Exactly why so much wealth was created by the Internet boom. The wealth came from utility that already existed, just needed to be harnessed to its fullest potential. ICO scams are based on generating wealth first and hoping that utility follows at some undetermined time in the future.
It's all snake oil. Maybe snake oil can be useful to someone at some point in time, but until then it's still just a scam.
I couldn't get people to sign mine share contracts with me to support the operating costs, I ended up spending most of it on my power bill, food, and my therapist (that sounds like it's a joke, but it's not). At the time my tiny run-of-the-mill software consultancy barely kept it's head above water. This thing actually put me deeply in the red. Texas summers. heh.
All the people I offered those mine shares to have called me this year thinking I was on to something! I wasn't on to something, I lucked into a situation and did something with computers that I liked. I didn't hold shit. I regret nothing. After the 2014 crash, everyone was saying "I told you so!" and I had some bills to pay. Jokes on them, I had a blast.
I really love what blockchain can do for consensus. I love that ETH can be used for address resolution outside of DNS. I love what is happening with IPFS. There is so much growing out of this that is good.
A partner in my mine got me on a call a year and a half ago with a friend of his from Bloomberg. The call was (from my perspective) supposed to be about my AR GIS platform. It turned out the dude was specifically a crypto journalist and had a stake in a Puerto Rico "Crypto Hedge Fund". Whatever that is. To his surprise, I had no opinions on hot coins!
Unlike the internet, the first "killer app" for this was about literally printing money. It's not a fair comparison. The real work that is happening with decentralized systems around this stuff is happening quietly. How many of you are listening to podcasts about DNS? People want to get rich quick. Sharks love to eat people that want that. It's a shame people got shucked.
Last year when people decided to give me calls about it, especially friends and family, my response was "How much do you know about cryptography? How much do you think you understand this stuff? I barely understand it. In my opinion, no one really understands what we are doing or what we are capable of with it. That doesn't make it an investment. Stick your money in an index fund."
My superpower: Taking things literally. Still more useful than the last 10 ICOs. And my bad jokes aren't as bad for the environment. 10k joke-coins pre-ICO and 2 downvotes for that one for me!
We had three innovative ideas in the financial sector - certificate of debt, compounded interest and book money. And now the fourth - trolling idiots to risk their retirement money because they want to get rich "with that computer money my son told me about".
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC1026931/?&utm_m...
r/memeeconomy but irl, if you will.
You don't appear to actually understand what the phrase "snake oil" means in English. It doesn't mean "snake oil isn't useful".
It means: during in the 1800s Chinese immigrants to American used snake oil (from the Chinese water snake; the one in your link) as a cure-all. Unscrupulous "snake oil salesmen" would sell what-they-called-snake-oil-but-actually-wasn't. Or it used rattlesnake oil instead of water snake oil.
Here's a 90 second video that says the same thing: https://www.youtube.com/watch?v=LaDsOJATX3A
Incidentally I'm pretty sure water snake oil is not actually a cure-all anymore than rattlesnake oil is.
That really depends on where you put 'beginning'. But more to the point, blockchains are useful now, just like the internet was. They're just not useful for all the things that are being promised (yet). Also, just like the internet wasn't.
> Now, all we see is rampant fraud and a complete disregard for the environment [0] with no gain in efficiency.
People never tire of pointing this out. Yet it completely ignores the fact that there are solutions to this problem that are in the works, and have been planned for a long time.
There are lots of problems with the crypto space. Fraud is rampant. Energy consumption is wasteful, temporarily. It's also not clear that dis-intermediating human institutions is actually what we want to do. But if you think it's all a fraud, or that there is no value, then you're just not thinking very hard.
2. Of course the effect on the environment will continue to be pointed out: Ethereum's energy consumption is growing and the use cases are nowhere to be seen. So far, "plans" in the cryptocurrency space never go as expected. Satoshi didn't expect persistent forks and altcoins, for example. Vitalik advertised Ethereum as a "world computer" but it can barely stand when only 14k users are trading cartoon kitties on it. He also said Ethereum's "code is law", until he changed his mind and forked the network due to a hack. Please excuse skeptics for holding accountable those that do not have a history of consistent and successful results.
Thereby allowing use and feature development to proceed hand in hand. That synergy between makers and users is wholly non-existent in the crytocurrency space, which is primarily focussed on flipping a quick buck.
People use cryptocurrency too. For value transfer, and to a more limited extent, for dapps like Augur. You seem to be criticizing the delta between the lofty hopes for it and it's actual usage. The early internet did not have such lofty hopes, so its growth was more organic. If you take away the pipe dreams from crypto, you have a remnant skeleton that i'd argue very much resembles the early internet.
> Of course the effect on the environment will continue to be pointed out: Ethereum's energy consumption is growing and the use cases are nowhere to be seen. So far, "plans" in the cryptocurrency space never go as expected. Satoshi didn't expect persistent forks and altcoins, for example. Vitalik advertised Ethereum as a "world computer" but it can barely stand when only 14k users are trading cartoon kitties on it. He also said Ethereum's "code is law", until he changed his mind and forked the network due to a hack. Please excuse skeptics for holding accountable those that do not have a history of consistent and successful results.
So, I said there are plans for solving the energy consumption issue. And your counter-argument is what, exactly? That sometimes people didn't foresee everything that might evolve? Help me understand the argument that you're making here.
People forget that in the early days of the Internet and its predecessors, most computers were still bigger than a washing machine, mostly available only to universities and big or specialized corporations, and data lines were limited to bandwidths many orders of magnitudes narrower than today.
The Internet had an inherent hard limit on scale and availability simply by the technology that was available at the time. Not only did the Internet then grow with the available technology, filling it out, its very nature provided a great lever to all research and development, leading to the exponential advancement of information technology that we live in today.
There is no comparison, at all.
All technology is limited by what is available at the time. I am nowhere near as bullish as I used to be on “blockchain” but I still think it can have a huge impact. If the internet democratized informatiom the blockchain has the potential to democratize finance and some types of information. The internet had all kinds of crazy scammers during the dotcom era. I think there is still potential here and while the shape isn’t super obvious I think it’s not worth betting against. Im no koolaide drinking crypro cargo cultist but I am optimistic it will solve some problems and be a net positive.
