Let's use your beef example. The beef might come from a farm. It's certified organic. It gets shipped off to a distributor. The distributor sells it to a store. You go to a store and buy it.
In the current system, if the store is a bad actor (e.g. selling beef it claims is organic, when it's actually not) then you don't really have a way of knowing.
However, if the beef was tracked on the blockchain and transferred to you on the blockchain at the point of purchase, then you are no longer relying on just the store telling you it's organic. The claim is verified by chain of custody on the blockchain. So now multiple parties (the farm, distributor, and store) would have to cooperate to dupe you. You can still get defrauded by the store if they completely swap the beef. But, they would STILL have to purchase legitimate beef and transfer it on the blockchain to you. It would be harder to get away with it vs. just changing the label.
That's just one example of where it can minimize trust. But once more assets are tracked on the blockchain, you can start to do REALLY COOL things with them.
For example, imagine using real estate to get decentralized collateral backed loans on MakerDAO.
I can go on and on about this stuff...but it's really cool and we're just getting our feet wet with the technology.
Tracking external assets requires trust, period. And that being the case, what advantage does blockchain bring to the solution?
It surprises me how much anger and claims of authority people that don't like blockchain show. Just be modest and open to potential uses of a technology. Are you a coder? Have you ever used Javascript? If yes then it's creator is a big proponent of blockchains. Take a moment to think about this. Numerous other examples too.
Having movements logged in a federated database has all the same properties.
Blockchain is crazy expensive to run. Why would anyone pay for that when there's dirt cheap alternatives that are every bit as effective at solving the problem?
That said, even then - when would it be cheaper just to bribe the voters?
Hypothetical example:
- The Citizen (on blockchain): EvilCorp is dumping toxic waste on my property! They are making millions of dollars from my ruin! I stake all of my available money -- $20,000 -- on this statement.
- EvilCorp (on blockchain): No we are not. We stake 1% of our discretionary PR budget -- $200,000 -- on this statement.
- PR firm (on blockchain): We stake $200,000 to support EvilCorp. They are our biggest customer, and we can handle the (unlikely) money loss if this means good relationship.
- Other citizens of the town: yeah, that sludge looks really nasty.. but EvilCorp has a ton of money. That guy has almost nothing, I do not think he is going to win. If we support him, we will likely lose our stake. So it makes financial sense to side with EvilCorp.
- Blockchain decides EvilCorp is correct. The Citizen now has backyard full of toxic sludge and broke.
- EvilCorp and PR firm both get even more money.
However, in my example, this is not the case at all. A PR firm or EvilCorp does not care about success of cryptocurrency, they just want to make sure that "The Citizen" will fail. For example, your link talks about "penalizing both sides hard" like it is unavoidable -- but this is exactly what EvilCorp would want.
I don't think I have seen analysis of the prediction markets which assumes actors who are willing to lose money to get the desired results.
if you need to know the final consensus (or lack thereof) about that verification, regardless of how consensus is determined, it's not a deal-breaker. multi-party signatures, basically, which is what ethereum is designed to do.
(for context tho: broadly I agree, blockchains make zero sense in very nearly all potential scenarios)
Consider, for example, the problem of restaurant reviews. We know that one person's review of a restaurant isn't going to be 100% accurate, because it's subjective. Socially, we've figured out ways of getting around that, like soliciting reviews from many different people, looking for reviews from people with tastes like ours, looking at the specific details they post, etc. They're also not generally incentivized to lie, because they've already eaten there and their review isn't likely to influence their service in the future.
All this falls apart if, say, the platform responsible for collecting these reviews has a business model where they are incentivized to bury negative reviews and manipulate scores upwards, but only for restaurants that have given them money. It'd be a much more trustworthy system if the reviewers could receive currency directly for the information they provide, provided by the potential customers who benefit directly from that information. Alas, basically nothing on the web works that way.
If only current blockchain implementations had acceptable performance to handle terabytes of data on mobile phones...
"reviewers could receive currency directly for the information they provide, provided by the potential customers who benefit directly"
The greatest benefit goes to restaurants with positive reviews, which are thereby incentivized to game the system.
Blockchain might have solved the problem of trustless consensus with proof-of-work, but you are now introducing a new situation in which any number of fake, anonymous contributors can distort the review system. If the review reader pays the review writer directly, upvoting their own phony reviews doesn't cost the corrupt restaurant anything.
I'm not so naive as to think that all problems are magically fixed by blockchain, but given the number of posts on HN and elsewhere who complain about the power of big tech companies and assume they're tampering with or misrepresenting data for their own profit, it seems like people consider this problem to be important.
The trustless consensus idea is inherently abstract and paranoid, for better or worse. But life in human society requires constant acts of concrete trust and mutual consideration.
The cypherpunks who invented the blockchain don't seem to have explored the idea taken to its "logical" conclusion of ripping out all trusted entities and (somehow) replacing them with exchange of anonymous cryptographic tokens. The blatant truth is that doing away with trust altogether would paralyse every aspect of civilization.
What, specifically, does a review system gain with The BlockChain?
And who pays for it? Blockchain’s aren’t cheap!
