Some blockchains allow smart contracts. Smart contracts sound like a nice idea, but when you think about potential use cases, you quickly realise they actually have no utility. Any application for a smart contract requires information from outside the blockchain which must be supplied by a trusted authority. This being the case, why bother with blockchain at all?
For instance you might have a company that's looking to reforest an area and you can have a smart contract that takes donations and sends them to the company if some image recognition software scans satellite images and sees the area being reforested(lots of technical complications there).
Or you might have a company that's looking to reduce some poverty indicators in a given city and the smart contract is controlled by statistics published by the local city(though it's not clear government statistics are released frequently enough for this to work, at least they are reasonably trustworthy in developed nations).
Now, why do these types of contracts need to live on the blockchain? Ehhhh. But there's certainly a case to be made for smart contracts, in general as more and more real world information is digitally published in real time.
I agree that there may be uses for that kind of automation, but probably you’re going to want human oversight and ability to intervene, and blockchain actually hinders that.
> Both the pro- and anti- proponents are moving sideways throwing the same memes back and forth at each other.
Oh the irony.
Btw it's funny how you have written this back to back without flinching.
There will be more, but the design process is hard. The reason Ledger was cracked first is because ledgers are pretty simple.
Saying blockchain is “just a ledger” is like saying the web is “just a bunch of nerds uploading documents about their hobbies”. That’s where it started but after many years we learned to solve other problems with the same ideas.
Face it. Blockchain is going nowhere. It was stillborn the day it was created. It's had 10 years and nothing about it has fundamentally changed (as many bitcoin advocates love to point out as if it was a positive thing).
Normal people who say "yeah, blockchain might have a use" are just being polite. They don't want to state the obvious. Beyond its current use case as a magnet for scams, fraud, pump & dumps and get rich quick schemes there is no use for the blockchain at all.
The usecase is censorship resistant financial transactions.
It is working right now, for people in Venezuela, for example. It is working for people who are attempting to make financial transactions, across the world, quickly and cheaply.
Tell me a better way to make censorship resistant financial transactions, over the internet, if you think this is useless.
A ledger is all it is, not an "app".
Many games can be implemented as a blockchain
Evidence:
Ledgers have been implemented as a blockchain
There you go. Now the burden is on you to provide evidence that it’s impossible for any game other than a ledger to be implemented as a blockchain.
I'm sorry to be snarky but if this level of reasoning is representative of the cryptocurrency community then there's a reason it's failing.
That’s pretty mean. I tried to engage your criticism in good faith, and you’re treating me like I’m too dumb to even talk to.
Feels bad.
Should we have a discussion on what the internet is and what blockchain is? I mean, you define a blockchain by its ledger component while I believe that's only a small part of it...
The way I value currencies, the size of the network and the number of projects built on top of it is what matters and in that view Ethereum and Bitcoin are definitely worth much more that their current fx price.
If Bitcoin’s are worth 1 cent each then cash flows in USD can also turn into large Bitcoin cash flows. But, Bitcoin cash flows could not turn into large USD cash flows.
Further, if Bitcoin’s value is dropping at say 15% per year then loaning them out at 10% per year is losing money vs converting them to USD, and doing nothing.
The core problem is Bitcoins are not a productive asset. They can't produce any cash flows.
Suppose you sell it in six months or sixty years. Then, you can compare USD to USD and say it was a good or bad investment. Alternatively, you could say you wished you had waited a year to buy the stock.
This is important for bitcoin as you have people that buy in and have yet to sell and can’t yet say if they made a good or bad investment for them. However, with dividend stocks you can hit the point where dividends are greater than total investments thus even if nobody ever sells becase it fails the company was still a positive net investment across all investors even if some lost money.
Long story short it’s possible for companies to a net positive investment, it is not possible for Bitcoin to be. If it’s value hits 0$ then you look at all the investments and people spent X buying it, payed Y keeping the network running, and made X - Y selling it which must be less than X.
