These are pretty good reasons not to invest in blockchains.
Blockchain "currencies" feature:
- high costs and slow speed of clearing transactions;
- volatility WRT to other stores of value;
- routine abuse and theft (with little chance of being made whole);
- association with criminal enterprise
These are pretty good reasons not to invest in blockchains.
I just loved Scott Kurtz' take on NFTs: http://pvponline.com/comic/2022-01-31
The use case that opened my mind is blockchain domain registrars. You can buy a domain and own it forever without a monthly payment. Everyone knows it is owned by a wallet and you can update the blockchain with your DNS info.
As far as I can tell it might be a little while before some of the TLD are supported by major browsers without an extension but I do believe support is inevitable.
Domains are a great blockchain product in my opinion.
Another aspect is products that can be tokenized without a company controlling things. The smart contracts are really cool in that you can make it so that you get paid a percentage of future sales. Forget about digital photos but think of it from owning a musicians album (royal does this).
These are things that can be done without the blockchain but you end up paying companies to manage it for you. They also set rules and they can also cancel you. Free from management fees and no company dictatorship.
As far as I can tell it might be a little while before some of the TLD are supported by major browsers without an extension but I do believe support is inevitable.
Domains are a great blockchain product in my opinion.
Another aspect is products that can be tokenized without a company controlling things. The smart contracts are really cool in that you can make it so that you get paid a percentage of future sales. Forget about digital photos but think of it from owning a musicians album (royal does this).
These are things that can be done without the blockchain but you end up paying companies to manage it for you. They also set rules and they can also cancel you. Free from management fees and no company dictatorship.
Agreed about the domains. To add to this, for me the main problem aren't even the domain registrars, but rather the certificate authorities. It is madness that any certificate authority can issue certificates for any domain!
With blockchain domains, you can put the public part of your certificate on the blockchain and no one has to trust any third party to issue certificates - the domain owners issue their own certificates and they're guaranteed by the blockchain. A whole useless industry would become obsolete!
(Eg https://handshake.org/ attempts to do this. Disclaimer: I'm not a totally disinterested party :)
With blockchain domains, you can put the public part of your certificate on the blockchain and no one has to trust any third party to issue certificates - the domain owners issue their own certificates and they're guaranteed by the blockchain. A whole useless industry would become obsolete!
(Eg https://handshake.org/ attempts to do this. Disclaimer: I'm not a totally disinterested party :)
Currency exchange. In the banking system it’s hard to exchange currencies for a fee lowe than ~0.5%, even for amounts in the tens of thousands USD.
I regularly exchange currencies using Wise or Revolut for a lot less than that.
If adding another layer was somehow more efficient, then all the companies in this space would do it under the hood. Yet almost none of them do.
If adding another layer was somehow more efficient, then all the companies in this space would do it under the hood. Yet almost none of them do.
I use Wise regularly and pay about 0.5% for EUR/GBP/CHF transactions.
The reason why DeFi exchanges offer low fees is that they are not “companies”, they are fully automated and have no overhead. For a company offering forex services the main expense are salaries, not fees (that on wholesale markets are on the order of 0.01%), therefore they would not benefit from using a blockchain as an underlying layer.
The reason why DeFi exchanges offer low fees is that they are not “companies”, they are fully automated and have no overhead. For a company offering forex services the main expense are salaries, not fees (that on wholesale markets are on the order of 0.01%), therefore they would not benefit from using a blockchain as an underlying layer.
Blockchain is a decentralized database. I think very little use cases actually require decentralization. Also, decentralization is not better per se than centralization or the other way around. It's different. Imo there are very little use cases that actually require blockchain technology.
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The blockchain prevents double spending without a trusted party--that's its only TECHNOLOGICAL solution.
Where you "are going wrong" (your words--not mine) is not appreciating the value of what SOCIAL solutions can from that, and refusing to accept that these subsequent solutions may be valuable to others for purely non-technical reasons.
---
SOCIAL USE CASE #1: Cryptocurrency
If you're privileged enough to live your whole life without ever being denied access to any degree of financial services, I'm happy for you. However, Satoshi created cryptocurrency at a time when SOCIAL trust in traditional money networks was at its absolute lowest--this context is so important. Cryptocurrency (built on blockchains) offer global financial networks which anybody to participate in, and you are free to form a opinion around how valuable that is to you personally.
