What's even worse, from my POV, is the humongous amount of electricity that is used to support the blockchain. And to what end?
Personally, I won't start believing in the blockchain until a non-wasteful alternative to the present PoW scheme gets developed and actually deployed. Right now, this looks to me like the most direct way of turning human vices into cooking us live on this planet that humanity has ever invented.
> The 'end' is the security of the bitcoin blockchain. Defence forces consume a massive amount of energy and human resources. They are still funded because countries don't all trust each other and they want security.
Yes. Wasteful as evil as the concept of a military is, countries need military forces to maintain peace, by keeping each other in check. It's an unfortunate direct consequence of the way humans organize themselves into societies.
But blockchain is not a direct consequence of a fundamental issue in human organization process (if anything, it's just a direct consequence of human greed meeting 2010s tech). It's the least efficient way of doing anything, because it completely eschews the need to trust other actors. Yes, I believe trustless systems are mostly a bad thing, because trust is literally the efficiency hack that allows us to coordinate at scale.
There are probably some theoretical problems where a trustless solution is perfect. But as it is today, the blockchain is trying to turn everything in the society into a Cold War-like military spending problem to avoid having to trust one another, even though trust-based systems work just fine.
I run 2 PoS wallets on one of my computers. It doesn't affect it much, though not all coins are equal (some consume more resources). It just have to stay on.
That's really cool because I can code the rest of the interface (front end etc.) with sloppy security and then ACTUALLY BOLT ON a secure layer with guarantees at the end.
Makes development much more streamlined. As the author of a huge codebase (https://qbix.com/platform) I worry that there are lots of security holes. With such a large attack surface, most new open source projects are swiss cheese, like early Wordpress (which is still full of holes from plugins).
Here, we just build our MODEL layer with a blockchain and KNOW the rules are going to be enforced.
Combine that with IPFS and a token and suddenly you don't have to pay for hosting to scale to billions of people. It's nice.
And anyway it's open source software! Why don't you go download the XRP consensus protocol from their github repo and try it. Ripple's servers won't even be part of the network.
What is there to trust? That they'll take your transaction? About the only thing they can do is refuse to include it in a block. Not much to trust really.
The fact that miners do not need to be known and trusted third parties means that there is great difficulty for any network adversary to identify enough miners to make an attack effective, and that even they were able to identify pools controlling >50% mining power, they would have great difficulty sustaining this attack as the network reacts by switching to new pools.
These facts in turn make it unlikely that a network adversary would
1. target miners in an attack as a means of controlling/obstructing the network
2. succeed in causing long lasting harm to the network in the event that they attempted such an attack.
Ripple's set of known and trusted validators can very easily be stopped and controlled by any reasonably powerful set of state level adversaries, and are themselves in a position to extract rent from the network due to the potential for such a group of known parties to collude, and the coordination problem that users of the network would have in hard forking away from such a colluding set of validators.
That's still a lot to trust. How do I know someone isn't just gonna go crazy? How do I know someone isn't shorting bitcoin? That's rational.
Someone could short Bitcoin Cash and then mine in secret using Bitcoin ASICs and make a fortune screwing the whole Bitcoin Cash chain with their superior power. Proof of work sucks!
It's not though because it takes a lot more than one individual to go crazy. It takes a huge number of people, who have a huge amount invested in the platform, to simultaneously go crazy and burn their hundreds of millions of dollars worth of their own assets down. People who own that much are generally mentally stable and focused individuals, and the idea that such a huge portion would spontaneously go crazy at the same time is extremely farfetched.
Relying on cryptoeconomic incentives is a much safer bet than trusting that a handful of trusted third parties won't be bent to the will of some political elite who pass a law, or won't collude to raise fees once they have attained a significant network effect and customer lock-in.
The mining has ALREADY been centralized in a small number of mining pools. They become a cartel that charges high fees, no collusion needed. You have only one miner every 10 mins, and it has to take every transaction made in the whole world. You call that a good scalable design. Not to mention they can just be DDOSed.
But anyway tell me again why it's not rational behavior for someone to mine Bitcoin Cash in secret and then unleash their far longer chain, after shorting Bitcoin Cash on the exchanges? Why is Bitcoin Cash even secure at all?
2. No one said that proof of work based cryptocurrencies can't be attacked. Obviously there's no such thing as an invincible protocl. The point is that it is much more costly/difficult to stop a proof of work based cryptocurrency than one that depends entirely on a small set of known and trusted third parties.
>>The mining has ALREADY been centralized in a small number of mining pools.
Already been addressed in my previous comment.
