What gave you this idea? If I have proof that I paid you cash for a service, and then proof you didn't provide that service, I absolutely expect to be able to reverse that transaction, via the legal system.
> A blockchain is much more resilient; the equivalent would be to have hundreds or thousands of redundant SQL databases around the world and somehow keep them all in sync.
That level of resilience is completely unnecessary and is part of why blockchain is such an extraordinarily wasteful technology.
> Local governments are fully capable of putting real estate NFTs or whatever on something like Ethereum or Cardano and publishing public keys such that people can verify their authenticity.
And who will hold these NFTs? And where will the data the NFTs sign be stored? If the government holds the NFTs, then nothing will change for you: you will have to bring the exact same kind of proof after you bought a house to the government so that they can update the blockchain record.
If they want to distribute the NFTs to the current owners of the houses, than they now need to establish an Ethereum/Cardano/[...] wallet for each person who owns a house in their district - a decade-long project in the best case, involving a level of bureaucracy to ascertain that no house NFT was incorrectly transferred to the wrong owner that will blow your mind (or, more likely, a process which will cause massive fraud and property disputes for decades to come).
And of course, the NFTs don't solve the problem of actually storing the data (physical scans of the documents that were used before the move to digital, at the very least, since the chain of ownership of each piece of property is an extremely important part of how you can settle disputes). Who will hold these records, and update them as needed? If it's still the county clerk, the problem of bureaucracy flies back in. If they want to make them part of the NFTs and store them on-chain, then minting the NFTs will be exorbitant, and it's doubtful the Ethereum blockchain would survive having the entire archives of home ownership in the USA on-chain.
That's very different from what's meant by "reversible transactions" in the context of other payment systems. If the legal system can dictate the reversal of a cash transaction, then it can do so for a crypto transaction - without either needing to have some explicit protocol to do so.
> That level of resilience is completely unnecessary
That's just, like, your opinion, man.
> And who will hold these NFTs?
The owners of the properties they represent.
> And where will the data the NFTs sign be stored?
NFTs can store arbitrary data.
> If they want to distribute the NFTs to the current owners of the houses, than they now need to establish an Ethereum/Cardano/[...] wallet for each person who owns a house in their district
Which is many orders of magnitude easier than the current system.
Besides, it doesn't have to be all or nothing; a gradual opt-in transition would be perfectly doable.
> If they want to make them part of the NFTs and store them on-chain, then minting the NFTs will be exorbitant
On just about anything noteworthy that's not Ethereum, the cost is on the scale of cents. Wow, such unaffordable, many expensive.
And no, you don't need physical scans of the original documents. A transcription will do fine.
Mine and everyone else's who holds important information in databases. The whole financial system for one.
> NFTs can store arbitrary data.
Up to some size.
> Which is many orders of magnitude easier than the current system.
It is not. The current system scales with the number of home transactions. Your proposal scales with the number of homes - a much bigger number.
> Besides, it doesn't have to be all or nothing; a gradual opt-in transition would be perfectly doable.
Sure, but then it's just a whole bunch of extra work for no benefits for 10-20 years. Not just for the county clerk, but also for home owners and buyers: not only will they still need to process the existing requirements, they would also have new requirements to obtain and prove ownership of their ETH/other crypto wallet. And they wouldn't see any advantage at all until the next time they sell their home (hopefully they will still remember their wallet address and private key by then!).
> On just about anything noteworthy that's not Ethereum, the cost is on the scale of cents. Wow, such unaffordable, many expensive.
Well, there are exactly two block chains that are somewhat noteworthy outside the crypto bubble: Bitcoin and Ethereum. And Bitocin doesn't support NFTs.
And any other block gain that becomes even mildly popular quickly explodes in values and transaction fees just like the other two. Turns out that storing hundreds of thousands of copies of the same data, and writing every single transaction to hundreds of thousands of systems before it is considered settled, without any kind of permission system, is actually very costly.
Note: you're right on the cash transaction statement, to some extent. There are still some important differences I feel, mainly related to the fact that today's systems enforce knowing the legal identity of parties to a transaction for something like a house, even if the sale is done in cash - which wouldn't be guaranteed if the house could be traded by selling an NFT on a chain.
If your opinion is that your information warrants less redundancy and resiliency than what Zoomer cryptobros get with their sad monkey NFTs, then maybe your information ain't all that important?
> Up to some size.
That size being more than sufficient to store a land parcel's coordinates, address, and other identifying data.
> The current system scales with the number of home transactions. Your proposal scales with the number of homes - a much bigger number.
