When will they be world changing? I have a client who insists on paying me in crypto and the whole thing is dramatically more expensive and complicated than using TransferWise with a 10,000x increased risk that someone fat fingers something and the money disappears into the ether forever
My opinion is that it's like tcp/ip, new plumbing (ethereum). So expect protocols and apps to be built on top of it, similar to HTTP and browsers. You just need one killer app to make all the hype worth it.
That killer app might be elections or possibly decentralized trading of electronic assets like stock ownership.
And the cost of bitcoin has naturally been inflating to the cost of the power needed to do the mining ... so the whole thing looks a lot like a bubble, great if you got in and out early, bad news for everyone else.
It's the evolution of buzzwords. Back in the day people used buzzwords that were nonspecific enough you could apply them to almost any solution. Synergy, paradigm, leverage, etc. Today's buzzwords have very specific meanings but are flexible enough you can convince people they're the solution to any problem. Blockchain, AI, machine learning, etc.
An article about blockchain where the thesis is that it doesn't solve any problems and it doesn't even mention Ethereum? This article is extremely poorly researched (maybe on purpose) and reads like clickbait.
> So much energy that the two biggest blockchains in the world – bitcoin and Ethereum – are now using up the same amount of electricity as the whole of Austria.
Ethereum developers have been working extremely hard to move to proof of stake to remove this massive power requirement. It's too bad that wasn't mentioned in the article.
Slide side track but I never get the complaints about power usage. It’d be great if crypto used less energy obviously but doesn’t fiat also use a ridiculously high amount of energy?
The same physical infrastructure that is also used for transporting just about everything else? Anyway, most currency transfer these days is digital, so even that doesn't hold much water.
We use armored cars and people licensed to carry firearms for the transport of "just about everything else"?
Also, most currency transfer being digital is a non-sequitor Businesses still need to move the money from their location to the bank regardless of the volume of transfers done digitally.
You are conflating fiat currency and physical dollars. The total sum value of physical currency is much less than the total amount of dollars in existence. Most dollars exist only as entries in a ledger.
Can you give some examples of ubititous systems in the real world which don't use crazy amount of energy in absolute terms? It would be helpful if you could provide an estimate for your notion of "crazy amount of energy" in terms of powers of ten kWh.
I'd like to point you to this Vice article titled "One Bitcoin Transaction Consumes As Much Energy As Your House Uses in a Week". Meanwhile swiping a credit card uses slightly more electricity than a google query.
Does it not seem strange to you that if a BTC transaction costs $1 to $5 in fees, yet supposedly uses $50 or more in “actual” electricity costs, there must be a disconnect there?
There is energy in certain places (underground, hydro) that cannot be transported to wherever journalists are writing their papers as they spitball electricity calculations.
The amount of hydro electricity that can be produced is fairly static, so increasing hydro consumption means that other energy sources (mostly coal) are needed to pick up the rest of the demand.
Yeah, that's the only spot. Literally just an "and" next to Bitcoin when talking about electricity usage. No mention of what it does, what's currently being built, or the use cases people are using today. I guess that doesn't fit the author's narrative so they ignore it or maybe don't even know it exists. I don't know which is worse in this case.
That's a long article itself but this might be a good starting point: https://consensys.net/blockchain-use-cases/ Consensys is run by an Ethereum co-founder and one of the most prestigious organizations in this space, so that page might seem intimidating but it's good, factual information.
Ethereum allows for the usage of unique and real items in the digital world. Money was obvious as it's impossible to have internet money if you can just ctrl+c and ctrl+v it to make copies. A bit of money is unique and can't be copied and thus is real and useful in ways previously digital information wasn't.
You can own a digital object or digital representation of a real object and use it on the internet. God's Unchained is a collectible card game like Magic the Gathering where the cards are digital, the rare cards are provably rare, and the players can trade the cards on any market out there or even take out loans on their valuable extra rare cards. This concept applies to many things including cars, houses, collectible fashion apparel, and anything else that there needs to be only one of.
DeFi is already re-creating all of the capabilities of the existing financial system but built on neutral and fair rules where no one person or company can arbitrarily change them and you always keep fully control of your assets.
There's too much to write but there is something here and it's worth reading about it with an open mind as it's very likely going to be important in a decade or so.
I wrote this below but copying here as it's hard to write a huge comment twice.
That's a long article itself but this might be a good starting point: https://consensys.net/blockchain-use-cases/ Consensys is run by an Ethereum co-founder and one of the most prestigious organizations in this space, so that page might seem intimidating but it's good, factual information.
Ethereum allows for the usage of unique and real items in the digital world. Money was obvious as it's impossible to have internet money if you can just ctrl+c and ctrl+v it to make copies. A bit of money is unique and can't be copied and thus is real and useful in ways previously digital information wasn't.
You can own a digital object or digital representation of a real object and use it on the internet. God's Unchained is a collectible card game like Magic the Gathering where the cards are digital, the rare cards are provably rare, and the players can trade the cards on any market out there or even take out loans on their valuable extra rare cards. This concept applies to many things including cars, houses, collectible fashion apparel, and anything else that there needs to be only one of.
DeFi is already re-creating all of the capabilities of the existing financial system but built on neutral and fair rules where no one person or company can arbitrarily change them and you always keep fully control of your assets.
There's too much to write but there is something here and it's worth reading about it with an open mind as it's very likely going to be important in a decade or so.
> Money was obvious as it's impossible to have internet money if you can just ctrl+c and ctrl+v it to make copies.
Ah, yes, that was Amazon's mistake. Accepting Internet money has meant that I've been able to just email them photocopies of the same money over and over. Hahaha, it has been the perfect crime. I hope Amazon never embrances Ethereum and I can keep getting free merchandise forever.
I get the joke but you don't send Amazon money, you just tell someone else (after multiple third-parties and fees) to let them take some of the money you store with them.
It's not at all like handing someone some cash, I never "signed up" to my local grocery store and I don't need to login to make a purchase, I can just hand them some cash.
I complete agree. Not mentioning ICOs (a way for projects and companies to raise money) and not mentioning DeFi (a way to lend and borrow money). I can't really take this publication seriously.
Ctrl+F proof of stake. Author didn’t do much homework. Just retreading the same criticisms about energy consumption and this-could-just-be-a-postgres-db-hosted-on-cloud-megacorp.
Crypto is a bubble but it’s also a space solving difficult problems that will shape how the world transacts. It’s volatile because it’s difficult and hard to understand, but that doesn’t mean there’s no value.
The 402 response code in HTTP might be a useful thing to "hook up" to Lightning, which itself is useful because of the Bitcoin blockchain.
Having fast micropayments payments running on data requests is useful for a wide variety of cloud applications, including but not limited to data transfer costs and queries to machine learning models, all without the need for "users" on the systems being accessed.
The way I'd put it is that the killer use case for Bitcoin is yet to come, which doesn't make it a solution for nothing, but more like a solution before its time.
That would change the dopamine cycle of content consumption. I really don't see that happening. And its not like this couldn't have happened without bitcoin.
Micropayments are actually very difficult to implement without accounts and some type of payment system. With Bitcoin, and Lightning, it makes it work.
For a regular user to use Lightning, they would have to run an always-online instance of lnd--a very memory-intensive Go program that also requires a Bitcoin fullnode (300GB) or the experimental Neutrino light node either of which also has to be always-online. The average internet user has never typed a bash command so this is a pipe dream. Or you could have the alternative which is to push people onto centralized Lightning-like (but better, more polished) services run by the likes of JP Morgan. (It's my suspicion that focusing hype on Lightning instead of scaling Bitcoin Core was a way to sabotage it in favor of paid services of a certain company that most Bitcoin developers are employed by but I digress.) Micropayments in general is a bad idea which the market has rejected time and time again. If you really want to do something like that, just do it the same way all billing works, add it up and notify the user with an invoice at the end of the month or year. That could be integrated into browsers without being tied to a specific payment method or forcing payment. I don't even want to imagine how rich hackers would get if every web browser had a code path that transferred real money.
I use Lightning with an app on my phone (Eclair) and I don't need an always online node, that's just not how LN is designed. As long as the app can sync once every 2-weeks I'm completely safe.
I don't know if you've seen the stock market lately... clearly the largest casino in the world is on Wall Street.
But anyways, DeFi has tons of use cases including automated crop insurance based on weather events, decentralized money markets for car loans, tokenized rental real estate, synthetic derivatives, standard savings and loans utilizing stablecoins, etc etc. The notion that blockchain hasn't found product market fit in 2020 is laughably outdated.
If you notice, the primary arguments against blockchain and crypto require holding it to a standard higher than any asset class in existence.
Its a mixture of “I don't respect this market and thats the only actual distinction” along with “I have no idea these criticisms are present in actual currencies as well as the stock market and commodities spot markets and credit market and derivatives market and collectibles market”
Eventually they move the goal post so far that they are giving actual relevant criticisms of blockchain technology, like scalability concerns
And then they get flipped into realizing they can actually contribute to the solution and spread awareness
And then in a few short years they have enough clout to raise capital in the space
There are relevant criticisms of the space, but the relevant ones are exclusively inside the space and are distinctly not irreconcilable as it is permissionless to build or advocate for consensus changes to implement something that was built.
The external criticisms lack nuance and masquerade their observations as absolute limitations.
..... Honestly have no idea what you're saying. I'm actively involved in the Compound community contributing "inside", but I don't think that matters. Outside criticism isn't automatically invalid just because it comes from outside.
