A blockchain is a specific set of choices suitable for a narrow set of use-cases | Hacker News Reader

A blockchain is a specific set of choices suitable for a narrow set of use-cases

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419 pointsBerislavLopac331 comments

I was recently at an "Emerging Technology" conference for emerging technologies that was targeted at non-technical entrepreneurs and innovators. 90% of the conference was focused on blockchain, while the remaining was focused on AI. During the entire conference, blockchain was being touted as a silver bullet for many problems, and many of the people at the conference ate it up.

The best anecdote to summarize the conference was a speech by IBM where they covered a project which they did with major retailer to track a supply chain. The speaker mentioned some impressive results which caused a noticeable people around me to literally say "wow". However, they did not once mention specifically how blockchain was the cause of these results or give reasons why blockchain was superior. From what I could tell as an engineer, the entire application could have been built without blockchain.

I was surprised at how blockchain was being touted as the next technological revolution (and very light on the details) and was concerned at how quickly the other attendees accepted blockchain as it was being sold. I left the conference thinking that it would only be a matter of time before blockchain would be touted as a silver bullet in the larger community due to conferences like these (although I am sure they've been happening for a while, and this was my first exposure). It will not be long before a large number of software projects will be based on blockchain needlessly, and/or the engineers will be arguing with management why using blockchain is a mistake.

Or the engineers will all agree that any apppend-only linked list is a [degenerate] kind of block chain.

Yeah - that is how it works! Blockchain can be solution to anything - you just need the definition of blockchain to be broad enough.

It is an empty signifier.

That reminds me of this IBM press release[1]:

> IBM, Walmart and Tsinghua University have piloted the use of blockchain to trace food items, including pork in China and mangoes in the U.S., as they move through the supply chain to store shelves. Recent testing by Walmart showed that applying blockchain reduced the time it took to trace a package of mangoes from the farm to the store from days or weeks to two seconds.

[1] https://www-03.ibm.com/press/us/en/pressrelease/53487.wss

The speech was about the mangos. They specifically said looking up the grower went from 7 days to 12 seconds due to blockchain and a $7b savings.

How many times will we have to debunk this "physical goods traceability through the blockchain can work and be more efficient than some random SQL database" nonsense? If you trace physical goods you need to trust people not to lie about their nature, if you have trust then you don't need a blockchain and can use something a lot cheaper and more efficient. They should put that on a banner on HN or something, it'll save everybody some time.

I assume that what IBM did was centralizing mango grower info in a database instead having to go through complicated, manual processes. They did that through a Blockchain for some reason but I'm sure you could get similar result in some PostgreSQL DB. Of course I can't know for sure because the announcement is all fluff and hype and no substance.

You can use Postgres or whatever as backend to the Blockchain if you wish. Blockchain solutions are maybe 20% Blockchain, 70% cryptography and 10% caching/traditional tech around it (percentages are my rough guess from what I’ve seen). They actually can solve some problems in large corporations relatively easily compared to centralised systems. If I had to summarise in few words why - I’d say it’s because of cryptography patterns and immutable/verifiable/temper resistant, distributed ledger that has completely different security profile from traditional systems - ie there’s nothing to hack except from stealing private keys in which case the damage is limited to areas that this key is covering (usually very small). This has implications in corporate setting because now you can deploy ambitious projects without worrying about security that much...

>If I had to summarise in few words why - I’d say it’s because of cryptography patterns and immutable/verifiable/temper resistant, distributed ledger that has completely different security profile from traditional systems

The temper resistance is not god-given, it's a consequence of the miners racing to mine new blocks. If you want the same type of resistance for a custom blockchain then you need to convince a bunch of people to mine your chain. Why would I mine MangoCoin?

So instead immutability is achieved by making a "side-chain" that eventually links to a big and secure chain like Bitcoin or Ethereum. But then it's basically the equivalent of having a SQL database, computing a checksum every day and uploading it in a custom bitcoin transaction. Effectively you could achieve the same thing by computing the checksum, signing it with your PGP key and uploading it publicly on your website for all to see. This way anybody can make copies and if you attempt to modify an old entry in your DB it'll invalidate the checksum and anybody having a copy will be able to prove it.

So with this scheme your SQL database is immutable, verifiable and temper resistant. Unfortunately if you implement it that way your announcement won't make the rounds on social media and give you a lot of free PR and a boost to your stock, so better brand it "with real bits of revolutionary Blockchain(c)(tm) technology inside" instead.

>ie there’s nothing to hack

The Blockchain runs on computers, computers can be hacked. People can forge a bad transaction saying that some mangoes are organic when they're not. People can say mangoes have been stolen when in fact they've been sold to avoid paying taxes. The blockchain isn't harder to hack than any distributed database. The Blockchain isn't magic.

PoW is never used for private/custom blockchains, I've never seen it, it doesn't make much sense. If you insist on saying it's just like sql, you'd have to say it's "just like" replicated, multi-master sql database, with publicly exposed read only access, forbidden deletes/updates, inserts restricted/enforced by triggers/whatever based on asymmetric cryptography of currently connected user.

It's just not the same thing, completely different security profile.

The only way to forge transaction is to steal private key.

Nobody is saying that blockchain will force humans to not click "organic" checkbox for non-organic mangoes, this is absurd - but it can encode digital signature of somebody who checks it so it can be later traced back and allows to write logic that signature is required for the mango to go to the next step in the supply chain for example.

I think you don't realize (most people don't) how many problems this little thing solves.

It's not replacement for sql, big data or what not - it would be silly to say that - when designing blockchain systems you actually spend a lot of time on finding the most minimal thing that has to be stored on the chain for your contracts to enforce all required logic. It allows you to trust data in it without security ceremony/setup.

> there’s nothing to hack except from stealing private keys in which case the damage is limited to areas that this key is covering (usually very small).

On the contrary. Let's say that you institute a blockchain to trace the chain of custody for evidence (not much different than tracing the chain of custody, cough supply chain cough, for mangoes). From the creation of a piece of evidence to transferring custody between different law enforcement officials, each block on the blockchain contains the private key signatures of law enforcement agents who have testified that they have taken custody of the evidence at a certain period of time. In theory, the benefit of a blockchain here is a publicly auditable record of custody which has clear value for the admissibility of evidence at public trial. Imagine that we wave away issues of latency for the sake of argument.

With cryptocurrency, actors are motivated not to share their private keys, because sharing their private key means risking irrevocably giving away all the currency in the wallet controlled by that key. What is the similar motivation here, for law enforcement agents not to share or otherwise compromise their private keys? If one cop tells another cop "hey I need you to do me a favor and sign custody of this evidence now while not actually taking it, so I can take it somewhere else and mess with it to make sure we can for sure put this guy away," or "hey do me a favor, I'm not going to sign custody on this now, but I'll do it later on" - what prevents this from happening?

Is it supposed to be the threat of perjury? Because the courts already have a problem with testimony which has been found to be false, where perjury cases are rarely subsequently prosecuted. Put it this way - just because something is auditable, who will audit it? And how do you police domain violations which are still valid blockchain transactions?

A blockchain where you have a publicly auditable, irrevocable record is meaningless if it doesn't really mean anything for blockchain actors to "act in their own interest". In this case, undermining the private keys is everything, because that's what undermines faith in the entire blockchain.

Normally you'd have independent party/institution that physically verifies and digitally signs facts.

Police officer would issue a request to that 3rd party to sign this fact.

Blockchain doesn't magically make people honest, but it can encode claims that you can verify.

