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Comment by Freak_NL | Hacker News Reader

Trying to learn something about blockchain: the technology and its applications right now, means wading through masses of hype and parties anxious to 'get into it' before it's 'too late'.

In healthcare IT the blockchain is hot right now. Government bureaus are pushing for adoption, care institute executives heard somewhere that this blockchain thing is the bee's knees and well suited for healthcare stuff like insurance mutations, and IT vendors are worried someone else will beat them to it.

Is it a useful technology? Probably. But right now for many the blockchain is the goal, not the solution to any specific problem.

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I think it is the perfect storm formed by the combination of:

- IT staff wanting to write "blockchain" on their CV (I have seen CVs driving technological choices so many times, hadoop used to store a 10MB csv file, etc)

- Some senior management reading in Newsweek that blockchain is the new hot thing and asking his CTO to give him blockchain stuff.

When such a storm forms, no objection from anyone in the organisation, no budget constraint or any form of rationality can stop it, a category 5 bullshit hurricane. A hammer looking for anything looking remotely close to a nail, even a finger.

Ha! I love that hammer analogy. I'm definitely stealing that!

A lot of simple uses I see being put forward for blockchains could just as easily be done by a simple signing certificate.

Perhaps, for a new generation, certs are too old fashioned, or many have never heard of their uses?

Most uses of blockchain I see have been put forward by very large companies... but large companies are the least likely to benefit. Blockchain gives you a decentralized source of trust. Large companies (e.g., banks, governments, etc.) specialize in providing a centralized source of trust.

I'd think that small banks/financial institutions would benefit far more than large companies. They can confidently share data with each other and enforce standards among themselves. Big companies, on the other hand, already have that trust through their reputation and detailed, legally enforceable contracts.

Nice example: say you wanna send $5M from the US to another country. Traditionally, you'd call a big US bank, send them the money b/c you trust them, and they'd send it to another large foreign bank b/c the US bank trusts the foreign one. There's a chain of trust based on the stature of the companies, and they charge a nice fee for that peace of mind. Blockchain can allow smaller companies to get into that game, but not entirely sure how it helps the big ones.

You miss the point about trust. The trust issue that blockchain addresses for big banks is not "I'm worried you're a scam that will disappear with all my money". It's "I'm worried that you've not got every single number exactly right and there will diaagreements". Hence it takes 2-3 days in the US to settle a simple financial trade, to allow for multiple batch reconciliations to verify that the information that each party holds about the trade matches up. Using a shared, distributed database to store all this information, instead of every party keeping their own copy, has the potential for colossal efficiency gains. That's why big institutions are interested in blockchain.

Or both parties could update a shared non-distributed database.

They could, though then there would be more trust issues about who hosts and controls the database. A database of which every participant keeps a copy, and with strong guarantees about consistency between the copies, has pretty obvious attractions.

I am definitely not saying blockchain is the only or even the best way to achieve that! Just that this helps explain its appeal

Exactly. Big banks have already dealt with these trust issues through their teams of lawyers, longstanding partnerships, and reputation in the market.

I'm not saying big banks have nothing to gain, they do, but proportionally less than a smaller company that no one knows about. It allows "Bank of Mom & Pop USA" to confidentially do deals with "Little-Town Bank" Shanghai" without going through the mega-banks.

Everyone is trapped chasing growth because that is what they are told to chase. What happens as a consequence has become almost academic these days. Root cause is the trap everyone is already in.

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