What percentage of defi assets are used for the purposes you described vs speculation? It's difficult to analyze rigorously but I could give you a lower bound on speculation by looking at interday altcoin movement on makerdao and compound. I think it's completely fair to characterize defi as "predominantly speculation", which I've editorialized into "unregulated gambling".
> I think it's completely fair to characterize defi as "predominantly speculation", which I've editorialized into "unregulated gambling".
You replied to my other comment, so this is exhibit A of a useless higher standard levied exclusively on the blockchain space, without acknowledging every other asset class.
Even with you not considering that a problem, and congratulations for that, the point in caring deflects away from what is happening and every asset class in existence.
In currencies, M0 is the small sliver of the supply use for goods and services, with the entire M1, M2, MB all used for speculation and is largely illiquid.
In stocks, credit, derivatives and commodities the same distribution is seen.
Its not odd for cryptoassets to have the same phenomenon occurring.
The interesting thing is just the overlapping feature set of all other asset classes at once, as well as the additional unique nature of cryptoassets.
The DeFi space in particular is converting non-interest bearing assets into interest bearing ones. That has market traction, and it is permissionless and of unlimited size, caveat emptor and that's a personal choice which has nothing to do with the viability of the space.
Decentralized lending is ~100% used right now for taking leveraged positions. Interest is paid because people have different beliefs about the value of the leveraged asset. I call that gambling. It's a personal choice if you went to call it something different.
I don't draw distinctions between negative expected value table games and positive expected value financial games, and by that standard Mortgages and insurance is gambling and there is nothing wrong with that.
My point is that the nomenclature isn't useful because its not different than other asset classes, but absolutely is used as an indictment against this asset class and market. Whether you and I are personally pragmatic about it as a personal choice or not.
agreed. Here "they'll" is not Vitalik/co, it's in control of the node validators, ofcourse you are affected by this if are in disagreement of the majority. The reason why it will be difficult to pull off a hard fork today[1].
See UASF for the success in community governance. This is good proof that the users are always in control, not miners or Vitalik.
51% is possible, but it only leads to chain reorgs, not the actual consensus rules.
In practice the actual cost and the uncertainty of an attack ensures that it is almost never attempted in practice for secure* blockchains:
1. You would need much greater hash rate share than 50% for good chances(forgoing the block rewards $$ incase of failure!), the social coordination is the bigger challenge, see mining pool distribution[1].
permissionless: seems to be code for "lets you do things that are illegal"
programmable: not exclusive to blockchain
trustless: also attracts those that are untrustworthy (scammers, etc)
unstoppable: seems to also be code for "lets you do things that are illegal", and im sure the various people who are in prison and/or under investigation for their various blockchain related crimes would disagree with how "unstoppable" it really is
So just to be clear illegal does not mean immoral. Lets assume that tomorrow a percentage of nations decided to revoke wealth and confiscate wealth. They could pass laws and make what they are doing legal and evasion of it illegal. While it would be legal for them to do so, it would be immoral as it is basically theft, and one would not be immoral to try to protect the wealth that they have worked for and amassed by illegal activities such as trying to get that wealth out of the country via digital currency before fleeing.
Let's take the Nazi's for example, because they are always the generic personification of an evil government. Had digital currencies existed in that time, it would not have been immoral for the Jews to transitional all of their wealth into digital currencies ahead of trying to flee Germany, though it would have certainly been illegal by German laws against the jews.
They're permissionless, open source, censorship-resistant, borderless, near instant compared to legacy finance, auditable, composeable (can build protocols on top of other protocols to extend various financial services), and they enable new capabilities that current system can't do.
These technologies try to solve for a lack of trust and avoiding regulation. This use case combination is exceptionally rare (as Animats enumerates, drugs, ransoms, and money laundering). As long as you have a functioning legal framework, financial distributed ledgers and smart contracts have very little value (what happens when a judge overrides your smart contract’s evaluation and result? A fork each time? The law supersedes the chain).
Instant payments don’t need a blockchain [1]. Avoiding financial regulation sends you to jail [2].
People are ultimately responsible, and people are ultimately held accountable. Disrupting nodes or node network traffic, 51% attacks, and proverbial rubber hoses are all options.
If Iran, Venezuela, and North Korea can barely avoid sanctions what makes you think a blockchain network can avoid something similar?
There is a functional arbitration platform called Kleros. It could be tied in with any contract to have some human “legal” input. In fact, any contract can be admin‘d by one person or a group. See DAO’s - curve.fi and aave are 2 examples, they are both community run where ppl vote on proposals with their shares.
As I think you were getting at, there’s enormous systemic risk with hacks and bugs. Now the contract ecosystem is so intertwined that a bug in one can cause a cascading effect. E.g a price feed which powers a DeFi platform could be hacked/attacked. Even a bug in a simple erc20 could have massive consequences since a lot of the contracts are intertwined
There is a single private key log in to ALL of them and they interoperate without requiring partnerships by way of sharing protocols and token specifications. It's quite unlike traditional banking verticals where each is siloed and never let the user share data or make it portable. (think 2-3 day processing times, shitty PDF exports and incompatible data exports).
You create a wallet, even offline if you want, and you have instant access to a worldwide, no KYC, pseudo anonymous, financial ecosystem. You can lend and trade all sorts of assets and derivatives. You don’t even need to log in or sign up in the traditional sense. It’s really incredible
Isn't Handshake the thing premised on IANA handing over control of the DNS to a premined cryptocurrency network so they can resell it? I keep wondering if I can do that with ARP. It's like that episode of The Office with the business seminar and the guy whose business idea is just that he gets a 1c cut of every credit card transaction.
DefiPulse is just a page with information about cryptocurrency. It's like calling coinmarketcap.com a scheme. Maybe you should bother to understand what you're looking before laying down your ignorant judgement.
Uniswap solves many problems (trustless cross-asset exchange, liquid markets without market makers, decentralized orderbook problem, decentralized price feeds, etc)
>Compound - it pays interest. But who's paying the interest?
- Getting money out of China. Buy into a mining consortium with yuan, get a fraction of the bitcoins, sell outside China for dollars or euros. You're manufacturing and exporting, which the government of China likes.
- Extortion. The ransomware extortion business depends on Bitcoin.
- Drugs. Delivered to your door in a plain wrapper.
The quantity and dollar value of drugs sold person to person in the US is orders of magnitude greater more than that of global darknet markets, and the amount of money being transferred by Venmo and Cashapp is growing, people are becoming more trusting.
I know one person who runs tens of thousands of dollars via Venmo and other apps selling weed and hard drugs in SF. Of course, in SF I doubt they even have a law against selling drugs.
Bad news travels fast, so there's lots of criminal subgroups. Bitcoin and crypto are dwarfed by financial speculation and DeFi.
My hope is that some centimillionaires and maybe billionaires will convert all their cash to BTC when a wealth tax comes. That's one possible scenario for 100k or higher.
The national institutions you speak of are the ones doing the exploitation. I wouldn't lose any sleep if they'll have to cut back on droning villages or putting poor people in prison because Bitcoin disrupted their funding.
Yeah, sure, buying an extremely volatile asset with ~2x price swing within recent couple of years is much less risky than paying 0.4% per year, while actively moving your assets to a different jurisdiction.
And the anonymity is guaranteed by design. You just send your billions through a couple of mixers registered to phony IDs and it they magically get obfuscated because hey, other billionaires do that every day as well.
There's no need for anonymity. I don't understand why that's relevant.
> extremely volatile asset with ~2x price swing within recent couple of years
Can be hedged with futures. Also S&P 500 had ~1.5x price swings recently and no one cared. The derivatives market has solved the problem of volatility in all markets not just Bitcoin.
There are already several billionaires who publicly say they have lots of BTC, prob many more who don't speak up. Jack (8B), Chamath (1B), Paul Tudor Jones (6B), Winklevii (1 B), Peter Thiel (2B). Eventually it will be known as the tax haven coin (already kind of is) and that will be its killer app.
That would be impossible to enforce or prove. Bitcoin may not be anonymous but it is pseudonymous. The government could make a case that you own this or that public key hash, but that can be litigated till kingdom come since they have no physical evidence. This is assuming our standards of jurisprudence as we know it would still exist in the future where the government attempts to seize coins. I suppose the government could always torture you. Imagine a world where the government tortures citizens to extract Bitcoin because they are forced into a corner by the abandonment of inflationary currency and they have to resort to actually "earning" money. That seems a bit extreme though (just to collect taxes) even for warlord countries let alone the USA. Which is why it wouldn't happen--there wouldn't be a government at all in that scenario, it would just disappear, and humanity would finally be free as it once was.
Blockchain is easy to criticize. Hell, I've done it plenty and I worked in the space full time for a good year and a half. But the problems that they're trying to solve, decentralization, censorship resistance, sound money, true democratic governance, etc. are hard ones to solve. Maybe it turns out that they are inherently unsolvable for the foreseeable future. I think the promise that a solution to some of these problems may exist is what drives curious developers to keep pushing the envelope, because, much like fusion power, if we eventually "get it", it'll change the world. Blockchain innovation is a lot like that. Keep pushing.
> But the problems that they're trying to solve, decentralization, censorship resistance, sound money, true democratic governance, etc.
Noble goals. Still, blockchains are inherently limited to the digital world. No amount of digital freedom or security stops you from being oppressed by an unjust government, or robbed at gunpoint.