But if you already have a trusted third party, then why do you need a blockchain? The whole point of a blockchain is to avoid the centralization of trusted third parties. At that point you might as well have a normal relational database / transactions with ACID gusrantees.

3rd party is just another actor in the system, they’re not running the system, they interact with it just like ordinary Joe with their private key.

> If you trace physical goods you need to trust people not to lie about their nature, if you have trust then you don't need a blockchain and can use something a lot cheaper and more efficient

I think the point is, though, that you can trust someone to be honest whilst someone is watching them, but you can't necessarily trust them not to change their minds at some point in the future. If it's all on the blockchain you have an immutable historical record.

Immutable data storage does not require blockchain, period. Using blockchain because you need immutable storage is like using a helicopter to cross the street. Yes it works, but they are way more simple, efficient and straightforward technologies that will do the same job better and without introducing a bunch of unneeded features/complexity.

> but they [sic] are way more simple, efficient and straightforward technologies

can you give examples? where all stakeholders have the same immutable "ledger"?

how about some combination of Merkle trees and HMACs? The person who writes the entry signs it with their private key. No need for PoW miners, a constant internet connection, having nodes compute the head of the blockchain, none of the extra nonsense that blockchains require.

> some combination of Merkle trees and HMACs?

...and then you could group the ledger entries into "blocks" of merkle trees and signing using HMACs, you mean?

You've basically reinvented the "blockchain". The commercially available blockchains are essentially this - they don't use proof-of-work. The enterprise blockchains are not the same as the one that underpins bitcoin.

So where's the innovation? If that's blockchain technology then Linux package managers, PGP, HTTPS and bittorent have been using "blockchain technology" for a long while now. I could've come up with this solution 10 years ago if you had asked me, and I'm really not that clever. Did IBM engineers really just discover public key cryptography?

The current blockchain craze is supposed to find its root in the Bitcoin whitepaper which is about a decentralized distributed trustless immutable ledger. If you remove any of these attributes you end up with something absolutely mundane that definitely doesn't warrant the ridiculous amount of hype, resources and money being poured into it. There are only a very small number of problems that can be solved with a decentralized distributed trustless immutable ledger. That's exactly the point of TFA.

I think this is a very important point to make because many cryptocurrency zealots ofter argue that "the blockchain technology is here to stay, ergo cryptocurrencies is here to stay". Except it turns out that the term became almost meaningless because anything sort of qualifies as a "blockchain" these days, including many centralized systems like IOTA or Ripple or systems that are de-facto centrally managed and mutable (like Ethereum).

If people realize that Blockchain is 90% hype, 9% old technology and 1% actual innovation then maybe they'll think twice about whether having a ~$400 billion market cap for cryptocurrencies is sustainable in the long term.

You sound like you are arguing against Dropbox 10 years ago: https://news.ycombinator.com/item?id=8863

That's the key problem here, people can't agree on what a blockchain is, and keep re-defining it to meet their implementation needs. If you think decentralization is fundamental you won't accept the enterprise blockchains into the definition, but the B2B companies aren't going to look at it that way.

This is what usually happens when marketing around a term gets too froth (see also, AI).

You're right and I don't want to get too far down the road of defending blockchain (as I seem to have unwittingly done). The marketing most certainly is over the top.

I work on a product that does produce traceability. People put wrong input on forms every day, print labels and stick them into crates. They then ask us to make their code show correctly when searched. Having the wrong product appear on search and an irate client because the blockchain is immutable would generate immense problems.

Why not have auditable mutability? The audit log is the thing that should be immutable.

Look: isn't the same as it happened for microservices, containers, serverless and many other new tech stacks?

It could have been done even without those, but since the cool kids are using them, then they spread

I see the resemblance but I think it's somewhat different in this case.

Something like Docker brought to light tech that many developers weren't familiar with but that existed before. But it actually accomplished concrete things in a very short amount of time.

Blockchain on the other hand is attractive not necessarily to developers, and it so far has promised a lot more than it has actually delivered. We see talks of huge figures and white papers and half finished products where the important features are coming in "the next milestone".

This is draining investment from others more viable solutions and creating the possibility for any blockchain startup to somehow shoehorn the tech into a product and insert themselves in a market of their choice.

IMO this is the wrong kind of disruption where potentially everyone loses in the mid to long term.

Microservices, containers, and serverless architectures all solve cross-cutting concerns that impact scalable and distributed architectures, core SaaS & cloud-native challenges, as well as some long running highly pricey problems in the Enterprise space. They're not tech stacks, they are design approaches that tightly align with our modern computing platforms. Googles enormous investments in this space are not random, it's reflective of their relative positioning compared to the rest of the market...

Block-chain tech is awesome in distributed scenarios where actors don't necessarily have contact with, or trust for, one another. That's a very narrow band comparatively.

Yes, people jump on bandwagons. Yes, engineers are often distracted by 'the new hotness'. But when Amazon, Google, MS, and VMware all align on virtualization technology it's something a bit bigger than people simply falling for 'cool tech'.

I recently went to a similar innovation conference, that was targeted at business owners. They were proposing block-chain technology as a panacea for every problem under the sun.

The funniest project involved parking meters 'on the block-chain' ...

It seems the more computational power we have access to, the quicker we find ways to waste it with inefficient systems ...

I think all the hype around block chain is hilarious for the very simple reason that block chain can’t actually solve any business problem that a centrally managed service couldn’t solve (with less effort likely).

The only thing block chain adds to any problem is when you don’t want a managed good or service to be under central authority or if it can’t be under a central authority (the later situation is probably more interesting). Crypto currencies make some sense (though I like my currency backed by the full faith and credit of a government, personally). However every other situation I hear of I wonder why someone couldn’t just manage a central service. Chain of trust on crates of produce? Supply chain professionals have solved the problem of authenticating sourcing of goods quite a long time ago (especially when laws required them too). Personally I think the one benefit that people don’t talk enough about is cases where the block chain can provide its users perfect forward secrecy on their transactions against the ledger, though again you don’t really need the block chain to do that.

> The only thing block chain adds to any problem is when you don’t want a managed good or service to be under central authority or if it can’t be under a central authority (the later situation is probably more interesting).

Trust (and thus the ability to use an authority) is not black and white. There are a lot of situations where some trust is allowed up until a certain level. Right now authorities are managed through some form of government or through legal enforcement (contracts and such).

- The first one only works in specific scenarios.

- The second one is extremely expensive (especially when working across borders). It might technically be not as elegant. But generally speaking servers are a lot cheaper than lawyers. Code is designed to be extendable and reusable, contracts are not. Let's not even talk about the long process of enforcing those contracts manually with very expensive lawyers in a physical court building.

Isn't the 'trust' eroded once a single party gains 51% of compute? Then you're just a really complicated and poorly implemented centralised database.

According to some comments from the core Bitcoin devs if an attacker has 51% of the hash rate they can selectively deny other people's transactions but it takes a much higher percentage of hash to be able to rewrite the blockchain.

51% attack is an issue that people have been concerned about for awhile. But an actor having 51% of the mining doesn't equal to poorly implemented centralized database. And a lot of ppl are keeping a look out for this issue so my guess is that even if one bad actor who happens to have 51%+ tries to hardfork, the rest of the community won't move.

There are efforts to deal with this issue. One example being the whole debate around moving from PoW to PoS and other systems.

> if one bad actor who happens to have 51%+ tries to hardfork, the rest of the community won't move.