Game theory. Without DLT you make more money by doing these things. With DLT it just becomes the cream skimming problem, where you're just paying money to shuffle assets around but you're actually losing money because the total value of all the assets is still the same.
E.g. if you replace Wagyu beef with flank steak, A) you can only do that once rather than infinite times, like you can currently, because each asset still needs to have been originated somewhere B) you now have to either sell Wagyu beef as flank steak or else sell it into an unregulated market as a potential lemon, where you'll take a huge price hit anyway.
So it certainly doesn't eliminate all fraud, but it eliminates the vast majority of fraud by A) ensuring you can only commit fraud at most once per genuine item produced B) vastly reducing the profitability of any fraud you do commit.
Keep in mind that once DLT is common place, what's a status symbol isn't going to be the watch itself or whatever, but rather it's going to be having your purchase of the watch recorded in the DLT. This means that even if you do defeat all the tamper proof mechanisms or whatever, the original item is going to be basically worthless.
Whether it's going to eliminate 99% of fraud or only 97.5% of fraud or whatever in each industry is difficult to say, but regardless of the exact number it's going to be high enough that everything not on the DLT is going to be both considered a potential lemon and also carry substantial legal risk, and as such will priced accordingly.
I mean that alone is a several trillion dollar a year improvement that will continue on indefinitely, and that's only one of the many applications for blockchain.
Consider that roughly 75% of American adults of working age are either unemployed or underemployed, and in most countries it's vastly worse than that. The reason most of them are unemployed or underemployed isn't (for the most part) that they're unable or unwilling to work or that they don't have valuable skills, but rather that double entry accounting doesn't enable a broad enough spectrum of economic relationships to capture the long tail of human talent.
When I say this is going to be a multi-quadrillion dollar technology I'm not kidding around. 99% of the stuff you own today wouldn't have been possible without the invention of double entry accounting, which vastly expanded the types of economic relationships that were possible and thereby vastly expanded the types of goods and services that could be produced. DLT isn't a replacement for your MySQL instance, it's a replacement for double entry accounting, and a 10x improvement at that. When people look back 500 years from now they're going to see that the vast majority of the (then) modern world wouldn't have been possible without it.
It's going to largely replace the middle class in the same way that automation has largely replaced the working class, because if you go down the Bureau of Labor Statistics list of jobs it's pretty clear that most middle class American jobs are basically just fulfilling glorified accounting functions.
Even just considering supply chain, as the profitability of creating counterfeit items decreases that doesn't just reduce the percentage of things you buy that are counterfeit, but it also makes it possible to make entirely new classes of (genuine) products that wouldn't have been economically viable previously.
Dynamic link tracking? Database Local Transformation?
And let’s be honest here, I’m gonna assume it is a clever buzzword designed to sell the failed blockchain technology to a new set of rubes, right?
And from the naked eye it definitely doesn't look like "most" middle class jobs are accounting - I see teachers, engineers, architects, healthcare, legal workers, protective services ..
https://www.bls.gov/emp/tables/emp-by-detailed-occupation.ht...
So my skepticism about your assessment of our labor situation and needs bleeds over to your enthusiasm about DLT.
It may cut fraud costs, but there are other ways to do that. Blockchain replicates computing costs relative to centralized data stores, so implementations have non-zero scaling costs.
Which is about as relevant as the cost of tea in china.
Or, to steal another analogy, counting on database efficiency as the competitive advantage for your business is like picking up nickels in front of a steamroller. Especially since DLT efficiency will eventually be figured out. Even if it takes another five or ten years or even twenty years, that's nothing in the grand scheme of things.
Lol. The BlockChain is inefficient by design! It is that exact inefficiency that makes it trustless.
Git is basically a distributed ledger without the proof of work inefficiency.
There is no way to reliably (key word here: reliably) take non-cryptographically provable information and achieve consensus on it in a decentralized manner.
It will of course be less scalable than the blockchain itself as a generalization.
and there are trackers for supply chain already run on centralized databases that can be tampered.
It looks pretty similar to blockchain, but it has lots of advantages for supply chain tracking: much better scaleability, no energy waste, no need for full chain, ability to only care about specific subset of entries, and so on.
There are a number of current CT servers, and they are generally free -- they are so cheap that a large company can run one as a public service. For supply chain, have a few competing companies and govt's of US, Russia and EU run it, and you would have very tamper-proof system.
A distributed database ("ledger") might make sense in the context of supply chains.
The competing technology is to have a central clearinghouse for the relevant data. Or to just not track the data at all.
One way would be to have each "verified" transaction to be associated with an individual or entity who is providing the "verification", with legally enforceable dire penalties for "submitting" a transaction that is later found to be fraudulent.
So, if a transaction is found to be fraudulent, it can be traced back down to the first transaction in which a fraudulent transaction was submitted as "verified".
For example supply line tracking blockchains. "Look this piece of beef was at place X on time Y with temperature Z, I have a hash and everything". Yes but how do I know that you didn't swap the barcodes or you didn't fiddle with the GPS or the thermometer was working or a million other things ?
Blockchain only makes sense if the asset is internal (i.e it gets created in it) because that makes it publicly auditable and you don't have to trust anyone. Cryptocurrency is the perfect use case and the reason they were invented.