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Crypto currencies and blockchain are broken because they lack utility

43 points by all2 ↗ HN
https://news.ycombinator.com/item?id=18493519

I've been struggling to put this in to words for a while now. The above thread on crypto currencies tanking has me bothered and has driven me to try and express myself.

Crypto-tokens are useless without utility. Because there is no value (not even fiat acceptance) intrinsic to any coin, they are useless without a utility function.

Some blockchain models have tried to solve this (lack of utility) with smart contracts. Smart contracts are also broken, though, for distributed trust systems. Sure, they might work on chain, but when someone needs to author a real-estate deal there is some trusting that happens off-chain. And when trust (the entire point of the blockchain) occurs off-chain there is no guarantee that what you expect to happen has actually happened (did they sell the property, is it in the condition described, etc.).

So, the only utility (smart contracts) for distributed trust systems can't be trusted when it comes to real applications.

The only other way any fiat currency gains utility is mass acceptance (which all crypto currencies lack). If I can't buy a cup of coffee with it, why would I accept XYZ coin as payment for anything.

So, I argue for utility. If any currency/blockchain technology is going to be successful it needs to be useful for something. In short: can I buy stuff I want with it?

My question is: how can the ideas of crypto currency and blockchain be leveraged in a way that is actually useful on a mass market scale? (ie, how do we bring utility to an idea that has been fluff - 'mining', really?! - so far?)

24 comments

[ 14.5 ms ] story [ 65.8 ms ] thread
samstave
Why cant an 'auditable chain of custody' be the only/primary utility?

I have heard people say that blockchain is the wrong tech for voting, as an example, well - OK - so, what then, is the 'correct' tech implementation for vote tracking?

Cant you have blockchain based code control even in an open source system to ensure no nefarious business goes on - based on how others have exclaimed they dont trust code for e-voting platforms... why cant this work.

So, what is the right tool to tackle such problems, and if we dont have a right-tool, then why do we not have a working group sanctioned and funded by the DARPAs of the world to solve things like this?

hackermailman
In most countries internet access is a total monopoly and so unreliable that the service blows out during a championship sports game let alone the entire country using it at once to vote. Meanwhile we have managed to avoid election disputes leading to riots and burning down parliament for 150 years using a simple volunteer run hand counting method with independent observers. I wouldn't be so quick to throw out a century of success for unproven technology from 2008. Maybe if one day we have guaranteed p2p connections avoiding the high priced access control by just 1 or 2 telecom monopolies, and weak standards/protocols that aren't being hacked on a regular basis like LTE.
samstave
>Meanwhile we have managed to avoid election disputes leading to riots and burning down parliament for 150 years using a simple volunteer run hand counting method.

The words 'Accurate, Accountable, Auditable' do not occur in this sentence.

hackermailman
Vote selling also doesn't occur in that sentence. There's a reason we don't tear off a hash from a ballot right now to be given to voters, enabling them to verify later their hand counted ballot wasn't discarded or used to vote for somebody else, because it enables vote selling since now you have proof you voted for a candidate. Foreign superpowers could even automate this with a smart contract. Upload a signed txn proving you voted how they want you to and collect your $100 worth of coins. SuperPACs with hundreds of millions of advertising dollars would cancel ads and buy your vote.
jhasse
Zero knowledge proofs can solve this.
hndamien
The problem is that the old successful technology is being thrown out for broken technology anyway. Blockchain voting might be a way to prevent “them” implementing that awful stuff.
Qwertystop
> Cant you have blockchain based code control even in an open source system to ensure no nefarious business goes on - based on how others have exclaimed they dont trust code for e-voting platforms... why cant this work.

That exists. Git was a blockchain before "blockchain" was a thing to hype.

pdpi
As somebody who works in the space, you've just hit a topic that annoys me to no end. The term "Blockchain" has a very specific meaning, and that is just a specific type of data structure (that also happens to be used in Git, as you describe). The whole meme around anything that's even remotely like a large scale distributed (not even decentralised, as Bitcoin is!) system being called a "blockchain" is literally worse than useless, because it has no precise meaning, and has robbed a word from a perfectly fine, well-defined meaning.
samstave
And you're proving my point...

if "blockchain" is so bad - why do I never hear any actual proposals for anything that is GOOD?