What's your evidence for this?
Even major Bitcoin advocates say it's no longer useful as a payment system: https://avc.com/2017/08/store-of-value-vs-payment-system/
Bitcoin's total TPS is circa 2-3. [1] And presumably a small fraction of that is actual money transfer. In contrast, M-Pesa, a digital money system that started about the same time and has millions of users, has 100x that volume and is growing rapidly. [2]
So I'm entirely skeptical that it's better for any significant market than even legacy money transfer methods, let alone trying to compete with newer tech.
[1] https://www.blockchain.com/charts/transactions-per-second
[2] https://www.mobileworldlive.com/money/news-money/m-pesa-reac...
I've used it for that. People use it on darknet markets for value transfer. I have seen many people claim to use it in Venezuela, though I can't confirm that (one of them posted in this thread [1]).
> Bitcoin's total TPS is circa 2-3. [1] And presumably a small fraction of that is actual money transfer. In contrast, M-Pesa, a digital money system that started about the same time and has millions of users, has 100x that volume and is growing rapidly. [2]
That's no longer true. The lightning network increases that to effectively infinite TPS. The infrastructure of nodes isn't that great yet, but it is now possible in principle for Bitcoin to scale to an essentially arbitrary throughput.
> So I'm entirely skeptical that it's better for any significant market than even legacy money transfer methods, let alone trying to compete with newer tech.
That's a fair skepticism. Though not due to slowness/throughput, as that problem is solved. And not due to environmental concerns, because that problem will be solved (in Ethereum, not Bitcoin). The legitimate objections to cryptos I see are:
1. It's not clear that decentralization, uncensorability, and irrevocability are really properties that people need. provides a value anyone really need.
2. Deflationary assets are subject to boom/bust cycles that can be toxic to modern economies. Crypto assets tend to be deflationary, and as such may not, over the longer term, serve effectively as global currencies.
I think those two points are the core of any serious objection to crypto. I believe that in the case of #1, the architectural change it would induce in our financial system is worthwhile, and consumers will feel the effects of that rather than the benefits currently stated for crypto. As for #2, it's a legitimate concern, and it may ultimately make them untenable, but we'll just have to see.
But you share one of the habits that makes these discussions so frustrating. You substitute marginal examples and handwaves at the future when asked for clear present evidence.
The Lightning network might possibly one day increase capacity to infinite TPS. It doesn't yet, and reasonable people think it never will. E.g.: https://reddragdiva.tumblr.com/post/175418385308/why-the-lig...
I am saying that based on the evidence I find, despite 10 years of enormous free advertising, approximately nobody uses it today for money transfer when compared with other money transfer options. Do you have clear evidence otherwise? Not anecdote, not what it possibly does, but actual evidence?
Such is unfortunately the nature of all predictive discussion. I don't think i'm being any more speculative than anyone discussing say, autonomous cars, or similarly 'somewhere on the horizon' technologies.
> It doesn't yet, and reasonable people think it never will. E.g.: https://reddragdiva.tumblr.com/post/175418385308/why-the-lig....
There's a decent bit going on in that link, but point by point:
> 1. it doesn’t work. the software is absolute dogshit. buggy as hell.
This is just saying the current iteration is buggy. That's no counter-argument to the concept.
> 1.5. it can’t work. the mesh network problem
The difficulty of this problem depends on the number of relevant nodes, and the way you structure the network itself. He even cites a good example - BGP. He claims that BGP works because the nodes trust each other, but regardless of them trusting each other, they solve the mesh network problem. That trust is not integral to the solving of the mesh network problem.
> 2. the whole idea is dumb. nobody wants a network of prepaid channels.
Now this sounds like a decent argument. Except that, one could argue that your bank account and credit card are simply prepaid channels. If the LN gets up to scale, and if it achieves sufficient node liquidity that you can pay essentially anyone...then I don't see how this prepaid channel differs in any way from a traditional bank account.
> 3. the LN solves a problem that doesn’t exist. the idea is to make transactions fast again
The LN may or may not cause merchants to adopt Bitcoin for payments. But it definitely solves the more narrow "Bitcoin doesn't scale" problem.
> 4. the LN is coin-agnostic - so it isn’t an excuse for bitcoin’s unscalability
This doesn't even logically follow. It's just a complete non-sequitur. The LN is an excuse for Bitcoins not scaling yet. The LN can also be used to scale other coins. It may be that people prefer those other coins once they've achieved scale.
> Do you have clear evidence otherwise? Not anecdote, not what it possibly does, but actual evidence?
It's extremely hard to get data for something like that. But the clearest cut case is darknet markets. Cryptocurrencies are definitely actually used there for real commerce.
Also, "people use cryptocurrency for value transfer" is not a forward-looking statement. It's a statement of what people do now. And this comes out of you saying, "blockchains are useful now".
You're handwaving right now. You can't know which part of the distribution you're in until it's over. I've provided quite a bit of evidence, as well. There are some forward looking statements for which there is no hard evidence, but only because there cannot yet be any.
> Also, "people use cryptocurrency for value transfer" is not a forward-looking statement. It's a statement of what people do now. And this comes out of you saying, "blockchains are useful now".
They do use it for value transfer right now.
> They do use it for value transfer right now.
Money launderers do. KGB agents do. A variety of other criminals do. But I have yet to see evidence that a significant portion of ordinary people use it for value transfer in preference to either traditional means or modern, non-blockchain digital ones.
So yes, you are technically correct on a narrow interpretation of a single sentence. But you are so far wrong in terms of the meaning of that sentence in the broader discussion. For the purposes of evaluating Bitcoin's commercial utility, effectively nobody uses it. If you have data otherwise, let's see it.
The same applies for comparisons with the early Internet. Pre-web, lots of non-technical people used it for practical purposes because it provided superior utility over other options. That doesn't appear to be true for money transfer for Bitcoin. Even prominent Bitcoin advocates have given up on that. E.g.: http://avc.com/2017/08/store-of-value-vs-payment-system/
Soooo, buying drugs and illegal gambling? Sure, I'll give you that one.
My argument rephrased: "Because cryptocurrency investors have repeatedly made claims that don't pan out, we can be reasonably skeptical and concerned about their energy consumption until they actually fix it or at the very least provide peer-reviewed scientific analysis on how it will be fixed."