Taking Bitcoin as an example, there have been many cases of bitcoins being seized or stolen. The reasons behind these losses were much the same as the reasons people lose fiat currency. Someone with authority came and took it.
Frankly, I don't really understand what there is to "get". You can create a perfect system, but people have to operate within it. That means laws, and it means ceding authority to regulation.
None of this is to say that I am not interested in blockchain tech, and am not open to it as a solution. I just haven't seen a problem solved by it yet. I would be happy to be proven wrong.
I'm somewhat of a cautiously optimistic skeptic that finds the blockchain stuff really interesting and potentially important (I've been playing with it since 2010), but not super useful at the moment.
I think these are some of things people think about it:
- Your country's financial system is unreliable or run by tyrants and the currency is bad. It might be hard to get a stable currency. Moving income into bitcoin could help you (people were doing this in Venezuela).
- Your country was invaded and crossing the border requires you to interact with corrupt guards that steal anything of value you try and get out. Putting your wealth into a bitcoin wallet can allow you to escape with it intact if you memorize your seed words (there was a story about someone in Ukraine that did this crossing the border patrolled by Russian guards).
- Bitcoin is deflationary, the coins are limited and scarce, but the currency is divisible. This means they should hold value over time. Fiat currencies are vulnerable to monetary policy of governments, bitcoin is less so. Bitcoin may increase in value in part because other currencies are decreasing in value.
- Ability to move money more easily than other deflationary assets like gold (which have other problems). Universal currency across different governments that can be converted into local currency.
All of this is primarily just BTC. I think there are other potential interesting things with ability to have an audit log of immutable transactions of a block chain generally. I think some of the other things are cool (urbit is using ethereum for IDs), but a lot of the other things don't seem to have much purpose beyond being cool. Faster transaction times? The strategy Dai uses to stay pegged to 1 USD is neat.
> - Your country's financial system is unreliable or run by tyrants and the currency is bad. It might be hard to get a stable currency. Moving income into bitcoin could help you (people were doing this in Venezuela).
You know what unstable governments in the middle of a revolution don't have? Reliable power and internet.
> Your country was invaded and crossing the border requires you to interact with corrupt guards that steal anything of value you try and get out. Putting your wealth into a bitcoin wallet can allow you to escape with it intact if you memorize your seed words (there was a story about someone in Ukraine that did this crossing the border patrolled by Russian guards).
Sounds like a great way to get rubber hosed to death.
> Bitcoin is deflationary, the coins are limited and scarce, but the currency is divisible. This means they should hold value over time. Fiat currencies are vulnerable to monetary policy of governments, bitcoin is less so. Bitcoin may increase in value in part because other currencies are decreasing in value.
Deflationary, for consumers, is bad. I am also not convinced bitcoin in nearly divisible enough to actually be world currency. (And that's ignoring the fact that it would need something like 7 orders of magnitude improvement in throughput)
> Deflationary, for consumers, is bad. I am also not convinced bitcoin in nearly divisible enough to actually be world currency. (And that's ignoring the fact that it would need something like 7 orders of magnitude improvement in throughput)
I don't think it'll be used for frequent transactions unless they actually can fix the time/throughput issues, but that doesn't mean it's useless. There could potentially be a future where you move BTC to some other currency with faster transaction times in smaller amounts for immediate or frequent use.
Just because a lot of blockchain tech is filled with people running ICO pump and dump scams, speculators, and an enormous amount of bullshit in general doesn't mean there isn't also some cool stuff going on too. There's a lot of nonsense, but there are also some real current applications, and I think, some real future potential.
As a distributed ledger, that does not require a consolidated authority, it has the potential to have many uses.
Many think blockchain as a synonym for BitCoin and the like, while the central technology seems to be the distributed ledger.
However, with anything distributed, the network is only as good as it's participants. Which means, when thinking long term, it fails to give confidence in the system, because who knows, 20 years from now, will there by any participants in the distributed ledger?
Looking at all the comments here I have a single response to most of them: I'll call it a solution when it is implemented. You can talk all you want about solutions to some of the (minor) problems addressed here (ignoring the rest of the problems) but unless it is in use then the article's commentary still stands. Unless it has a ton of users, the article's commentary still stands. If you really do believe in block chain, prove us all wrong and implement the changes.
Take a look at cardano. They have implemented a blockchain that is backed by peer reviewed [1] research, the article here talks about how the blockchain takes a huge amount of resources to run. The people at the cardano project has managed to enable people to even run a full block producing node on something as small as a pi[2][3]. So far from all the blockchain projects I am interested in, this is my favorite one so far.
If you got a few hours of free time you should really check out this project out.[4]
Disclaimer I am a cardano(ada) holder and I actively take part in this project as a pool operator.
Why is being peer-reviewed what Cardano fans always lede with? That doesn’t automatically make something “better”, IMO. Also, what even uses Cardano? Project has been “in progress” for years and all I’ve seen are photos of Hoskinson with his mouth open taking selfies in various parts of the world. Algorand is probably the best project right now in crypto aside from ZCash that’s an actual contender against ETH (disclaimer: I hold none of either).
You also only get privacy with transactions between two z-addresses, and those require a fair amount of resources to generate (I think HW wallets can't sign those transactions due to computational limitations). Most zcash transactions are between t-addresses which don't have any benefits over BTC (they're public).
As far as cardano, I'm skeptical of proof-of-stake compared to proof-of-work (though I might just not understand it fully). Proof-of-work seems like the main BTC innovation against abuse and a lot of the coins that use stake (stellar lumens, tezos) seem like they drop the defining characteristic of BTC decentralization in order to get faster transactions. Without proof of work you don't really get true decentralized protection from the system itself, you have to put trust somewhere. At least the tezos putting coins at risk approach is interesting. The cardano website also really sets off my bullshit alarms: https://cardano.org/
> You also only get privacy with transactions between two z-addresses, and those require a fair amount of resources to generate
FWIW this is rapidly improving. The main thing we need to implement Zcash-style private payments is a Merkle proof in a zk-SNARK, so that we can prove ownership of an account in the Merkle tree without revealing the account. So the proving cost depends heavily on our choice of hash function.
Since most SNARKs operate over large finite fields, traditional bit-oriented hashes are a poor fit, but the designers originally went with SHA-256 anyway to be on the safe side. More recent versions of the Zcash circuit use Pedersen hashes, which are much cheaper and still provably collision-resistant (assuming discrete log hardness).
Future versions will probably use more specialized hashes designed to minimize field operations, like Rescue [1]. There's also the idea of using an embedded GKR protocol to verify gMIMC hashes with a very low incremental cost [2], although it might be overkill for Zcash-style circuits.
I'm not really involved, just a fan of their work :) I think Mir and Zcash have some similar long-term goals, like using SNARKs to scale without affecting security. We just felt that starting over with a new blockchain seemed like the most practical way to get there.
I really fail to see why it being peer reviewed is not a strong point in favor of the project. If blockchains are supposed to be something other tech is supposed to be built on top of, then shouldn't it be build with the help of the scientific method? Breaking things moving fast doesn't work all the time you know ?
>>photos of Hoskinson with his mouth open taking selfies in various parts of the world
Honestly don't really know how to answer this. For someone who isn't interested in cardano you seem spend a lot of time stalking a blockchain ceo ;)
Because peer review doesn't mean nearly as much for the credibility of something as people think it does. It basically just means two other qualified people looked over the research and said "There are no obvious flaws in methodology or reasoning," it doesn't mean that the reviewers verified every claim made or that they agree with the conclusions reached.
Even though academia is not perfect, it seems like going through peer review is on many dimensions better than not doing so. For instance, you get feedback and you document your reasoning and approaches for others to learn from. The only argument against it that I could see is added cost in terms of resources and time invested but for something like a blockchain it seems worthwhile to take the plunge.
Historically, bitcoin was inspired by the 2008 crash. Same crash that inspired the 1% matches in the US and other movements over the world. Because of the centralization of wealth and power.
Once the next major depression comes in, a form of cryptocurrencies will gain traction again. People are fed up with big banks and centralized power.
Number mobility between Indian telecoms runs on private blockchain. AFAIK it is live and actively used. BC solves a problem there because operating a database for that scale would be very complicated. So every telco has their own copy that get synced via a consensus mechanism and signed transactions
You know that a private, or permissioned, blockchain is pointless, right? If some entity controls the blockchain, you might as well just use a standard database.
Because it is a really inefficient way to store what amounts to an immutable ledger in a traditional database. While I don't agree with a lot of the consensus that blockchain is completely useless. I pretty much agree that it is useless if it is owned by a private entity. That was one of the main points of the blockchain, how can we create a public datastore that is not owned by anyone and it tamperproof. I see public blockchain as valuable to freedoms in a libertarian sense but see no value in companies adopting the core blockchain techs. Tooling around public blockchains sure or API's available on things like D'APPS make sense, but private ledgers make absolutely no sense to me. Just use a traditional database and implement all the data storage as a ledger pattern and you get the same effect with out all the energy consumption.
AFAIK private blockchains usually don't rely on proof of work so there's no large energy usage.
I agree that if they're private they're equivalent to a customized database system, private blockchains aren't interesting but it doesn't make them useless, it's simply another way to solve problems that could already be solved before.
It isn't owned by a single private company, most usually. But multiple companies with equal rights to update. That's what you cannot do with traditional db.