SOCIAL USE CASE #2: Permission-less Smart Contracts
If you have a digital payment network wherein anyone can transact, why not create programmable flows around that economic activity? Decentralized financial applications--savings accounts, payment channels, compounding interest, asset swaps, escrow--were all the lowest hanging fruit and so they came first because the network protocol they've been built upon includes a monetary asset natively.
Back in the Web1 days, there was an application called GameSpy. The service provided a way to find a list of community-owned gaming servers that hosted multiplayer sessions for various PC games. Technically speaking, it was the epitome of what the Internet was capable of and it failed because there was no viable monetization strategy for either the middleware or the server hosts that didn't involve centralizing the platform. A web3 version would survive with decentralized coordination, could stream payments to gaming servers, reward players for playing on the platform, and would make a good case for a DAO to provide upkeep of the middleware layer.
SOCIAL USE CASE #3: NFTs
Our lives continue to move towards fully digital experiences, and NFTs are key to commemorating moments in the metaverse.
To be clear: a NFT is a single number (ID index) sitting in a 256-bit address space, which is recorded to belong to some cryptographic data that you keep secret. It MAY have a visual representation you can find with a URL, but that is not a requirement.
---
That's my 2 gwei.
Where you "are going wrong" (your words--not mine) is not appreciating the value of what SOCIAL solutions can from that, and refusing to accept that these subsequent solutions may be valuable to others for purely non-technical reasons.
---
SOCIAL USE CASE #1: Cryptocurrency
If you're privileged enough to live your whole life without ever being denied access to any degree of financial services, I'm happy for you. However, Satoshi created cryptocurrency at a time when SOCIAL trust in traditional money networks was at its absolute lowest--this context is so important. Cryptocurrency (built on blockchains) offer global financial networks which anybody to participate in, and you are free to form a opinion around how valuable that is to you personally.
SOCIAL USE CASE #2: Permission-less Smart Contracts
If you have a digital payment network wherein anyone can transact, why not create programmable flows around that economic activity? Decentralized financial applications--savings accounts, payment channels, compounding interest, asset swaps, escrow--were all the lowest hanging fruit and so they came first because the network protocol they've been built upon includes a monetary asset natively.
Back in the Web1 days, there was an application called GameSpy. The service provided a way to find a list of community-owned gaming servers that hosted multiplayer sessions for various PC games. Technically speaking, it was the epitome of what the Internet was capable of and it failed because there was no viable monetization strategy for either the middleware or the server hosts that didn't involve centralizing the platform. A web3 version would survive with decentralized coordination, could stream payments to gaming servers, reward players for playing on the platform, and would make a good case for a DAO to provide upkeep of the middleware layer.
SOCIAL USE CASE #3: NFTs
Our lives continue to move towards fully digital experiences, and NFTs are key to commemorating moments in the metaverse.
To be clear: a NFT is a single number (ID index) sitting in a 256-bit address space, which is recorded to belong to some cryptographic data that you keep secret. It MAY have a visual representation you can find with a URL, but that is not a requirement.
---
That's my 2 gwei.
Blockchain is all about eliminating trust in transactions.
For the most part, it doesn't work.
An extremely small number of crypto trades are done without trusting some 3rd party.
For example, what is your crypto worth? Most people trust unregulated crypto exchanges to tell them. Exchanges that can and do engage in minting their own crypto and using it (and other means) to manipulate the "free" market.
Blockchain solves a problem that most people don't have --- it eliminates trust in banks and government --- and replaces it with trust in unregulated exchanges that are free to scam and collude at will.
For the most part, it doesn't work.
An extremely small number of crypto trades are done without trusting some 3rd party.
For example, what is your crypto worth? Most people trust unregulated crypto exchanges to tell them. Exchanges that can and do engage in minting their own crypto and using it (and other means) to manipulate the "free" market.
Blockchain solves a problem that most people don't have --- it eliminates trust in banks and government --- and replaces it with trust in unregulated exchanges that are free to scam and collude at will.
Automatic market makers, Argent, RAI, multi-sig wallets, Baseline Protocol, Helium, FOAM Space, lending, digital ownership (say of in-game items), anonymity (I donate to Russian opposition in crypto only), improved payment UX.
All things that work well and do it better than non-blockchain.
All things that work well and do it better than non-blockchain.
I cam to the same conclusion in 2016, and I am not aware of any useful applications that have been developed since.
You didn't try hard. Blockchain is clearly different from a centralized database.