>>But anyway tell me again why it's not rational behavior for someone to mine Bitcoin Cash in secret and then unleash their far longer chain, after shorting Bitcoin Cash on the exchanges?
It would be much riskier than simply mining honestly. If they short it and their attack fails, they would lose a huge amount of money.
Having people host with several nodes running a consensus algorithm is worse than trusting all your data to one actor in "the cloud"?
If a thing moves across multiple organizations then you can make a case for a blockchain application, logistics is an obvious example, but there are others like asset (expensive paintings / vintage wine) provenance.
https://techcrunch.com/2017/12/15/ups-bets-on-blockchain-as-...
All problems related to inter-company collaboration are people and organizational problems not technical problems. Blockchain solves nothing in this space.
The problem is that some people adopted blockchain as some kind of weird gimmick to wrap extraordinary claims such as the ones in the original post and promote scams (altcoins, appcoins, whatever).
That's a problem of anonymity (or lack thereof).
Some other chains are working the problem in their own ways, I'm just less familiar with them.
edit: If UPS doesn't count then nothing is going to count.
Lots of things are interesting in theory. Bitcoin is about to end its first decade though. Asking where the actual value comes from seems on topic to me.
Hell, if these don't pass the ideological test, just ask someone from Venezuela why do they need bitcoin.
Basically, saying that bitcoin can (at the moment) function as a better currency than one that is completely failing is valid and interesting, but not exactly a ringing endorsement.
> Can someone provide a counter example? What are people doing in the real world with this stuff?
What? Where did they move the goalpost.
You might want to check this page out:
https://www.stateofthedapps.com
There are 938 projects listed that leverage Ethereum/Solidity.
One of my personal favourites is: https://colony.io. The whitepaper is a fun read.
Block chain centric use cases don't count since those just reinforce my worst case hypothesis-- that cryptocurrency is a financial MMORPG and a pure value-free bubble.
What's an actual case of an actual team, project, or organization using this stuff to do something... actual?
I'm both a developer and a founder and am very active in tech. I have yet to encounter a single case of someone using a block chain based application in the real world with the exception of the core currency/wire transfer use case of cryptocurrency. We have used it for that ourselves, but as others have noted the appreciation in value is actually harming this use case.
What I see here is heaps of money being raised and a lot of developer time being spent building things without any contact with reality whatsoever. As they say in the military: the first casualty of war is the plan. IMHO there is nearly zero chance that you are building the right thing until you have shipped and iterated a few times, especially with something complex and rather byzantine. The only exception to that might be "scratch your own itch" or "dogs making dog food" projects, but those really aren't exceptions since if you are the customer you can (to some extent and in the early days) short circuit the process by testing on yourself in your own head as you go.
Colony looks like groupware on the block chain. Groupware is a very well known tar pit of death.
Speculative investing + skyrocketing valuations does encourage highly motivated reasoning-- a unique kind of confirmation bias:
"This technology MUST be the answer to all the problems of the future because I'm getting wealthier TODAY!"
Irrational exuberance is rampant.
That said -- the recent New Yorker article on Estonia's digital society [1] covered that country's usage of a blockchain to manage patient healthcare records.
> the backbone of Estonia’s digital security is a blockchain technology called K.S.I.
K.S.I. from Guardtime [2] is an enterprise permissioned blockchain that is less decentralized than bitcoin and ethereum. Still, its exciting to see that Estonia is leveraging immutability and (some) decentralization to build a secure persistence layer that provides data provenance and a log of data access for management of their citizens' personal data, including healthcare records.
[1] https://www.newyorker.com/magazine/2017/12/18/estonia-the-di... [2] https://guardtime.com/technology
You didn't even read properly - we were talking Estonia. At the scale of a local health care system the blockchain is perhaps really nothing more than a fancy database, if at that scale it will stay energy efficient for a long while.
--
Under the prototype, users interact with the charging station by agreeing to a smart contract that is programmed on top of the Ethereum network. Prior to charging, the user makes a deposit on the network, which is later released after the transaction is complete.
The main difference is that instead of users being billed for the amount of time that they are connected to charging station–i.e. the way most stations work today–users pay only for the amount of electricity consumed during the charging process. The hope is that both the cost of the micro-transactions, and the allocation and consumption of electricity, will be made more efficient and ultimately save money.
In addition, the blockchain plus smart contracts has the potential to streamline the process of purchasing power from a charging station. In theory, this can take place directly with the machine (charging station) and not require prior contact with the providing company or a human representative.
When VisiCalc was demo'ed there were people lined up literally pulling out their checkbooks and offering to pay almost limitless amounts of money for the prototype. Spreadsheets had insane value to accountants.