They both scale with both. Or do you propose that the current system instantaneously sprung into existence without spending centuries distributing paper deeds beforehand?
> Sure, but then it's just a whole bunch of extra work for no benefits for 10-20 years.
If you don't consider the greatly improved auditability and resiliency to be a benefit then that's further reason to question whether your opinion is actually representative of people with important information needing stored.
> not only will they still need to process the existing requirements, they would also have new requirements to obtain and prove ownership of their ETH/other crypto wallet
That doesn't logically follow. It's quite possible for it to be a "one or the other" deal.
And ownership is pretty trivial to prove: you either can initiate transactions with that wallet's private key or you can't.
> Well, there are exactly two block chains that are somewhat noteworthy outside the crypto bubble: Bitcoin and Ethereum.
There are a lot more than only two which are noteworthy. That you believe otherwise is itself reason enough to disregard your comment as thoroughly misinformed...
> And any other block gain that becomes even mildly popular quickly explodes in values and transaction fees just like the other two.
...as is this. There are multiple NFT-capable blockchains that have demonstrated better scalability both in theory and practice by virtue of them using a consensus method more sane than burning energy on useless SHA256 hashes.
> There are still some important differences I feel, mainly related to the fact that today's systems enforce knowing the legal identity of parties to a transaction for something like a house, even if the sale is done in cash - which wouldn't be guaranteed if the house could be traded by selling an NFT on a chain.
It wouldn't necessarily need to be guaranteed, because the information is already in a public ledger. If you want to get fancy you could address that further with NFTs representing personal identification (which has other applications, like tracking licenses and certifications and other endorsements, but I digress).
This isn’t the only form of dishonesty. There’s cases where you initiate an honest transaction, the vendor ships you something you didn’t ask for because they are trying to clear inventory, and then refuses to refund or exchange. Then you file a claim with Amex and get your transaction reversed in about a week.
The flipside is there are times I've been unable to pay with cards because the processors deem it to be too large of a risk, despite me being happy risking my own money. Or, see the risks people take running businesses on PayPal - large companies able to reverse transactions / hold your money solves some issues but raises others.
Technically true, but also completely pointless. An organisation running an SQL database doesn't need hundreds or thousands of redundant SQL nodes/copies to reach the level of robustness required.
Not every usecase requires that sort of resiliency, of course, nor does every use case prioritize it above latency and throughput; nobody except the truly deranged are asserting that a blockchain could or should replace every SQL database out there. For those who do need that sort of resiliency, though, a public blockchain is much more cost-effective.
Are there any extant proof-of-stake blockchains that achieve the security guarantees necessary to make a currency viable? Last I heard proof-of-stake was still a hypothetical idea, not something that someone had actually managed to make a working currency with, and that all of the cryptocurrencies in common use were still using proof-of-work (which is of course much more resource intensive).
If you want to eliminate Sybil attacks in PoS, there is no way of externally validating which branch of a split chain is legitimate. Each of them has a majority of stake backing it.
As for PoW however, you can just look at the total work proven.
Which is itself possible by penalizing stake pools that go offline, thus motivating them to maximize uptime. That's how Ouroboros-based chains (Cardano, Polkadot) do it (among other mitigations against various attacks).
> If you want to eliminate Sybil attacks in PoS, there is no way of externally validating which branch of a split chain is legitimate. Each of them has a majority of stake backing it.
Which is why Ouroboros-based chains consider the "pledged stake" (put simply: an upfront collateral) of each pool when selecting one to control the next block and receive the corresponding rewards. This has its own implications (in particular, the pledge needs to be high enough to deter would-be Sybil attackers but not so high that it's unattainable to honest pool operators), but it seems to be effective in practice.
This is still unfair to stakers that legitimately have infra disruptions. I have not seen any design for PoS that is actually fair and reasonable and I doubt it will ever happen because this is simply not something you want to just put in an algorithm. The problem space fundamentally requires human intervention at a high level.
I'd hardly characterize that as "unfair"; it's no more unfair than any other perceived correlation between uptime and trustworthiness.
> The problem space fundamentally requires human intervention at a high level.
It fundamentally requires the opposite. The more human intervention possible, the more room for exploitation and corruption and unfairness. This is evident both within the crypto space (Safemoon comes to mind) and outside of it (the legacy financial system comes to mind).
I am saying that correlation inherently makes no sense. Uptime isn't the same as trustworthiness, that assumption is only made because designers of blockchain algorithms have bizarrely decided that "trustworthiness" is not a real thing so they need to continuously look for other things to use as a substitute for it, instead of just using what most people (including many promoters of cryptocurrencies in their real, physical lives) use: trustworthiness.
