I guess servers are terrible computers too because you can’t carry them in your pocket?
Or phones are terrible computers because they can only stay powered for a day or two?
Blockchain is horribly inefficient in almost every regard. But thats the trade off.
It only looks better than the alternatives if you live in a place where the economy is heavily mismanaged. If you're currency is only better than the absolute worst economies in the world don't expect all the people in better economies to look favorably on it. Except perhaps as a way to further exploit those in terrible economies by speculating in that currency and driving high volatility in it's value.
> Actually Bitcoin keeps moving the goalposts.
Okay.
So much for the trustless auditable log. Btw "auditable log" is easy (eg certificate transparency), the hard part is deciding what goes in it.
Having said that you always trust something, you better do it consciously and run some real consensus algorithm like raft or stellar consensus protocol.
The tradeoff GP is referring to is efficiency for security. If you have a distributed, "trustless" network you unfortunately have to trade your efficiency for more security.
It's also completely contrived. Being digital means infinitely replicable, or thereabouts. Do we really need this game of artificial scarcity?
People used to talk about things like property records, but if this realm of artificial scarcity is going to interface with the realm of actual scarcity in the real world, it's still going to need the systems of adjudication that already exist in the real world.
Code is law. But law is not code, otherwise legal disputes would have long since been settled and we wouldn't need systems of courts and various legal avenues to surface new areas of contention and revisit old areas in new light.
If the above wasn't an issue. How do you get past the resource hogginess? These things are currently handling a minuscule portion, if that, of what their proponents propose they take on, and they are already comically massive resource hogs. How can they scale?
Oh please! Remember the Ethereum fork? It's mob rule at best.
If code was law then the founders of Ethereum would be broke having lost their fortunes to the genius that exploited a bug in their code.
Regarding your second point: Look into newer projects like Solana, Polkadot or Cardano which are already live and have much better scalability.
Cross border maybe, but then what court would you go to?
> Look into newer projects like Solana, Polkadot or Cardano
Are these newer projects more or less built with the same vision? What is their reason for being?
Censorship resistance would be nice, so would laws against private censorship in certain areas. Distributed mechanisms of censorship resistance would be more trustworthy and transparent. But people find information in centralized locations, be it a library, or Twitter, etc.
Is there legit headway towards combining beneficial aspects of distribution with the efficacy of centralized platforms? What are the mechanisms that keep it running and the incentives involved?
What does this mean?
When I say code is law, I mean “law” in the physics sense. We can code, print “hello world”, and know exactly what the code will do. We can write code up to some threshold of complexity and know exactly what it will do in all cases. Like how given certain information about a physical system we can calculate trajectories or whatnot up to some threshold of complexity.
I was making the point that civil law is a different kind of law from this physics sense of the word.
With more clarity, code is physics law, but civil law is not physics law, i.e. civil law cannot be fully ported to computer code.
Maybe I'm wrong and all civil law could be translated to computer code. Might that make for a better world? Even if possible, there's so much inertia in the system with lawyers and judges wanting to keep their job which is another human complexity that would have to be worked through.
But smart contracts would change the way contracts are written, as they're often intentionally ambiguous for a variety of reasons. There's also the problem of "oracles", but we already have a profession for translating real-world events into legal ones (notaries).
And people were willing to pay hundreds of dollars for plush toys with the appropriate tags preserved in plastic. Bubbles are a thing, and the crowd can be wrong. To pretend otherwise is silly.
More fundamentally, the original promise of Bitcoin was that it would act like a currency. It has failed at this. You can tell because all of the advocates have shifted over from “money of the future” to “it’s a store of value”; a subtle admission that it’s not actually functioning like a currency.
Technology evolves over time. Just because its not perfect at the first go, doesn’t mean it should go in the trash.
The converse is also true; just because it’s an improvement over past failures doesn’t mean that it’ll actually work.
My issue with crypto has always been fundamental; I don’t think crypto fans really have a good grasp on what motivates the average person, because most crypto fans[0] are ideologues, and like many ideologues they struggle to recognize that not everyone shares their values. Decentralized and trust-less speaks to engineers, but your average person has no idea what that means and doesn’t really care either. Plus a lot of the consequences of crypto currency design are absolute anti-features from a consumer perspective; nobody wants to find out that losing their password means that they’re broke, or that they can’t reverse a fraudulent charge. Your average consumer wants those features, and is willing to give up decentralization, something they didn’t value, to get it.
0 - At least those fans of crypto that want to see it used as currency. As compared to those crypto fans that want to do whatever it takes to make the number go up.
