A blockchain is like having an append-only log in someone's house. Everyone can look at it, nobody can erase from it, and everyone can buy an expensive pen to create a new entry. The people who own the house can replace the log with an older copy if they wanted to, if they don't like the new entries for example, which is what happened to Ethereum, but the real opportunity is not compromising the blockchain, it's running scams with it and on it. With no oversight, no fraud detection, no customer protection anything goes. All the blockchain can do is setting the fraud in stone.
We already have better cryptographic tools for verifiability supporting transparency and censorship resistance, and they are much faster and more pratical.
You can't replace existing things with a Merkle tree and proof of whatever consensus, because the powerful will always have more of that whatever. Once they do you get a centralized system worst than any existing one.
The same applies to blockchain in general. If a new layer-1 is released you audit the code, the token supply, distribution - if its not put out clearly to you its suspicious, otherwise you go through the same process. Those who can read first hand what the risks are can get in early, those who cannot wait. Its not rocket science.
If you cared so much about fraud victims, you would drill into new, atomic contracts and protocols, but instead you take the lazy, spiteful approach of calling the whole space a fraud and expect people to believe you because you work with computers. Can you fix my printer while you rationalize your position?
Being readable will not stop bugs. This is the history of software engineering. Heartbleed went unnoticed for years, for instance. Putting the onus on the participants to verify a bug-free smart contract is kind of absurd if you ask me. It's just not possible and definitely won't scale.
In society there are incentives for example for a bakery to not poison you. The obvious one is the financial gain, reputation, but also the threat from not following laws, regulations. There are health inspections and so on. Even with that a lot of things a bakery sells is not healthy for you.
It doesn't matter how smart the tools are, if the only incentive is to defraud people, which is how the crypto economy works today. It's all lions and hyenas, and there is no algorithm to fix that, if anything decentralized consensus makes it easier for people to obfuscate and shrug responsibility.
Let’s say for the sake of argument that the 5.25" floppy disk actually transferred data slower then if you had handwritten it between the machines, you couldn’t use the data from the 5.25" floppy disk unless you first validated it which would take several kW hours of power. You also could claim a stake at the data and could potentially sue other disk users for patent violations if you validated some patent more often then them. Now you have a case of a technology that is: a) worse then the alternative, b) expensive to use, and c) has harmful unintended consequences. Now I would consider the 5.25" floppy disk a good comparison to cryptocurrency. However the 5.25" floppy disk was none of these things, as it was a perfectly good technology at the time for data interchange despite it’s limitation. The same can not be said about cryptocurrency.
Now this is a silly example I know, I couldn’t find a more realistic case of unintended consequence for the 5.25" floppy disk.
In regards to censorship, trust, and any other perceived benefit of blockchain technology for applications, those benefits rely solely on the organization that controls the application - ultimately landing users in the exact same space. Blockchain is hailed as a way to build decentralized applications without any regard to the fact that those applications would still need to be built by a central organization.
The final note that advocates seem to profess as some great proof of why blockchain is ok is that other systems are flawed, as if proving that some other system is flawed is proof that it's ok for their system to be a sesspool of fraud and waste.
The technology is perfectly legitimate and mostly not awful as long as you stick to big reputable projects such as Bitcoin, Bitcoin Cash, Ethereum, Monero, Litecoin and others who have been on the market for a long time with a proven track record.
> In regards to censorship, trust, and any other perceived benefit of blockchain technology for applications
These are not "perceived" benefits, they are in fact benefits.
Monero represents digital, anonymous, fungible, untraceable, censorship-resistant cash, the same properties that real world cash provides. It can be transacted worldwide with extremely low transaction fees.
> those benefits rely solely on the organization that controls the application - ultimately landing users in the exact same space
Who is the organization that "controls" the "application"? As cliche as it is, "code is law".
> as if proving that some other system is flawed is proof that it's ok for their system to be a sesspool of fraud and waste
You may not like crypto, but it does have use cases that people in the real world are relying on and find useful. The crypto space indeed has many scam projects, but not every project is a scam. That's just the nature of open source software - people will copy an idea and use it for their own personal gain if it proves to be profitable.
There are so many things that are far less useful and far more wasteful than cryptocurrency. I could start taking this argument seriously if we first ban all addictive social media platforms, the whole adtech industry, gas-guzzling trucks and so on.
Trust comes from when I know who the other person is, not just his/her/its attributes. A good debate comes from strengthening the things that bind us in an open forum.
Sofar blockchain seems to be about making money (and I agree with OP on this point) and doing its version of the .com bubble.
Not saying that nothing of value might come from it, but at this point I don’t see anything of that kind.
They did manage to get through some of the game at least!