1) Noone can arbitrarily change the contents of the blockchain, the concensus is needed to even append to it.
2) Blockchain solves the Byzantine generals problem.
3) Blockchain doesn't have one central authority (only the code that governs it, but the code must be first accepted by the participants). So if you build a payment system on top of a blockchain, there's no single entity that can freeze or seize your money.
1) Noone can arbitrarily change the contents of the blockchain, the concensus is needed to even append to it.
2) Blockchain solves the Byzantine generals problem.
3) Blockchain doesn't have one central authority (only the code that governs it, but the code must be first accepted by the participants). So if you build a payment system on top of a blockchain, there's no single entity that can freeze or seize your money.
Just because you come from a place of great financial privilege does not mean others have no use for a censorship resistant form of money.
Afghanistan: https://theintercept.com/2022/01/19/crypto-afghanistan-sanct...
Argentina: https://www.bbc.com/news/business-60912789
Russia: https://www.reuters.com/world/europe/navalny-ally-urges-dono...
Lebanon: https://www.reuters.com/article/lebanon-crypto-currency-yout...
Nigeria: https://www.coindesk.com/tech/2020/10/16/nigerian-banks-shut...
Ukraine: https://www.cnbc.com/2022/03/23/ukrainian-flees-to-poland-wi...
Myanmar: https://www.bloomberg.com/news/articles/2021-12-13/myanmar-s...
Afghanistan: https://theintercept.com/2022/01/19/crypto-afghanistan-sanct...
Argentina: https://www.bbc.com/news/business-60912789
Russia: https://www.reuters.com/world/europe/navalny-ally-urges-dono...
Lebanon: https://www.reuters.com/article/lebanon-crypto-currency-yout...
Nigeria: https://www.coindesk.com/tech/2020/10/16/nigerian-banks-shut...
Ukraine: https://www.cnbc.com/2022/03/23/ukrainian-flees-to-poland-wi...
Myanmar: https://www.bloomberg.com/news/articles/2021-12-13/myanmar-s...
I did research for a Blockchain class a few summers ago. One of the use cases for private Blockchain is if multiple competitors want to cooperate to provide a single service. The most successful example is Maersk's Tradelens. Multiple competitors can hand off a package between each other and a customer or customs official can see the whole journey of that package and sensitive data like invoices without all competitors having access to that data or having to trust a central authority to keep everyone's secrets.
Yes, to me blockchain at this moment is more a solution looking for a problem. Regarding the biggest implementation, aka, Cryptocurrencies, what if they are "Too big to fail"? Should we as a society just let it happen to avoid a negative net economic welfare (in the short run)?
Web3 - The sequel nobody wanted but the studio had to make
https://docs.google.com/presentation/d/1V7UGmTw1pR6HsT8kF8dh...
TL;DR: All the current stuff is flaming garbage, but that's ok, we're basically where the web was in 1995. Just with a lot more scams instead of VC pitches.
https://docs.google.com/presentation/d/1V7UGmTw1pR6HsT8kF8dh...
TL;DR: All the current stuff is flaming garbage, but that's ok, we're basically where the web was in 1995. Just with a lot more scams instead of VC pitches.
Except the web actually has value.
Ask ordinary people in developing country, and you will know, why they need decentralized money.
In short, their government is corrupted, and they can't trust government or some standard centralized private company, because centralized mean, it could been easily corrupted.
Also corrupted officials usually limit usage of gold and other material things, but thanks to western tech, it is easy to hide flash with crypto and ignore those limitations.
Because of this very high share of people in exUSSR use crypto.
Sure, in developed countries of old democracies, all these things are not so important as their governments works much better than in developing countries, they just have not such problems, so in G7 talks about crypto transforms to lazy talks of sharp end of egg vs other end.
In short, their government is corrupted, and they can't trust government or some standard centralized private company, because centralized mean, it could been easily corrupted.
Also corrupted officials usually limit usage of gold and other material things, but thanks to western tech, it is easy to hide flash with crypto and ignore those limitations.
Because of this very high share of people in exUSSR use crypto.
Sure, in developed countries of old democracies, all these things are not so important as their governments works much better than in developing countries, they just have not such problems, so in G7 talks about crypto transforms to lazy talks of sharp end of egg vs other end.
I think, it’s just another intellectuel and speculative game to play. Fun as well with some interactive products.
But I think it’s more rigged than the stock market, insider trading and rug pull are too many
But I think it’s more rigged than the stock market, insider trading and rug pull are too many
You're not wrong.