What does that mean for Walmart and tracking their inventory?

This is the problem - these blockchain ideologists only tend to see problems and solutions from the perspective of the actual cryptocurrency blockchains. Real world is sadly a little different...

Using that logic, centralized systems have zero trust since single parties own 100% of the networks.

Complete opposite - A centralised system requires you to trust the single party operating it, but that's super transparent. Either you trust it or you don't, but it's clear what you're getting yourself into.

Meanwhile, blockchain networks advocate a functional network that doesn't require trust - it's kind of predicated on the fact that you _can't_ trust anyone. But if a single party obtains 51% power, you have to trust them anyway. If you're going to require trust, you may as well just do away with the whole complicated setup and be explicit about it.

> Trust (and thus the ability to use an authority) is not black and white. There are a lot of situations where some trust is allowed up until a certain level. Right now authorities are managed through some form of government or through legal enforcement (contracts and such).

How does trust play a role in a company tracking its own inventory? What does blockchain offer in terms of trust even when working across borders?

Because for any sufficiently large company, they won't be the only entity in their inventory's supply chain. Sharing data throughout the supply chain accurately and reliably is an extremely hard problem that has yet to be solved sufficiently.

So specifically, blockchain offers a totally accurate, reliable, secure way to track and exchange data across a multitude of distinct businesses with little opportunity for corruption. I'd say that's very valuable, and NOT something that can be done with a central database.

So, you are saying sharing data through supply chain is difficult. It is difficult because data cannot be tracked in an accurate, reliable, secure way and there is corruption involved. And lastly, blockchain is the only solution to these.

How will blockchain help in tracking shipments in an accurate, reliable and secure manner and most importantly, how does it stop corruption? If possible, how about using an example for clarity? Let's say Apple shipping a new MBP from China to a customer in US. How does blockchain work in ensuring all the above features?

> How will blockchain help in tracking shipments in an accurate, reliable and secure manner and most importantly, how does it stop corruption?

We already had double entry accounting in order to establish immutable book entries but that gives us a problem of a potential multiple sets of books. The publishing of these records to the blockchain via PoW therefore establishes a sort of triple entry system where the Proof of Work idea is intending to prove a single unmodified ledger.

I work IT for a retail manufacturer. We have to track ingredients for every product we create and what products they each go into and to which customers they ship out to. I'd say it's reasonable that we trust our own database but do you? Is it reasonable for you to trust my database? What if there's a huge recall because of a tainted ingredient? What if I found out I'd lose my job or the company would fold because of this recall and maybe I was lied to and told the tainted ingredient is harmless(Im no food scientist)? I think we have enough evidence to show that companies will sometimes alter books and lie to avoid responsibility but not me no, I'd NEVER do such a thing, i'm a good boy who would never get fired for doing such a thing but maybe that's what would get me fired....fuck what do I do? Oh you meant data corruption....yea no one has double spent yet have they?

>So specifically, blockchain offers a totally accurate, reliable, secure way to track and exchange data across a multitude of distinct businesses with little opportunity for corruption.

This is genuinely amusing to me. I feel like in these discussions you can replace "blockchain" with "philosopher's stone", like it's some kind of magical element that solves problems using the power of dreams and internet memes.

Let's imagine that we're in the real world for a second (I know, lame). Now we're in a company that deals with fruit imports. We have a ton of contractors all around the world and we use the Holy Blockchain to deal with that.

One of our contractors adds a transaction to our chain saying "we're sending you the container #12 containing bananas". Then almost at the same time an other contractor in the same area says "we're sending you the container #12 containing lemons".

How does the Holy Blockchain, Peace Be Upon It, solve this issue? Do we use PoW? Does the contractor with the most powerful computer decides who's right? If it turns out that the lemon contractor wins somehow and gets its transaction on the blockchain but it turns out they lied or were mistaken, do we tell the customers that "the code is law" and they're just eating extra-bitter bananas?

I mean seriously, it's not magic, it's a bunch of data chunks linked through a SHA-256, it's not going to bring world peace and it's not going to magically make everybody in the world agree about everything. As long as bananas won't grow directly on the Holy Blockchain (May Satoshi Grant Peace and Honor on It and Its Blocks) then nothing will ever be totally accurate, reliable or secure. Unfortunately I hear that digital bananas are not very nourishing.

You are taking the argument too far, but then you probably know it.

It's just a "tamper-proof" ink for a reasonable price, nothing more, nothing less. It won't grow bananas or lemons, and GIGO (garbage in, garbage out) principle still applies.

How about if instead of coming up with the fictional scenarios that won't work, you instead learn about technology, ignore hype (and greed) and come up with the some that will work? Hint: they exist.

If its tamper proof ink can't we solve that by signing the document and emailing it?

You could, depending on your requirements. If someone needed proof that this was indeed signed and sent at that time, it gets more difficult with e-mail.

Please try to track the context of an argument. You're ignoring the part where simias was responding to a post which stated that blockchain is "totally accurate [and] reliable", which is in complete contradiction to your view that it's GIGO.

You are misquoting:

> So specifically, blockchain offers a totally accurate, reliable, secure way to track and exchange data across a multitude of distinct businesses with little opportunity for corruption.

There is nothing said there about contents of the data, so the GIGO principle still applies, as always. Attacking blockchain that it doesn't help if input is garbage is thus pointless.

I would suggest you read the quoted statement again. It is very precise and true (imho of course).

> PoW

I don't know any private blockchain solution in the supplychain space that uses PoW. There are more ways to form consensus.

> This is genuinely amusing to me. I feel like in these discussions you can replace "blockchain" with "philosopher's stone", like it's some kind of magical element that solves problems using the power of dreams and internet memes.

You can use any type of software, as long as it has one clear picture of what the current status is (a database would work, 100 different databases would not work). A bulk of commodity trading is a done on paper right now, because no one wants to trust a single party to hold this database. I am not familiar with fruits but I work in soft and hard commodities (anywhere from grains to beans to oil to metals) and everyone is looking into distributed systems to solve this exact trust issue. But maybe all these companies should hire you to build a mysql database instead I guess?

> One of our contractors adds a transaction to our chain saying "we're sending you the container #12 containing bananas". Then almost at the same time an other contractor in the same area says "we're sending you the container #12 containing lemons".

Those are two different transactions, I don't know any type of software that wouldn't compute that you get 12 bananas and 12 lemons? I guess I'm not understanding what you are trying to say.

They are saying that one party says the container with ID #12 has bananas and a different party says that container #12 has lemons, not that there are two containers, one with 12 bananas and one with 12 lemons.

Ah, well there is no system ever that will solve that problem. Blockchains are simply systems that allow for the (as much as possible) trustless formation of consensus. So as soon as you have fraudulence data entering your system you know exactly where it came from and also that everyone is relying on the same data. This removes the need for everyone to double check everything multiple times.

I am involved in commodity trade finance (the financing of supply chain) and the current process is basically a huge number of different companies all checking the same data (documents & contracts). The banks actually check these documents multiple times (4 eyes principle).

You can build an API around a mysql database that does the checking. But no company would trust your checking for compliance, legal and trust reasons. If you offer them a full node (piece of software that doesn't trust all data thrown at it) in a blockchain system that they can run on their own infra it's a different story.

> Ah, well there is no system ever that will solve that problem.

That was the parent commenter's point: the really hard problems are not ones that technology can solve.