Other than the core use case of currency that I mentioned, where are the "killer apps" for block chain? A lot of it looks like minor and dubious improvements or solutions in search of a problem. Neither of those comes close to justifying the insane amount of money and resources being poured into this area.
It may be the case that the fundamental, key, killer features of the blockchain have lost their initial lustre to many people, and I understand that. But decentralization and verifiable, consistent truth are a really, really big deal.
There are applications with promise, large promise. Killer apps? Maybe. They will arrive, it's more "which of these" and not "whether these":
"At the Ambrosus project we aim to radically improve the global supply chains by creating a trusted ecosystem where we can reliably record the entire history of products and execute commercial transactions accordingly."
Prediction markets -- fascinating stuff with major potential.
* https://qz.com/1163660/brazil-may-write-new-laws-based-on-da...
Brazil experimenting with laws/petitions on the blockchain
... There are many amazing use-cases.
The reason this YC article was published is because there is a great demand for blockchain from investors.
Ignore it or doubt it at your own peril!
If the transaction is on an immutable public record, the authority couldn't say: "Well, no you didn't pay us. Pay us again, or we'll steal your dog."
If you live somewhere where Government/Corporation are out of control, this sort of safe guard has major benefit.
Is the charging process now trustless? Nope, because I still need to trust that once I make my deposit the real-world charging station will honour that payment. Is it decentralized? Of course not, I'm standing in front of a single charging station, not a zillion different ones. Is it immune to double-spends? As a user, I don't care.
Blockchain as a technology as originally described by satoshi's paper is an extremely good solution as a cryptocurrency. You have a bunch of transactions and they all reduce into a single number -- your wallet balance. Anything other than this you're just shoehorning data in a crappy linked list and you'll pay all the penalties for doing so.
Frankly, I think the MMORPG economic model is more sane. At least in-network consumption is part of the core use case and they've demonstrated 20 years of (incredible) profitability.
https://hackernoon.com/ten-years-in-nobody-has-come-up-with-...
This is just the beginning
Big Pharma Seeks DLT Solution for Drug Costs
https://www.coindesk.com/blockchain-day-big-pharma-seeks-dlt...
In the centralized world with a thin protocol layer that captures little value and a fat application layer that captures a lot, we see far, far more development in the application layer. When you invert where the most value is captured, you invest where the most work is done.
That said, all sorts of open source projects have shown that there are plenty of people willing to sacrifice their ability to capture value if it means they can produce even more value that is instead captured by users.
Don't get me wrong. I want to believe. I want a decentralized trust-free ubiquitous computing future. I want an alternative to conventional VC to fund startups. I want an alternative to adware/surveillanceware to fund products and services.
That's why I am saying "put up or shut up" and calling BS on this mania. It's sucking all the air out of the room and if this really is a totally vapid value-free bubble its collapse is going to be a disaster.
I'm not sure yet steemit will end up being a winner in this field, but I find this a very smart approach for challenging the network effect of big competitors.
As a user (writer/curator), you earn tokens for doing what you already do for free in reddit or facebook. The tokens you earn are like altcoins, you can trade them for whatever you like.
As you say, the key point of blockchains, like bitcoin, is that there is no central trusted entity. So, like steemit has done, if you add a trusted person or company, the main feature of the currency is wiped out and there's no point in having a blockchain in the system.
I'm not saying this model is foolproof, and perhaps you're right and steemit (or app specific coins) will never be a big hit because of that. My point was just to show an example of a different kind of business model / monetization strategy made possible because of the blockchain, and there will certainly be others.
I will add though-- the major reason cryptocurrency has so much value in that space is that the alternatives (bank wire, Western Union, etc.) are so terrible from a UX perspective. If those alternatives vastly streamlined their UX I think a lot of the value in cryptocurrency in the developed world might disappear. It might still have value in countries without good and reasonably stable banking systems.
Check SALT, millions in loans already distributed https://www.saltlending.com/
The only exception is things like Sia, and that's not cost or convenience competitive with Amazon S3 or Backblaze.
Where is the value here? When I visited this I was expecting to see at least something about building something useful for... something... Building what for the blockchain?
Oh kitties. Yeah.
I am absolutely aware of the fact that early stage tech often looks like a toy, but here's the thing. PCs were a toy but it didn't take long at all (VisiCalc, etc.) before they had actual uses. BBSes were a toy but they were immediately useful to their users for trading data and messaging.
We are now about eight years into block chain and beyond its one core use cases there is almost nothing. Whatever value has been delivered seems extremely minor compared to the vast sums of money being spent, making this perhaps the worst ROI I've ever seen.
Can someone provide a counter example? What are people doing in the real world with this stuff?