I see a lot of value in blockchain tech that cannot be replaced by any DB. In fact a DB is incomparable with a blockchain. Whatever you can do today with an average blockchain requires a lot of upfront work to make a system that works to replicate any of the value that a blockchain brings.
First of all it functions as a currency which inherently brings with it a lot of value. You can exchange and hold virtual currency with minimal fees. This applies primarily to proof-of-stake blockchains (Algorand, Tezos, Cardano). Ethereum/Bitcoin have due to proof-of-work become less a currency and more an investment. There's more value just holding them than actually converting them.
Blockchain tech is trustless and decentralized both of which is very valuable to me personally. I've lost trust in the modern banking system. I guess the turning point at which I became more attent to what the financial salarymen are doing was the 2008 financial crisis. But I'd say that's just the tip of the iceberg. Between all the tax havens hiding billions in plain sight, various scandals such as Wirecard, disappearing money balance on my bank accounts, evaporating loans for large defunct companies, there is just so much crime based around hidden centralized systems. I see blockchain as having the potential to level the field in a system where (centralized) banks are just trying to ripoff the average Joe.
Then we have the stablecoins which work as a safe haven for hyperinflation. While I'm not affected I find this a very serious use case. There's a constant set of countries that are failing to stabilize their local currency and who knows when this is going to hit the reader. Being able to keep value to your monthly wage is a use case in a failing economy. Stablecoins have been found to be an essential part for decentralized finance and pretty much every smart contract-capable cryptocurrency is/has added them.
Also note that having a wallet for a cryptocurrency does not incur monthly charge. Banks charge you for just keeping a balance if you have more than X amount of currency on you account. There's also no maintenance costs which are common for some types of accounts. And plenty of crypto currencies allow you to stake and get a passive income that is higher than what you get on any bank account.
Then there's the DeFI loans. You can basically take a loan as long as you lock a collateral. That's the only condition. Now feel free to go read any of the contracts you signed for a leasing/loan and compare the user experience. DeFI loans are risky due to possibility of liquidation but I see this tech improving and maturing moving on.
While this may sound like I'm the greatest fan I'm more of realist. Blockchain does have a lot of issues. Account recovery is a impossible. Scams are rampant. Transaction speeds are a lot slower than non-blockchain tech can do. Also the immature community praying for a 10x is a pain to follow. But saying it's just a bad DB is plain false.
First of all it functions as a currency which inherently brings with it a lot of value. You can exchange and hold virtual currency with minimal fees. This applies primarily to proof-of-stake blockchains (Algorand, Tezos, Cardano). Ethereum/Bitcoin have due to proof-of-work become less a currency and more an investment. There's more value just holding them than actually converting them.
Blockchain tech is trustless and decentralized both of which is very valuable to me personally. I've lost trust in the modern banking system. I guess the turning point at which I became more attent to what the financial salarymen are doing was the 2008 financial crisis. But I'd say that's just the tip of the iceberg. Between all the tax havens hiding billions in plain sight, various scandals such as Wirecard, disappearing money balance on my bank accounts, evaporating loans for large defunct companies, there is just so much crime based around hidden centralized systems. I see blockchain as having the potential to level the field in a system where (centralized) banks are just trying to ripoff the average Joe.
Then we have the stablecoins which work as a safe haven for hyperinflation. While I'm not affected I find this a very serious use case. There's a constant set of countries that are failing to stabilize their local currency and who knows when this is going to hit the reader. Being able to keep value to your monthly wage is a use case in a failing economy. Stablecoins have been found to be an essential part for decentralized finance and pretty much every smart contract-capable cryptocurrency is/has added them.
Also note that having a wallet for a cryptocurrency does not incur monthly charge. Banks charge you for just keeping a balance if you have more than X amount of currency on you account. There's also no maintenance costs which are common for some types of accounts. And plenty of crypto currencies allow you to stake and get a passive income that is higher than what you get on any bank account.
Then there's the DeFI loans. You can basically take a loan as long as you lock a collateral. That's the only condition. Now feel free to go read any of the contracts you signed for a leasing/loan and compare the user experience. DeFI loans are risky due to possibility of liquidation but I see this tech improving and maturing moving on.
