Why doesn’t someone, then, who actually understands their almighty blockchain god, illuminate us, mere mortals, on the wonders of blockchain and how it can be good for society in the foreseeable future.
You know what’s really tiresome? Having the promises of blockchain sold to us for years now without a single, useful purpose for it in sight other than, well, cryptobros.
Amongst the complicated math and crypto posts that nobody can understand, Vitalik has covered several use cases on his blog.
The entire point of voting is to provide a way to pick something that virtually everyone can agree was fair. Blockchains are too complex for virtually everyone to understand, and so most people can't agree that they're a fair way to decide on things. They require trust in the programmers and cryptographers, *and most people don't have that trust*. And with good reason, programmers are notorious for making buggy, unreliable, confusing software.
Vitalik entirely ignores this argument against blockchains for voting, and pretends that the most important objections are the technical ones.
Almost nobody understands any of the complex systems in their life (e.g. banking, software) but it doesn't stop people trusting them. People have trust in these systems because they reliably produce the desired output not because they understand how they work.
Any application where you need an immutable ledger is a good application for blockchain. Just because crypto enthuisiasts are trying to shoe horn this technology into anything and everything doesn't mean the above isn't true.
1. You can't trust any single known party, or group of parties, to attest the integrity of the ledger (otherwise, you could just use plain old digital signatures)
2. You need infinite pseudonymous accounts in this ledger.
3. You need it so badly that you're willing to forgo a significant share of whatever value having this ledger creates, regularly, forever (mining fees).
There have been attempts to rebrand blockchain as anything containing a chain of digital signatures, no mining needed. In which case it's old technology - but in that case I also agree that it has a use.
Artists are by their nature known parties, as are factors in a supply chain. They may have a use for digital signatures, but they have no use for a scheme including mining.
1. That currency is going to be heavily speculated because it's unregulated by design.
2. That currency is going to be used to bypass regulations that do in fact protect people.
3. That currency will be used to bypass an international system that is designed to allow nations to punish other bad national actors without resorting to war.
If you want to foster anarchy and to create an expectation that any individual is on their own and are actually prevented from getting assistance when they lose everything then a cryptocurrency is an ideal ideological fit. If you want something more balanced then merkle trees might be a useful tool but leave the currency aspect out of it.
What's your definition of good? An immutable ledger is a good idea and useful. An immutable ledger where every write costs 50-200 USD isn't as useful, for example.
> People are never allowed to criticize it without the same, repeated feedback “If that’s what you think blockchain is, then you don’t understand it.”
That's because the criticisms are always the same talking points, all of which have been addressed multiple times ad nauseam. If Bitcoin advocates appear dismissive or opaque it may be that they're exhausted of debunking the same criticisms over and over again, particularly when there's a wealth of information out there to find. Though you have to be willing to leave the anti-Bitcoin media bubble. Perhaps all us Bitcoiners are sufferring from delusions reinforced by confirmation bias, but perhaps you are too?
> Why doesn’t someone, then, who actually understands their almighty blockchain god, illuminate us, mere mortals, on the wonders of blockchain and how it can be good for society in the foreseeable future.
This kind of snark also doesn't help with the above. But if you're actually curious I thought this did a decent job of explaining Bitcoin's blockchain, decentralisation, and trustlessness: https://dergigi.com/2021/01/14/bitcoin-is-time/
> You know what’s really tiresome? Having the promises of blockchain sold to us for years now without a single, useful purpose for it in sight other than, well, cryptobros.
Perhaps you should stop listening to the promises of "blockchain" and "crypto" and instead focus your learning efforts on Bitcoin only... cryptobros be damned. Bitcoiners probably dislike them more than regular folk.
but since bitcoin doesn't have any central authority it's not really fair to conflate the purpose/value of btc, blockchain tech with idea of cryptobros/scams/ponzis.
Today there are many transactions that take days to clear. For example if you buy stock, it appears instantaneous to you, but the scenes your brokerage, the other brokerage, and the clearing house have to make sure all the money is there, the stock is there, etc
Clearinghouses make a lot of money just guaranteeing transactions. That is friction in the system.
Wire transfers, ACH, cashiers checks, etc all have the same issues.
Even things like title insurance, transfer of title, deeds of trust etc have those issues.
Instead of NFT for a gorilla picture, think of NFT for your house that essentially represents your deed. Transferring your deed is a very complicated process.
