A global, government agnostic money like bitcoin that no group of insiders and early adopters have unassailable control over, seems like the only likely candidate for something that needs a truly decentralized and trustless blockchain.
The rest is hype.
Except for bitcoin's current "monetary" uses, like money laundering and tax evasion.
Better for the planet.
But what do I know? I'm just a dumb ape.
Or is the "designed for hyper consumption" a reference to inflation in fiat currencies? Sorry, perhaps I've confused myself.
Our inflationary currencies that are in vogue in the modern era are explicitly designed to psychologically encourage people to go out and consume more than they actually need to, because their money is terrible at preserving it's value long term.
Inflationary currencies might be great at keeping the economy red hot, but I'm of the opinion that they're terrible for the long term sustainability of our planet.
Money is just an exchange token.
It has no control over what it is used for.
How about the current status quo of the Internet? Do you think being mined, sold, and endlessly tracked is OK?
[0]: https://thenextweb.com/news/ethereum-nodes-cloud-services-am....
Blockchains solve the wrong problem for a lot of the proposed applications I've seen, like handwaving about "supply chain". The biggest difficulty is not that you don't trust the database, it's that you don't trust the connection between the electronic data and reality. How do you trust a person to have packed the correct grade of meat into the box you are buying? If they've dutifully recorded something on the blockchain and you can verify that nobody has tampered with that record, it still does not help you.
And if you have regulation to ensure supply chain steps comply, then you trust the regulators, then you can have a central database.
Crypto coins are unique in that you can verify them mathematically. They have no connection to anything else out in the real world so they don't have that problem.
So aside from coins, where else is it that you would not trust a central database, but you can verify/trust the entries being added to that database?
I would not trust a central database for any application, even those where I have to trust the verifiers of the entries to that database.
E.g. I would prefer stablecoins over credit in a bank.
With a decentralized database, immutability and permissionlessness are the default, until the trusted third party actively intervenes to strip you of these privileges.
With a centralized database, access is by default denied, and requires active intervention from the trusted third party, in the form of a grant of permission, to acquire.
But when you make that blockchain private, trustful, and permissioned (only designated nodes can add blocks) you are taking away the very properties that make the blockchain immutable. And it has to be done because that is what enterprises would want. So an enterprise blockchain like Corda/Hyperledger is no different than a central database. And no serious business least of all banks would do their business on a public truly distributed open blockchain.
I don't see how that's reasonable. What am I missing, surely virtually nobody would be willing to spend the massive resources of a blockchain for that kind of risk model.
> E.g. I would prefer stablecoins over credit in a bank.
So aside from coins, what's another concrete example?
> With a decentralized database, immutability and permissionlessness are the default, until the trusted third party actively intervenes to strip you of these privileges.
> With a centralized database, access is by default denied, and requires active intervention from the trusted third party, in the form of a grant of permission, to acquire.
This sounds very much like the buzzword snake oil I've heard many times before, but I'm willing to be open minded about your non-coin example.
What you wrote earlier is:
>>Crypto coins are unique in that you can verify them mathematically. They have no connection to anything else out in the real world so they don't have that problem.
Stablecoins cannot be verified entirely mathematically, as they have a connection to real world bank notes, so my example doesn't fit your exception.
>>This sounds very much like the buzzword snake oil I've heard many times before, but I'm willing to be open minded about your non-coin example.
I'll use the coin example, because it's easy to demonstrate the principle.
I can move my stablecoins, without having to ask a third party custodian for permission. With bank credit, I need to ask the bank for permission to withdraw it, or transfer it.
A stable coin where you trust whoever is providing the backing for that asset is no different from a crypto currency in that way, the trust model still requires that you trust someone to honor the coin or value it in some way.
So it's a bad example. The interesting part about it that you can move coins between people who don't trust one another without a 3rd party is entirely due to the remotely verifiable nature of the thing, like any other coin. That is the one and only interesting thing about it, and that's common to all these kind of coins.
I'm asking for something else.
I don't follow. With a cryptocurrency you don't have to trust any one. The cryptocurrency can't be redeemed for anything, and thus there's no one to trust for honoring the claim upon redemption.
>>The interesting part about it that you can move coins between people who don't trust one another without a 3rd party is entirely due to the remotely verifiable nature of the thing, like any other coin.
Yes true. And that applies to any digital property on the blockchain.
The challenge for digital property that is a claim on a real world asset is being able trust a third party to honor the claim upon redemption of the digital property. Some parties have solved that for claims on national currency, and thus we have a few stablecoins.
Whether this model can extend to real estate, automobiles, commodities and other assets/goods remains to be seen.
Of course you do if the currency has been backed by some other asset. You can't just declare that your crypto currency is a "stablecoin" and therefore it is backed by US dollars. There has to be something actually backing it. And that's what you have to trust.
And if it's not a stable coin then you have to trust that you will be able to sell it or exchange it. If your government bans banks or merchants trading in crypto then you might have a problem.
But I specifically didn't want to talk about crypto currency because as I keep repeating, that is the one place where block chains can make sense (even though you still have the edge problem).
> Yes true. And that applies to any digital property on the blockchain.
No, no it doesn't. Not sure what you're having trouble understanding, but it specifically only applies to property that you can verify remotely without trust. I.e., coins.
> The challenge for digital property that is a claim on a real world asset is being able trust a third party to honor the claim upon redemption of the digital property. Some parties have solved that for claims on national currency, and thus we have a few stablecoins.
It's not solved. You still have the trust problem. If you have to trust the entity backing your stable coins then you don't need distributed trust.
> Whether this model can extend to real estate, automobiles, commodities and other assets/goods remains to be seen.