While this may sound like I'm the greatest fan I'm more of realist. Blockchain does have a lot of issues. Account recovery is a impossible. Scams are rampant. Transaction speeds are a lot slower than non-blockchain tech can do. Also the immature community praying for a 10x is a pain to follow. But saying it's just a bad DB is plain false.
Blockchains are the natural evolution of fault tolerant database systems into the multi-stakeholder domain. Databases that are not just architecturally fault tolerant (eg. using Paxos or Raft), but politically fault-tolerant (using BFT). Money is an obvious and natural use case for such multi-stakeholder database systems, but conceivably much other critical infrastructure is as well. Though of course, since we are talking about multi-stakeholder, uptake in commercially meaningful areas will inevitably be slower and riddled with political conflict.
I'm also a blockchain skeptic when it comes to building the best technological solution.
However, I've worked for a successful startup in the blockchain space. Blockchain was instrumental in generating interest and securing funding for the first rounds of financing. If blockchain had not been part of the company elevator pitch, it worked never have gotten off the ground.
If adding shiny object Y to solution X is what causes your product to succeed at having the largest market share of X, then Y has value. Many companies have succeeded by having the most customers, not the best technology.
However, I've worked for a successful startup in the blockchain space. Blockchain was instrumental in generating interest and securing funding for the first rounds of financing. If blockchain had not been part of the company elevator pitch, it worked never have gotten off the ground.
If adding shiny object Y to solution X is what causes your product to succeed at having the largest market share of X, then Y has value. Many companies have succeeded by having the most customers, not the best technology.
Blockchain technology helps you create applications without the need to have a trusted 3rd party.
What it solves?:
- Sending money from Alice to Bob without the need of a trusted party like Venmo/Paypal/Bank.
- Vehicle registration / House title deeds are maintained by the local government. A decentralized application can potentially mint an NFT (ERC-721) and maintain such a DB. (Although, the physical society would need to come with laws to tie up physical good's with NFT's)
- In today's Gaming Economy all the digital goods bought/earned are controlled by the company (Zynga/Roblox). A blockchain powered game will allow the owners to have actual control of the digital goods ( money - tokens, wearables - NFT's) bought/purchased that they can sell/exchange in the open market. Imagine buying a souvenir from Disney Land and then not being able to sell/exchange it.
What it solves?:
- Sending money from Alice to Bob without the need of a trusted party like Venmo/Paypal/Bank.
- Vehicle registration / House title deeds are maintained by the local government. A decentralized application can potentially mint an NFT (ERC-721) and maintain such a DB. (Although, the physical society would need to come with laws to tie up physical good's with NFT's)
- In today's Gaming Economy all the digital goods bought/earned are controlled by the company (Zynga/Roblox). A blockchain powered game will allow the owners to have actual control of the digital goods ( money - tokens, wearables - NFT's) bought/purchased that they can sell/exchange in the open market. Imagine buying a souvenir from Disney Land and then not being able to sell/exchange it.
In my opinion, none of those things are real problems that need solving. They’re fabricated to fit a technology.
I don't subscribe to Netflix because I'm not entertained by such things. That doesn't mean others don't have a need for low-cost narrative diversion.
The fact that you don't acutely feel the need for a trustless digital money is very telling of your position in the world. I would recommend you read the book "Check Your Financial Privilege", by Alex Gladstein. You will find that, as an absolute fact, the use case is in extremely dire need of solving, and Bitcoin is the solution.
The fact that you don't acutely feel the need for a trustless digital money is very telling of your position in the world. I would recommend you read the book "Check Your Financial Privilege", by Alex Gladstein. You will find that, as an absolute fact, the use case is in extremely dire need of solving, and Bitcoin is the solution.
Blockchains are a tech for commons records among consenting parties. As a "database", it's really quite niche. But as a fundamental tech it's an advancement, because it lets you set up some basic rules and then know that the log henceforth doesn't need a designated custodian, and can accommodate many contributors. The surface area for indiscretion is reduced, and the chain doesn't need highly visible maintenance to stick around.
This quality also makes it actually pretty unsuitable for capitalism: capitalism premises enclosure of the commons through the enforcement of the state. It desires strong identity and legibility everywhere. So it becomes "pointless" by definition - a bad database - if the state or some other body is assumed in control. Thus the commonplace scenario of blockchains being a legitimizing veneer for scams has taken hold: actually using their best qualities is anti-capitalistic, but using them to obscure a scheme can be done if you tinker around with the financing enough so that you stay a step ahead of regulation.