TLDR: Individials can make money in the lottery, from perymid schemes, or from Bitcoin, but on net they are all poor investments.
Your last statement is interesting because you use the term "money" yet I'm not sure you have questioned the nature of the "money" you are making with your investments. If you imagine yourself in a glass bead economy, and you replace all of your notions of money with glass beads. You are making your investments with glass beads and making net positive glass bead investments from dividends. This is all fine in your glass bead economy. However, the day that the Venetians come with technology to make glass beads, they will subtly buy up all of your wealth because you chose a poor for of money - that you were making so much of with your investments.
https://en.wikipedia.org/wiki/Trade_beads
Alternatively, Bitcoin could be the trade beads (despite the fact they are disinflationary), but the point is the same about the assumptions being confined to the context of a single economy and currency.
That’s the Bitcoin model. If you want to use Bitcoins as your money then it’s even more obvious. If I sell 10 bitcoins to somone they get 9.99999 of them and miners get that .00001 or whatever bitcoin. Wait 1000 years an they are still our that .00001 or whatever coin.
Miners also got coins from the original 2.1 Million but rather than pay people they payed overhead spending electricity and depreciation on hardware. That money is simply gone never to be recovered. Sure, they can sell coins to other people, but that money is new investments.
PS: Bitcoin as a useful service is fine, people lose money to Visa every day but trade that money for other forms of utility.
It’s talk of Bitcoin as an investment that is more troubling. You can make money buying gold or whatever at the right time, but it’s a hedge not an investment. Holding gold has real costs and their is no dividend just the next buyer.
I don’t think it has failed as a medium of exchange though. I used it yesterday as one. That said, it hasn’t filled as niches there, specifically the major ones.
ICOs were created precisely because these projects aren't supposed to generate profit.
I take HN user's reaction to Web3 to be within expectations for any revolutionary technology. If von Neuman criticised FORTRAN for being too high-level and not needed for serious computer science and IBM failed at capturing the web, Warren Buffet didn't invest in Microsoft, Apple or Google, then this to me suggests that the bigger the paradigm shift, the more those who created or benefit from the status quo will fight it. It's my belief that the web as we know it was developed without security or privacy in consideration and that this is the ultimate reason why we have the current "surveillance economy" and the cyber risks affecting people, businesses and nation states and that the Web3 will offer a cryptography-first alternative within the next two years.
We could go through my comment history and you'll see that for the most part I try to share my knowledge and experience in a positive way and never assume others are irrational, but a few interactions were generally negative. I do get a gut reaction to comments that insinuate my line of work benefits criminals, for instance, and lashed out once or twice at terrible articles or blogs that were shared here and were taken as authoritative when in fact they were complete nonsense for anyone _working_ in the space. I regret those but won't delete them. This is my work and I sustain a family with it so yes I am biased but not uninformed or incapable of learning new facts.
More broadly, I'm familiar with how trends work and some aspects of the blockchain community can be off putting and the technology itself is often misrepresented as simply a "distributed ledger" but I'm also confident that anyone who cares enough to try and join a developer focused meetup (Ethereum!) or event will see the side that I try my best to represent.
Ten years and you still have no accepted standard for valuation. Hmmm.... what does that tell you about the entire space?
Beanie Babies are collectibles, cryptocurrencies are money. Both have had bubbles but only one of them is tied to a brand name and there have been plenty of great new collectibles that have taken its place since.
Cryptocurrencies on the other hand are a new solution to a new problem (digital native representation of value) and even if the current offer isn't perfect their development hasn't stoped or even slowed down in any considerable way and there's no reason to believe we won't continue to grow and make better products and solutions. Money isn't going away anytime soon.
It's been established over and over again that cryptocurrencies are not money. They are a collectible like Beanie Babies. Cryptocurrencies vary too much in value to be used as money. Would you go into a Starbucks and spend $4 USD dollars to buy a coffee, if there was a chance that the $4 might gain 10,000% in value over the next year? Of course not.