Having said that, while I agree with that point, your extremely informed comments in this thread on the usefulness of a private blockchain for a real use case have been the best argument for the the technology that I've seen. It's an interesting space; I just wish I saw more of your kind of perspective instead of the constant hype and "crypto" speculation.

>Let's not even talk about the long process of enforcing those contracts manually with very expensive lawyers in a physical court building.

You'll still need them at the end of the day though ? Code running in a computer somewhere doesn't rule the physical social very animal side of things.

Laws and lawyers are fuzzy constructs because humans are fuzzy creatures to start with, and imo we need that flexibility in laws and in their application, hence why I don't trust the "code is law" catch phrase.

I'm not saying it applies to everything. I'm not talking about you getting into a fight with your neighbor and the blockchain will help you settle things. But when two financial companies (for example) enter in some kind of contract the majority of the work involved can be automated on a blockchain as soon as there is one they both trust. source: I've worked for banks trying to do specifically this.

Can you name a situation where the blockchain could obviate the need for lawyers?

"I think all the hype around block chain is hilarious for the very simple reason that block chain can’t actually solve any business problem that a centrally managed service couldn’t solve"

This is a very common statement on here regarding blockchain solutions, and is effectively like saying "There's no program you can't write with 1991 Visual Basic" (or build in Excel -- I've had financial sorts try to hammer every problem into an Excel workbook). Theoretically true, but outrageously off the mark given the nuance on needs of many very varied projects.

Blockchain style solutions are not relevant for many projects. They have some legitimate uses, however, and saying "But you could..." isn't a retort.

>Blockchain style solutions are not relevant for many projects. They have some legitimate uses, however, and saying "But you could..." isn't a retort.

Except you've got that backwards. Since none of those solutions actually exist yet beyond hype, it's the blockchain proponents who have to show how using blockchain technology in those situations is not only feasible but superior. Saying that you can already solve those issues with existing techniques IS the default.

Isn't it just basically triple entry accounting?

Blockchain tech is ultimately about trust. Trust that the accounting hasn't been altered. You don't quite have it solved with just a double entry ledger right?

> Blockchain tech is ultimately about trust. Trust that the accounting hasn't been altered.

A simple git repository offers this property. Really it's just any data structure where only growing it is permitted. You don't need a blockchain to get this.

https://twitter.com/whitequark/status/946886702932557824

No, I don't have it backwards. Blockchain solutions offer decentralized, trustless alternatives to existing centralized, trust-based solutions. Further, it's bizarre reading this constant claim that nothing exists beyond hype, when a number of orgs have operating or in testing blockchain solutions for industries from manufacturing to finance. Inertia is a hell of a thing, as is "the way we do things", so it isn't surprising that it didn't suddenly replace everything, but it does have uses.

Please do list a couple of useful solutions where blockchain is the right/better tool for the jobs and thats outside of crypto coins or secondary layer of payment abstraction (and even there any payment option could work better in a lot of the cases).

Property title insurance is a great example. With blockchains it should be possible to reveal the owners of all properties and all transactions in order to remove ambiguity from the system. It is true that constructing and making use of such data implies trust in some sort of organization or process, but a robust store of ownership data is currently beyond keeping of property title records as currently performed by entrusted government entities.

Why would this work better? Not to be cynical but it seems from a engineering perspective that the trade off is security for data robustness? Anyone who takes control of the network will take control of all property title insurance data. In return at least i know up time will be 100%...

>No, I don't have it backwards. Blockchain solutions offer decentralized, trustless alternatives to existing centralized, trust-based solutions.

The problem is that the more we look at potential use cases, the more we found that trust relations are necessary to handle a load of basic process requirements that cannot be solved by blockchains alone, thus requiring the addition of trusted actors, thus removing the need of blockchains to begin with.

Blockchains proponents tend to see trustlessness as a benefit by itself. In their view, Blockchains are better than traditional databases because trustlessness is better than traditional client-server models.

System designers see trustlessness as a constrain. If you are in a bad situation where no single actor can be trusted by everyone else, then you can implement a decentralized database using blockchains. It's going to cost a lot in term of performance and efficiencies, but it's doable. But as soon as this constraint of truslessness is removed, why the hell would you bother with something like blockchains? And experience show us that, well, there's actually not a lot of contexts where trustlessness is an absolute requirement.

The implicit part of this argument, though, is that blockchains are expensive: in order to have this trustless system you have to have PoW which is inherently computationally (and therefore monetarily) expensive. It's not going to be easier to write either (which is the reason why people aren't using 1991 Visual Basic).

In other words, the argument here is why would you do it this other way that is more complicated and/or expensive when you could do it the default way which is simpler and cheaper.

I wouldn’t worry too much until there is an actual use case, and if there is a use case, then why worry?

I work in the Danish public sector, and we’re sold tech by consultants who hype politicians and upper management, both ares with very little technical understanding. But while they don’t understand what tech is, they do understand change management, and if there isn’t a proven benefit, they won’t buy the hype.

We’re doing a lot of RPA these days, and from a technical standpoint that’s really fucking stupid. An API would be a gazillion times better than a screen scraping macro. In reality, however, we run 370 different IT systems and the truth is that a lot of them won’t have a decent API in the next 20 years, if ever. So while RPA is really stupid technically, it has immense value on the business end because it automated shit we couldn’t automate otherwise.

The reason I mention RPA is that I asked my engineers if it was worth looking into about 3 years ago, and they gave me a straight no. So we didn’t pay it attention until our CEO asked me what RPA projects we were doing after having attended a Deloitte conference on the business application of RPA in the public sector.

Blockchain doesn’t have a use case, and that means it won’t sell, even if it’s hyped to non-tech people.

You do see a few public block chain projects, but they are mostly poc’s that never lead anywhere and they are all run by in house enthusiasts, who were “allowed” to “run with it as long as you keep doing your regular work as well” because allowing your workforce to play with their ideas is motivational, even if it’s really just a waste of time.

>I wouldn’t worry too much until there is an actual use case, and if there is a use case, then why worry?

I don't usually worry much about over-hyped technologies that gets the executive types all fuzzy inside while the rest of us look from afar wondering if they even understand what they're talking about. Web 2.0, NoSQL, IoT, Blockchain... The list is long. And it's not all trash, there's often some value at the core of the hype once you remove all the fluff.

But Blockchain is a bit more nefarious that this IMO, because it goes hand in hand with cryptocurrencies. The huge valuation of cryptocurrencies is the only reason Blockchains got so much publicity in the first place. I'm certain that if Bitcoin hadn't recovered from it's huge crash a couple of years ago you wouldn't see nearly as much Blockchain this and Blockchain that everywhere.

Conversely if you look at cryptocurrency enthusiast forums they use these news articles about big companies investing money and resources into "the blockchain" as proof that there's some high intrinsic value to the technology and to justify a very high valuation and pump it even more, especially to newcomers. "IBM is going to create a blockchain, BUY BUY BUY!"

It results in a big spiral of hype enabling scams enabling hype enabling scams... Meanwhile as far as I can see the only practical use cases of cryptocurrencies and even "the blockchain" at large is unbridled speculation, pyramid schemes and buying illegal stuff online. All that while expanding a ridiculous amount of energy mining the damn thing.

> Meanwhile as far as I can see the only practical use cases of cryptocurrencies and even "the blockchain" at large is unbridled speculation, pyramid schemes and buying illegal stuff online.

You aren't looking very hard, then!

Presumably your engineers didn't want to move from world a where they understand why things break to world b where any change even to a landing page could cause a cascade of failures due to automation that depends on that page.