Think about how social media or app stores are essentially controlled by the choices of a few CEOs. Imagine a distributed social media will allow everyone to ignore you, but no party can censor you. You own your data instead of an entity like facebook.
Wait, aren't blockchain transactions hilariously slow and depend on an internet connection?
> Clearinghouses make a lot of money just guaranteeing transactions. That is friction in the system.
Aren't popular blockchains using transaction fees to pay for validation?
> Wire transfers, ACH, cashiers checks, etc all have the same issues.
Seems to also apply to bitcoin.
For regulatory reasons, not for technical ones. You're using the word "transaction", but you should distinguish between legal transactions and what is essentially a database transaction.
the issue is that we show the things being made and hn calls them all scams and ponzis and fraud.
we show the rates adoption, and the growth in use and hn says its all speculation and fraud and needs to be made illegal.
we point out that crypto is in many ways doing better than other industries to represent marginalized communities and we all get labelled cryptobros and any of us who arent that get erased from the picture.
if we post anything positive linking to a twitter account that account starts getting endless abuse.
there are very few people who bother coming to hn anymore, pretty much everyone working in the space has given up on it.
We have automated stable currencies, permission-less loans and lending, streaming payments, UBI experiments, co-ops governing land use, automated taxation and public goods funding experiments, sybil resistance mechanisms for 1p1v governance, resilient p2p infrastructure that people are using every day to pay each other and run their businesses. Composability for all of these things to quickly build your own business logic on top of it. Standards for tokenising royalties/payments/tickets... All running on p2p infrastructure anyone can participate in. Thats pretty amazing imo.
At what point will what we've been building be considered useful? If you took any of these things and wrap it in a saas startup connected to stripe hn would eat it up and claim its the greatest startup of the decade. but because its built on crypto it can only ever be world destroying disaster capitalist alt-right incubating cartoon villain fraudulent vc led scammers right? its just so tiring.
Credit cards were "invented" in 1951. By 1970 51% of US households had at least one. All happening well before the internet. Even with all of the hype an estimated 13% of American households even traded crypto last year. Want to guess how many households used it to purchase a good or service?
Globally we're more connected than ever. It's been 13 years - if bitcoin was actually superior for anything other than speculative trading people would be using it for something other than speculative trading.
Regarding the abuse here on HN - tweet something negative about blockchain and I think your perspective on the "abuse" coming from the HN community will change. By nature "cryptobros" and other people pumping these things are doing so for their own financial gain. People that are negative about crypto typically don't have any skin in the game and even if they do (somehow) their ferocity pales in comparison to the portions of the population that are expecting to retire with it.
Source for this?
Also, all of these transaction numbers are for on-chain transactions. They don't include layer 2 solutions like the Lightning Network. Given that the Lightning Network is built for micro-transactions, where sats can literally be streamed to a creator, while someone listens to a podcast for example, it's possible (though impossible to definitively confirm?) that on-chain AND off-chain transactions already exceed credit card services.
You have to understand that Bitcoin (the blockchain network) isn't trying to be a credit card network. It's a settlement layer/clearing house. Traditionally for a transaction to occur with finality would take days, perhaps weeks to occur. When you make a purchase with a credit card that payment isn't occurring with finality in the banking system. It takes days to "lock in". On Bitcoin it takes 10 minutes and is completely automated and trustless.
The Lightning Network (enabled by the SegWit upgrade) allows for payments to occur instantly, with low fees, and can be used for micro-transactions. The tradeoff to that convenience is it's less secure. This is why you would have a Lightning wallet for your day to day usage, and your "savings account" in cold storage on-chain. You would only use on-chain transactions for big purchases, or to open a Lightning channel.
> Globally we're more connected than ever. It's been 13 years - if bitcoin was actually superior for anything other than speculative trading people would be using it for something other than speculative trading.
It literally is, you're just not paying attention. As already mentioned it is being used to stream payments in podcasts as your listen, it is being used in competitive video games, there are gift card services like Bitrefill,
The Lightning Labs blog does a good job of summarizing the state of the Lightning Network.
https://lightninglabs.substack.com/p/the-flywheel-is-startin...
https://lightninglabs.substack.com/p/the-summer-of-lightning...
Generally speaking, L2s are interesting because they all make compromises from the principals of blockchain (as you mention - but that's for another day). It's been interesting, to say the least, to watch some of the fundamental definitions and principals such as "decentralized" and "secure" get redefined over the years.