There have been dozens of good articles over the last two years comparing money to cryptocurrencies and detailing all of the differences. If you still don't understand the differences, at the end of 2018, then you are keeping yourself willfully misinformed, and I suspect no comment on Hacker News will be able to change your mind.
Sorry but that's not true. You may be confusing "money" with "currency" though.
There's at least one US state that allows paying taxes in cryptocurrencies and there are a few countries here in Europe where cryptos are legal tender.
Legal tender must be accepted to extinguish a debt, by any party.
Just because bitcoin is not illegal doesn't make it legal tender. It may be used if all parties agree.
I understand the first link you gave says that Germany accepts Bitcoin as legal tender, but that is from a misunderstanding of what legal tender is. German vendors are within their rights to refuse it and insist upon real legal tender.
For those reading along, a useful baseline to get you straight on legal tender is in countries where fiat currencies are just broadly assumed to be valuable any legal tender laws are basically just ornamentation. Scotland, for example, doesn't have any bank notes as legal tender, just some old coins. Nobody in Scotland doubts that the notes they have are valuable, but its laws don't bother explicitly privileging this as "legal tender". Nevertheless if you get on a bus in Edinburgh with a goose and some shiny rocks and try to barter, well, you'll be lucky if the other passengers let you back off in one piece, let alone to get an actual ride. "Exact cash fare only".
Yes I have linked to it.
edit: In German: https://www.scribd.com/document/372651554/2018-02-27-Umsatzs...
The European Commission says [1]:
"Within the euro area, only the euro has the status of legal tender."
"Yet...contractual parties are free to use...virtual currency schemes (e.g. Bitcoin). Although these are not official currencies and have no legal tender status, parties can agree to use them".
Germany has not made Bitcoin legal tender. Don't fool yourself.
[1] https://ec.europa.eu/info/business-economy-euro/euro-area/eu...
The link I provided is jurisprudence in Germany but it doesn't impact the whole of the EU. Malta might soon join though.
If there are "a few countries here in Europe where cryptos are legal tender" then this is a big deal and you need to provide a reference.
Otherwise you just come across badly. Terms are important.
The German source says that for some purposes it is "treated equally to legal tender" and that "exchanging virtual currencies to legal tender and back is tax free". Neither statement makes sense if it were legal tender.
Its status for some purposes is similar to that of other non-Euro currencies (e.g. contracts between private parties agreeing on it etc), none of which are legal tender in Germany.
Bitcoin and other cryptocurrencies are treated equally to legal tender in Germany.
I’m sceptical that you spent 20 years in fintech without learning the definition of legal tender.
If you go to a restaurant, eat your meal (thereby accumulating a debt) and slap legal tender on the table, the restaurant must accept it. They may also accept other things, like Visa credit cards or Ethereum. But they aren’t obligated to. The former is legal tender. The latter is a way to pay. Obligations around settling debt are the sole defining characteristic of legal tender, so it doesn’t make any sense to say one thing is “treated equally” to legal tender if it lacks this core characteristic.
If you travel abroad you may have to exchange your currency to pay for a meal, because your coin is not treated equality to legal tender locally, and the defining characteristic is that it settles the debt at the time of exchange. I believe that's a function that cryptocurrencies fulfil by design and if the court states they are to be treated equally to legal tender that seems to prove my point.
I'll bite. "Digital native representation of value" isn't a problem, it's a solution. Cryptocurrencies are a medium of facilitating that solution. No one would think to themselves, "I have a problem: I need a digital-first store of value or currency, now how can I do this?"
Instead they might think to themselves, "I have a problem: I need to do <thing>; this can probably be accomplished if I use a digital-first store of value." I don't see why you would care about how your money or asset is being represented unless you have another problem that forces you think about it.