The bit about the stock is that shares counting issue isn't a 'problem' for the stock market, its a feature. They could easily solve this with existing technology. They don't because they make too much money playing the games. Blockchain won't fix that any more than it will solve censorship or cure cancer.
So can anyone who builds a service on top of blockchain technology™ which is something a user ultimately has to interface with. Just because you have some unremovable flags set on your magical decentralized database that doesn't mean a service can't choose to ignore it.
> eliminate corruption
> Imagine a stock market that ran on some next generation blockchain tech that was perfectly transparent without any doubt about the number of shares in existence. No more dirty tricks or fraud possible.
Please elaborate, how does any of what you vaguely describe "eliminate corruption". How would it prevent dirty tricks and fraud?
That is precisely why this is such a societally detrimental technology. The communities that are forming around it are self-reinforcing and suck up both monetary and intellectual capital.
All of this hype about crypto's "potential" is demolished in Dan's excellent work.
>It's a lack of imagination to think that because crypto is "slow" now (and not all of it is by the way), that it will always be the case.
Proof of work combined with the deflationary nature of these currencies is literally the antithesis of efficiency. The system necessarily needs to become less efficient over time because new coins need to become asymptotically harder to mint.
>Maybe a purely decentralized system cannot.
It's clear that the systems that interpret the blockchain (and even the blockchain itself, if wealthy and well-connected folks decide to fork) can be pressured into "censorship."
>if they can prove perfectly transparent and reduce or eliminate corruption?
No system that relies on human inputs can prove to be perfectly transparent or eliminate corruption. The blockchain itself can have provably unbreakable crypto that prevents man-in-the-middle manipulation of data but that in and of itself does not govern the interface between the chain and the people feeding it data.
1) First of all, are we discussing crypto as a currency or blockchains as a technology? Your criticisms seem all over the place here.
2) Maybe talking negatively about the dangers of deflationary currencies while we're in a period of economic inflation and peoples' purchasing power is being deliberately destroyed is not the best idea.
3) I'm not convinced that deflation in a currency is a bad thing. Mainstream economics schools hate deflation, but the Austrian school writes very favorably on the merits of deflation: https://mises.org/library/deflating-deflation-myth
4) Proof of work might or might not be around in the future: who knows? But that doesn't mean that blockchains are unworkable, just that one implementation might not stand the test of time.
> No system that relies on human inputs can prove to be perfectly transparent or eliminate corruption.
Look into what Oracles are and how they can guarantee the reliability of information and the concept of cryptoeconomic security. Who knows where this ends up going and if it's widely used or not, but there's a very high chance that all of the theoretical objections you would make here have been addressed.
Blockchains require an incentive for members of their network to maintain a copy of the shared ledger. Modeling it after a deflationary currency creates a first-mover advantage that generates this momentum. We're not talking about "theoretical objections" or hypothetical better systems, the commonly implemented blockchain systems are creating problems that are manifesting themselves today, and every ounce of capital invested into them creates real inertia against changing how they fundamentally work.
>Proof of work might or might not be around in the future: who knows?
We can not afford to be ambivalent about how this technology evolves.
1) There's a lot of research and development into blockchain technology by very smart people. The systems are improving. What technology we'll have 5, 10, or 25 years from now is going to be much different than what exists now. It's a lack of imagination to think that because crypto is "slow" now (and not all of it is by the way), that it will always be the case. The equivalent is looking at a 5.25" floppy disk in the early 80s and thinking that all physical media is forever going to be too small and too slow to be usable.
2) Low cost, speed, privacy, safety, and usability are great attributes to have: and in many cases are currently superior on established centralized systems. But don't other important attributes exist?
* What about resistance to censorship? A centralized system can ban you because of what you say or even because of who you are. Maybe a purely decentralized system cannot. I guess that's one reason why a lot of people fear it.
* And what about trust? Many people do not trust a lot of centralized systems from powerful groups: such as how many shares of stock are even in existence given the practice of naked shorting. Check out this story.
https://www.reddit.com/r/Superstonk/comments/rsaevv/in_march...
> In March of 2005 this guy bought 100% of shares (1.1M shares) in a traded company to prove the corruption. The next two days that same stock traded 50 million times and dropping the price 99% in two hours. All this with LITERALLY NO SHARES AVAILABLE TO BORROW OR SHORT.
Isn't it possible that the drawbacks of blockchains might be worth it if they can prove perfectly transparent and reduce or eliminate corruption? Imagine a stock market that ran on some next generation blockchain tech that was perfectly transparent without any doubt about the number of shares in existence. No more dirty tricks or fraud possible. Are the upsides of this not worth any discussion?