Also I don't think there is any significant energy consumed. There is no mining or anything like that. You have to pay for extra network traffic and more disks, simply because you're going to have more copies of data, most likely, but it's not so large amount of energy.
An API doesn’t care what company the client belongs to, so it’s pretty easy to have a DB that can be updated by more than one company. There’s no technical reason to prefer a blockchain, it’s just marketing.
It's pretty easy to make it like you said. But it also pretty easy to make it in a way when some companies would have a preference.
Second would be more profitable for the owners of that db, so there is a motivation to do it in that way. In many of the countries outside of US/EU it's a popular practice.
> BC solves a problem there because operating a database for that scale would be very complicated.
Would it, though? Google tells me that India has a population of around 1.4 billion people. Let's assume each person has one phone number, and each phone number requires one kilobyte of number-mobility-related data. Then the database would need to store 1.4 terabytes of information.
1.4 terabytes doesn't seem like an impossible amount of data to store. That fits on a consumer hard drive! Dell will sell you a single server with that much memory! Request volume doesn't seem like a huge issue either, since porting a phone number is something people do extremely rarely.
I don't think it is the size that is the problem. I imagine it is like a routing table, keeping track which number is managed by which operator, and if India has number portability, there needs to be a transactional method to update it that is shared by all operators. I could imagine this being done with a blockchain.
Or for that matter, recording of call details for billing between operators?
"Keep track of which number is managed by which operator" reduces to "store a small amount of information for each phone number".
In a traditional database setup, the "transactional method to update it" would be sending a request to a central server to update the database. The central server can be run by whatever regulatory body or industry association is responsible for number portability -- ideally, this would be the group with legal authority to overrule whatever the computer system says anyway. It wouldn't need to handle a large number of transactions per second because people don't change phone providers very often.
You could imagine doing it with a blockchain instead, but you could also imagine doing it using a Yahoo Groups email list -- that doesn't make it a necessary or good solution.
Sounds good at first, but now your calls stop working if the regulator's system goes down for maintenance. You can certainly make it work, but I don't see what the major benefit of using a central database is here.
> It wouldn't need to handle a large number of transactions per second because people don't change phone providers very often.
That makes it fit blockchain quite well, actually.
What if other operators don't want to introduce an additional governing entity with a super power of taking their customers? Like if they don't want additional corruption, easy to misuse power, etc?
I mean, I can imagine government wants this, so if such ideas comes from government you're going to have such regulatory body. But otherwise, if it comes from operators itself, they don't want to introduce such entity, and they don't want to award one of them as an ultimate boss to rule all of the numbers. Blockchain, at least, gives them a chance to continue to be equal.
Blockchain backers seem to take it as a given that centralization is bad. But when pressed on why, the best answers I have seen are “because centralization is bad”. Well, I guess that’s not 100% true; the first answer is that we shouldn’t trust authority. Why? Because authority is bad. Why? Because authority is bad.
But as this article articulates so well, that’s a red herring. Like, you can come up with all sorts of wild scenarios where central authority can be bad. But ultimately, these are scenarios you’re unlikely to encounter in the real world, and if you do, there are much simpler solutions.
Blockchain technology always reminded me of that XKCD about cryptographer expectations vs. reality (https://xkcd.com/538/): it’s solving a problem that only really exists in fantasy for 99% of the population.
I imagine the issue is maintaining consensus between the different phone companies. Without blockchain you'd have to have a canonical database run by a single entity, whereas you can use blockchain as the consensus mechanism among competing companies.
I mean sure you could have the government manage the central database but maybe the Indian government is not equip to run such a database. Plus you can avoid some of the problems with high costs or stagnation that can happen with centrally run systems. I don't think there's any particular reason to reject blockchain if it works in this case.
Start non-profit for that purpose that will manage the database.
Ther database will hold only entries signed by telco companies. Some rules will apply on what happens when a number changes.
Everyone gets access to the raw database, and to query the database.
In case of mismatches there will be an agreed arbitration process, with agreed upon fines to the party no being responsible. This or some other contract.
This sort of solves the problem.
The key win in the blockchain - is the decentralization. But we know, in the real world how to arrange cooperation using centralization. it works. It's done every day. So this case is mostly useful when you want to avoid regulation.
Another win of the blockchain - a lot of work has been done verifying that it is secure. It probably is the mose secure system for those sort of problems. And that's a good reason to use it in many places.
I'm not sure I agree that blockchain is the most secure solution for common problems.
Let's say you get a computer virus that steals your banking credentials and transfers your money to someone else's account. In the traditional banking system, it's often possible to reset passwords and reverse transactions, especially if you catch the bad behavior quickly. With Bitcoin, your money is gone forever and it is mathematically impossible for you to ever get it back.
That's true for Bitcoin because it's almost impossible to get most miners and nodes to agree to reversing such a mistake, it's completely against the spirit of the project.
But in the example above that could still be easily fixed, you'd just need the companies involved to agree to reverse the mistake, as they are the miners of the chain.
Most things people seem to think are running on blockchain tech turn out not to be, so I'd be interested in any evidence here. Nonetheless.
> operating a database for that scale would be very complicated
They're already operating a database, so at most this is an argument that a traditional database tech wouldn't work, except...
...this is only a few billion rows, at most, right? With minimal data? It would totally, totally work. We're at a scale where a copy of "MySQL for dummies" is going to explain everything you need to know here. A moderately large number of people in this thread probably work for companies that have traditional databases that work at a larger scale or with higher demands than this.
I've worked with MySQL and Postgres databases that invariably include one or two tables with over a billion rows per table. Typically the rows record user fingerprint info of some kind, either UA or location.
There is no problem with performance until schema changes are made, requiring a careful migration strategy plan (this is why DBAs get the big bucks.)
> Most things people seem to think are running on blockchain tech turn out not to be, so I'd be interested in any evidence here. Nonetheless.
There's a few such systems in production - in practice, they tend to use a private Ethereum or Hyperledger as a back-end data store, and 100% of the use case for using a blockchain for your private back-end data store is being able to say "blockchain!" in the press release.
Number portability in my country is handled without blockchain. Granted, India's population is about 100 times larger. But I don't see a reason why a scale-up with a factor of roughly 100 would be prohibitively problematic.
Maybe it's not about transaction scale. And I don't really see how blockchain helps with scale, imho it's opposite.
With this particular case, it maybe be solution to fight corruption (just a guess). Centralized trusted control of all phone number of a country is a huge power and a magnet for different types of corruption. So maybe the difference is that in your country the magnitude of corruption is lower than in India, or easier to handle because of size.
> So maybe the difference is that in your country the magnitude of corruption is lower than in India,
I don't know about corruption levels in India. I am under the impression that the level of corruption in my country is rather tiny, so this could very well be the explanation.
The shifting goalposts of this argument have been interesting to watch over the last 3-4 years.
Stablecoins: I remember plenty of commenters being quite certain that volatility made cryptocurrency unusable. And yet a short time later we have successful decentralized stable coins.
DeFi: Just in the past months Uniswap has rivaled centralized exchange volume as a decentralized exchange. It's permissionless composability appears to be spinning off an interesting group of experimental financial instruments.
These are a couple huge concrete examples of successes that make the ~show me something real~ argument difficult for me to accept. Nobody has built skyscrapers yet, but skyscrapers aren't built in a day. We have some pretty solid architecture going up it seems.
And if you've been following the space long enough most of this article is tedious and inconsequential:
1) "For instance, hundreds of links to child pornography and revenge porn were placed in the bitcoin blockchain by malicious users."
2) "Also, in a blockchain you aren’t anonymous, but “pseudonymous”: your identity is linked to a number, and if someone can link your name to that number, you’re screwed. Everything you got up to on that blockchain is visible to everyone."
Blockchains have many different properties. Some have more stringent privacy measures than others. Many HN readers are likely familiar with privacy coins employing things like zero-knowledge proofs or ring signatures. Not to mention the burgeoning research into the implementations of homomorphic encryption. How about Harvard putting your genome on the blockchain in such a way where you retain full control over it's rights? Doesn't sound completely useless to me: https://nebula.org/whole-genome-sequencing/
3) "The fact that no one is in charge and nothing can be modified also means that mistakes cannot be corrected. A bank can reverse a payment request. This is impossible for bitcoin and other cryptocurrencies. So anything that has been stolen will stay stolen."
First of all huge amounts of digital theft occurs today that goes unreversed. Also infrastructure reducing errors in cryptocurrency is being improved all the time. Transaction finality has cons but also pros and can be modified. And one can also imagine insurance for these types of losses becoming commonplace.
4) "And then there’s the environmental problem."
This is probably the most legitimate concern so far. All I can say is I hope we get serious about investing in clean energy production as a country/globe. Many things use energy, including cryptocurrency, and that isn't stopping anytime soon whether we like it or not.
5) His complaint that a specific project is not using the blockchain correctly and individuals couldn't explain the blockchain well isn't very convincing.
Of course lots of experimentation will fail. Pets.com didn't make the internet wrong. And even the experts have trouble describing possibilities that don't exist yet. If that isn't reminiscent of the early days of the internet then I don't know what is. If you've seen Bill Gates get mocked by Letterman while trying to describe the early internet then you understand this difficulty.
It's worth remembering that this area is still incredibly young. If you can't at least see the potential then maybe you aren't looking in the right places. Like here: https://a16z.com/2018...