I use statistics for Bitcoin transaction volume in these comments for several reasons:
1) Bitcoin is more widely known than any other blockchain based technology.
2) It's (essentially) only used for payments so transaction volume is more easily directly compared to other uses. For example, Ethereum has roughly double the daily transaction rate of Bitcoin but it's not clear to me how to easily breakout payments for direct comparison to Bitcoin, Visa, etc.
3) I'd use Lightning transaction volumes if I could find them. Anywhere. I've researched this quite a bit and all I can find are posts like the ones you provided (from Lightning Labs themselves) or from places like the Dailyhodl, etc talking about how big all of the markets Lightning is going to take over are, how much potential there is, etc. The typical "by 2030 we'll be doing (insert astronomical number)".
If you have a reputable/reliable source for the number of transactions on the Lightning Network I'd love to see it. The amount of bitcoin on it, the number of channels, the number of nodes, etc make for some impressive looking graphs but I suspect the transaction volume (to me the only real number that matters in terms of adoption) is still extremely low. If it wasn't everyone in the blockchain sphere would be hyping that too.
Let's circle back - I use blockchain at my current startup. I had 200 GPUs mining Ethereum in 2017. I'm not anti-blockchain by any means. I bring up what I consider to be valid criticisms because the bubble inside a bubble wrapped in an echo chamber present in blockchain today isn't doing anyone any favors. The reality is that (zooming out) after 10 years blockchain is still a toy. If it has any chance of ever living up to the promise and hype at least some people need to step out of the bubble and ask themselves why it's actually been one of the most slowly adopted technologies in the last 100 years.
That doesn't agree with the data I've seen for Bitcoin: https://twitter.com/woonomic/status/1356310219215699968?s=19
And "blockchain" is pointless outside of Bitcoin, which might explain why its adoption has been slow as a more general technology. The blockchain was created to solve a very specific problem related to Bitcoin's mission statement (as defined by Satoshi). With that problem solved by Bitcoin, what else is there to use "blockchain" as a technology on exactly? Ok, there might be some very niche use cases that are applicable, but those aren't going to see the technology widely adopted.
> If you have a reputable/reliable source for the number of transactions on the Lightning Network I'd love to see it.
I don't think it's actually possible to determine this. There's no way to see transactions that occur across the entire network. Nodes are only aware of the transactions that route through them. Maybe some clever people have determined a way to infer it, but I'm not aware of any. The metric most people use to judge growth of the Lightning Network is btc capacity i.e. how many bitcoin are "held" in channels between nodes, which is open information.
Bitcoin launched 1/2009 - as of now there are 100M users (your graph says 135M, which seems to be a very high estimate but lets go with that).
World Wide Web was released 4/1993 - 13 years later there were at least 700M users (very conservative estimate). Mind you this growth depended on everything from having a computer (22.9% of US households had a computer in 1993) to laying untold miles of fiber optics, undersea cables, building out physical datacenters, etc. Literally people digging ditches and ships circling the globe - many thousands of miles over.
By being essentially just another internet application (most people consider WWW = internet) taking advantage of all of this infrastructure Bitcoin/blockchain had/has a HUGE advantage over the WWW. To be a bitcoin user in 2009 you had to have a computer and install a program. To be a bitcoin user for the vast majority of its life you could/can hear about bitcoin at a bar, pull your phone out, and install an app on your smartphone to be a "bitcoin user" for next to nothing in under five minutes.
To be a WWW user in 1993 you had to have a computer that could handle it (Windows? Trumpet Winsock?, CPU, RAM, modem, etc) and a local ISP, etc. I remember in 1994 having to install a modem, a second phone line, and dial into an ISP that was LONG DISTANCE... It literally took weeks to get on the internet in 1994 and especially in my case, it was very expensive and very technically challenging (Hayes commands anyone? Chat scripts? PPP/SLIP?).
Then a little later America Online (still crazy expensive), maybe have it at work or university, or in the later years get lucky and have broadband in your area. I couldn't get DSL until 2004, for example (and it was still very expensive).
Even with all of these monumental challenges the WWW grew at least 5x faster than bitcoin (and it's really probably closer to 10x).
I suspected that was the case with Lightning. I'll keep digging into this because as I'm sure you can tell I'm fascinated with this. Overall I'm really trying to ask:
Why has adoption in the "cryptosphere" been so terrible (arguably the worst rate of any recent technology)? This is a question every honest blockchain advocate needs to ask themselves because there are clearly significant issues impeding mass adoption. Whatever these issues are need to be identified and rectified to the extent they can. I truly hope it's not the obvious answer - "It doesn't provide anything most people want or need".