Yes. He also is a Twitter shitposter who got in trouble with the SEC for promising to take Tesla private at $420 a share, a number he picked because it was funny, and was also involved in the GME nonsense a few weeks back.
If you’re pointing to men like him as serious figures pushing for bitcoin’s adoption, then it’s time to stop and rethink a lot of things.
> yet Bitcoin acceptance keeps growing say by day, how do you explain that?
Bitcoin speculation grows day by day. People want to get rich (in USD I’ll point out) with it. Actual usage of Bitcoin as a currency is not growing.
As always, gimme a call when I can buy a latte and groceries with it. I’ve seen literally one place with a “we take Bitcoin” sticker, and the receptionist had absolutely no idea why it was there or what it meant.
> Is everyone else wrong?
Why couldn’t they be?
Same problem as when you're in let's say Uzbekistan and only have Rubles, an exchange has to happen in order to spend your Rubles in local currency.
Not going to try and disuade your from your position but bitcoin is not going anywhere and might as well accept it.
It's supposed to be money, not a religion. I don't need to accept bitcoin into my heart, or something strange like that.
That's all I'm implying with accepting. You'll get bitcoin when it makes sense for you. Nobody is forcing you to do anything, but like I said bitcoin is here and your lack of acceptance doesn't hinder it.
It’s individual trades that depend on the price because they have finite endpoints. However, assets are owner independent and therefore based on their long term value proposition.
The fundamental part of a blockchain is that each block signs the previous block, making it very difficult to rewrite history. And it is exactly what git does.
We could implement a cryptocurrency on a git repository. Just commit and push 'I am X, here is the proof, send Y gitcoins to Z' whenever you want to do that.
The only thing git is lacking compared to say, bitcoin, is a builtin way to select the "origin" repository. In most git-based projects, there is a global consensus on a central location. In bitcoin, it is automatically selected based on who wasted to most computing power on a pointless cryptography problem.
Blockchain is a funding key word.
There, fixed that for you.
Blockchains offer an alternative system (outside of government run systems) to keep track of ownership. Now, in my opinion there's little to gain of replacing those existing systems - they are working just fine. But for a new asset class (notably digital assets) blockchains will work very well.
Again, the important change is the change in social consensus. If you told someone 5 years ago that you hold a certain token on the Ethereum blockchain nobody would have cared. If you today ran a registry of tokens on your github repository nobody would care. But if you hold a token today on the Ethereum blockchain then people are willing to pay for it.
you mean, the 1979-model Merkle tree? I concur that in a lot of marketed "blockchains", the closest to a useful bit is the 1979-model Merkle tree.
A blockchain is a linked list where each element of the list contains the hash of the previous element. It's basically a degenerate Merkle tree. That is all that it is. It isn't a metaphor. It isn't throwing off the shackles of an overreaching government, nor is it a takeover of our society by militant right-wing conspiracy theorists.
It's a data structure.
You can't build a public database on a Merckle tree without being able to agree on what goes into it.
A blockchain is just a data structure. It isn't even a very interesting one.
In common parlance "blockchain" isn't well-defined: it just refers to something that's, like anarchy, dude, whoa....
> The first blockchain was conceptualized by a person (or group of people) known as Satoshi Nakamoto in 2008.
So "degenerate Merkle tree" is not enough, it also needs consensus mechanism, byzantine failure tolerance and so on.
Insisting on meaning of "blockchain" which is different than commonly accepted will just make all arguments more confusing.
Doubtful, because ownership only makes sense in a context of scarcity whereas digital assets are in infinite supply.
Edit: Arguing in good faith... you could suggest changing the protocol, sure, however you would need follow that particular blockchain's rules for gaining consensus about changing the rules first.
Your profit was actually made possible by others adopting these other tokens which is entirely external to Bitcoin's protocol or community's desires. And as we've seen with some Bitcoin spinoffs, forking does not guarantee profit.
There's plenty of things that are scarce but essentially worthless. There's no robust secondary market in Penn Central Railroad timetables, the little plastic caps that SNES cartridges came with, or copies of the May 18, 1986 edition of Arizona Republic.
Having a built in utility factor is a very strong way to answer the "is it worth having?" question. It provides a stickiness to the asset, rather than just being a pump-and-dump vehicle.
Gold says "I'm worth having! I can be made into jewelry and really good connectors for premium audio cables."
The paper dollar says "I'm worth having! I can keep the IRS from sending you to jail."
Hell, even MMORPG gold says "I'm worth having, because you can trade me for a Sparkly Unicorn Rainbow Dragon of Death mount."
