In the least, it should be useful in some non-paradigm-shifting, more obvious applications like concert ticket sales (see TIX) and date-stamping of journalism and public records (see PO.ET).
I’m interested if anyone disagrees. If a blockchain is a basic immutable ledger, I guess I wonder why there isn’t more attention on already-useful ledgers which currently depend on less efficient infrastructure to enforce consistency. It seems possible this is what Vitalik is getting at.
> what about current infrastructure makes it less efficient than blockchain for your examples?
This is complete conjecture, mainly because I'm not sure if I fully understand his question, but would less human interaction increase efficiency of current financial networks/institutions? Sure, small transactions in mainstream financial institutions don't need oversight as fraud prevention is adequate and easy to interact with, but large wire transfers and escrow accounts probably mandate a set of human eyes for supervision (again, just conjecture). That's something smart contracts can eliminate.
Yeah good question. I didn’t elaborate very well on that.
The inefficiencies come about in transactions by separate parties. I am no expert on how Ticketmaster works, but I will use an event ticket as an example. If customer(a) buys a ticket from a venue and wants to sell it to customer(b), there are 4 separate parties dependent on that transaction. The current solution is having Ticket unique Ticket stubs which are difficult enough to counterfeit that they protect the transactions enough but counterfeit tickets do get made and sold often. Those make cause for problems. And, selling the physical tickets requires a physical transaction. All of these things mark inefficiencies.
These mirror the inefficiencies overcome by cryptocurrencies in that the solutions replace stringent centralized enforcement with decentralized access.
I would say that blockchain is more that just an immutable ledger. It is a distributed, decentralized immutable ledger.
The former (just an immutable ledger) is either relatively trivial, i.e. a linked chain of hashed content, or not really required. After all the entire commercial world runs and is regulated successfully on the immutable ledger that is their accounting system.
At issue is that a "distributed, decentralized" immutable ledger has little application. The problems it was design to solve (like preventing double spend) just don't apply to most systems, no matter how hard we would like them to.
Makes sense. But, I think it’s important to consider that if a ledger is not decentralized, it may be immutable, but it’s immutability is not verifiable by all parties.
>>Preston Byrne argues: well, effectively what you’re saying is that “tokenization onto a blockchain allows you to break securities laws.” That’s hardly an innovation so much as a circumvention.
That's an innovation in circumventing centralized authorities.
>>As a payments layer, Bitcoin is slow, expensive, and unscalable. But if Bitcoin is to serve as digital gold, that doesn’t matter. Bitcoin being hard to move around encourages people to treat it like gold. Almost all of the political and economic characteristics of Bitcoin make it the natural cryptocurrency to fill this niche.
This is not true. A store of value needs to be mobile to be effective. Value is only stored to eventually be moved. Bitcoin's liquidity has to concentrate on off-chain ledgers controlled by trusted third parties when on-chain transaction fees are exorbitant. That makes it highly susceptible to regulations.
If in 10 years, almost all trade in Bitcoin is being done on exchanges, and almost all trade in another cryptocurrency is being done in peer-to-peer retail transactions, and China shuts down its exchanges, the other cryptocurrency will still have significant liquidity in China, while Bitcoin's will be severely reduced.
Wow. The writer of this article like many other articles I read about Bitcoin in these days does not seem to care about all illegal activities happening on top of Bitcoin, and just talking about it as one of the killer apps.
Am I the only one who watches all this Bitcoin drama with a sad face if not a broken heart where people are killed, hurt, or get frauded? I had and have zero belief that this stuff will work but on top of that I am really disappointed how it evolved from a geek project to a big wave of distruption if not a distraction.
Anyway, do crypto currency communities have any plans about preventing illegal activities that hurt real people?
Bitcoin, if not worse, has similar problems that cash money has. While governments trying to get rid off cash, now we have Bitcoin on top of that.
There will be regulations on Bitcoin for sure but how can it be regulated without breaking the original premise, that is, being able stay anonymous with one's transactions?
I'm confused on how you think cryptocurrencies are responsible for getting people killed or hurt. Fraud is a definite concern, as is the case with any unregulated market.
Doesn't paper money "cause" people to get killed or hurt just as you say Bitcoin does?
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[ 3.9 ms ] story [ 35.8 ms ] threadI’m interested if anyone disagrees. If a blockchain is a basic immutable ledger, I guess I wonder why there isn’t more attention on already-useful ledgers which currently depend on less efficient infrastructure to enforce consistency. It seems possible this is what Vitalik is getting at.
Honest question, what about current infrastructure makes it less efficient than blockchain for your examples?
This is complete conjecture, mainly because I'm not sure if I fully understand his question, but would less human interaction increase efficiency of current financial networks/institutions? Sure, small transactions in mainstream financial institutions don't need oversight as fraud prevention is adequate and easy to interact with, but large wire transfers and escrow accounts probably mandate a set of human eyes for supervision (again, just conjecture). That's something smart contracts can eliminate.
The inefficiencies come about in transactions by separate parties. I am no expert on how Ticketmaster works, but I will use an event ticket as an example. If customer(a) buys a ticket from a venue and wants to sell it to customer(b), there are 4 separate parties dependent on that transaction. The current solution is having Ticket unique Ticket stubs which are difficult enough to counterfeit that they protect the transactions enough but counterfeit tickets do get made and sold often. Those make cause for problems. And, selling the physical tickets requires a physical transaction. All of these things mark inefficiencies.
These mirror the inefficiencies overcome by cryptocurrencies in that the solutions replace stringent centralized enforcement with decentralized access.
The former (just an immutable ledger) is either relatively trivial, i.e. a linked chain of hashed content, or not really required. After all the entire commercial world runs and is regulated successfully on the immutable ledger that is their accounting system.
At issue is that a "distributed, decentralized" immutable ledger has little application. The problems it was design to solve (like preventing double spend) just don't apply to most systems, no matter how hard we would like them to.
>>Preston Byrne argues: well, effectively what you’re saying is that “tokenization onto a blockchain allows you to break securities laws.” That’s hardly an innovation so much as a circumvention.
That's an innovation in circumventing centralized authorities.
>>As a payments layer, Bitcoin is slow, expensive, and unscalable. But if Bitcoin is to serve as digital gold, that doesn’t matter. Bitcoin being hard to move around encourages people to treat it like gold. Almost all of the political and economic characteristics of Bitcoin make it the natural cryptocurrency to fill this niche.
This is not true. A store of value needs to be mobile to be effective. Value is only stored to eventually be moved. Bitcoin's liquidity has to concentrate on off-chain ledgers controlled by trusted third parties when on-chain transaction fees are exorbitant. That makes it highly susceptible to regulations.
If in 10 years, almost all trade in Bitcoin is being done on exchanges, and almost all trade in another cryptocurrency is being done in peer-to-peer retail transactions, and China shuts down its exchanges, the other cryptocurrency will still have significant liquidity in China, while Bitcoin's will be severely reduced.
Am I the only one who watches all this Bitcoin drama with a sad face if not a broken heart where people are killed, hurt, or get frauded? I had and have zero belief that this stuff will work but on top of that I am really disappointed how it evolved from a geek project to a big wave of distruption if not a distraction.
Anyway, do crypto currency communities have any plans about preventing illegal activities that hurt real people?
Sooner or later, blockchain-based money will be regulated. Just like paper money is today. But its too early now.
There will be regulations on Bitcoin for sure but how can it be regulated without breaking the original premise, that is, being able stay anonymous with one's transactions?
The ledger is public, so it was never really anonymous. Just hard to follow.
Doesn't paper money "cause" people to get killed or hurt just as you say Bitcoin does?