The DeFi thing has finally pushed me to look at crypto again, which turned me on to metamask (via Brave), and after experiencing the UX, it's glaringly obvious that this is the next big thing. Nobody even talks about it, but the fact that I can "sign in" to my "brokerage account" simply by visiting dydx or unisawp and authenticating securely with my browser is pretty incredible.
People are claiming to be excited about DeFi because everyone loves unregulated derivatives and lending at insane APYs, but I think the real reason this has taken off is because the UX makes the future feel so real and achievable.
I'm just scratching at the surface now, but it's clear we've come a long way since bitcoin. I won't be shocked if it turns out bitcoin becomes seen as worthless old technology, but blockchains will never go away.
> Nobody even talks about it, but the fact that I can "sign in" to my "brokerage account" simply by visiting dydx or unisawp and authenticating securely with my browser is pretty incredible.
There's an experimental browser that provides this functionality for all kinds of websites, not just financial ones. You set up an account once when you install the browser, and then you can use it for one-click logins.
It's made by Alphabet Inc, but I can't seem to remember what it's called. Vanadium? Manganese? Ultron? Something like that anyway...
Go install Brave and visit https://trade.dydx.exchange/. Congratulations, you can now trade leveraged derivatives. No signup required.
Seriously, go see what the process looks like. Just by not being full of A/B tested bullshit and free of regulation, you can get a glimpse of the future.
It feels powerful in a way that registering a Google account doesn't.
>2 How about Harvard putting your genome on the blockchain in such a way where you retain full control over it's rights?
I've never understood how the argument of putting private data on the blockchain is "good". To me this has seemed to be one of the worst ideas that is constantly pushed. It makes one strong assumption: the security of the network is and will always be unable to be decrypted. This seems naive. I am much less concerned with a centralized database where encryption of my data can be updated as new standards are adopted.
> Stablecoins
At the rare times I see people accept crypto as payment the options I see are: Bitcoin and Ether (and maybe bitcoin cash). I've never seen stable coin. Never seen stable. So not only is it not in practice but you're also illustrating my point about
>> You can talk all you want about solutions to some of the (minor) problems addressed here (ignoring the rest of the problems) but unless it is in use then the article's commentary still stands.
Great, you checked off one of the many boxes and created a coin that no one uses. Personally I don't count that as a success. (We can say the same thing about ZKP coins. I've never seen it accepted as payment anywhere) You need to check off ALL the (major) boxes in a single coin.
> 3
Is your comment seriously that "stealing happens, so it doesn't matter if we make it easier?" Seriously? Many people I know, including myself have had CC info stolen (often not our fault, other sites get hacked and dumped). Getting that fixed is pretty simple with a centralized source. I couldn't imagine having a significant chunk of my savings in an account that could be removed and not returned. The FDIC guarantees I'm safe with at least $250k and I'm pretty confident I'm practically safer than that. I get a lot of safety, stability, security, and privacy with fiat currencies. None of those are perfect, but cryptocurrencies need to check all the boxes here (plus fast transactions) to replace it. Better in a single aspect but worse in others does not warrant replacement and that's why we see it.
> 4
Please stop with the lemmings arguments. You also have to consider the utility of the electricity use. Cryptocurrencies aren't providing much utility. They aren't saving lives. The AC in your house has more utility.
> 6 (not a typo)
You ignored one of the most important arguments. Time. That has been a killer feature of cryptocurrencies since the beginning and people have been shouting that it will be solved with POS, POB, whatever. It is still non-viable unless the transaction times are brought down to at least a few seconds.
> It's worth remembering that this area is still incredibly young.
It is, but it is also very much hyped. Many technologies get hyped when young and go bust. In fact, this is more common than the other way around. So read my comment as asking for compelling reasons to think blockchain isn't one of them. Your argument has just been assuming I don't know about all the things you listed. Sorry to break it to you, but I already did. I feel confident many other HN users did as well.
Yay, we can reproduce the worst part of physical art on the internet now... art is interesting because it's art, not because rich people can speculate on it. In an ideal world everyone could have a Monet on their wall. With digital art, that's possible. Why the heck do we want to change that?
This author is way behind the times. Bitcoin is obsolete. Nano (nano.org) is what the author should be looking at as the future of p2p digital currency. Nano transactions are feeless and take under 1 second, fully confirmed. If you send 1 Nano the recipient receives 1 Nano. There is no mining involved so it is green and it is decentralized. These features make microtransactions possible. You could use it to pay a fraction of a sent to stream a song or read an article. Or us it to log in to websites. Npass is doing both. https://npass.dev/npass Robocash is using Nano to prevent robocalls. https://www.myrobocash.com/
Smart contract coins like Ethereum will have tons of uses, especially for digital goods. You could easily cut escrow.com (and all escrow fees) out of the process of transferring domain names (and other digital goods) with smart contracts if a domain registrar got with the times.
I'm using NANO for microtransactions in browser-based multiplayer rougelikelike. Bid for your character and cashout if you survive. Bid again from the same account to resume your saved game.
Valuation isn't necessarily a measure of utility. Usually it is correlated with hype and marketing.
Most people interested in cryptocurrencies have little to no interest in actual use cases. Investors simply want the price to go up. This is usually criticized as a "greater fool" investment strategy.
The article speaks to this. If there is any value in an cryptocurrency, it is up to the developers to divine it. Investors will eventually find a price equilibrium, but for now the ecosystem seems driven by hype, buzzwords, pozi-dapps and bubbles. NANO doesn't have any of that.
The block chain is what? An array of objects? The real tech is deciding who gets to push to the array. So, it's just about permissions. How do you know who to trust in a crowd? Assuming the crowd is more trustworthy than a centralized authority. "Power corrupts", yadda yadda, centralized power is certainly corrupting, but so is dark money that can be used for drugs, human trafficking, etc.
I guess it depends which is the larger evil where you come from, the government or the criminals, whether to trust the central or the decentric authority.
I contributed to the start because they pitched themselves as 'unbreaking news', instead they're just another weak publication writing bad articles with catchy headlines (of which this is a good example).
Bitcoin has a large (100M+) user base (or at least it seems like it) but I can’t think of another blockchain app that has reached that level. Ethereum is more like a framework or platform as I understand it so I don’t think it counts in the same way.
Besides bitcoin are there any other blockchain apps that have large user bases?
This article really hits the nail on the head: All these problems blockchain are supposed to solve are problems of coordination. And you don't need blockchain for that, you need buy-in.
And if you think LARPing is pathetic then that's on you. While you go to your billion dollar church or watch your billion dollar sport or analyse your String theory or do your medieval sword fights in dress-up at castles.
295 comments
[ 225 ms ] story [ 6481 ms ] threadThat killer app might be elections or possibly decentralized trading of electronic assets like stock ownership.
1. Money 2. Zooko's Triangle
Your prior should be that anything else is some kind of delusion or scam.
https://www.facebook.com/notes/facebook-engineering/tao-the-...
Kinda like all those AI startups that aren't actually using AI.
> So much energy that the two biggest blockchains in the world – bitcoin and Ethereum – are now using up the same amount of electricity as the whole of Austria.
Also, most currency transfer being digital is a non-sequitor Businesses still need to move the money from their location to the bank regardless of the volume of transfers done digitally.
- the largest bank in Canada used one Tandem computer for all banking transactions until 2000
- ebay used one E10K for all auction transactions until 2000.
(I actually worked in the data centers for those, and could have touched them if I wasn't concerned about possible grounding issues.)
You're looking at a few kilowatts each for billions of transactions per day.
So any comparison of bitcoin mining vs. banking is simply stupid.
https://www.vice.com/en_us/article/ywbbpm/bitcoin-mining-ele...
There is energy in certain places (underground, hydro) that cannot be transported to wherever journalists are writing their papers as they spitball electricity calculations.
https://news.bitcoin.com/how-big-hydro-power-partners-with-b...
China’s southwestern Sichuan province, a mountainous region that is estimated to have over 50% of the Bitcoin network’s total computing power
https://www.coindesk.com/bitcoin-mining-hash-rate-rainstorms...
Ethereum allows for the usage of unique and real items in the digital world. Money was obvious as it's impossible to have internet money if you can just ctrl+c and ctrl+v it to make copies. A bit of money is unique and can't be copied and thus is real and useful in ways previously digital information wasn't.
You can own a digital object or digital representation of a real object and use it on the internet. God's Unchained is a collectible card game like Magic the Gathering where the cards are digital, the rare cards are provably rare, and the players can trade the cards on any market out there or even take out loans on their valuable extra rare cards. This concept applies to many things including cars, houses, collectible fashion apparel, and anything else that there needs to be only one of.
DeFi is already re-creating all of the capabilities of the existing financial system but built on neutral and fair rules where no one person or company can arbitrarily change them and you always keep fully control of your assets.
There's too much to write but there is something here and it's worth reading about it with an open mind as it's very likely going to be important in a decade or so.
That's a long article itself but this might be a good starting point: https://consensys.net/blockchain-use-cases/ Consensys is run by an Ethereum co-founder and one of the most prestigious organizations in this space, so that page might seem intimidating but it's good, factual information.
Ethereum allows for the usage of unique and real items in the digital world. Money was obvious as it's impossible to have internet money if you can just ctrl+c and ctrl+v it to make copies. A bit of money is unique and can't be copied and thus is real and useful in ways previously digital information wasn't.