STFU about blockchain and say someting of positive impact as opposed to constantly bitching about blockchain.

I am not pushing blockchain, I am pointing out that people who "work in the space" clearly have nothing, else theyd stop saying "blockchain sucks!" and say "See, what you really want in a situation like this is..."

samstave
if this "works" why hasnt it been embraced/shown as example?

Your comment doesnt hold up to the evidence of history...

https://xkcd.com/2030/

AND

https://xkcd.com/463/

craftyguy
Wow, XKCD is now being cited as evidence. What a world we live in.
samstave
Hah. Not evidence... anecdotal poking of fun...

Dont take things too seriously. ;-)

pdpi
You specifically don't want that particular brand of audibility for vote tracking, because secrecy is crucially important. Instead, you're going to need some system based on Zero-Knowledge Proofs, or something akin to that.
hackermailman
The value is too volatile in most crypto schemes to enable anything like remittance or other consumer level transactions. You need either a stablecoin scheme, which introduces a centralized authority (and in that case, you've reinvented paypal and people will just use paypal) or some reliable method where your coins can be sold immediately at a guaranteed price otherwise if you want to send $50 to your cousin in the developing world by the time you've wasted time going through all the hassle of doing so they're now worth $25.

For your off chain problems Egor Homakov's Failsafe Network (now called Fairlayer) addresses that problem https://github.com/fairlayer/wiki

For your request of being able to just pay with your phone anywhere you go, with an easy to use interface that registers payments immediately, Moxie's mobilecoin project may be the answer if it's ever realized https://www.mobilecoin.com/

Basically you just need to wait for this to mature, and for the majority of speculators to get run out when it all collapses. It would be nice to have reliable exchanges as well instead of every few weeks discovering another scandal of price fixing or stolen coins.

AboutTheWhisles
People have been already doing remittance for the last five years with cryptocurrency. It isn't too tricky to understand that someone can set up a small office in both countries, take in one currency, send cryptocurrency they already have, buy more with that currency and have the other office sell some cryptocurrency when they receive it from the first office.

This is something that does not depend on low volatility and can be done on a small scale while bypassing a large expensive service like western union.

bsvalley
Thanksgiving is coming, black Friday and Cyber Monday. 2 things are happening:

- 1. people are cashing out any gains and closing things out this year prior to filling taxes.

- 2. people are getting more fiat to spend this week and get some good deals.

You can't tied the monetary value of crypto and its utility all together. These are 2 separate things. Just wait for the end of the holidays and you'll see Wall St will jump on crypto since they've been waiting for a big discount to get on board. As far as utility goes, tones of very talented people are working heads down on crypto as we speak. They don't get bothered by charts.

lostctown
Am I reading reddit? There was no reference in OP's post to the current prices.
bsvalley
My bad I jumped the gun too soon. Sorry for that poor comment of mine :/
respawnzero
"people are cashing out any gains and closing things out this year prior to filling taxes."

Hahaha gains. thats a funny joke.

leashless
We fixed this: http://Mattereum.com/LP and it'll be up on an alpha basis in the next couple of months.

Basically we are where SSL was before we got Certificate Authorities to bind the crypto keys to real world legal entities. Without that commercial infrastructure to absorb risk and connect the two domains, nothing can move across domains - which is where the real value can be generated.

I project managed the Ethereum launch, I've been around the crypto world for 20 years, and we've been working in this for quite a while. Read the paper. Give us a look.

all2
So I looked. It sounds nice. You have nice partners. But I don't see source or anything like that.

Suppose I wanted to dabble or contribute, how would I go about that?

asasidh
un-censorable money is not utility enough ? how about a fixed cap and deflationary nature that makes it a better store of value. Can you find any other asset class that has performed better in the last 5 years ?
alboaie
Blockchain could make easier to implement the vision of complementary curencies from https://www.amazon.co.uk/exec/obidos/ASIN/0712683992/transac... Bernard Latier is prophetic in "The Future of Money: Creating New Wealth, Work and a Wiser World". Aloso, Blockchain could enable some sorts of decentealised UBIs. Unfortunately the first wave was too libertarian in its culture and not focused on doing really good things for the world. Too much greed, fear and short sighted decisions. But this wave proved that the monopoly on money is an acident and not a necesity. This could be very huge. When many people start believing it just becomes reality..