"This has to be on the blockchain. But! don't look behind the curtain to everything else in our company that relies (and thrives) on a single point of trust.
BTC is only good as a deflationary pseudo-commodity, like gold. And like gold a good holding amount is probably below 10%, I'd say below 5% of the portfolio.
Cryptokitties can manipulate their contract, so in that case it is true a central authority is in control. Even though Bitcoin has been around 10 years there is still a lot of development and people are still figuring out how to approach this type of thing. The obvious answer is to start with a central contract and have a mechanism to slowly decentralize or remove ownership. It’s going to take time to get it right but it will happen (and even cryptokitties can upgrade their contract to include this logic).
I disagree, they have plenty of pinch points which allow de facto control.
The small group of core developers control the laws of the currency and directly tied to that its value. They can perform hard forks and change all the rules. The users have very little influence there.
Exchanges control which currencies are popular, along with huge amounts of the money in circulation, and change things like deposit/withdraw rules arbitrarily.
The miners can attack the currency to rewrite history (has been done), refuse to use new rules, or switch to a new currency.
Many of the fundamental tenets of bitcoin as it started out (that most users will mine, that most users will take care of their own wallets) have been proven too optimistic when in widespread use. People just don't want decentralised things given the massive tradeoffs and the rewards of centralisation for companies are too great.
I think blockchains like bitcoin are a very interesting experiment, and currencies will escape state control as nation states continue to wither away, but none of the current currencies is fit to take that role, nor was the pivot of startups to 'blockchains for...x' a good idea - it's a solution in search of a problem in most cases. We are unfortunately more likely to see a corporate currency or one from a superstate take that role than a decentralised one.
Anyone running a node can indeed decide what software they run. That’s exactly my point. There’s no such thing as “they” performing hard forks. Developers make decisions, sometimes they disagree and fork. Miners make decisions on which fork they want to run. Users are free to run a node.
Generalizing “blockchains for x” doesn’t do much good. Sure there are terrible blockchain projects as there are terrible app ideas, but there are quite a few good projects out there. I’m a fan of Keep.network for example.
> Miners make decisions on which fork they want to run.
Miners are surprisingly consolidated, so this mostly determines which version "wins". And the economic value of which fork wins is determined by the markets. If you keep running the "wrong" version of a fork you find out that it's worthless and only the coins on the "right" one retain value.
(I know this is a high standard for any new technology; I'm not saying I expect it on the front page of their website.)
Like no CTO ever got fired for choosing IBM - No digital transformation manager ever got hired without at least mentioning blockchain.
(Edited to add: Note this isn't a bad thing per-say. Ive seen blockchain used as ammo to do push something through thats actually useful, regardless of whether it was the most apt tech choice or not.)
DeFi is the most concentrated aspect of blockchain at the moment. Assets going into DeFi are up and to the right: https://defipulse.com/
Don't we have 24/7 trading without the block chain? And low fees?
It appears all the many of these benefits you mention are for those just transacting in a crypto currency, and not for the other 99% of finance transacting in other currencies (and physical goods).
Can you elaborate on this? Physically settled futures are important to producers and consumers of commodities. I can imagine that replacing these with a cash settled contract might increase spot volatility.
I think a lot of exotic derivative contracts will be innovated in the crypto exchange networks, and those that become popular will eventually applied to traditional commodities and equities once the bureaucracy comes up with regulations in 5 to 10 years.
Take, for example, property titles on the blockchain. Sounds promising. But property rights are ultimately enforced by governments (namely, the government that projects control over the area on which the property sits) through their legal systems.
In this case, for the majority of reasonable threat models, blockchains add complexity without adding value. Say that your wallet is holding a title token. I hack your computer and use your private key to transfer the token to my wallet. According to the blockchain, I am now the rightful of the property. However, it's very unlikely that your government would recognize me as the owner. The government wouldn't let me move all my stuff over and start living there just because the property token is in my wallet. The blockchain state and de facto/de jure state have diverged.
Similarly, say the government becomes tyrannical and begins seizing property. The property token in your wallet will, once again, not save you. You will be jailed. The "code is law" of blockchains becomes redundant to the "law is law" of governments.
In 50 years there won’t be a single Fortune 500 company that isn’t built on DLT.
If you read a book about the impact that double entry accounting had on the world then I think it's easier to imagine all the ways that triple entry accounting (DLT) will transform the economy.
I think understanding DLT as a 10x less labor-intensive version of double entry accounting is key to understanding its ability to enable new and qualitatively different types of business relationships.