A world where such failures causing production to fail become more likely because its challenging to predict ahead of time who depends on what and it what way.

Where they presumably have to then debug the mess.

Your engineers were right and unfortunately you are probably wrong about dumb ideas not selling.

Predicting time and allocating resources is my headache, and while RPA will make that worse, it also supports our primary function in a way that gives our more possibilities than we’ve had in years.

If we can save nurses for 10.000 administrative hours a yearwith RPA, then we’ll absolutely do it, even if it comes at the cost of having more work in operations. I mean, why wouldn’t we? Supporting the business end is our sole purpose of existence.

It’s not that bad though. We mainly use it as a last resort, either as something temporary while we wait for an API or on systems that will never have an API. A lot of these systems are old, one of our mainframe interfaces haven’t changed in 16 years.

On top of that, patch notifications in the public sector are often written solely for end users. This means that it’s actually easier to predict a button changing in an interface than an API breaking.

I’ve seen REST interfaces change, and break, without warning because the REST bit was really just slapped on there by sales.

Our first RPA poc saves us around 9.000 hours a year. It helped us get our case working up to a point where we’re within the legal deadlines (something we’ve never been before) and due to the lower pressure in the department we’ve managed to turn employee satisfaction from a 4/7 to a 5.6/7 and reducing sick leave from 15% to 8.

My department had to hire an extra engineer because if it and the business end had to allocate 1/4 of a yearly position to support the process. The business case is still green financially.

My engineers have never been more wrong. Even if the tech sucks, but that’s still my headache. Because I fully realize I can’t have a CS candidate do drag-and-drop programming full time and keep them happy.

Well, sir, there's nothing on earth Like a genuine, bona-fide, Electrified, blockchain. What'd I say?

Blockchain. What's it called? Blockchain. That's right! Blockchain.

Blockchain Blockchain Blockchain

I hear their energy use makes fans whir loud. It's as energy efficient as a GPU cloud. Is there a chance a fork could bring the end? Not on your life, my Nerdy friend.

What about us brain-dead slobs? You'll be given cushy MLM jobs Were you sent here by the ICO Devil? No good sir, I'm on the level.

The wheels came off my project plan. Take my ASIC, my good man. I swear it's Company's only choice. Throw up your hands and raise your voice.

Blockchain. What's it called? Blockchain. Once again. Blockchain.

But our product quality is still all broken. Sorry Bob, the mob has spoken.

Blockchain! Blockchain! Blockchain! Blockchain!

Block, d'oh!

(with apologies to The Simpsons).

You aren't far off. Remember the bitconnect guy?

Phil Hartman, you are still missed!

https://en.wikipedia.org/wiki/Phil_Hartman

We now live in the information age. Blockchains and AI will transform everyday life as well as specific sectors such as health care and trade.

Imagine walking in to a Starbucks café, order a cup of coffee, digitally signing a payment transaction on your mobile or laptop and then wait for it to be confirmed by the Blockchain while enjoying the hot cup of coffee you have ordered.

What is more, think about AI, you will not need to talk to the staff to place an order for your coffee. The staff can relax and watch you make gestures to a camera. They will be able to read on a screen if you’d like it white or black.

I think the article is too negative and does not see the big picture of transformation that is going on (as exemplified above).

> Imagine walking in to a Starbucks café, order a cup of coffee, digitally signing a payment transaction on your mobile or laptop and then wait for it to be confirmed by the Blockchain while enjoying the hot cup of coffee you have ordered.

You could do the the exact same thing now with credit cards, except the waiting. And then you could get your money back if the coffee sucked, and you wouldn't lose all your money if someone happened to steal your private key .

Pretty sure it was sarcasm.

Probably, but it's hard to tell in this debate where believers constantly have to rely on forgetting about existing technology completely.

It's important to keep Poe's law in mind when you're posting plain-text parody; you don't have tone of voice and body language to help convey your real intent.

I think you can already pay contactless either by your mobile or credit card and without the need of Blockchain.

> What is more, think about AI, you will not need to talk to the staff to place an order for your coffee. The staff can relax and watch you make gestures to a camera. They will be able to read on a screen if you’d like it white or black.

In McDonalds you have automatic machines that you can place an order and pay, e.g., contactless, without bothering the staff. Later you only just need to pick your order up.

I'd like you to know I got the sarcasm, even if nobody else did :)

Ah, I missed it.

It could have been more evident with Random Capitalization and effecting the utilization of grandiose Vocabulary... but on second thought that would just make it harder to distinguish from the original crackpots.

Imagine opening a mobile app, ordering a cup of coffee to a nearest Starbucks, having your transaction confirmed in matters of seconds and only then walking into a Starbucks where your cup is waiting for you.

You can do that right now, with no blockchain in sight.

What is more... interesting(?) - is that starbucks might have reason to use blockchain tech for non-public systems (info sharing with suppliers/vendors/etc, currency exchange between countries, etc) but it would be completely independent of any public use of blockchain, and we'd never know (or need to know, or care).

For info sharing with suppliers etc, you have systems with trust. Calling each other's APIs with authentication credentials. Old solutions are much better than blockchains there.

I don't disagree entirely. I think there may be some ... I don't want to say completely 'new' benefit to blockchain in this respect, but as it's explored more, there may be some other benefits which go beyond current approaches to info sharing/trust.

I suspect it will end up being more like 'nosql' - appropriate as an adjunct tech to deal with specific use cases, vs a foundational mindset to build everything on top of. But... that's just my own half-coffeed-this-morning thoughts...

AI will transform everyday life.

Blockchain may be used by businesses and make early proponents wealthy

Imagine being a Venezuelan right now.

https://www.wired.com/story/where-could-bitcoin-succeed-as-a...

Everything is fine, right up until the moment it's not.

I got to counter this sort of hype to a room full of bankers last week. It had the right effect, I'm pleased to say.

Slides: https://davidgerard.co.uk/blockchain/2018/04/19/welcome-to-t...

I enjoyed this. Nice presentation.

People believing the hype having an amazing willingness to forget about all the other technology that has already existed for decades.

Yep, that puzzles me, why so many people just accept "blockchain helped us to do that" without asking how exactly it did. Blockchain itself is really new interesting technology which opens new opportunities, but I'm afraid its real usage and advance can be slowed by all that hype around with snake oil-like offerings.

Imagine talking about TCP/IP in the late 1980ies. This is great but mostly limited to academia.

The blockchain isn't interesting as a business case any more than TCP/IP was.

The blockchain is the foundation of a new decentralized infrastructure for the digital space (which physical properties), but we still haven't "opened up the internet" to the public.

Let me fix this for you - "Imagine talking about IPX in the late 1980ies. The blockchain isn't interesting as a business case any more than IPX was."

Care to elaborate? Not sure I understand.

IPX was a rather popular internet protocol in the late 80s, it was a TCP/IP competitor and during 90s it was often present in application configurations as a equivalent of TCP/IP, usually only these 2, no other choices. It wasn't really scalable and completely lost to TCP/IP soon.

You present blockchain as a new "TCP/IP" (meaning successful technology) but it might as well be a new "IPX", left on the margins of history books after a decade of struggle. Currently nobody knows for sure.

The blockchain is nearing it's 10th anniversary with no sign of slowing down when it comes to people investing time in it.

Furthermore as far as I am aware there is not BlockchainX

Thank you. That's the key acknowledgement missing from nearly all the breathless descriptions of "where this is going".