Yes, although also remittance payments, and some usage in places with unstable currencies like Venezuela. Hard to gauge how much, though.
> My argument rephrased: "Because cryptocurrency investors have repeatedly made claims that don't pan out, we can be reasonably skeptical and concerned about their energy consumption until they actually fix it or at the very least provide peer-reviewed scientific analysis on how it will be fixed."
While that is, in the abstract, a fair argument I don't think there are actually that many examples of it in practice. Vitalik didn't claim Ethereum would be a world computer right away. He's always been clear and explicit about the scaling roadmap. I don't think the promises of the core devs of Ethereum or Bitcoin have been overstated or unmet. If you believe otherwise though, i'd be happy to listen to your argument.
"Authorities have .. permitted trading of bitcoin in Venezuela, though they have heavily fined and detained people who use computers to earn bitcoins by auditing online cryptocurrency transactions. Such “mining” operations use immense amounts of electricity, which is heavily subsidised in Venezuela — meaning the state essentially winds up paying for the process."
"few businesses openly advertise that they accept cryptocurrency out of concern they will be extorted. It’s still difficult to make many purchases in Venezuela with bitcoin"
https://www.news.com.au/technology/online/venezuelans-seeing...
Bitcoin not only thrives here and allows you to bypass the whole craziness with the economy by using exchanges like localbitcoins.com where somebody would deposit the amount of bitcoin you sold to your local bank account. This way you just keep your money in bitcoins if you want. This is specially true with miners.
Meanwhile, no doubt some are using crypto to supplement their incomes/savings as well.
No,“can” and “are legally allowed to” don't, technically, mean the same thing.
The other part is that we Venezuelans never walk anywhere. Going somewhere without a car feels dangerous. Oh and in big cities, if the car is armored the better. Plenty of shops now to convert your SUVs.
Furthermore how does that allow you to pay for food, water, utilities, or even fuel for your car?
Shipping Fedex/DHL in Venezuela isn't nearly as reliable as shipping in the United States. Nor is it cheap.
Energy and gas are super cheap in Venezuela (38 cents a gallon). I'm not sure where you're going with your argument there.
You can hold crypto as a hedge against the Bolivares, convert to fiat as needed, just like any other fungible asset.
Well, why is this so easy for you to brush aside?
If indeed blockchain tech can successfully subvert bad public policy, isn't that pretty remarkable in its own right?
https://eips.ethereum.org/EIPS/eip-1011
There you go. Read it then make your arguments against it. If not, then shut-up.
"I'll believe it when I see it"
> He also said Ethereum's "code is law", until he changed his mind and forked the network due to a hack.
It is ultimately a decision of the miners. They have the power to choose to upgrade or not. As for the decision to fork, it was done via voting. The decision was for the interest of the Ethereum project's success. Being a maximalist and losing sight of the goals is not desirable. But as a miner, you have the choice to not upgrade the Ethereum client you are using. And those who did not now became 'Etherem Classic'. Sure everyone should be a skeptic and hold accountable, but not to the degree of being unreasonable. One should understand why they desired to fork before making conclusions.
This stuff is so early. A lot of the really enabling infrastructure doesn't exist, and won't exist for years. Most builders have no idea what the true strengths and limitations are. It'll get there, but it's not a 2020 type of get there. Maybe 2025.
Cryptocurrency is the first time we could really escape that.
As for infrastructure, things like the lightning network will provide scalability, things like starks and bulletproofs can help both privacy and scalability, decentralized exchanges help accessibility.
It does not. In 1995 the Internet was useful for 30m people. In 1985 it was useful for 30,000. Email was better than paper mail from the get-go. Networked file transfer was way better than mailing magtapes or CDs. Remote terminal connections were way better than driving or doing long-distance dialup. The Internet was not the wonder it is today, but from very early on it had clear practical use.
> But more to the point, blockchains are useful now, just like the internet was.
Not really. I ask regularly here, and so far there's approximately no commercial use case where blockchains are better than some other technology. The main exceptions being hype, fraud, speculation, and some light financial crime like money laundering and capital control evasion. If you have some examples, I'll of course read them with interest.
My personal bet is that blockchains will be like XML: a technology that was going to be The FUTURE for a while, got put into a bunch of things (often generating large consulting revenues), and then quietly dropped later as people discovered that there were better alternatives for almost every practical use case.
https://trends.google.com/trends/explore?date=all&geo=US&q=x...
(Or less, perhaps, in that I suspect the peak was earlier.)
But yes, I'm sure it's in plenty of Y2K-ish enterprise systems, spreading like kudzu.
My point is the extent to which that is different from the peak of XML's hype cycle, which was circa 2000. Then, XML was everywhere. E.g., eBay circa 2004 would render data internally as XML, which would get passed off to multiple Rube Goldbergian XSLT transformation layers on its way to becoming HTML. Or I did some work at a bank around then, and their internal architecture was very XML-heavy. There was no good reason for this, and from what I see JSON now dominates.
I note though that your examples were all created when XML's hype cycle was in full swing, and many have enterprise roots. I'll be interested to see if projects created today end up using XML even for the document-creation cases for which it was intended. JSON is also a way to represent large tree-structured data, and I wouldn't be shocked to see it take over most of the data sharing just because that's what everybody knows.
You see that now. But in 1985 most people thought email was silly, if they knew about it at all. Why replace the mail? The mail is fine. It's only when you look back on it, with modern eyes, that you see how great it was.
> Not really. I ask regularly here, and so far there's approximately no commercial use case where blockchains are better than some other technology. The main exceptions being hype, fraud, speculation, and some light financial crime like money laundering and capital control evasion. If you have some examples, I'll of course read them with interest.
I stated some above. But i'll copy/paste:
- Value transfer
- Prediction markets
- Asset trading/custody (not just cryptoassets, I mean, potentially real estate, equities, etc. can be tokenized)
- Venture capital that is more transparent and open (the ICO space is obviously not there yet, but I think it can move in that direction)
Moreover, the "most people" standard does not apply. I'm not asking what "most people" think about Bitcoin. I'm asking for evidence of delivered value to early-adopter audiences. In 1985 any crowd of tech people could tell you why email was better. It would have been easy to find non-technical academic staff who were excited about email, as many of them had been using (mostly non-Internet) email for years at that point. Neutral observers could easily be shown that it was valuable.