You can own a digital object or digital representation of a real object and use it on the internet. God's Unchained is a collectible card game like Magic the Gathering where the cards are digital, the rare cards are provably rare, and the players can trade the cards on any market out there or even take out loans on their valuable extra rare cards. This concept applies to many things including cars, houses, collectible fashion apparel, and anything else that there needs to be only one of.
DeFi is already re-creating all of the capabilities of the existing financial system but built on neutral and fair rules where no one person or company can arbitrarily change them and you always keep fully control of your assets.
There's too much to write but there is something here and it's worth reading about it with an open mind as it's very likely going to be important in a decade or so.
Ah, yes, that was Amazon's mistake. Accepting Internet money has meant that I've been able to just email them photocopies of the same money over and over. Hahaha, it has been the perfect crime. I hope Amazon never embrances Ethereum and I can keep getting free merchandise forever.
It's not at all like handing someone some cash, I never "signed up" to my local grocery store and I don't need to login to make a purchase, I can just hand them some cash.
Crypto is a bubble but it’s also a space solving difficult problems that will shape how the world transacts. It’s volatile because it’s difficult and hard to understand, but that doesn’t mean there’s no value.
Having fast micropayments payments running on data requests is useful for a wide variety of cloud applications, including but not limited to data transfer costs and queries to machine learning models, all without the need for "users" on the systems being accessed.
The way I'd put it is that the killer use case for Bitcoin is yet to come, which doesn't make it a solution for nothing, but more like a solution before its time.
https://developer.mozilla.org/en-US/docs/Web/HTTP/Status/402
financial apps on ethereum - https://defipulse.com/ - https://uniswap.info/home - https://compound.finance/ - https://nexusmutual.io/ - https://bloom.co/ - https://baseline-protocol.org - https://augur2.eth.link/
non-financial apps on ethereum - https://audius.org/ - https://ens.domains/ - https://decentraland.org/
popular newsletter - https://weekinethereumnews.com/
But anyways, DeFi has tons of use cases including automated crop insurance based on weather events, decentralized money markets for car loans, tokenized rental real estate, synthetic derivatives, standard savings and loans utilizing stablecoins, etc etc. The notion that blockchain hasn't found product market fit in 2020 is laughably outdated.
Its a mixture of “I don't respect this market and thats the only actual distinction” along with “I have no idea these criticisms are present in actual currencies as well as the stock market and commodities spot markets and credit market and derivatives market and collectibles market”
Eventually they move the goal post so far that they are giving actual relevant criticisms of blockchain technology, like scalability concerns
And then they get flipped into realizing they can actually contribute to the solution and spread awareness
And then in a few short years they have enough clout to raise capital in the space
Most economic activity in Defi is unregulated gambling, but I don't think that's necessarily a bad thing.
There are relevant criticisms of the space, but the relevant ones are exclusively inside the space and are distinctly not irreconcilable as it is permissionless to build or advocate for consensus changes to implement something that was built.
The external criticisms lack nuance and masquerade their observations as absolute limitations.
You replied to my other comment, so this is exhibit A of a useless higher standard levied exclusively on the blockchain space, without acknowledging every other asset class.
Even with you not considering that a problem, and congratulations for that, the point in caring deflects away from what is happening and every asset class in existence.
In currencies, M0 is the small sliver of the supply use for goods and services, with the entire M1, M2, MB all used for speculation and is largely illiquid.
In stocks, credit, derivatives and commodities the same distribution is seen.
Its not odd for cryptoassets to have the same phenomenon occurring.
The interesting thing is just the overlapping feature set of all other asset classes at once, as well as the additional unique nature of cryptoassets.
The DeFi space in particular is converting non-interest bearing assets into interest bearing ones. That has market traction, and it is permissionless and of unlimited size, caveat emptor and that's a personal choice which has nothing to do with the viability of the space.
My point is that the nomenclature isn't useful because its not different than other asset classes, but absolutely is used as an indictment against this asset class and market. Whether you and I are personally pragmatic about it as a personal choice or not.
a lot of people enjoy not playing by the rules.
https://www.coindesk.com/ethereum-executes-blockchain-hard-f...
See UASF for the success in community governance. This is good proof that the users are always in control, not miners or Vitalik.
[1] https://www.coindesk.com/binance-may-consider-bitcoin-rollba...
enjoy your user uncontrolled anarchy
do you have any response to > 50% attacks?
In practice the actual cost and the uncertainty of an attack ensures that it is almost never attempted in practice for secure* blockchains:
1. You would need much greater hash rate share than 50% for good chances(forgoing the block rewards $$ incase of failure!), the social coordination is the bigger challenge, see mining pool distribution[1].
[1] https://btc.com/stats/pool
permissionless: seems to be code for "lets you do things that are illegal"
programmable: not exclusive to blockchain
trustless: also attracts those that are untrustworthy (scammers, etc)
unstoppable: seems to also be code for "lets you do things that are illegal", and im sure the various people who are in prison and/or under investigation for their various blockchain related crimes would disagree with how "unstoppable" it really is
Let's take the Nazi's for example, because they are always the generic personification of an evil government. Had digital currencies existed in that time, it would not have been immoral for the Jews to transitional all of their wealth into digital currencies ahead of trying to flee Germany, though it would have certainly been illegal by German laws against the jews.
Instant payments don’t need a blockchain [1]. Avoiding financial regulation sends you to jail [2].
[1] https://en.wikipedia.org/wiki/Instant_payment
[2] https://www.theverge.com/2019/4/9/18302053/bitcoin-dealer-pr...
If Iran, Venezuela, and North Korea can barely avoid sanctions what makes you think a blockchain network can avoid something similar?
Ethereum is becoming increasingly anonymous. While not as good as Monero, it's still trivial to go in and out anonymously.
https://decrypt.co/40284/us-homeland-security-can-now-track-... ("US Homeland Security Can Now Track Privacy Crypto Monero")
As I think you were getting at, there’s enormous systemic risk with hacks and bugs. Now the contract ecosystem is so intertwined that a bug in one can cause a cascading effect. E.g a price feed which powers a DeFi platform could be hacked/attacked. Even a bug in a simple erc20 could have massive consequences since a lot of the contracts are intertwined
Its the interchangeably parts feature of smart contracts. Was missing before this year.
Analogous to how interchangeable parts heralded the industrial revolution.
The DeFi space would not be growing by orders of magnitude a quarter without that.
and
https://handshake.org/ also awesome
> premised on IANA handing over control of the DNS AND that hand over is to a premined cryptocurrency network so they can resell it?
Then not as far as I can tell.
If it's or, then yes. It looks like there is a 15% pre-mine: https://handshake.org/files/handshake.txt
Uniswap - a scheme for assisting with speculating in cross rates between various cryptocurrencies.
Compound - it pays interest. But who's paying the interest? It doesn't seem to make loans. Possible Ponzi.
Nexus Mutual - insurance against failure of smart contracts, based on smart contracts.
Bloom - "validate anything about anyone." A signing service for identity document / email / etc tuples.
Baseline - Main use seem to be sealed-bid RFPs.
Augur - "Your global, no-limit betting platform".
All of these are either gambling schemes or solve a non-problem.
Uniswap solves many problems (trustless cross-asset exchange, liquid markets without market makers, decentralized orderbook problem, decentralized price feeds, etc)
>Compound - it pays interest. But who's paying the interest?
People who want loans in cryptocurrency.
Blockchain, big data, cloud computing, AI, and magic are roughly equivalent.
Don't waste your time reading it even if blockchain is weak.
- Getting money out of China. Buy into a mining consortium with yuan, get a fraction of the bitcoins, sell outside China for dollars or euros. You're manufacturing and exporting, which the government of China likes.
- Extortion. The ransomware extortion business depends on Bitcoin.
- Drugs. Delivered to your door in a plain wrapper.
What are the transaction costs like on BTC these days? I'm surprised many people still bother with BTC given the enormous costs I've seen.
https://ycharts.com/indicators/bitcoin_average_transaction_f....
https://www.blockchain.com/btc/tx/d56ae8052711ac81cb68a0ccf3...
Replace `out` with `{in|out}` and China with `<any country>`, and now we're in agreement.
> - Drugs. Delivered to your door in a plain wrapper.
Sounds like a much better experience than getting shot when trying to get your dose (if you're an addict).
Bad news travels fast, so there's lots of criminal subgroups. Bitcoin and crypto are dwarfed by financial speculation and DeFi.
And the anonymity is guaranteed by design. You just send your billions through a couple of mixers registered to phony IDs and it they magically get obfuscated because hey, other billionaires do that every day as well.
/s
> extremely volatile asset with ~2x price swing within recent couple of years
Can be hedged with futures. Also S&P 500 had ~1.5x price swings recently and no one cared. The derivatives market has solved the problem of volatility in all markets not just Bitcoin.
There are already several billionaires who publicly say they have lots of BTC, prob many more who don't speak up. Jack (8B), Chamath (1B), Paul Tudor Jones (6B), Winklevii (1 B), Peter Thiel (2B). Eventually it will be known as the tax haven coin (already kind of is) and that will be its killer app.
A US wealth tax would obviously apply to BTC holdings too.
I am confused. In your view of the world, does KYC/AML not exist at bitcoin exchanges?
Noble goals. Still, blockchains are inherently limited to the digital world. No amount of digital freedom or security stops you from being oppressed by an unjust government, or robbed at gunpoint.