I was at a similar conference last week and the same thing happened and the same IBM case that tracked produce supply chain was presented. The same "wow" moment was shared when they said they can now track the origin of a product in under 2 seconds where before it took them a week.

I happen to work in a product that manages produce traceability, and I can confirm that it is quite within the realm of possibility to track produce in under 2 seconds with a simple web app and a relational database. We have been doing it for about 10 years.

To add, the produce supply chain is full of connectivity and digital literacy issues, so I would venture a guess that a blockchain implementation would generate a lot of attrition on the operations side of things. Another point of concern is performance since this is a fast moving supply chain due to the product short shelf life.

It was interesting to see how this audience thinks that blockchain somehow "solves" traceability when this has been going on in several different forms in a wide array of different industries with specific needs. They seem to also think that the right way to do it is with IoT and smart contracts, as if it were just a step away to push such a solution to an existing supply chain.

It keeps me up at night that one day a top-down decision will come that says we must a have a blockchain solution because market, or new competitors will bloom in the face of absurd amount of money being thrown at blockchain solutions and take market share. I imagine that 5 years from now, the winners of today's hype battles will be the losers when they have to maintain an overly complex inflexible solution for many years more.

> I happen to work in a product that manages produce traceability, and I can confirm that it is quite within the realm of possibility to track produce in under 2 seconds with a simple web app and a relational database. We have been doing it for about 10 years.

But now IBM can do it in 2 seconds as well! This may create a big boon for "DB2->blockchain" conversion contracts.

We still seem to be in this weird period with blockchain stuff where it's a neat idea, but the problems people are tackling with it are mostly... mild variations of solved problems so far. This may be understandable - these are problems which are known to have value, and as new companies want to solve these problems, they may opt for a blockchain-based version vs traditional "old school" relational db. But there may also be limited value there compared to old school version.

This feels a bit like "key value store" systems vs databases. There was (is?) a lot of hype around schemaless and "lightweight" KV stores, but most of the problems are also solved by intelligent use of SQL. Ditto for the XML-databases rage from ... 12-15 years ago.

"Rational Blockchain on AIX, fast deployment via Websphere", now that will sell like hot apples. IBM to the moon!

I also work with some of the big ones and their customers and partners. I don't understand how case studies like that are shown and believed without question, and not just in blockchain but other tech or processes too. Baffles me, really disappoints me. In college I expected high up business people to be discerning and no-bs but they will buy anything without thinking critically about the pitch! I don't understand it.

> It keeps me up at night that one day a top-down decision will come that says we must a have a blockchain solution because market, or new competitors will bloom in the face of absurd amount of money being thrown at blockchain solutions and take market share. I imagine that 5 years from now, the winners of today's hype battles will be the losers when they have to maintain an overly complex inflexible solution for many years more.

If the people making the calls don't understand the technology, you can just make up jargon to keep them happy. Make a regular app, call it a "blockchain solution" and call it a day.

You dont't need blockchain or databases for that. A single Kafka topic can do that.

It's even worse among start-ups. My VC friends tell me than almost every. Single. Venture they see has ai/ml bolted onto it, often with no real purpose.

>I was surprised at how blockchain was being touted as the next technological revolution (and very light on the details)

If you're surprised by this you must not have gotten online much in the last 10 years, especially on this site. Blockchain technology has been heralded as the next great revolution in human society that will transform all aspects of human existence and usher in an endless golden era of freedom and prosperity.

What exactly is the specific use case where Proof of Work blockchain are appropriate?

Consensus in that design is:

1. Perhaps the single most expensive consensus algorithm ever designed.

2. Deliberately one of the slowest.

3. Does not actually provide trustless consensus once 1/3 of the miner nodes decide to collude.

Other than "our data is a merkle tree but you have to trust us to submit transactions to it", and "a currency system with a failed promise to deliver either scale or trustless consensus" what, is the proper application?

Please provide sources and/or elaboration for/on the following:

* Deliberate slowness.

* Comparative slowness (given the problem space).

* 1/3 collusion breaking trust-less consensus.

* A definition of "us", "trust" and "scale" for your 6th line.

> Deliberate slowness.

As OP article alludes, bitcoin difficulty is tuned for a very long interval between blocks, to reduce the risk of nearly-simultaneous "uncle" blocks.

Other blockchains such as Ethereum have seemingly successful alternative approaches. IMO the article has a very limited perspective on blockchain technology. It's understandable, since the space is exploding and very hard to keep a handle on, but I think it should be less sweeping in its claims.

That doesn't really solve the problem at all though.

Ethereum beautifully solved the problem of "how do I cheaply make a token with trustless trading semantics?", and it's been used to raise billions of dollars of funding. So that might depend on the problem you're talking about.

There's an enormous amount of interesting blockchain technology, so sweeping dismissals of it tend to be lazy and ignorant.

> to raise billions of dollars of funding

How much of that was neither exit scammed nor lost to contract bugs?

Not the point. It's obviously introduced new problems, but does provide a highly valued capability. Sweeping dismissals of the space based on bitcoin's design are ignorant and lazy.

How do we know there isn't a selfish mining ring owning and subtly biasing Ethereum?

I want a good answer to this question before I put money back in. Because tbqf, it's very easy to raise capital on buzzwords. Especially if you're so we'll suited to money laundering.

It should be possible to check for autocorrelation of block arrival times, and correlation with forks. I don't know whether anyone's gone looking for that, but Eyal and Sirer have a strong incentive to monitor for it, and obviously have the chops to do so.

While there are bad actors in every system, how that system handles bad actors is still relevant and to the point when judging it.

Hardly lazy. The entire space has existed for 10 years and the underlying tech for even more. So far all that has been produced is massive amounts of fraud. If you want to count pump and dump scams, Ponzi schemes, pyramid schemes, terrorist funding, organized crime money laundering schemes, crypto-locker scams, “underage kids buying hardcore drugs” schemes, child trafficking schemes, blatant tax fraud, “hiding money from the ex wife” schemes, and all the other underground frauds, scams and criminal behavior as “valuable”, be my guest.

... oh and all at the low low cost of the several small nations worth of electricity required to power the brutally slow, inefficient by design Rube Goldberg contraption that is the blockchain...

The whole space is a joke.

how much of the internet was dedicated to porn and funny pictures?

Over 99% of it?

The PoW blockchain is slow to propagate updates but design. If you don't know how proof of work blockchains work, I advice you to Google around for a nice technical breakdown. Suffice to say, it is fundamental and a property people specifically code in to make blocks take a specific amount of time to complete.

As for the 1/3 citation, I guess that's slightly less known: "Selfish Mining". Citation: https://arxiv.org/pdf/1311.0243

Of course "1/3" is a joke. It's actually closer to 1/4.

TL;DR for those of us on small viewports?

People can collude to get a disrporotionate amount of the profit from a blockchain. The more people collude, the more profit they get, the more rational it is to join them.

This then bridges into traditional 51% attacks.

> The more people collude, the more profit they get, the more rational it is to join them.

This is not true. Colluders diminish the value of their PoW reward by reducing the trust of all other participants in the system and honest actors have an even strong incentive not to join them. Just a few years ago a mining pool that gained a very large share of the Bitcoin hashrate had members choose to leave -- https://www.coindesk.com/bitcoin-miners-ditch-ghash-io-pool-...

Please see the referenced paper. They address this.

Because Selfish Mining attacks are not inherently detectable, you cannot expect the average user to detect them.