>It fundamentally requires the opposite.
No, this is extremely, extremely, extremely wrong on every possible level. Even from the perspective of a cryptocurrency, this is extremely wrong. I can't stress this enough. You are creating a system for humans to use for human purposes. The entire point of it is human intervention. When designing these blockchain algorithms (which I should remind you are designed and maintained by humans as code that needs to be continuously maintained by humans) all that happens is you encode that particular form of exploitation and corruption and unfairness into the system itself. Even within your example it's wrong; discriminating against those with bad uptime enables exploitation and corruption towards areas that have bad infra. And remember since this is code that can be updated and changed by humans it will be vulnerable to the same level of corruption that you see anywhere else. You might trust the maintainers not to do this but now you're back to the same old trustworthiness again.
The former is pretty darn important for the latter. How can I trust something that is prone to outages?
> You are creating a system for humans to use for human purposes. The entire point of it is human intervention.
One does not follow from the other.
> When designing these blockchain algorithms (which I should remind you are designed and maintained by humans as code that needs to be continuously maintained by humans) all that happens is you encode that particular form of exploitation and corruption and unfairness into the system itself.
Well then it's a good thing that code is available to the general public and can be audited by the general public.
> Even within your example it's wrong; discriminating against those with bad uptime enables exploitation and corruption towards areas that have bad infra.
The correct response would be to improve infra in those areas, or for people in those areas to use one of the umpteen gajillion VPS providers in the world to run their stake pools instead of trying to do so from their closets.
> And remember since this is code that can be updated and changed by humans it will be vulnerable to the same level of corruption that you see anywhere else. You might trust the maintainers not to do this but now you're back to the same old trustworthiness again.
Then it's a good thing that the code in question is open to audit by the general public and that new versions of the code require consent from the network before they actually go "live" in any meaningful sense.
Cardano, Solana, and Polkadot seem to be doing quite alright.
Maintaining read replicas and coordinating writes across all of them starts to look a lot like one after a certain point.
> it is much cheaper than the wasteful process of crypto mining.
It almost as if not all blockchains involve mining.
No they aren't. They are already running public SQL databases (with limited query access) for managing property changes. And they already have a set of processes and employees to manage real estate transactions and taxes. If a blockchain startup wants to try to get a local government office to let them run it on a blockchain, they will need to prove that the taxes always settle, and that fraud can be reversed. These are both important parts of the system for the local government.
I suspect that there is a granule of use in the idea, and that's that you can farm off the infrastructure for your real-estate management onto third parties and ensure they give you your taxes and respect your authority. But that's not really what people think of when they say "blockchain" with dollar signs in their eyes. The incentives for the people running the infrastructure go out the window too, because the profits are modulated by the government, and it's way easier to just sell them software directly that only has to claim to be effective, and rarely has to deliver on it.
Not a single county I've lived in has offered that, to my knowledge. If they did, then if other online county services are any indication, the uptime would be horrendous and the interface would be 90's era garbage.
> If a blockchain startup wants to try to get a local government office to let them run it on a blockchain, they will need to prove that the taxes always settle, and that fraud can be reversed.
The former is baked into any cryptocurrency worth its salt, and the latter can be done by minting a new record of ownership invalidating the previous one. Better yet, time-limiting parcel NFTs and issuing them in exchange for tax payments would directly tackle both rather cleanly and would work just as well for land leases as it would for traditional real estate.
> monitoring and reversing payment transactions
I disagree with the article on this point. No reasonable person expects to be able to reverse a cash transaction; that the same applies to an electronic equivalent ain't the fatal flaw that critics seem to regularly insist without real basis. Transaction reversal is indeed outright harmful to honest vendors, and is only really necessary for the legacy systems because the legacy systems have borderline zero protection against dishonest vendors retaining customers' payment information and pulling money from it (and/or giving it to others who will do so, be it voluntarily through some shady dealmaking or involuntarily through card skimmers and database breaches and what have you).
> interacting with government agencies to execute real estate transaction
You wouldn't need a central authority for this. Local governments are fully capable of putting real estate NFTs or whatever on something like Ethereum or Cardano and publishing public keys such that people can verify their authenticity. They're much more likely to do that than to try to run an equivalently fault-tolerant and accessible-to-the-public SQL database themselves (and absolutely more likely to do even that than to trust some entity outside their legal jurisdiction to do that, barring outright state/federal mandates to do so).