Can you share some of the numbers you're citing? Who is using what to run their businesses daily? What's the number of transactions relative to current financial systems? How many actual users do you have for these things? The problem is anyone digging deeper sees it's all marketing and bullshit.
It starts being useful when it's not motivated by VCs and others with a financial stake trying to get higher exists hyping up products with no utility and no users.
They were frank enough to tell me that their business could have done the same thing in a centralized fashion, but they wouldn't have gotten funding.
Cryptocurrencies don't have a "killer app". Something for the common person.
I suspect that even when they do, it will be incidental. Something that could have been developed as part of a centralized architecture, but built with cryptocurrencies because the financial support was there.
> permission-less loans and lending
What does this mean?
This is the part that confuses me. What is the theory of value here? If you don't like it don't buy it. If you're not interested, don't buy it. If you don't see the benefits, don't develop cryptocurrency applications.
Nobody is compelling developers or users to use this technology. Meanwhile state run currencies are forced upon us. Walled gardens and browsers force tech choices on developers.
Isn't it enough to dislike something and avoid it entirely? Why advocate for limiting the choices of others? How is this not authoritarian paternalism?
Ummm.. have you seen the mountains of hype and cash poured from the cryptocurrency community onto regular folks?
> Isn't it enough to dislike something and avoid it entirely?
I would, but the cryptocurrency community isn't letting me do that.
Not knowing the purpose of cryptocurrency is its purpose. There's nothing wrong with having a general purpose technology, like computer programming, that is adaptable to specific purposes on demand.
From the article:
> Let’s start with this: Venmo is a free service to transfer dollars, and bitcoin transfers are not free. Yet after I wrote an article last December saying bitcoin had no use, someone responded that Venmo and Paypal are raking in consumers’ money and people should switch to bitcoin.
Not everyone has access to Venmo or PayPal. For instance, sex workers are routinely booted off the platform in the US with their funds being frozen. People in developing countries also may not have access.
> In fact, I would assert that there is no single person in existence who had a problem they wanted to solve, discovered that an available blockchain solution was the best way to solve it, and therefore became a blockchain enthusiast.
How about people that want to hold western stable coins and they are legally prevented from holding dollars or similarly stable currency?
[0] https://www.washingtonpost.com/politics/2019/09/06/argentina...
> Turkey had an 80% foreign currency surrender requirement in place from September 2018 to late 2019 during a previous iteration of a currency crisis and has also used other “soft” capital controls including changing fees charged on currency conversions and adjusting the requirements for currency hedging.
There are financial assets I cannot hold due to the accident of geography. For instance, I can't hold Chinese stocks. I cannot easily and safely send money to family in Cuba, Iran or North Korea. There are a lot of places I cannot hold real estate.
Capital controls and monetary debasement are very much the rule on a long enough timespan.
[0] https://worldview.stratfor.com/article/turkey-takes-first-st...
I bet we agree on many issues including, let people move freely between countries, have less rules, have smaller countries. But there is nothing wrong with the idea of a government backed currency even if you can point to failures like Turkey, Venezuela and many more.
Also are you seriously saying that because you can't rent seek land in Liberia there is a problem with the global economic order?
Something has existed for tens of thousands of years and in the last 50 years has been supplanted by something else. Which would I bet on surviving 1,000 years from now? Hard currency.
1. The earliest known currency was the shekel and it was more of a accounting instrument and it was used ~5000 years ago.
2. Fiat was invented in the 7th century https://en.wikipedia.org/wiki/Fiat_money#China
Regarding your claim that hard money is good.
We are talking about a system that completely floundered under pressure from economic expansion (hard money) vs a system that has been presiding over the largest economic booms in history and is currently adopted by every government in the world (fiat) and your argument is "well look which is older".
2. I never claimed fiat was invested 50 years ago. I stated that the global monetary system switched over from predominately hard money with fiat
> We are talking about a system that completely floundered under pressure from economic expansion (hard money) vs a system that has been presiding over the largest economic booms in history and is currently adopted by every government in the world (fiat) and your argument is "well look which is older".
It floundered because it was routinely debased and not adhered to. That was my whole point. I would also say that fiat has failed a lot. You google list of hyperinflation to get a sense of how bad it has been over time. Even today you have people living in countries in which they have to watch their wealth disintegrate every year by double digit amounts
Civilization didn't begin with Bretton Woods...