Too many refutations of selfish mining appeal to an oracle. This is an example of such an argument.

If the big miners need to self regulate like that, then why bother with proof of work in the first place?

You say, "traditional," but has one ever actually taken place?

Bitcoins are mined by a uniformly random process, which means even groups with a small amount of power can mine blocks, and even can occasionally mine more than one in a row. But instead of publishing that mined block immediately, there is a better strategy. Waiting on publishing makes a fork, and the colluders can keep mining on the fork until the strategy defines that they should publish - which is basically when the "honest" branch catches up to the colluding branch. Since the colluders don't have a majority, this will always happen, but that's ok.

Due to the way that the Bitcoin protocol works, honest miners will sometimes "help out" the colluding group by mining on that published fork. This basically amplifies the power of the colluding group, which is the goal. Worse, the paper proposes that the percentage of honest miners switching to the fork can be influenced cheaply, by choosing which blocks to forward along in the p2p network.

Interesting. Wouldn't this be riskier than non-collusion, since it diverts hashpower from the main chain and the merging of the side chain depends on help from non-colluding miners?

Great paper!

I have been asking that for years without getting a good answer. It's a really cool technology! I wanted to use it for something!

But cryptotulips aside, every real-world use case I've looked at can be solved some other way (e.g., real-time published transaction logs). Humans are pretty good at creating trust contexts (see, e.g., 99% of commerce), and they're quite averse to doing anything significant in truly trustless contexts.

Almost nothing is a unique solution to a set of problems. Just because the problems that distributed ledger technologies address can be solved in a different way doesn't mean that to do so is the right business decision.

Sure, but PoW is (by design) computationally expensive, so any blockchain solution has the burden of showing why it's sufficiently better than the alternative to merit the extra cost.

Another problem is that if your nice blockchain has N computers in it, someone can go to AWS and add N+1 and take over your network. You basically have to blow more money on PoW than the network is worth _constantly_.

Or you can have a "private blockchain", which defeats the purpose entirely.

This would be a much better defense if PoW blockchains solved ANY problems.

As far as I can tell, they provide inferior guarantees AND performance to existing methodologies and algorithms.

Is there some other technology out there creating an immutable supply token better than Bitcoin that I don't know about?

What problem does that solve? Fiat money is clearly better than Bitcoin, easier to spend and use.

Yup. The only fields where Bitcoin et al have an obvious advantages is scams, fraud, speculation, money laundering, and a little light drug crime and extortion. Bitcoin has many theoretical use cases, but possibly none that are legitimate, socially useful, and in practice better than alternatives. And we've had nearly 10 years for those uses to appear.

Also: it isn't particularly efficient at these tasks. Proof of work mining has been discovered to have a major flaw AND it doesn't scale well.

I'm sorry, I don't know of one. But that doesn't mean PoW blockchains are actually reliably doing this either.

Any database that only allows appending, and is public readable?

Digital signatures have been a thing for ages.

Sure. And since this is an obvious fact, I figured most people would read that in. But just to be clear, I mean "solved more effectively some other way".

Blockchains in particular carry a business penalty for a few reasons. One is that they're novel. As Dan McKinley says, we should "choose boring technology" [1] unless we have a strong incentive not to. Blockchain expertise, to the extent that it exists, is bid up in the marketplace, giving another excellent reason to pick something else. A third is that the vigorous blockchain hype has created a fair bit of blockchain skepticism in reaction. I know people looking for work that won't even talk to blockchain companies. And then we have questions about security, efficiency, reliability, and all the other operational concerns that one mainly learns through hard lessons (hopefully other people's hard lessons written up for the rest of us to read).

[1] http://mcfunley.com/choose-boring-technology

> Does not actually provide trustless consensus once 1/3 of the miner nodes decide to collude.

Source? This does not match my understanding of POW blockchains.

https://news.ycombinator.com/item?id=16898463

I found this article related to the attack in that paper https://bitcoinmagazine.com/articles/why-bitcoin-mining-pool...

While I'm not completely convinced that the countermeasure of "spy mining" completely mitigates the attack, it does appear that this is not a new vulnerability. Further, if a pool had all of the hardware under one roof, it wouldn't be possible to spy at all which would reinstate all of the problems outlined in the paper.

I don't see how "spy mining" actually helps. It seems a bitter pill to suggest that now we need ANOTHER layer of validation on top of the existing protocol, further increasing Bitcoin's energy cost.

And if you believe this mitigates the attack, then "spy selfish miners" must also exist then, keeping parity.

Proof of work as implemented now is fatally flawed, and it's primarily a tenant of faith instead of logic that it isn't. Just google "selfish mining debate" and enjoy the plethora of inane and tedious reactions.

But also: yes the paper is not at all new. After replication and other checks, the Bitcoin community has gotten up on its high horse, plugged its ears tight with wax, and started signing, "I can't hear you!"

Personally I'm skeptical of all blockchain hype but as I have people in the industry close to me I try to keep an open mind and at least understand the technical and game theoretical aspects of the space. I can definitely agree that the aligned interests of those pressing for adoption and increasing prices has made rational debate difficult in many circles.

This reads like a rhetorical question – 'what could possibly be the application for something this deliberately bad?'

I won't speak for what "blockchain" can or will become, but you might see the hype more clearly by considering the ideology inherent in asking specifically for the "proper application." You imply that you or someone in a position you understand might "apply blockchain" to a "problem," as you commonly understand it.

I see "blockchain" more as a movement, which completely evades "application" in the common sense. People building these technologies, and organizations around them, live in a separate world that makes little reference to the broader world of which most of us are a part. They start with distinct priors, which rule out most existing solutions on the grounds that they demand political centralization (see: https://medium.com/@VitalikButerin/the-meaning-of-decentrali...).

You can summarize this ideology as: 'if there's a sysadmin, the system is broken.'

It may very well be the case that they are creating a new world that will be marginalized and outcompeted by incumbent systems and organizations, but that's how I understand what's 'actually going on'.

I admire the principles of decentralization, but I think it's rather like "serverless" - it moves the functionality around in order to pretend. All the cryptocurrencies have pretty "centralized" dev teams; as with Etherum they can fork to decide what history is and most miners will go with that. History is written by whoever has the github.

Consensus forking should always exist as an option. The problem with PoW blockchains is not the visible governance options. Those are a very positive feature.

The problem is the invisible governance patterns that an unreliable consensus algorithm creates.

>History is written by whoever has the github.

Not really, just because a change is pushed to the github repo, doesn't mean the network (and its participants) will automatically accept it. Those unhappy with the changes can always fork the network if they want.

As seen in their very example: ETC exists distinct from ETH

But that never in reality happens. All the forks of Bitcoin or Ethereum are mostly irrelevant. The majority will blindly follow core devs in both cases as have been proven by a long series of forks that became irrelevant very quickly as most people stay with the core version (Bitcoin or Ethereum Core Devs).

that wasn't the case with the segwit rollout on bitcoin. despite the feature being merged and released, miners were able to hold up adoption for months

I think a world where multiple, visible sysadmins compete is much better than a world that pretends to have none when in fact their technology enables invisible, undetectable but exceptionally powerful groups to form out of self interest. Wouldn't you agree?

Are you referring to miners? They are neither undetectable, nor exceptionally powerful. They do have an environmental impact, but the bitcoin community believes the juice is worth the squeeze.

I think the reference was to invisible powers controlling your news, search, social, legislative, and economic institutions.