> I stated some above. But i'll copy/paste:
No, what you stated above was hypothetical. None of those are areas where blockchains are demonstrated to be better than commercial alternatives for any significant audience.
Ten years ago, even five years ago, I would have given you a pass for selling the amazing possibility rather than any actual facts. Sorry, but time's up on that. I'm asking for proof of traction, not further hype.
It is often the case that:
Securities lawyers and traditional venture capitalists don't want a world where regulatory agencies and traditional venture capital can be routed around.
Those in financial law enforcement don't want the trend toward total financial surveillence, euphemistically called instituting anti-money-laundering controls, reversed.
More generally, those with a major economic or ideological investment in government-funded programs don't want people to have financial privacy that makes enforcement of the income tax more difficult, or to see an alternative to central bank issued currency, which gives governments the power of seignoriage, gain traction.
The utility of cryptocurrency is clear: sending value from point A to point B electronically without depending on an intermediary that can extract rent or surveil/censor the transaction.
So if the best cryptocurrency early-adopter audience is people who are harming society, then you've pretty much guaranteed that cryptocurrencies will remain societally marginal.
In the case where criminals profit from harm, the criminals may personally experience utility from Bitcoin, but the total net utility is negative. E.g., if I steal your new $30k car and sell it to a fence for $10k paid in Bitcoin, I have experienced a $10k gain. But since you experienced a $30k loss, net utility is negative. Ransomware, often seen using Bitcoin, is another example of net negative utility.
In the case where the exchange in question is low harm, we generally see society evolving toward legality. E.g., marijuana has been declining in illegality, so the need for evading state detection declines too. There are now multiple marijuana storefronts within walking distance of my house. Bitcoin doesn't help them.
I suppose you could say I have an investment in government, which I call "being part of a modern, civilized community". So I do object to Bitcoin's money-laundering potential on those grounds, and also deny that aiding freeloaders in tax evasion is much in the way of "real utility", any more than any other tax evasion scheme.
Even if we're willing to call Bitcoin's financial crime usage "real utility", I don't think it's "real" for the purposes of this discussion, which is about comparison with the early days of the Internet. The comparison is only meaningful if the early "real utility" is indicative of future utility for a broader audience. That was obviously the case for something like email (which 90% of Americans now use) or online shopping (80%). But there's no particular reason to think 80-90% of people will be excited about risking IRS penalties and jail time for tax evasion or money laundering.
In the context that you made the argument in, which is consumer demand for cryptocurrency, the type of utility we're talking about is utility for the user.
>>In the case where the exchange in question is low harm, we generally see society evolving toward legality. E.g., marijuana has been declining in illegality, so the need for evading state detection declines too. There are now multiple marijuana storefronts within walking distance of my house. Bitcoin doesn't help them.
Marijauna stores would benefit tremendously from a widely used cryptocurrency. Legal marijuana shops have enormous difficulty getting bank accounts.
The government pressured payment intermediaries into stopping donations to Wikileaks a few years ago. Cryptocurrency was a vital lifeline for the organization during the blockade.
Craigslists recently shut down its personals section, due to FOSTA. Adult entertainers are having their PayPal and Patreon accounts closed. Venezuela's economy has been totally destroyed by its government's interventions. Areas of China are being turned into an Orwellian dystopia: https://www.hrw.org/news/2018/02/26/china-big-data-fuels-cra...
Your claim that ways of circumventing centralized control of financial transactions is growing unnecessary is totally unfounded.
>>I suppose you could say I have an investment in government, which I call "being part of a modern, civilized community".
So to clarify, you're not part of any of the groups I mentioned earlier?
>>But there's no particular reason to think 80-90% of people will be excited about risking IRS penalties and jail time for tax evasion or money laundering.
Filesharing is used by millions of people, and it is illegal. There are many countries in which taxes are widely avoided, so we also know that happens. In some countries circumventing govermment control is a matter of survival.
Cash, by its very nature of being fungible and untrackable, makes anti money laundering laws almost useless, and cash is used the world over.
Your idea of a global surveillance state to enforce taxes on private transactions and to track criminals as the only way to coordinate the use of resources and prevent crime is not the only future open to mankind, and you yourself obviously don't believe it is or else you wouldn't put so much effort in trying to discourage the use of cryptocurrency.
We could go to a future where law enforcement needs a warrant to know the content of a transaction, and where taxes are levied on immovable property, instead of being tied to private economic activity, and a strong civil liberties and economic argument could be made that this would have total net utility.
And it's not just circumventing centralized control by governments. Private financial intermediaries track their users' financial activity extensively.
On top of all of this, simply having a mechanism to transfer value electronically through an immutable protocol provides utility in avoiding rent-seeking by large trusted third party intermediaries who've attained large network effects.
The idea that there is no conceivable utility in avoiding payment intermediaries that can censor/surveil you, except to commit crime, let alone crime that is socially harmful, is preposterous.
I agree some governments do bad things and would also like less of that. I just don't think Bitcoin solves any of those problems. China may indeed be turning into a digital surveillance state, but that makes digital currencies like Bitcoin ineffective given that they depend on a free and open internet.
I also agree that some countries are only haphazardly governed, with tax evasion as common. But I don't think there are many countries like that that a) don't have perfectly good ways already to evade taxes, b) have reliable electrical grids and internet grids, and c) have sufficient economic activity to make them trendsetters for the global economy. Is Bitcoin used beyond the level of anecdote in Venezuela? Possibly. Will that matter to the adoption of Bitcoin in most of the world? No.
I'm definitely not saying that there's no conceivable utility in cryptocurrencies. I'm saying that there's approximately no practical, demonstrated utility aside from some light financial and commercial crime. My main problem with the Bitcoin promoters is that the only thing they have is theoretical, imagined, conceptual utility. Selling the dream was fine 10 years ago. But at this point the reality is pretty clear.
China can't stop people in its borders from using cryptocurrency. Neither can Venezuela, where it is currently helping at least some people survive. Electronically transmittable information is just too hard to contain, even without an open internet.