Taking Bitcoin as an example, there have been many cases of bitcoins being seized or stolen. The reasons behind these losses were much the same as the reasons people lose fiat currency. Someone with authority came and took it.
Frankly, I don't really understand what there is to "get". You can create a perfect system, but people have to operate within it. That means laws, and it means ceding authority to regulation.
None of this is to say that I am not interested in blockchain tech, and am not open to it as a solution. I just haven't seen a problem solved by it yet. I would be happy to be proven wrong.
I think these are some of things people think about it:
- Your country's financial system is unreliable or run by tyrants and the currency is bad. It might be hard to get a stable currency. Moving income into bitcoin could help you (people were doing this in Venezuela).
- Your country was invaded and crossing the border requires you to interact with corrupt guards that steal anything of value you try and get out. Putting your wealth into a bitcoin wallet can allow you to escape with it intact if you memorize your seed words (there was a story about someone in Ukraine that did this crossing the border patrolled by Russian guards).
- Bitcoin is deflationary, the coins are limited and scarce, but the currency is divisible. This means they should hold value over time. Fiat currencies are vulnerable to monetary policy of governments, bitcoin is less so. Bitcoin may increase in value in part because other currencies are decreasing in value.
- Ability to move money more easily than other deflationary assets like gold (which have other problems). Universal currency across different governments that can be converted into local currency.
All of this is primarily just BTC. I think there are other potential interesting things with ability to have an audit log of immutable transactions of a block chain generally. I think some of the other things are cool (urbit is using ethereum for IDs), but a lot of the other things don't seem to have much purpose beyond being cool. Faster transaction times? The strategy Dai uses to stay pegged to 1 USD is neat.
You know what unstable governments in the middle of a revolution don't have? Reliable power and internet.
> Your country was invaded and crossing the border requires you to interact with corrupt guards that steal anything of value you try and get out. Putting your wealth into a bitcoin wallet can allow you to escape with it intact if you memorize your seed words (there was a story about someone in Ukraine that did this crossing the border patrolled by Russian guards).
Sounds like a great way to get rubber hosed to death.
> Bitcoin is deflationary, the coins are limited and scarce, but the currency is divisible. This means they should hold value over time. Fiat currencies are vulnerable to monetary policy of governments, bitcoin is less so. Bitcoin may increase in value in part because other currencies are decreasing in value.
Deflationary, for consumers, is bad. I am also not convinced bitcoin in nearly divisible enough to actually be world currency. (And that's ignoring the fact that it would need something like 7 orders of magnitude improvement in throughput)
It's reliable enough actually (people are currently doing this). You also don't need it up all the time to move value into BTC.
> Sounds like a great way to get rubber hosed to death.
There isn't a way for them to tell that you've done this, and in the case in the Ukraine it allowed him to get out with his wealth intact: https://www.forbes.com/sites/tatianakoffman/2020/06/13/why-b...
> Deflationary, for consumers, is bad. I am also not convinced bitcoin in nearly divisible enough to actually be world currency. (And that's ignoring the fact that it would need something like 7 orders of magnitude improvement in throughput)
I don't think it'll be used for frequent transactions unless they actually can fix the time/throughput issues, but that doesn't mean it's useless. There could potentially be a future where you move BTC to some other currency with faster transaction times in smaller amounts for immediate or frequent use.
Just because a lot of blockchain tech is filled with people running ICO pump and dump scams, speculators, and an enormous amount of bullshit in general doesn't mean there isn't also some cool stuff going on too. There's a lot of nonsense, but there are also some real current applications, and I think, some real future potential.
Universities are failing and we've got bored, super smart kids running around 'hacking' and scaring the shit out of everyone.
The recent twitter hack wasn't impressive, it was stupid.
Many think blockchain as a synonym for BitCoin and the like, while the central technology seems to be the distributed ledger.
However, with anything distributed, the network is only as good as it's participants. Which means, when thinking long term, it fails to give confidence in the system, because who knows, 20 years from now, will there by any participants in the distributed ledger?
If you got a few hours of free time you should really check out this project out.[4]
Disclaimer I am a cardano(ada) holder and I actively take part in this project as a pool operator.
[1]https://iohk.io/en/research/library/ [2]https://twitter.com/BetterStake/status/1296217244217868289 [3]https://twitter.com/search?q=cardano%20Raspberry&src=typed_q... [4]https://github.com/input-output-hk
You also only get privacy with transactions between two z-addresses, and those require a fair amount of resources to generate (I think HW wallets can't sign those transactions due to computational limitations). Most zcash transactions are between t-addresses which don't have any benefits over BTC (they're public).
https://bitcoin.stackexchange.com/questions/49115/whats-the-...
As far as cardano, I'm skeptical of proof-of-stake compared to proof-of-work (though I might just not understand it fully). Proof-of-work seems like the main BTC innovation against abuse and a lot of the coins that use stake (stellar lumens, tezos) seem like they drop the defining characteristic of BTC decentralization in order to get faster transactions. Without proof of work you don't really get true decentralized protection from the system itself, you have to put trust somewhere. At least the tezos putting coins at risk approach is interesting. The cardano website also really sets off my bullshit alarms: https://cardano.org/
FWIW this is rapidly improving. The main thing we need to implement Zcash-style private payments is a Merkle proof in a zk-SNARK, so that we can prove ownership of an account in the Merkle tree without revealing the account. So the proving cost depends heavily on our choice of hash function.
Since most SNARKs operate over large finite fields, traditional bit-oriented hashes are a poor fit, but the designers originally went with SHA-256 anyway to be on the safe side. More recent versions of the Zcash circuit use Pedersen hashes, which are much cheaper and still provably collision-resistant (assuming discrete log hardness).
Future versions will probably use more specialized hashes designed to minimize field operations, like Rescue [1]. There's also the idea of using an embedded GKR protocol to verify gMIMC hashes with a very low incremental cost [2], although it might be overkill for Zcash-style circuits.
[1] https://eprint.iacr.org/2019/426
[2] https://hackmd.io/@uCHu_NMSQ4mIUvA8i4qAyg/rkxBcmvcI
I saw in your profile you work on Mir, are you also involved in Zcash?
>>photos of Hoskinson with his mouth open taking selfies in various parts of the world
Honestly don't really know how to answer this. For someone who isn't interested in cardano you seem spend a lot of time stalking a blockchain ceo ;)
>> disclaimer: I hold none of either
congratulations!
Then people saw bitcoin made money so thought if you stick blockchain on something else maybe some of the money dust will rub off. Less good.
Once the next major depression comes in, a form of cryptocurrencies will gain traction again. People are fed up with big banks and centralized power.
But if the code is already written, meets the project requirements and is easy to deploy, why not?
I agree that if they're private they're equivalent to a customized database system, private blockchains aren't interesting but it doesn't make them useless, it's simply another way to solve problems that could already be solved before.
Also I don't think there is any significant energy consumed. There is no mining or anything like that. You have to pay for extra network traffic and more disks, simply because you're going to have more copies of data, most likely, but it's not so large amount of energy.
Second would be more profitable for the owners of that db, so there is a motivation to do it in that way. In many of the countries outside of US/EU it's a popular practice.
Would it, though? Google tells me that India has a population of around 1.4 billion people. Let's assume each person has one phone number, and each phone number requires one kilobyte of number-mobility-related data. Then the database would need to store 1.4 terabytes of information.
1.4 terabytes doesn't seem like an impossible amount of data to store. That fits on a consumer hard drive! Dell will sell you a single server with that much memory! Request volume doesn't seem like a huge issue either, since porting a phone number is something people do extremely rarely.
Or for that matter, recording of call details for billing between operators?
In a traditional database setup, the "transactional method to update it" would be sending a request to a central server to update the database. The central server can be run by whatever regulatory body or industry association is responsible for number portability -- ideally, this would be the group with legal authority to overrule whatever the computer system says anyway. It wouldn't need to handle a large number of transactions per second because people don't change phone providers very often.
You could imagine doing it with a blockchain instead, but you could also imagine doing it using a Yahoo Groups email list -- that doesn't make it a necessary or good solution.
> It wouldn't need to handle a large number of transactions per second because people don't change phone providers very often.
That makes it fit blockchain quite well, actually.
I mean, I can imagine government wants this, so if such ideas comes from government you're going to have such regulatory body. But otherwise, if it comes from operators itself, they don't want to introduce such entity, and they don't want to award one of them as an ultimate boss to rule all of the numbers. Blockchain, at least, gives them a chance to continue to be equal.
But as this article articulates so well, that’s a red herring. Like, you can come up with all sorts of wild scenarios where central authority can be bad. But ultimately, these are scenarios you’re unlikely to encounter in the real world, and if you do, there are much simpler solutions.
Blockchain technology always reminded me of that XKCD about cryptographer expectations vs. reality (https://xkcd.com/538/): it’s solving a problem that only really exists in fantasy for 99% of the population.
Ther database will hold only entries signed by telco companies. Some rules will apply on what happens when a number changes.
Everyone gets access to the raw database, and to query the database.
In case of mismatches there will be an agreed arbitration process, with agreed upon fines to the party no being responsible. This or some other contract.
This sort of solves the problem.
The key win in the blockchain - is the decentralization. But we know, in the real world how to arrange cooperation using centralization. it works. It's done every day. So this case is mostly useful when you want to avoid regulation.
Another win of the blockchain - a lot of work has been done verifying that it is secure. It probably is the mose secure system for those sort of problems. And that's a good reason to use it in many places.
