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Comment by pgodzin | Hacker News Reader

> And since these systems are open rather than proprietary, we’ll see applications bigger than Facebook.

I think this vastly overestimates how much the vast majority of people care about this

I think a lot of the applications that they talk about will be built in such a way that people won't really know or care about the fact that its decentralized, or exists on a blockchain. Much in the same way that a lot of people don't use the "internet" but use Facebook every day. They don't care about the underlying tech, they just want to see funny pics or talk to their grandma.

Right now, cryptocurrencies are in the "Usenet" stage, where most of the users are tech enthusiasts. Eventually they may get to "Facebook" stage, and you're right, most users won't care about blockchain, but they'll still use it.

It will cost an order of magnitude more to run the app on the blockchain, just like it costs an order of magnitude more to have a decentralized ledger instead of a centralized ledger for accounts. There remains no useful application that justifies the cost, aside from malware monetization and other illegal transactions.

It's a lot less costly to transfer money with a distributed blockchain, to give you just one counter example.

It currently costs more than $2 to transfer Bitcoins. It's free to transfer money to people in the same country off the blockchain, and the transfer confirm is faster.

$2 is less than the cost of an international wire transfer, especially if you live in a country where people are restricted by laws from making such transfers. But in any case, Bitcoin has reached its transaction capacity and transaction slots are scarce. Simple payment transactions on Ethereum currently cost less than $0.05 on average.

Domestic money transfers, which make up the bulk of the transactions that people care about are free and instantly confirmed with existing centralized ledgers. Why should people waste time and money using a distributed ledger when the existing system works better?

1. Even if you were right, that still leaves international transfers as an area where cryptocurrency is superior to the old establishment system.

2. Not all countries have free domestic transfers. The US doesn't. Many of Canada's banks don't offer it. And not everyone is banked, even in the developed world.

3. You give up your privacy when you use the banking system, so if you don't want your payee to know your name and bank account number, you're better off using cryptocurrency.

1. International transfers are only viable between first world countries because technical literacy and access to internet are undeveloped outside those regions and that's all before converting your crypto to spendable money which is inconvenient if not prohibitively expensive outside the first world.

2. The US doesn't have free wire transfers but all major banks offer free instant transfers between other major banks; not a perfect system but fine for the consumer masses.

3. KYC regulations mean you're going to give all of your info to an exchange which have an atrocious historical record with regard to security when compared with banks, but exchanges also require a bank account to convert funds and often to buy them (or at a minimum a debit card linked to a bank account).

Crypto is pretty much always the worst option except in the situations where you have an imperative desire to put a degree of separation between your legal name and a financial transaction.

1. So then you accept that cryptocurrency is better for international transfers in the developed world? Your point about the developing world is really reaching as well: large areas of the developing world have widespread internet access, and there are a growing number of ways to exchange between fiat and crypto in the developing world.

2. It's not free in the US..

3. People can receive cryptocurrency in commercial exchange. It's not just through purchasing it with fiat.

There are certainly areas where crypto has advantages to fiat, and more advantages could emerge as its liquidity increases. I'm really not sure why you're going to such lengths to insist it has no purpose and advantages.

The vast majority of people don't care about TCP/IP either, but still use Facebook. (Blockchains are similarly low-level infrastructure, that enable all kinds of higher-level user applications.)

But what would make 2B people use an open blockchain-based technology vs a closed proprietary one?

A closed proprietary layer on top of it.

If I am reading you correctly, I disagre. I suspect you couldn't even find two billion people who care if the source is open.

I love FOSS. I donate to EFF. I have met people who are heavily involved. I am in the minority.

If people were going to care about it being open source, the computer realm would probably much different. People just don't care, and it's not like we've been shy about telling folks about its benefits.

Most folks are happy enough with their closed source. No evidence suggests that this is going to change. FOSS has been more than adequate, for most users, for a long time.

There is no evidence that this year will be the year of Linux on the desktop, for example.

Then, what are the advantages to the firm?

My point exactly.

Yeah, its also a shame that all these crypto-currencies don't seem to be interested in the idea of money to exchange goods and services but instead seem to be all about volatile financial thrill-rides.

Is that what the creators think is the central focus of currency?

Crypto-currency will only "get big" when it becomes nice and boring.

Open protocols are already much larger than closed systems. Look at email (based on SMTP) and the internet (based on TCP/IP). This statement only expects a successful new protocol to follow the same trend.

Selection/survivor bias. For each SMTP there are probably 100 open protocols that are by the roadside.

Yes. Let's look at more examples:

Chat: Open: XMPP, Jabber, Adium, Tox, Jitsi. Closed: WhatsApp, Facebook Messenger, Apple Messages, Line, Skype, WeChat.

Social: Open: ? pump.io, Diaspora? Closed: Facebook, Google+, LinkedIn.

App Stores: Open: F-Droid. Closed: Apple App Store, Google Play

Authentication: Open: FreeOTP. Closed: Authy, Google Authenticator

Office: Open: LibreOffice. Closed: Microsoft Office.

Cloud: Open: ? buddycloud, GitLab. Closed: iCloud, Dropbox, Google Drive, Microsoft OneDrive.

OS: Open: Unixes. Closed: OS X, Windows

Browsers: Open: Firefox. Closed: Chrome, Safari, IE

Maps: Open: OpenStreetMap. Closed: Google maps, Apple maps

I realise these are mostly not "protocols" (depending on what layer we're talking about). Nevertheless, can hardly say that "Open protocols are already much larger than closed systems".

This is a Bad Comment that tries to disguise itself as a Good Comment by going for quantity over quality. Cherry picking, misinformation, and apples-and-oranges comparisons can all be found here. For example:

> Google Authenticator

...is open source and based on open standards.

> Chrome

Chromium

> Safari

WebKit (originally derived from KHTML)

> Cloud: Open: ? buddycloud, GitLab. Closed: iCloud, Dropbox, Google Drive, Microsoft OneDrive.

The open and closed products here aren't even in the same spaces.

Google Authenticator, the one that you download from Play Store, is not open source:

> These apps are not on the app stores, and their code has diverged from what's in the app stores, so patches here won't necessarily show up in those versions.

Source: https://github.com/google/google-authenticator/blob/master/R...

True, but the developers of those open protocols have no or little financial incentive for the success of their standard. Traditionally closed protocols had the financial incentive. Blockchains are different in that way.

I mean, Diaspora has an open protocol. How well did that take off?

What's a Diaspora?

But facebook already uses TCP/IP. What does blockchain add?

I think you're underestimating how big the cryptocurrency market will be.

In terms of market size sure, in terms of active users, I'm skeptical. Best case is that the decentralization is seamless and creates no friction. There are already closed protocols that enable almost everything you would be able to do with that. Anything else would require using the cryptocurrency as a store of value, which you will NEVER get 2 billion people to buy into.

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