With the greater utility that comes from a larger userbase and greater liquidity, and technological upgrades like better scalability, it's easy to imagine cryptocurrency helping a lot of people, who are currently repressed by major institutions like governments, protect and increase their wealth, leading to a free-er and more prosperous world.
>>My main problem with the Bitcoin promoters is that the only thing they have is theoretical, imagined, conceptual utility.
There are other, better cryptocurrencies than Bitcoin. But I do agree that much of the utility of cryptocurrency is imagined and theoretical.
>>Selling the dream was fine 10 years ago. But at this point the reality is pretty clear.
Cryptocurrency was a totally new paradigm when Bitcoin launched 9 years ago. It needs more time to be developed and tested before a verdict can be passed about the technology's inherent utility.
> Why replace the mail? The mail is fine. It's only when you look back on it, with modern eyes, that you see how great it was.
These statements may support your argument, but they have no basis in reality.
Meanwhile, existing systems like Betfair's betting exchange have been working for over a decade.
That's an outstanding analogy, one I had not considered before, but certainly XML is far less..err...includable is perhaps the word(?)... into a software project then a blockchain-based datastore and verification would be, right?
Let's just hope a XSLT-like companion to the blockchain is never developed...
Indeed, Jabber, an XML-based protocol, is seeing new life as a big IOT protocol. My cheap robot vacuum spends its day hanging out in a chatroom and communicating via XML, for example.
Seriously: Where is the actual value of crypto currencies?
I can see specific (limited) applications for the blockchain.
But you assert that people (who may have thought long and hard about the utility of crypto currencies) are lazy thinkers.
At the very minimum you could provide an argument instead of throwing around insults.
This is a great use case for the blockchain but you may have missed it if you only read Techcrunch articles about CryptoKitties.
How long do we have to wait to find a valid use case for blockchains? It's been 10 years now and we're still asking the same question.
Putting ethical concerns aside: these are very large market segments. Cryptocurrencies may be overvalued but there's definitely a real use case. It's just not a use case that governments, banks, or conventional VCs like.
I feel like all the claims to the effect that cryptocurrencies have no use case are ignoring the obvious.
And I think the hidden story of the "war against terrorism" has probably been a sustained effort to crack down on informal money transfers, and something like cryptocurrency is an inevitable response to the decline of traditional methods.
Here are some use cases that I think are potentially legit:
- Value transfer
- Prediction markets
- Asset trading/custody (not just cryptoassets, I mean, potentially real estate, equities, etc. can be tokenized)
- Venture capital that is more transparent and open (the ICO space is obviously not there yet, but I think it can move in that direction)(1) all of these can essentially require transparency + encryption (i.e. git + signatures), not the whole blockchain,
(2) hence can be had without the huge energy losses (that come from many nodes (re-)computing the same result over and over, and
(3) centralisation is a feature most people want, because it helps resolve conflicts (à la Vitalik's centralised resolution of the DAO conflict).
That's just empirically not true. You need to timestamp transactions in a BFT way for all those examples. No way around it.
> hence can be had without the huge energy losses (that come from many nodes (re-)computing the same result over and over, and
You can get this with Proof of Stake. But you do need a BFT timestamping mechanism.
> centralisation is a feature most people want, because it helps resolve conflicts (à la Vitalik's centralised resolution of the DAO conflict).
Citation needed. Centralization has upsides and downsides. It will take time to figure out how to do decentralization well.
No, for most things what you really need is a happens before relationship. Git does that better, since it supports multiple timelines (branches) that can be resolved (merged) cleanly if there are no conflicts (double spends).
What about when there are, though?
How long do we have to wait to find how to do decentralization well? It's been 10 years now and we're still asking the same question.
I guess you could have a 3rd party that has to verify everything ( government ) but then you are basically back to just doing it with a paper deed at the courthouse.
Right now, getting into the 'trusted financial institution' list is extremely difficult. It's a slow, incremental process that takes decades of good behavior and careful stewardship. Part of the reason it's so difficult and so heavily regulated is because of how much trust we place in these institutions. If we did not have to trust them so much, it would be easier to become one. It would have less need for regulation. Incumbents would be weaker, and the industry as a whole would therefore be healthier. This is sort of an abstract point, but I think it's the truest sense in which blockchain may change the world: by commoditizing trust.
a really neat case for this would be lost items. if each cellphone had its IMEI and your keypair associated you could prove you owned something lost. or if found someone could look you up to return it. you could buy a game or software once and never have to worry about a serial key.
https://hackernoon.com/ten-years-in-nobody-has-come-up-with-...
SISTER: Any interest in learning blockchain development? I'm getting into that world and will need someone reliable. Plus, I'll be able to expose you to projects and get you consulting gigs. I know you have your new job and all it's demands. Timing prob isn't good but figured I'd check in anyway.
ME: No thanks. I know the blockchain technologically is a thing but every application of it I've read about (e.g cryptocurrencies) looks like a scam perpetrated by people who think the problem with society is being social, misunderstand the history and purpose of the Federal Reserve system, and/or believe the idle rich deserve to be richer. I understand there's a lot of stupid money washing around in those circles. Just make sure you're playing with somebody else's money.
SISTER: I have no interest in the ICO crypto currency application. I'm more into the smart contracts. Id like to apply it to healthcare (help end the opioid crisis). Or the credit reporting agencies...get rid of them and allow individuals to control access to and use of that information. So many applications that are just beginning to scratch the surface. My MBA thesis project is using blockchain to help end the opioid epidemic through better diagnosis of individuals more prone to addiction or just getting it to sell on the streets.
ME: I've seen some discussions of using blockchains for things like certifications or logistics. They've all seemed kinda hand-wavey to me. Like yes there may be some minor efficiencies to be gained by moving to a new tracking/trust system. But the real issues will still be the humans at the ends of the transactions. I'm not sure how the blockchain fixes that. But maybe you can persuade me. Fortunately, the technology itself is over my head. I've seen some python tutorials I could probably dig up for you. But I don't have time myself to try to pick it up.
SISTER: The ledger platform we are currently planning to use (hyperledger by IBM) has some free training but apparently you need a basic understanding so I'm sure it will be way over my head.