With that out of the way, this leads me to my actual point - what is an actual problem you see being solved by a "digital native representation of value"? For example, a common one I see a lot is distrust of governments due to control or censorship.
How about HTTP 402?
https://en.wikipedia.org/wiki/List_of_HTTP_status_codes#4xx_...
Randomly posting a quote and a link is not discussion, nor is it an argument.
I posted a link that people who are familiar with the development of the internet and HTTP will remember that there was a big problem back then.. we didn't have a digital native representation of value and all digital data structures can easily be copied so the fear of double-spends is what caused Digicash, Bitgold and a few other earlier digital currencies fail.
In modern times, credit cards and the like provide an adequate solution the problem (there's definitely strong dislike over things like fees, though). Early digital currencies failed because they weren't trustworthy as third parties, or they failed to gain a wide enough userbase to keep fees low. But it's not like they all failed--PayPal is with us today. Bitcoin and other cryptocurrencies suffer as a payment method in that they don't solve the customer's problem, particularly in cases like ransomware where there is strong reason to doubt the seller's ability to deliver.
Except blockchain based currency can't solve the "402 problem" as you call it. They are far to expensive and would never scale to the transaction volume required.
And if you are going to say "oh yeah well Lightning Network will save us!". Lightning Network is the biggest pile of vaporware I've ever heard of. It's been "just around the corner" to save bitcoin for almost as long as bitcoin has been a thing. ...I do love the solution to scaling the blockchain is to not use it--a real ringing endorsement of Satoshi's Glorious Block Chain if I ever heard one!
The solution may be new but the problem is not at all new. The first solution to that problem was proposed in the 1980s and there is a large body of academic work on cryptographic approaches that preceded Bitcoin.
"Company X looks exactly like Amazon when they only sold books."
"Company Y is like an early Google, but with a larger addressable market."
If you want us to believe crypto will be like the internet, support that belief with real evidence. But don't uses these cheap FOMO tricks to manipulate people into buying in. Tell us why "many of the blockchain native companies that survive this crash likely have the same growth."
What has the crypto industry actually done other than replicate some basic currency transfers through a highly inefficient and unintuitive trade of virtual points? It's a great research concept but it had no purpose in its creation, and finding some utility to bolt on top has so far proven to be futile in practicality and feasibility.
It was useful but it was not understood to be useful by a large majority of people.
The crypto industry has developed novel crowdsourcing (ICOs, DAICOs, etc), fungible and non-fungible tokens, transparent voting mechanisms, token curated registries, oracles, prediction markets, state-channels, distributed time service, Zero Knowledge cryptography, leaderless consensus in distributed systems, fraud proofs, algorithmic stablecoins and a lot more.
We're also discussing whether it is actually useful or not, not whether it is widely understood to be (which depends on it being useful first). So the question remains, what utility do cryptocurrencies provide so far?
I have a feeling there will be a steady demand for this in the future, but I'm not sure how the bitcoin <-> fiat exchanges are going to avoid government attention.
With this blockchain startups, where's the equivalent? They never made any revenue. They never had a real market. What money they did make was predicated entirely on the continued solvency of the existing coin markets.
Cryptocurrencies don't compare.
You got to be kidding me. Even today Amazon sells by undercutting profit margins from competitors!
They chose to operate at a loss because they couldn't generate enough business to do anything different. Their shareholders wouldn't have allowed for it otherwise.
Now name a single crypto currency start-up that is making able to even cover their own operating expenses, let alone invest their cash flow into growth.
Fun how that works.
I will keep on working, crash or not, because I like what I do.
The bear market has been brutal and some very good teams were caught off guard because they lack to experience and know-how to balance a treasury or keep a startup alive. Many of us here are also equally unqualified to succeed though.
In the aftermath of the 99 crash, Amazon shares were trading for a few dollars and so were many other companies that today are huge monopolies. I believe that many of the blockchain native companies that survive this crash likely have the same growth.