The required nexus between the blockchain and the tangible and legal worlds means every limitation that exists today will exist for a "smart contract". It's the same plumbing with a paint job.
Right now, we have the government operating as both the "miners" and the auditors.
A middle-ground, then, might be one in which there is a general-purpose public blockchain where the government takes the role of the trusted third-party on-chain, thereby lowering the overall societal costs of things like unfulfilled contracts while still ensuring that my oil-reserves are what I say they are.
From the government's perspective I see this as desirable but falling prey to the principal-agent problem. We'd need virtually no civil-court judges or attorneys to prosecute white-collar crime anymore. It'd lower costs, but in doing so unemploy many of the people in the system.
But the rest of your post is pretty silly. How does a secure digital exchange protect against fraud? It doesn't.
It's that plus a whole new crop of perverse incentives which arise with any "smart contract". Especially, no smart control can reach out to the "real world" and get data, more less facts. A smart control would essentially be limited to some data-stream in on Internet. And anything like that can be subverted seven ways from Sunday. Do you really want billions riding on THAT?
(and, yes, give us some Rube Goldberg scheme of averaging six different weather stations for your result. I'm sure nothing can go wrong with any of those ideas. Yeah, World finance then gets to be hoisted on the lpad petard).
When the great recession started, it was not caused by an external shock, rather by the viral mistrust that the underwriters of the bad loans were solvent. A financial fragility problem that the blockchain can work to address.
I also don't think this is a false dichotomy. Most likely we'll end up at a place with some improvement over what we have today (I'd actually argue we're currently at this point now) but not without all of the limitations.
This is true -- it's also true the 5% is pretty damn interesting.
There are plenty of interesting tokens out there. Some of them are tackling real problems. That's pretty exciting. I don't begrudge someone who's trying to solve something.
The historical analogs are lazy in my view. The financial and political system we operate in today has done plenty of damage. Indeed, some of the key examples listed on the slide.
The last global financial crisis wasn't that long ago (and wasn't that "reversible", certain people may recall). You could spin every one of those dot-points as commentary on our existing financial systems.
Doesn't mean blockchain is going to fix it. In fact, I have many doubts and concerns. There is so much to do. However, I really like that people are trying.
Even with that remark -- I wasn't thinking particularly politically. There are plenty of markets I think blockchain has a decent swing at.
Blockchain does not appear to be the best way to build a decentralized system for user controlled data (such as a decentralized social network).
We already figured that system out: local software, local storage, open source, local permissions & controls. Billions of people have personal computing devices now. No blockchain is needed at all, that just adds entirely unnecessary bloat.
You shift the point of control back to the local device and away from the network. It is that simple, and it's how we largely used to control user data.
I agree. Blockchain only makes sense for things that require immutability which many applications do not. OpenBazaar is a good example of one of the applications I was thinking of.
* Website gives person a unique code to broadcast on the blockchain to prove they have control over that identity
* 'Approved' services claim things publically about identities (eg age, allowed to drive) which others can use to verify claims
What I don't get is:
* how you know which 'approved' services to trust in the first place
* why you'd want all of that information public
* how it'd fix the original issue
The other issue is that none of this is necessary. If I want to prove to Person X that Gov Y says that I have property Z, why can't I just present a cryptographically signed certificate saying I have property X. You could even have a similar revocation list as CA.
You don't think if the problem were that easy to solve, it would be solved already? Throwing blockchain in the mix gets Facebook nothing that it couldn't get today by just partnering with organizations can verify identities.
Not to mention, the "fake news" issue isn't largely an identity issue — there are plenty of people and organizations willing to lie on their real accounts to further their sociopolitical agenda, and plenty more people who don't care if something's true so long as it confirms their existing viewpoints.
All this money is invested in "get-rich-quick" hopes. Few would care, or invest anything, if it was just for the decentralization aspect (case in point, all the failed aspects of decentralized social networks and other such efforts).
I agree that human greed and corruption is a big problem. It is a problem for any system out there.
But, blockchain was supposed to solve this by introducing trustless and decentralized applications. If there is now a need for regulators, how is blockchain supposed to solve other problems? The world is already complex, we don't need another layer.
People that use the word "fiat" are also entirely ignorable.
OK, but blockchain is not a distributed consensus protocol. It's a document timestamping protocol.
I'm also super curious why you think blockchain systems don't have actors that work independently of each other? I was always under the impression that was the entire point.
Sort of. However, a Perforce server with local replicas is not the same thing as a fully offline git transaction, for example.
>I'm also super curious why you think blockchain systems don't have actors that work independently of each other?
They work as part of the network but two users can't make a transaction without having to involve the network.
Except for private blockchains, which are totally brain-dead.
And mining is actually less akin to solving math problems and more akin to, well, actually mining. That is, digging around enough until you find some gold.
* Distributed consensus schemes are not useful only for monetary applications. When they are used as such, there exist mechanisms to commit to a certain fiat price and minimize market exposure to the point where transactions are almost free, in fiat terms.
* The disbursement of tokens and the distributed consensus rewards do not need to be tied together like in Bitcoin. A premined token like Stellar can offer very strong security guarantees without needing mining pools (but of course, any kind of imaginable database is vulnerable to majority attacks, so that means nothing by itself)
* The limited block capacity is a Bitcoin-specific problem that incidentally motivated interesting results in off-chain transactions (Lightning).
* The sorry state of the distributed financial markets says nothing about the technology and more about human greed and the slow capacity of regulators to adapt; critically, smart contracts and distributed algorithms enable control mechanism and hard guarantees that have no old world equivalent, they can eliminate counterparty risks, guarantee solvency and fair arbitration etc.
That being said, 95% of the times the word "blockcahin" is uttered these days, what follows is most likely bullshit.