ME: I hate to be cynical (j/k I love it) but I'm sure that's the point. IBM would love to convince the next generation of MBAs they need Hype(r)ledger™ and its attendant battalion of IBM consultants to reimplement a table or two that someone in the org already has working like a charm in a simple spreadsheet.
SISTER: Well duh...they're for profit public businesses. I would be worried if that wasn't their reason. That doesn't mean that the applications hosted on their platform aren't practical or solve a problem that prior technology couldn't. 90 people die every day from opioid overdoses ... what if your technology could reduce that number to even 80? Profits are secondary. Check out blockmedx.com when you have a second.
So there you have it I guess: blockmedx.com
So patients are encouraged to sell their prescription records to "interested parties" in exchange for chits they can use to buy prescription drugs. Sounds altruistic to me!
What's a cancer patient going to do when they lose their crypto-opioid wallet password?
Where is blockchain 'useful' for any common practice?
Honest question: for what?
I've yet to hear a use case where blockchains are actually solving a problem, other than "buy things on the black market".
Seems with all the rampant fraud that it's the developers that aren't thinking very hard.
For about 1/20 of the applications they are suggested for, best I can tell.
The first electronic computers were purpose built to crack wartime codes [1][2]. The problem preceded the technology.
Colossus was a computer, although it's very unlike anything today because it isn't a stored programme computer. So it's more like one of those LCD watch games from the 1980s, it could do something else than what it's doing now, but only by literally taking it to pieces and rewiring it.
But your main point is spot on. In the mid 1940s several machines including Colossus are built mostly by military groups and these fulfill different criteria for bring a "computer" as we'd understand it. But by 1950 companies are already selling these new "computers" for commercial use. The US Federal Government bought several in 1951.
Just because it's a technology doesn't guarantee it will be as successful as other technologies.
Exactly. The early internet was full of promises of taking over retail. None of that worked, at first. Instead the internet was useful for messaging and putting up personal websites. All the responsible people at the time kept whining -- how is it going to make money??
Well, people kept working on it. For years. Business cycles came and went. Eventually the promise worked out.
What? This is nonsense alternate history.
The early Internet had active, useful messaging long before anyone thought it would be useful for "retail". The arrival of commercial spam on Usenet was a shock to everyone. And personal websites came before the dot-com craze.
Timeframe? The early Internet was pretty non-commercial and the commercial services were generally proprietary and/or run by telecoms (Minitel, Prestel). There were a lot of failures in the 99/00 boom, but Amazon was founded in 1994.
> how is it going to make money
Ironically the question was more "how am I going to give you my credit card safely, given that cryptography is a technology subject to US export control".
Online shopping was not a "promise" on which the Internet and its predecessors were built, it was merely one of an uncountable amount of use cases on top of an already useful thing.
In the early days, there were always way more users that wanted to get on the Internet at more times than possible. The scale of the Internet was never capped by interest or potential applications, but by available funding and technology. To me, that sounds like the opposite of cryptocurrency.
$6.00 an hour, outside of business hours, for 300 baud access to CompuServe.
Don't forget The Source as well...man did I ring up some outrageous bills back then ugh.
Depends on when "early days of internet" is defined? The internet could be seen as an evolution of ARPAnet https://en.wikipedia.org/wiki/ARPANET which was defined in the mid-1960s and took years to deploy and probably decades to evolve to the usefulness you describe.
ETH network is moving to a Proof-of-Stake consensus algorithm which will reduce it's electricity impact: https://github.com/ethereum/wiki/wiki/Proof-of-Stake-FAQs
And meanwhile, there are other blockchains, like Qtum, that are already Proof-of-Stake and run Ethereum VM and create blocks on Raspberry Pis, for minimal energy consumption: https://github.com/qtumproject/qtum/wiki/Installing-Qtum-on-...
Blockchains have been around for 10 years now and every year they cause bigger problems without actually solving any.
Being able to transfer value between two parties without having to trust anyone has value. We can argue about how much value, but it's non-zero.
There is a lot of trust involved in a cryptocurrency transfer. You have to trust your technical competence to securely mount your wallet. You have to trust the wallet you're sending money to is the wallet it's supposed to go to. You have to trust the person you're sending money todo what you're paying them to. You have to trust the network to maintain the value and convertibility of the currency you're sending and receiving. Et cetera, et cetera
In practice, nobody wants to do these things. So we see centralization at exchanges. Precisely in the way people not wanting to handle cash use banks.
That's clearly not the point. The transfer itself does not require trust. That's the value.
Cash transfers and barters are trustless. Wires are trustless (in being reasonably irrevocable) in a manner similar to cryptocurrencies (i.e. if we ignore the plumbing). Cryptocurrencies solve for trust in the most reliable part of the trust chain while exacerbating every other element of transaction risk.
Yes, but they require physical presence.
> Wires are trustless (in being reasonably irrevocable) in a manner similar to cryptocurrencies (i.e. if we ignore the plumbing).
Irrevocability is not the same as trustlessness. Your transaction is still being intermediated by an entity that can choose to appropriate your funds otherwise.
> Cryptocurrencies solve for trust in the most reliable part of the trust chain while exacerbating every other element of transaction risk.
I think I agree with this statement literally. The question is what price are we paying for that reliability? And does blockchain offer an alternative tradeoff that we might like better?
The frequency of each of coins being stolen from wallets, being lost by exchanges or pilfered by ICO frauds is far, far higher than anything happening at proper banks. Blockchains are a neat technology which should have never been marketed as a currency.
What does that have to do with what we're talking about?
I think at that point it becomes fair to ask: what is the likelihood that I am going to lose money unexpectedly to my credit union, or my recipient to her bank? And then by comparison, what is the likelihood that I or my recipient are going to lose money to coin theft, exchange failures, fluctuation in valuation, or other things inherent to dealing with blockchain transfers?
Rightly or wrongly, I think many people would rate potential losses higher with blockchain solutions than with USD wire transfers. I know I would.
You're totally right. But let me flip the question around a little bit. What would our financial system look like if we didn't have to place so much trust in our intermediaries?
It's not that banks aren't trustworthy. They are. They're extremely good stewards of the public trust, for the most part. But the fact that we place so much trust in them has systemic effects that are stifling to innovation. And I think that's what blockchains may allow us to overcome.