But there is genuine activity, gradually increasing over time, through the contrasting role of blockchain stewardship. This starts with the role of miners in the technical substrate; and it proceeds towards more general ideas around governance and solving decentralized coordination problems. Markets often appear in the midst as a way of ranking things by price as well as by name or category, but markets aren't necessarily special. The speculative market does has a role in building up these ideas, though, because each time the tide goes out, those projects that have done the best at addressing coordination issues become survivors. There's a holistic element to the tech really working well that is just barely being touched upon.
This quality also makes it actually pretty unsuitable for capitalism: capitalism premises enclosure of the commons through the enforcement of the state. It desires strong identity and legibility everywhere. So it becomes "pointless" by definition - a bad database - if the state or some other body is assumed in control. Thus the commonplace scenario of blockchains being a legitimizing veneer for scams has taken hold: actually using their best qualities is anti-capitalistic, but using them to obscure a scheme can be done if you tinker around with the financing enough so that you stay a step ahead of regulation.
But there is genuine activity, gradually increasing over time, through the contrasting role of blockchain stewardship. This starts with the role of miners in the technical substrate; and it proceeds towards more general ideas around governance and solving decentralized coordination problems. Markets often appear in the midst as a way of ranking things by price as well as by name or category, but markets aren't necessarily special. The speculative market does has a role in building up these ideas, though, because each time the tide goes out, those projects that have done the best at addressing coordination issues become survivors. There's a holistic element to the tech really working well that is just barely being touched upon.
The main purpose is to scam idiots. It’s very effective at that.
There's no intrinsic value in Blockchain Tech.
Numbers in a computer merely signify what you are willing for them to signify. In that sense, blockchain tech is no different from fiat currency. That piece of colored paper in your pocket is merely a promise of worth. People can renege on their promises, either because they want to or because they are forced to.
So tell me, how many hamburgers have you bought with Confederate Dollars or Nazi Reichsmarks lately?
Numbers in a computer merely signify what you are willing for them to signify. In that sense, blockchain tech is no different from fiat currency. That piece of colored paper in your pocket is merely a promise of worth. People can renege on their promises, either because they want to or because they are forced to.
So tell me, how many hamburgers have you bought with Confederate Dollars or Nazi Reichsmarks lately?
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I made the choice to use Firefox because of the monopolistic direction that we're headed, but I think it will become harder and harder to argue for Firefox.
I wonder if there is another way to create an information network that simplifies the user experience by scraping website code and reformatting it into a simple template with defined ux-patterns like navigation, font, text size, colors, buttons, links, media, etc. and excluding unwanted content like ads, filler bg images and such.
So basically creating a design system that you apply to all websites. The scaping/tagging would need to be smart and there would probably be a need for separate templates for some use cases (could twitter work?) but maybe the focus should be on information-driven sites like blogs, wiki, search, media, etc.
I wonder if there is another way to create an information network that simplifies the user experience by scraping website code and reformatting it into a simple template with defined ux-patterns like navigation, font, text size, colors, buttons, links, media, etc. and excluding unwanted content like ads, filler bg images and such.
So basically creating a design system that you apply to all websites. The scaping/tagging would need to be smart and there would probably be a need for separate templates for some use cases (could twitter work?) but maybe the focus should be on information-driven sites like blogs, wiki, search, media, etc.
“why the distributed ledger?” (Jan 2022)
https://mirror.xyz/mattdesl.eth/2WNUAK_DuQsxj3Ei3CY-IlWyVb8V...
https://mirror.xyz/mattdesl.eth/2WNUAK_DuQsxj3Ei3CY-IlWyVb8V...
I'm always happy to talk anyone's ear off about Blockchain, it is by far the most interesting space I've ever worked in. Feel free to ask me your hardest questions.
Decentralized Finance (DeFi) is my favorite aspect. It's honestly outstanding how far behind the curve of DeFi knowledge HN is and so few are willing to debate and learn.
I work at a company called Balancer, we've built an app that allows you to essentially invest in index funds of tokens. You can put money into a pool of say 40% ETH, 30% Bitcoin, 20% LINK, 10% USD. Then instead of you paying fees for someone else to manage this fund, you get paid - often 5% - 20% per year, to have this fund.
How? Traders use your funds as an arbitrage opportunity when the ratios go out of wack. There are a lot of day traders in crypto right now and every time they make a trade through your pool they pay a 0.3% - 1% fee.