Different cryptocurrencies are making a wide range of cases, ranging from "I can let you transfer value cheaply and quickly across borders" to "I can let you buy contraband goods without an obvious paper trail." And a lot of these claims are still to be proven or fully realized.
It's entirely possible we're barking up the wrong tree with blockchain. Maybe there's a killer app for it that's not currency, but the current trends seem to be predominantly about it. (It feels like a lot of the supply-chain-tracking and registry-of-ownership hype died down)
[citation needed]
Crypto ideologues are a strawman. Anyone working on the actual tech agrees that blockchains are useful if, and only if, you can't rely on a single party and need a decentralized, trustless append-only database. Otherwise, why bother with the extra complexity? That's the whole point of blockchains, after all.
Technology choices are complex set of trade-offs, even within the blockchain space.
There is a reason JP morgan is developing quorum
NoSQL was a nice buzzword to bunch up web caches and log processing tools for analytics, especially for the creepy-spying-ads corps.
The blockchain niches seem to be much, much smaller than what it's sold for. Once the dust settles (~5 years from now) it's likely that not much will be left behind an all this money spent on it will have been wasted.
Heck, NoSQL databases have wider applicability than blockchain and few people consider them a major technological revolution, let alone a social or economical one.
One observation that I recently saw:
> Bitcoin is such an environmental disaster it really is a crime against humanity. So what does Tesla do with their $1.5B in revenue last year from clean car credits sold to other automakers? Put it into “Destroy the Planet Inc”
* Nailed it *
I've long said the killer app for blockchain already exists: international money laundering and untraceable transfers.
This also happens to be the precise use case where folks want to "evade conventional and easier systems".
Then, Crypto at its worst is far better than international Wire Transfers, etc.
Let’s say I’m invoicing someone abroad for $100k USD.
Today they send me a wire transfer. It costs about 25 USD (fixed fee, but in this case 0.025% of the transaction, i.e. negligible) and normally completes the same day.
The payment is made in the currency of my invoice, so I’m guaranteed to receive the right amount. (Any currency exchange is the sender’s responsibility. But a lot of companies maintain accounts in various currencies, so they probably have USD at hand.)
How does crypto payment improve anything here? Exchanges just add extra steps. The extreme volatility of Bitcoin means that, by the time an exchange is processing my $100k withdrawal, it might be worth $90k. It’s not a useful currency if it goes up and down 10% in a day.
How does using one of these products let me access the money faster than a wire between the sender’s USD account and mine?
> unregulated
Depending on your perspective, this is either a feature or a bug. In my opinion, a big feature.
> you have to move the money to a real bank to use it
Well yes, that's one of the main hurdles right now caused mainly by lack of adoption. It's not a fundamental problem with the tech; in fact, it's the very kind of problem that would be solved by it going mainstream.
> How does using one of these products let me access the money faster than a wire between the sender’s USD account and mine?
This one is easy: 6 Bitcoin confirmations takes about an hour, and only a few minutes for Ethereum. Much, much faster than wire transfers.
I live in New York now, but previously I lived in Europe and UK. Bank transfers there are instant. If you want to send 20k EUR from Finland to Spain, it can be done immediately, 24/7, with minimal fees. Same in UK for GBP transactions.
So it’s perfectly possible to do this without a cryptocurrency. It takes some political will though. But then again, it also takes political will to prevent cryptocurrency exchanges from being shut down if they truly threatened central banks.
US wire transfers seem to depend entirely on goodwill of banks. I regularly send wires between Wells Fargo and Schwab, and they always complete in a few hours. Yes, it sucks that banks get away with bad service. But routing money through unregulated cryptobanks isn’t a long-term fix because the regulators will come for them.
https://news.bitcoin.com/central-bank-of-nigeria-orders-bank...
I guess if the use case is “I want to send $1M from Iran to an American who will distribute the money to Nigerian accounts”... Then yes, that is presumably easier to execute in crypto. But there are also pretty good reasons why countries want to keep an eye on that kind of flows.
Your story about it being easy and cheap to do via remittances or whatever is pure fiction. Any traditional mechanism is at least two of slow, expensive, and onerous.
What country has the banking infrastructure to support easy $50k-equivalent withdrawals from a local Bitcoin exchange, but not for receiving wires?
US Bank -> Wire -> IBKR -> Wire -> SG Bank (or whatever)
Usually this takes at least 5-9 business days end-to-end. (Wire delay, withdrawal hold, wire delay on the other end.)
A bitcoin transaction takes a few minutes, and if your counterparty doesn't want Bitcoin, there's probably an exchange with an entity in the destination country, so you only need to wait for the second wire delay.