I think risk is associated with stores of value. "I rob banks because that's where the money is." So we move the stores of value from banks to blockchain exchanges and hot wallets, and the risk moves accordingly. Now, instead of the risk being borne by organizations with decades or centuries of experience mitigating it, backed by the Fed, it's borne by people who barely understand the wallet software they downloaded, and Magic: The Gathering card traders who aren't as smart as they thought they were, and people who are absolutely definitely sure that smart contra--oops, let's just "fix" that.
So what you describe as centralized stores of trust stifling innovation can also be described as centralized stores of risk mitigating loss. And I think that's pretty much what we've seen so far.
Large banks have a lot of money to buy influence; that's the source of their systemic risk.
But you can do wire transfers at small banks and credit unions.
Generally speaking, if my things get stolen, "it was stolen by X and not Y" is not a value-adding rebuttal. It is actually counterproductive if X (e.g., a cryptocurrency thief) is harder to gain recourse against than Y (e.g. an FDIC-insured bank).
That's certainly true. But the issues around people losing their coins and having their keys stolen can be solved by better UX and application security. Essentially crypto transmutes the problem domain, from a people problem to an application design problem. It's still a problem. It still needs to be solved, but the domain-transfer allows it to be solved cheaply at scale in a way that the human one can't be.
In other words, i'm making the claim that the issues you cited are not essential properties of blockchains, merely transient properties of their present implementations and UX. If you want to make the case that they are in fact central, i'd be happy to listen to that though.
The fact that nobody understands how human institutions work is an advantage, because it prevents malicious actors from subverting them. Whenever someone figures out how institutions work, they destroy them and civilizations fall, so they evolve to be incomprehensible. So "transmuting the problem domain" seems like a bad move to me.
End financial services users repeatedly choose convenience and risk guarantees over self-management. This isn't something which can be papered over with a saucy UI, particularly when the tangible benefit is difficult to describe. ("Decentralization" isn't a benefit, it's an attribute.)
Totally agree. In a hypothetical crypto dominated world, most people would still use centralized services to store their money. But they'd have the ability to opt out if and when they choose.
The problem with this vision is those people using centralized services see no benefit. They are better off sticking with the status quo.
Cryptocurrencies make sense for people who wish, for philosophically reasons, to control their own money. That vision doesn't require a "crypto dominated world." It does, however, require shrinking the vision from "re-imaginging the financial system" to "solving a need for a small group of devoted people." That's okay, and if that's how crypto were marketed it would (a) be more honest but (b) come with a lower value.
1) cheaper financial services 2) broader financial services 3) real-time financial services 4) access to financial services regardless of location (or nation) 5) decentralized applications fully integrated with financial services
The average Joe doesn't need to control their own private keys in order to gain these benefits.
But think of it this way. What would be more difficult, for an organization or company, today?
A) start your own bank B) start your own key management service
A) make an application that accepts payments as low as $0.01 B) make an application that accepts payments as low as .001 ETH
A) create a new protocol layer on top of the banking system B) create a new protocol layer on top of Ethereum
---
Today, we rely on perhaps at most a few dozen companies (PayPal, Stripe, VISA, MC, etc) to build interfaces with our banking system.
There is no "app store" for banking system financial services. It's hard, hard work to build anything on top of that archaic system.
Blockchain makes currency an internet-native construct. Which has profound implications that we are just beginning to see the very earliest examples of.
Existing solutions also evolve and has become cheaper, faster and more accessible. Sure there are exceptions like political dissidents but that's relatively small group. If you would like to solve this issues on large scales like Venezuela than solutions would be mostly political rather than technical.
If a million people want to deal with each other without any trusted party to intermediate, then they have to keep a million ledgers and agree on a protocol for reconciliation. Once you've conceded over a million-fold factor of inefficiency, being cheaper doesn't seem plausibly within reach. I don't see the details as mattering much; it's the big picture that doesn't make sense.
Narrowly, yes, that's true. But I think there's a broader context to consider than that. Our current financial system is architected around these financial centers of gravity. Blockchains represent an alternative to that structure. Yes, there will still be intermediary institutions, but they will not have the same fundamental centrality that the current ones do. I think this is an important change, and one that is likely to lead to other changes that will be more directly appreciated by consumers and the broader economy than the philosophical self-sovereign money issues.
Unless it's an Mt.Gox situation.
Personally I trust those entities much more than some shlocky fly-by-night crypto exchange.
To each his own, I guess.
You aren't trusting an exchange when you send a transaction on the blockchain.
This is true, but exchanges have become the de facto on/off ramp for cryptos. If I want to acquire bitcoin without mining, how am I going to do it other than buying from a centralized entity?
Edit: As I post this I remembered that Paradex, a decentralized exchange for ERC20 tokens built on 0x, was recently acquired by Coinbase[1], the largest centralized crypto exchange, who in turn might soon be acquired by Facebook[2]
1. https://www.reuters.com/article/crypto-currencies-coinbase/c... 2. https://www.independent.co.uk/life-style/gadgets-and-tech/ne...
Sure, that's true. But once you own them, they're yours to do with as you please. You can also buy them from someone peer to peer if you really want to onramp in a 'decentralized' way.
Now we're back to no advantage over cash or bartering.
This makes it seem like you can onramp via an exchange and still maintain all the benefits of decentralization. If I don't onramp in a decentralized way then there will also be a centralized entity with tremendous power.
They have a strong business interest in not doing so. Because the identity of the entity is known, and thus subject to reputation loss.
Why do I care about limiting the options to blockchain?
Don't you need to trust nodes that they'll pass down and/or include process your transaction, and that they'll do so in a timely fashion? Which seems just like trusting that, say, your bank or the Mastercard servers will process your transaction properly? Not to mention the more mundane aspects like the fact that you still need to trust that your ISP won't cut off your access to the network, etc...
To me the value seems to be that nobody can forge a transaction based on your currency (or whatever it is you have), not the idea that you somehow don't need to trust anyone when you do transfer value.
Yes, but their incentives are structured to align with yours in that scenario. You are trusting them to act in their own interest.