No they all have the same problem.
You're misunderstanding me. By cryptocurrency, I am referring to a natively digital asset, with nothing from the real world, e.g. US dollars, backing it. ETH would be an example of a cryptocurrency.
I am distinguishing cryptocurrencies from stablecoins, which do have something from the real world backing them.
That's why I wrote:
"The cryptocurrency can't be redeemed for anything, and thus there's no one to trust for honoring the claim upon redemption."
With stablecoins, you need to trust a third party - the issuer of the stablecoin - to provide USD in the event that the stablecoin is redeemed.
With a cryptocurrency, there is no third party you need to trust to honor any pledges.
Yes, governments can ban a cryptocurrency, but that is NOT a case of a trusted third party violating its commitment to you, as in the case of a stablecoin issuer in default, so it's an entirely different category of dependence on trust in a third party.
There are centralized CAs, domain/ip registrars, ISPs…shit even the libraries that comprise your entire computing stack all come from centralized databases!
Your comment is stored on a database.
USDC/Tether have private databases and their collateral is held by third parties in again their own database.
Every time there's a bull market in cryptocurrency, the charlatans jump out of the woodwork. They build a bunch of websites and scam a lot of naive people. When the market reverses, these project disappear one after another, usually with people's money, sometimes because they don't actually solve a problem. Almost every one of these NFT grift projects are going to disappear over the next year or two.
Of course, he's saying all that after pumping and dumping his personal centralized crypto crap MobileCoin into Signal.
The parent article's point is that most currently popular technologies found an application rather quickly, whereas blockchain technologies have been around for a long time (in tech terms) and still have not made ground.
> How long do we need to wait before someone comes up with an actual application of blockchain technologies that isn’t a transparent attempt to retroactively justify a technology that is inefficient in every sense of the word?
Probably the fact that, despite having been under development for > 10 years, we haven't seen any ground broken by any blockchain technologies for any reasons other than speculation or triviality. Which is what the other 95% of the article focuses on. The inefficiency of the development process, not necessarily the technology, although yes, the latter is a factor.
Remember that blockchain technologies have become legal tender, have over a trillion in market cap, have become financial instruments traded by people around the globe, is taught at Universities and part of the CFA accounting exam, is in the news daily, has resulted in large investments in research, etc…
It’s impact has hardly been non-trivial. Just the impact on finance is substantial even if people seem to gloss over a new financial asset as “just finance stuff”.
It's a Ponzi scheme. There's no inherent underlying value, its "market cap" is strictly a function of more dumb money flowing into the system. Occam's razor, this is the most likely explanation for everything in the crypto space; the model makes sense and explains a lot more than "a new financial asset" hokum.
No one understands what it will be (and people involved in the space barely understand what is, as in what all exists, today).
But here’s something that is concrete to anchor to: there’s somewhere north of $1T floating around in blockchains today.
That’s an incredible amount of money and people that have problems that need technology solutions.
To be explicit, the reason blockchains exist is to have a globally consistent database that doesn’t require trusting the operator.
which I mean when I think of that I think - that would be really useful for crime because you don't want to trust the operator because either 1. they're a narc 2. they're a criminal.
it's also useful for currency because not trusting the operator allows you to keep them from turning into paypal.
but then I just draw a blank on what it is useful for after that.
Of course blockchains can be used for crime, almost anything can. In fact, if you want the preferred currency of criminals the world over, look no further than the US Dollar.
Most organizations, governments, businesses, etc. start with plenty of trust to go around. There's no reason to inherently distrust them, so their governance, currencies, securities, etc. work just fine. Distrust breeds over time, which is why establishing governance, currencies, securities, etc. in a way that can be cryptographically verified by anyone is a useful property to have to ensure the system remains generally trustworthy long into the future.
For example, there are many reasons to distrust stock brokers, the Depository Trust Company, the spineless SEC, and other entities who run our securities exchange. If securities were traded on a blockchain instead of an opaque database that can't be audited except by a corrupt few, everyone could strongly trust in the freedom and fairness of the securities exchange markets.
If I could own all my stocks on the blockchain, I would do it in heartbeat.
I believe the system where a semi-independent central bank has the ability to regulate the currency of the country is a good thing on the whole. It's the best balance of compromises we have seen actualized.
Having a fixed supply of digital coins seems more like a return to the old days where there was a fixed supply of gold and silver coinage. And that era was called the dark ages. A system with fractional reserve credit is much more conducive to economic growth and prosperity.
I'd also imagine that crypto ownership is massively concentrated in the top 10% wealthiest people anyways.
Sorry to burst your bubble, but cryptocurrency does not work this way. Your reasoning can be applied to any asset, for example, a shitty house in California that is now worth $1M.
The market can bear smart contract platforms whether that platform writes to a proof of work system, a faster distributed set of nodes, or on localhost with port forwarding.
It doesnt matter! People like to deploy that kind of code on a platform that can be accessed that kind of way.
If there isn’t a token then people DDOS it instantly, with smart contracts that take up too much processing cycles or memory. Simple. People dont want to use limited fiat payment rails to attempt to preallocate resources, it doesnt work very well at arbitrary amounts, it ceases to be permissionless and the author is agreeable here: its been 13 years of this other solution and is an international hit!
Think about developers on Shopify’s app store that try to sell to ecommerce merchants. Its the same people with the same goals! Sell tools that theoretically make someone else’s life easier. Extract value because commerce exists. Thats really valuable. Thats exactly whats going on in blockchain. Just because you and your friends are taking linear bets with your capital and cant quantify why things go up way too often really has nothing to do with the people that built that tool for you who are taking little basis points here and there.