Some banks charge up to 2% for currency conversion, but surely that’s better than the 10-15% lottery involved in Bitcoin? Unless you want to have a gambling aspect to your invoices.
My suspicion is that your mental model for comparing volatility and loss is incomplete, given that you didn’t mention anything about the size of the transfer compared to your wealth, or anything else about local risk-aversion/utility convexity.
That’s fine, but I don’t think it aligns with what most people want from their money transfers.
To me it is unclear what issue there is to solve unless your country has messed up banks.
This decision flow chart is Figure 6 of NISTIR 8202, "Blockchain Technology Overview":
* https://csrc.nist.gov/publications/detail/nistir/8202/final
See page 53 of the PDF ("42" at the bottom of page, 'physically').
If you need a handy guide to give to someone to explain blockchain (though not crypto currencies), it's hard to go wrong with send people this link.
For a more finance-y, the CFA Institute has a useful white paper:
* https://www.cfainstitute.org/en/research/foundation/2021/cry...
Blockchain on Bitcoin is meant to be inefficient. That's why there's a fair distributed race because it's a waste and no one has any head start or another motivation to mine to go ahead of the others.
You can come to think of something efficient and you should be able to start your blockchain and get funded well but criticizing is certainly the easy part.
Saito fixes it (https://saito.io/arcade). There is no 51% attack and no scalability trilemma. So you have a network that pays for itself and generates a quantifiable cost-of-attack in all situations.
This doesn't answer your final question -- what the use cases are for a public network that cannot exclude users -- but isn't claiming there is no difference between that and permissioned networks the same as saying that Linux will never catch on because it is competing with Windows?
Openness is the bazaar.
Yes you could get permission.. but it would take time. What if you want to do some random thing over a weekend? You’re not going to want to ask permission
Asking permission also opens the giver up to an implicit risk. Not just in a legal sense, but if you need to ask a mid level manager for permission they have nothing to gain and everything to lose
Putting everything out there on a permissionless chain with a rock solid set of predefined rules, it’s the hacker dream
Also, the idea that Visa is going to help the Blockchain finally scale is ... well, let’s just say that you’re not supposed to enthusiastically endorse what the detractors have been saying for years.
Cool. Why is this a thing tons of people want?
> A person can have access to the same financial products that banks have access to, because they cost a fraction of a price to run then they normally do on CEX and instead of waiting for 3 days for a transaction to complete, it completes in 5 minutes.
Which financial products? How many people want those things?
For BTC to disrupt the financial industry I'd expect there to be a huge number of people who want its features over the alternative. But where are they? Where are the billions of people who want to manage the storage of their own wealth or trade derivatives daily?
But you could have just sold the ETH in the first place...? If it truly is a "currency" then why are you taking a currency loan on your currency? That's like putting up $150 of collateral to get a $100 loan, it makes no sense.
Unless it's not a currency, in which case this is just a margin loan - I think my speculative asset is going to go up in price, so I will take out a loan against it instead of selling it. Which has only two use cases: I need the dollars and I'm avoiding paying capital gains, OR I want this margin loan to speculate on more cryptocurrency!
That's a pretty small use case compared to like, "loans" in general. Plus if/when the ETH/USD price crashes, all of these loans will get liquidated and push the price down further. I fully expect a "portfolio insurance"-Black Monday type crash if ETH ever falls by more than 30%.
If stablecoins, custodial or noncustodial gain widespread adoption, DeFi will remain as a niche for hardcore crypto fans.
Why? It seems the exact opposite to be — if stablecoins gain widespread adoption, there will be a lot more exposure to DeFi because you have stablecoins already and can directly partake in DeFi.
Right now the biggest hurdle is fiat -> crypto conversions and back, stablecoin or not. If you already have stablecoin because it’s widely used, then that won’t be a problem anymore.
Unless stablecoins, custodial or noncustodial, gain widespread adoption, DeFi will remain as a niche for hardcore crypto fans.*
Like reverting transactions? Handling of disputes? Fraud detection?
> Essentially blockchain makes financial products faster, cheaper and more accessible.
You literally mentioned bad UX just a few sentences ago? How that makes it more accessible than existing systems?
Cheaper? What's the transaction cost at any given moment in time?
Faster? Credit card transactions are instant these days, have no fluctuating costs, and carry an added benefit of, you know, customer and seller protections.
This is the number one model for valuation of Bitcoin-like cryptocurrencies. Say you live in Venezuela and dealing with custodial intermediaries in your local fiat currency is completely untenable. You can’t store money in gold or other precious metals. You can’t keep it in a bank account. You can’t transfer it (with fees) in a foreign exchange market.