Let's say you get a computer virus that steals your banking credentials and transfers your money to someone else's account. In the traditional banking system, it's often possible to reset passwords and reverse transactions, especially if you catch the bad behavior quickly. With Bitcoin, your money is gone forever and it is mathematically impossible for you to ever get it back.
But in the example above that could still be easily fixed, you'd just need the companies involved to agree to reverse the mistake, as they are the miners of the chain.
So a database?
> AFAIK it is live and actively used.
Most things people seem to think are running on blockchain tech turn out not to be, so I'd be interested in any evidence here. Nonetheless.
> operating a database for that scale would be very complicated
They're already operating a database, so at most this is an argument that a traditional database tech wouldn't work, except...
...this is only a few billion rows, at most, right? With minimal data? It would totally, totally work. We're at a scale where a copy of "MySQL for dummies" is going to explain everything you need to know here. A moderately large number of people in this thread probably work for companies that have traditional databases that work at a larger scale or with higher demands than this.
But if you consider it more like an easy to cluster database with free, tamper-proof backups, it makes a lot more sense.
There is no problem with performance until schema changes are made, requiring a careful migration strategy plan (this is why DBAs get the big bucks.)
Source: DBA.
There's a few such systems in production - in practice, they tend to use a private Ethereum or Hyperledger as a back-end data store, and 100% of the use case for using a blockchain for your private back-end data store is being able to say "blockchain!" in the press release.
With this particular case, it maybe be solution to fight corruption (just a guess). Centralized trusted control of all phone number of a country is a huge power and a magnet for different types of corruption. So maybe the difference is that in your country the magnitude of corruption is lower than in India, or easier to handle because of size.
I don't know about corruption levels in India. I am under the impression that the level of corruption in my country is rather tiny, so this could very well be the explanation.
Stablecoins: I remember plenty of commenters being quite certain that volatility made cryptocurrency unusable. And yet a short time later we have successful decentralized stable coins.
DeFi: Just in the past months Uniswap has rivaled centralized exchange volume as a decentralized exchange. It's permissionless composability appears to be spinning off an interesting group of experimental financial instruments.
These are a couple huge concrete examples of successes that make the ~show me something real~ argument difficult for me to accept. Nobody has built skyscrapers yet, but skyscrapers aren't built in a day. We have some pretty solid architecture going up it seems.
And if you've been following the space long enough most of this article is tedious and inconsequential:
1) "For instance, hundreds of links to child pornography and revenge porn were placed in the bitcoin blockchain by malicious users."
This is a tired argument from 2013 which nobody cares about: https://www.wired.com/story/why-porn-on-the-blockchain-wont-...
2) "Also, in a blockchain you aren’t anonymous, but “pseudonymous”: your identity is linked to a number, and if someone can link your name to that number, you’re screwed. Everything you got up to on that blockchain is visible to everyone."
Blockchains have many different properties. Some have more stringent privacy measures than others. Many HN readers are likely familiar with privacy coins employing things like zero-knowledge proofs or ring signatures. Not to mention the burgeoning research into the implementations of homomorphic encryption. How about Harvard putting your genome on the blockchain in such a way where you retain full control over it's rights? Doesn't sound completely useless to me: https://nebula.org/whole-genome-sequencing/
3) "The fact that no one is in charge and nothing can be modified also means that mistakes cannot be corrected. A bank can reverse a payment request. This is impossible for bitcoin and other cryptocurrencies. So anything that has been stolen will stay stolen."
First of all huge amounts of digital theft occurs today that goes unreversed. Also infrastructure reducing errors in cryptocurrency is being improved all the time. Transaction finality has cons but also pros and can be modified. And one can also imagine insurance for these types of losses becoming commonplace.
4) "And then there’s the environmental problem."
This is probably the most legitimate concern so far. All I can say is I hope we get serious about investing in clean energy production as a country/globe. Many things use energy, including cryptocurrency, and that isn't stopping anytime soon whether we like it or not.
5) His complaint that a specific project is not using the blockchain correctly and individuals couldn't explain the blockchain well isn't very convincing.
Of course lots of experimentation will fail. Pets.com didn't make the internet wrong. And even the experts have trouble describing possibilities that don't exist yet. If that isn't reminiscent of the early days of the internet then I don't know what is. If you've seen Bill Gates get mocked by Letterman while trying to describe the early internet then you understand this difficulty.
It's worth remembering that this area is still incredibly young. If you can't at least see the potential then maybe you aren't looking in the right places. Like here: https://a16z.com/2018...
People are claiming to be excited about DeFi because everyone loves unregulated derivatives and lending at insane APYs, but I think the real reason this has taken off is because the UX makes the future feel so real and achievable.
I'm just scratching at the surface now, but it's clear we've come a long way since bitcoin. I won't be shocked if it turns out bitcoin becomes seen as worthless old technology, but blockchains will never go away.
There's an experimental browser that provides this functionality for all kinds of websites, not just financial ones. You set up an account once when you install the browser, and then you can use it for one-click logins.
It's made by Alphabet Inc, but I can't seem to remember what it's called. Vanadium? Manganese? Ultron? Something like that anyway...
Seriously, go see what the process looks like. Just by not being full of A/B tested bullshit and free of regulation, you can get a glimpse of the future.
It feels powerful in a way that registering a Google account doesn't.
Well clearly someone cares
>2 How about Harvard putting your genome on the blockchain in such a way where you retain full control over it's rights?
I've never understood how the argument of putting private data on the blockchain is "good". To me this has seemed to be one of the worst ideas that is constantly pushed. It makes one strong assumption: the security of the network is and will always be unable to be decrypted. This seems naive. I am much less concerned with a centralized database where encryption of my data can be updated as new standards are adopted.
> Stablecoins
At the rare times I see people accept crypto as payment the options I see are: Bitcoin and Ether (and maybe bitcoin cash). I've never seen stable coin. Never seen stable. So not only is it not in practice but you're also illustrating my point about
>> You can talk all you want about solutions to some of the (minor) problems addressed here (ignoring the rest of the problems) but unless it is in use then the article's commentary still stands.
Great, you checked off one of the many boxes and created a coin that no one uses. Personally I don't count that as a success. (We can say the same thing about ZKP coins. I've never seen it accepted as payment anywhere) You need to check off ALL the (major) boxes in a single coin.
> 3
Is your comment seriously that "stealing happens, so it doesn't matter if we make it easier?" Seriously? Many people I know, including myself have had CC info stolen (often not our fault, other sites get hacked and dumped). Getting that fixed is pretty simple with a centralized source. I couldn't imagine having a significant chunk of my savings in an account that could be removed and not returned. The FDIC guarantees I'm safe with at least $250k and I'm pretty confident I'm practically safer than that. I get a lot of safety, stability, security, and privacy with fiat currencies. None of those are perfect, but cryptocurrencies need to check all the boxes here (plus fast transactions) to replace it. Better in a single aspect but worse in others does not warrant replacement and that's why we see it.
> 4
Please stop with the lemmings arguments. You also have to consider the utility of the electricity use. Cryptocurrencies aren't providing much utility. They aren't saving lives. The AC in your house has more utility.
> 6 (not a typo)
You ignored one of the most important arguments. Time. That has been a killer feature of cryptocurrencies since the beginning and people have been shouting that it will be solved with POS, POB, whatever. It is still non-viable unless the transaction times are brought down to at least a few seconds.
> It's worth remembering that this area is still incredibly young.
It is, but it is also very much hyped. Many technologies get hyped when young and go bust. In fact, this is more common than the other way around. So read my comment as asking for compelling reasons to think blockchain isn't one of them. Your argument has just been assuming I don't know about all the things you listed. Sorry to break it to you, but I already did. I feel confident many other HN users did as well.
Ctrl+c and ctrl+v
Take Gods Unchained for example: https://godsunchained.com/
It's as close to a real trading card game as possible, simply because when they produce 5 cards there are only 5 cards.
Smart contract coins like Ethereum will have tons of uses, especially for digital goods. You could easily cut escrow.com (and all escrow fees) out of the process of transferring domain names (and other digital goods) with smart contracts if a domain registrar got with the times.
https://playerkillers.exchange/KILL
Most people interested in cryptocurrencies have little to no interest in actual use cases. Investors simply want the price to go up. This is usually criticized as a "greater fool" investment strategy.
The article speaks to this. If there is any value in an cryptocurrency, it is up to the developers to divine it. Investors will eventually find a price equilibrium, but for now the ecosystem seems driven by hype, buzzwords, pozi-dapps and bubbles. NANO doesn't have any of that.
When you start looking at cryptocurrencies as code, valuation becomes meaninglessness.
I guess it depends which is the larger evil where you come from, the government or the criminals, whether to trust the central or the decentric authority.
I contributed to the start because they pitched themselves as 'unbreaking news', instead they're just another weak publication writing bad articles with catchy headlines (of which this is a good example).
Persuasion is everything The Correspondent was supposed to be and isn't: https://www.persuasion.community/
If you want to actually learn more about bitcoin, I'm part way through this and it's really good: https://www.amazon.com/Bitcoin-Cryptocurrency-Technologies-C...
Besides bitcoin are there any other blockchain apps that have large user bases?
And if you think LARPing is pathetic then that's on you. While you go to your billion dollar church or watch your billion dollar sport or analyse your String theory or do your medieval sword fights in dress-up at castles.