All it takes is to turn one participant, and the threads can be followed to trace the money.
If I hold something in a digital wallet, I can never be sure I've eliminated all the ways to take it remotely and anonymously.
so your company either has to set up its own KYC/AML compliance department (noting that this is often a regulated profession) or it is probably breaking the law.
International bank payments are slow, but they are also reversible and compliance is not your problem.
Is it drug trafficking?
I'm a refugee from Wallachia. My government has collapsed, my currency is destroyed by hyperinflation. How do I use Bitcoin for payments?
As I mentioned, Alex Gladstein has lots of good articles outlining how people in countries that are affected by war, authoritarianism, hyperinflation, or all of the above, use Bitcoin. These are the best articles for that:
https://bitcoinmagazine.com/culture/bitcoin-financial-freedo...
https://bitcoinmagazine.com/culture/cubas-bitcoin-revolution
https://bitcoinmagazine.com/culture/can-bitcoin-bring-palest...
https://bitcoinmagazine.com/culture/bitcoin-a-currency-of-de...
I'm a poor peasant from Wallachia, I barely know how to use a smartphone. ELI10.
1. How do I buy the Bitcoin in the first place? My government or bank aren't selling them to me.
2. How do I actually transfer that money?
That doesn't mean Bitcoin isn't already helping millions of people in these types of countries that have unstable currencies, governments, or both, but also have wide spread internet and smartphone adoption.
Read the Alex Gladstein articles I mentioned above.
...therefore we need bitcoin? Is this the new spin? People don't see it's a tech that was invented without a use case?
Many people don't have electricity too, what are you talking about?
If I'm wrong about crypto helping the unbanked, please provide any context or numbers to back up this claim.
P.S. Let the poor countries solve their own problems, if you want to help donate money directly.
Have you read a single quote from Satoshi Nakamoto? He's very clear about the use case... many times.
“If you don’t believe it or don’t get it, I don’t have the time to try to convince you, sorry.” — Satoshi Nakamoto
That was fun, thank you.
Do you know why the majority of those people don't have bank accounts? Because they have no fucking use for it! They either have no money (how does crypto help those people?) or they use banking services through their family/friends.
Do you know what 3.7 billion people don't have? Access to internet.
Everyone has use for a way to store their wealth, no matter how small. Economies that use money, in whatever form, are much more efficient than those based on barter.
> Do you know what 3.7 billion people don't have? Access to internet.
Yes, Bitcoin won't help people without access to the internet. There are still hundreds of millions (maybe billions?) of people that DO have access to the internet, but don't have a reliable way to store their wealth, either because of irresponsible governments or central banks.
You know what governments and central banks can do to the security and issuance of Bitcoin? Nothing. Absolutely nothing.
And that's very valuable to some people.
Oh ffs, what are you talking about? Do you think that the poorest people on earth are poor because they choose not to deal with money? Will they store their blanket and cup on the blockchain? My god.
> You know what governments and central banks can do to the security and issuance of Bitcoin? Nothing. Absolutely nothing.
What is preventing a government from getting >51% of mining power and just wrecking havoc on the chain? Afraid of governments but can't think of the possibility of them taking over mining operations or just fucking up the internet to take it down. Is it wilful ignorance or naivety?
At that point, why not just bank with the legal regime you're already implicitly trusting?
https://www.crunchbase.com/organization/true-link-financial
most of his complaints about crypto being hard to use could easily be applied to the internet, cell phones, and computers in their early days. Almost all technology starts off with a niche community that is often mocked before it improves and becomes mainstream. Crypto gets even more hate because people who think they are smart are seething about missing the train and the cognitive dissonance demands that they write off the entire industry as useless
On what basis? Certainly not on the basis of volume of transactions used to purchase goods and services in the real economy. Nor on the basis of adoption of other use cases for smart contracts, supply chain provenance tracking, etc. I assume you mean on the basis of trading volumes and market caps, which are completely irrelevant.
The fact that the author is comparing to services like Venmo or PayPal really goes to show how much they don't understand about what Bitcoin was built to achieve.
Also goes to show that people like the author should also check their financial privilege: https://bitcoinmagazine.com/culture/check-your-financial-pri...
FYI the author of this ^ article is the Chief Strategy Officer at the Human Rights Foundation. All his articles on that site are worth reading to gain a more global perspective of what Bitcoin is doing outside of the western hemisphere.