All these things require dependency on the local fiat currency (plus more for custodial fees if dealing with anything like gold or stocks or bonds), not even factoring in issues of the fiat currency’s own extreme volatility and transaction fees. Banks being trusted central parties or Visa being able to process 40k transactions per second sure won’t mean shit to you at that point.
But with Bitcoin you can drive across the border and actually buy milk or medicine, no fiat currency involved. You’ll happily see the volatility and slow transaction process / high fees as a worthwhile overhead cost for independent purchasing power outside of your local fiat currency.
Now, of course this is a rare and small use case by volume and by market cap in comparison to normal functioning fiat currencies. At any given time only a small amount of the world demand for financial transactions would fall in some destabilized government zone where independence from local fiat currency is materially important and having a preemptive stock of cryptocurrency holdings really matters. And somewhat lesser there will be some small market for people with extreme risk aversion preferences or “prepper” outlook (eg, “What if the US dollar collapses?” - most of us don’t care to hedge that extreme tail risk, but some people do care).
The total demand for currency holdings like this will obviously be much lower than any total market cap of a major fiat currency.
But it may still be higher than the total market cap of cryptocurrency today - that completely depends on your personal take on forecasting and speculating.
In other words, there are several straightforward and uncontroversial reasons why buying and holding cryptocurrency rationally makes sense. You could happen to be wrong about the speculative future demand for this type of transaction capability. You could be wrong in the magnitude of the forecast. But being wrong doesn’t make it irrational hype or conceptually broken from first principles, as you foolishly assert. There are many very uncontroversial, directly obvious and rational reasons to speculatively buy and hold crypto, depending on your personal appraisal of that market and future demand for that transaction capability.
Don’t stablecoins solve the volatility problem, and NANO solves the slowness/transaction speed aspect? Granted, these features can’t be combined just yet. But they are available separately
I still don't understand why the government of Venezuela is so bad that it's literally leaving their people without the necessary means to buy milk, where "government has been able to partially block internet access to citizens by using a system that allows them to restrict selected content that may threaten their power over the country" but allows people to use untraced bitcoins...
Governments are deeply incapable of stopping even just basic crimes and fraud. If they can’t stop overtly criminal acts often committed with no technology to assist in obfuscation, why would anyone believe they can (a) detect network traffic somehow related to Bitcoin and (b) trace it back to an individual and (c) prove that individual has broken some law? Let alone to do this to perfectly law-abiding citizens conducting perfectly legal purchase of Bitcoin.
Your point is very bizarre to me. Are you suggesting a government so incapable of managing fiscal activities that it descends into hyperinflation crisis is somehow magically super competent at extremely bespoke and difficult internet traffic surveillance of legal cryptocurrency transactions they have no reason to need to invest in expensive capabilities to monitor in the first place?
they can block VPN traffic
> Governments are deeply incapable of stopping even just basic crimes and fraud
that's just silly
in my countries there are 270 homicides every year on a population of 60 million people
do you think it's luck?
> detect network traffic somehow related to Bitcoin
because it's stupid easy
> prove that individual has broken some law?
do you really believe that in places like Iran or North Korea they really need to prove individuals broke some law?
> Are you suggesting a government so incapable of managing fiscal activities that it descends into hyperinflation crisis is somehow magically super competent
if they are so incompetent, why are they in charge then?
if they are so incompetent, how did they manage to censor any media channel, including the internet?
remember that "poor" countries aren't really poor, regimes keep the population in poverty but they still handle a ton of money.
With a blockchain-based standard, you could make vendor buy-in permanent and enforceable. The only way that one of the big players could win in this new normal is if the products on their proprietary standard are better (in merit) than the entire marketplace that implements the blockchain standard.
I think the trick to lasting open standards is to provide only a MVP ecosystem at launch. No one vendor is strong enough to close the platform behind them. Again, like the IBM PC, their product both needed and spawned a galaxy of add-on and compatible products, providing enough of a force to protect the open standard.
Same protection against vendor death/depreciation/etc, and on top of that your data is more secure, the system survives internet outages, and you don't have to mess with the immense complexity blockchain adds.
Remote access, if you even need it, can be done through a thousand other methods (direct IP address, tunneling proxy, VPN, etc etc).
The only good use cases that come to mind is if there is some particular reason for you to evade the conventional and easier systems of communication and storage. The lesson is: you should evaluate technology on its merits, not its politics. Three classic sources on the blockchain question immediately come to mind:
http://doyouneedablockchain.com/
https://imgur.com/a/RlUj9Ed
My personal favorite:
https://twitter.com/vgcerf/status/1019987651301081089