Hence we circle back to exactly what I said in the last line of my comment: https://news.ycombinator.com/item?id=17493508
> To me the value seems to be that nobody can forge a transaction based on your currency (or whatever it is you have), not the idea that you somehow don't need to trust anyone when you do transfer value.
What I meant is that the capability that "nobody can forge a transaction" and "don't need to trust anyone" are actually the same thing. You are forced to trust your bank because your bank could forge a transaction on your behalf. You trust them not to do this. That is the nature of your trust in them. Blockchain eliminates this weakness, and it is in that sense that you do not have to trust a 3rd party.
If this is really what you're saying, then you've completely changed your argument 180 degrees to match that of me and the above commenter (which is cool!), because earlier you said the exact opposite. Specifically, when the above commenter said "you have to trust the network to maintain the value", you rebutted that that "is clearly not the point. The transfer itself does not require trust. That is the value." Now that you've concluded that the actually is trustless storage rather than in trustless transfer, yes, I think we are in agreement!
Notwithstanding the above, by the way, it simply isn't true that "I am forced to trust my bank because they could forge a transaction on my behalf". It's actually the opposite... I don't trust my bank for precisely that reason. Rather, as I stated above, the reason I nevertheless end up ultimately trusting my bank is that I trust the government will have my back if the bank decides to screw me over illegally. Again: it has nothing to do with the bank's capabilities or lack thereof, and everything to do with the legal system.
> I don't trust my bank for precisely that reason
Yes you do, unless you don't have a bank account. The fact that you presumably have a bank account with a non-zero balance is evidence that you trust them not to steal your money.
Good point. Although I would draw a different conclusion. Your point assumes this new technology is for direct human consumption. For me decentralisation, smart contracts and "the internet of money", along with AI, will allow autonomous agents operate and interact without human intervention. That will be transformative.
The value of a currency is based on nothing more than trust. It’s because people trust a (crypto)currency that it has a value; trust is the very thing that makes a dollar bill having more value than a random piece of paper.
Yes, email was used for business purposes in the 80s...but it took a long, long time for the internet to reach mass adoption and maturity. Decades.
Meanwhile, Ethereum was launched in 2015. Unless you think the tech has hit an evolutionary dead end...that it's not going to go any further, I think it's incredibly ignorant to criticize this nascent technology based on where it's at today.
Sure, Ethereum will definitely have more things built on it, and attract new users and in all likelihood become more user friendly. But if you can write or evaluate bulletproof code, resolve oracle problems and trust the token's value to remain stable you can automate some transactions without third parties isn't a proposition as obviously universally appealing once bandwidth and adoption is there as anyone can be given access to anything that can be shared on a computer anywhere, any time.
"Usenet gained 50 member sites in its first year, including Reed College, University of Oklahoma, and Bell Labs,[5] and the number of people using the network increased dramatically; "
"UUCP networks spread quickly due to the lower costs involved, and the ability to use existing leased lines, X.25 links or even ARPANET connections. By 1983, thousands of people participated from more than 500 hosts, mostly universities and Bell Labs sites but also a growing number of Unix-related companies; the number of hosts nearly doubled to 940 in 1984. More than 100 newsgroups existed, more than 20 devoted to Unix and other computer-related topics, and at least a third to recreation"
Sites participating in Usenet were using UUCP, which also allowed email.
It's worth noting that at its peak when CryptoKitties transactions hogged the Ethereum network and made it barely useable, CryptoKitties had only 14k users.
If I would build a system that gets DoS'd with 14k users I would get fired faster than the latest startup burns through VC money.
I was thinking about combining CryptoKitties and Second Life type breedable animals to make collectable ponies you could go play with and show off in virtual reality.
But no.
Because the example you said about the internet (from loading webpage to video streaming) does sound amazing. What's the "parallel" for crypto that you see?
What if you were able to do micropayments efficiently on the web?
What if many contractual agreements between parties were settled on blockchain, and monies held in escrow disbursed automatically based on pre-programmed rules?
Business payments are delayed not because there is an underlying fault in the payment systems (wire transfers are nearly instantaneous, at least within the country), but because businesses sit on payments.
A new technology isn't going to solve this problem. Businesses like to hold onto invoices as long as they can get away with it.
And centralized solutions will always be faster.
Meanwhile, the banking system itself is not centralized. It's quite slow to settle monetary transfers from bank-to-bank.
Right now, Lightning Network is live on BTC's chain. It's instant, near free, and yet it's decentralized.
Most crypto-things have this idea that they servers validating transactions have to be compensated and that anyone can do this validation. (validation == mining)
Having a few well regulated entities do all the mining is a centralized system that can be verified externally. Without all the cost of decentralization. And with the added security that validators are trusted entities.
This sums it up better than I could. The wrenching of power away from centralized authorities and organizations (which we have seen abuse us and our privacy mercilessly for their gain) to decentralized applications with no middlemen, that are free of censorship, and can not be "stopped."
In your example of the early internet (too slow to load webpage, to streaming video), you described a direct benefit you experienced personally (you needed to access a piece of content and it got that to you fast)
But when you use crypto, you said it's revolutionary because it "wrenches power from centralized authorities". That is not a direct benefit you experienced personally. That description is a high-level concept.
So, it's hard for me to see the parallel.
How is there still this much FAD in cryptocurrencies considering their terrible scaling technology and economic solutions?
So without a bank, who's going to loan you money? Because unless you're donating pennies from hundreds of thousands of people, it's going to be an entity with a fair amount of $CURRENCY, so basically a bank.
I don't think the ICO's are being compared to the Internet itself, but to the many early attempts at building webapps on it that ultimately collapsed in the dot com crash. That's what most ICOs are.
How is running an ICO not useful to people? Get lot of money with only doing a lousy whitepaper, drive ferrari and live luxury life rest of your life. No joking, many people can't imagine anything better.
It's weird because people compare it to the early days of the Internet... but the early Internet was useful from its beginning: you could at least send messages and files across the network, which was incredibly useful to academia and the military and was orders of magnitude more efficient than any alternative.
Now, all we see is rampant fraud and a complete disregard for the environment [0] with no gain in efficiency. It's high time we hold "crypto-anarchists" accountable for these issues.
[0] The Ethereum network consumes more electricity than Iceland https://digiconomist.net/ethereum-energy-consumption