These tokens are mostly crypto coins right now but they can be anything, including tokens that track oil, gold, share prices, or even housing index funds. Other companies build these tokens and as they are standardized they can be used in Balancer pools.
Balancer the app is completely decentralized and open access to all. Your money is yours, we have no access to user funds.
This is barely the tip of the iceberg, eventually the entire financial system is going to be overtaken by open, permissionless systems and they will be much bigger than today because there are far fewer rent seekers, and entire world gets to participate.
Decentralized Finance (DeFi) is my favorite aspect. It's honestly outstanding how far behind the curve of DeFi knowledge HN is and so few are willing to debate and learn.
I work at a company called Balancer, we've built an app that allows you to essentially invest in index funds of tokens. You can put money into a pool of say 40% ETH, 30% Bitcoin, 20% LINK, 10% USD. Then instead of you paying fees for someone else to manage this fund, you get paid - often 5% - 20% per year, to have this fund.
How? Traders use your funds as an arbitrage opportunity when the ratios go out of wack. There are a lot of day traders in crypto right now and every time they make a trade through your pool they pay a 0.3% - 1% fee.
These tokens are mostly crypto coins right now but they can be anything, including tokens that track oil, gold, share prices, or even housing index funds. Other companies build these tokens and as they are standardized they can be used in Balancer pools.
Balancer the app is completely decentralized and open access to all. Your money is yours, we have no access to user funds.
This is barely the tip of the iceberg, eventually the entire financial system is going to be overtaken by open, permissionless systems and they will be much bigger than today because there are far fewer rent seekers, and entire world gets to participate.
If the entire world gets to participate, wouldn't that make everyone a rent seeker?
I'm going insane reading these replies and seeing not a single mention of DeFi. It's the fastest growing startup sector maybe of all time, going from nothing to half a trillion dollars in 3 years and yet somehow HN has completely missed the boat and still thinks nothing is being built on blockchains.
I guess all the crypto folk got sick of the pessimism on here and went to build with more optimistic open minded communities.
I guess all the crypto folk got sick of the pessimism on here and went to build with more optimistic open minded communities.
yes -- but the (positive) value is to only certain parties.
you're not missing anything.
both bombs and blockchain tech are destructive for most people -- not positive/additive.
but bombs and blockchain tech can also make megafortunes for the people that own, control, and use them.
there are some edge cases where bombs and blockchain tech could theoretically be more useful than the alternatives, but a sane/decent world would save those experiments for the philosophy lecture room.
you're not missing anything.
both bombs and blockchain tech are destructive for most people -- not positive/additive.
but bombs and blockchain tech can also make megafortunes for the people that own, control, and use them.
there are some edge cases where bombs and blockchain tech could theoretically be more useful than the alternatives, but a sane/decent world would save those experiments for the philosophy lecture room.
I personally follow where devs are naturally curious.
Where I see devs making cool stuff:
- AI/ML
- traditional coding
Where I don't see devs:
- Blockchain tech
- AR/VR
Ultimately I think what happened is the hype cycle made crypto seem like the next Internet, when it's really just fintech. It's interesting to Wall Street, not engineers.
Even the whole DAAP thing is DoA. Can't think of a single app that is more than a tiny demo.
Where I see devs making cool stuff:
- AI/ML
- traditional coding
Where I don't see devs:
- Blockchain tech
- AR/VR
Ultimately I think what happened is the hype cycle made crypto seem like the next Internet, when it's really just fintech. It's interesting to Wall Street, not engineers.
Even the whole DAAP thing is DoA. Can't think of a single app that is more than a tiny demo.
At the same time, the amount of coverage and attention it is getting and for a sustained period makes me believe I am missing something.
After all there are few instances of technology fads that have sustained such serious interest for a prolonged period of time (approaching a decade now) with little to show for in terms of investment returns or societal impact.
I am talking committees formed in parliaments and central banks around the world to discuss its benefits, serious universities dedicating whole programs on the subject, elite investors pouring money into its potential, and the list goes on.
So far the most charitable explanation I could come up with for the craze is that it is an effective rebranding for marketing purposes of database technologies, similar to how "data science" rebranded statistics and business analytics.
On the other hand "data science" even if it is merely rebranding did arguably lead to significant change in tooling/workflows in how data is consumed and presented in corporates around the world, no such thing could be said of blockchain.
Where am I going wrong? I am particularly keen to hear from people who underwent the journey from skeptics to believers in the space.