No. It is possible for miners to collude and get unfair advantages, without even close to 1/3 the hashpower, and without being easily detectable.

I don't know why this is getting downvoted. The current assumption that colluding miners are detectable is absolutely false. There is no way of knowing whether a block comes from a specific mining farm/network as all information about that is forgable by the creator of the block.

If you try to mitigate this by controlling who has access, you just eliminated the advantage of being trustless and thus made blockchain an expensive database.

Please go read the selfish mining paper.

I prefer a world where some Giancarlo Devacini guy, living and working in offshore country, can issue billions of "dollars" out of thin air and being literally unaccountable. /s

Or perhaps they won't be outcompeted. But I think you are right, these are world views in competition.

Or perhaps they are all just blinded by greed and have invested far more than they had to lose... probably much simpler explanation

> 'if there's a sysadmin, the system is broken.'

Am sysadmin, is this best practice or just us being reciprocally lazy again?

> It may very well be the case that they are creating a new world that will be marginalized and outcompeted by incumbent systems and organizations, but that's how I understand what's 'actually going on'.

I keep telling people exactly this! Just because X makes sense or is the best doesn't mean the crowd will agree with it's application. See also all politics ever as an example. I feel like I can say it because I identify as one but, It's just another libertarian fantasy.

> Consensus in [proof of work blockchain] design is:

> 1. Perhaps the single most expensive consensus algorithm ever designed.

It's like arguing that bubblesort is one of the most expensive graph traversal algorithms. It's not, because it's a protocol for document timestamping, not establishing a consensus.

> 2. Deliberately one of the slowest.

Indeed. It was designed so verification of the timestamps is much, much faster than producing them. In previous work, with trusted third party operating a timestamping service, it was enough to control a single service, so there was no need to design this into the very data structure.

> 3. Does not actually provide trustless consensus once 1/3 of the miner nodes decide to collude.

Indeed it does not, because it was never designed as a consensus protocol.

> [...] what, is the proper application [of blockchain]?

When you need to establish an order in a sequence of related documents, like with trade contracts. Outside of this very narrow purpose, blockchain is pretty much useless.

> Indeed it does not, because it was never designed as a consensus protocol.

What exactly do you think a distributed ledger is other than a normal ledger and a trustless consensus protocol?

> What exactly do you think a distributed ledger is other than a normal ledger and a trustless consensus protocol?

There is no such thing among cryptographic protocols as "distributed ledger". The ledger is implemented on top of document timestamping and while required for Bitcoin, it doesn't exist for blockchain data structure. It's like calling HTTPs a cryptographic protocol for serving files.

About this "trustless consensus" part, how do you define "consensus" and how does it relate to what computer science calls "consensus" with its most prominent problem of Byzantine generals, especially with the impossibility proof (the one that talks about 1/3 traitors)?

I'm sorry, but I cannot even work out what your post is about.

Firstly: the single most important function of the Bitcoin network is to maintain a ledger that prevents double spends. Ethereum's charter is not so easily summed up bit it shares a responsibility here.

The tools Bitcoin uses to do this do indeed stem from cryptographic research, but the primary function of a blockchain is not to certify the past but to come to consensus on the immedate future.

No elliptic curve will do that for you. It is a distributed algorithm leveraging guarantees given by cryptographic primitives. Every expert accepts it as such.

As for your final note: multiple "solutions" for the Byzantine generals exist and have been published for years. Many of them give better guarantees than what a post-selfish-mining PoW blockchain gives you.

If your argument was, "It was never possible to come to consensus to begin with" then what are we talking about. If your argument is that it works fine, you should refute the cited paper directly. If your argument is that it's fine despite the flaws, I do not agree.

> I'm sorry, but I cannot even work out what your post is about.

The point boils down to this: you throw the "consensus" term left and right. The term has a concrete meaning in computer science, and you use it incorrectly, so stop doing that.

> As for your final note: multiple "solutions" for the Byzantine generals exist and have been published for years. Many of them give better guarantees than what a post-selfish-mining PoW blockchain gives you.

Note that the Byzantine generals problem has a rigorous proof that says you cannot have a consensus if loyal nodes don't outnumber the traitors by more than 2:1 (so you need 2/3 + 1 loyal nodes), and the proof is not about just the original algorithm Lamport et al. designed, it's about the consensus problem itself.

Where does the blockchain's "50% + 1" stands against that if blockchain was supposed to be a consensus algorithm?

> If your argument was, [...] If your argument is [...] If your argument is [...]

My whole point is "don't use the 'consensus' term incorrectly" and "call the blockchain what it is, i.e. timestamping protocol".

> My whole point is "don't use the 'consensus' term incorrectly" and "call the blockchain what it is, i.e. timestamping protocol".

The time is 35. If you don't agree, we'll have to come sort of... Oh wait I'm not supposed to use that word.

If you can invent a reliable alternative to proof-of-work distributed consensus there is a multi-billion dollar opportunity there. It’s inefficient, but before bitcoin came along there was no way to even do it. An inefficient way is better than no way at all.

Some other cryptocurrencies are trying alternatives. But none have been as “battle hardened” as bitcoin.

Follow the core developers and you’ll see their focus is on creating an open distributed platform. It’s up to us to figure out what to use it for.

Can I also invent a system that's been proven to not safely guarnatee consensus for years, and trust everyone to ignore it?

If so, I've got a thrilling investment opportunity for you.

> An inefficient way is better than no way at all

Really, why?

IMHO, there's a pretty compelling argument to be made that Bitcoin and the other cryptocurrencies have had a significantly net-negative impact on the world, from facilitating scams and other illegal activity to now having to worry that sites we visit will monetize by stealing CPU cycles to the significant impact on climate change, these technologies have caused a lot more harm than benefit. And all the while, they haven't even figured out how to build a ledger that can scale to day-to-day transactions. My bet is that the whole thing ends up being a tax on people who've forgotten their 17th century Dutch history.

We should've drawn the line in the sand back with 56 bit key limits

> from facilitating scams and other illegal activity

The same was said over and over on the nascent days of the internet, about how it facilitated anonymity so easily and how it would be used by criminals.

> by stealing CPU cycles

Difficulty in bitcoin mining is raising all the time (because of the competition among miners). This is why nobody mines nowadays with CPUs or GPUs but with ASICs. The fact that some sites are trying to achieve some decent mining hashrate by pulling the amount of visitors of a website is a naive move that will soon be off-set by even more raising levels of difficulty. Soon this will not be profitable at all, even if your website was the 1st in Google's page rank.

> to the significant impact on climate change

I like that skeptics raise this point, because:

1) The cryptocurrency mining industry is the fastest one to chase energy-efficient solutions. As soon as a device consumes less electricity, it's adopted widely because of the huge incentives to do so (e.g. CPU->GPU->ASIC).

2) Compare the electricity spent by the entire banking industry with the electricity spent by the entire crypto-mining industry. Now guess what's more efficient.

> The same was said over and over on the nascent days of the internet, about how it facilitated anonymity so easily and how it would be used by criminals.

There's 2 things I want to say about this comment:

1. Those accusations were not wrong. In the same sense that we have pretty clear evidence that a lot of the value injected into bitcoin and stored there is via money laundering.

2. Unlike proof of work currency blockchains, the internet clearly delivered and had no direct theoretical challenges to its very existence that people subsequently and fervently denied.

Proof of work is a bad idea. It's been discredited. It doesn't do what people thought it did. And it's MUCH too expensive to keep doing.

Proof of Work is the only way for people to transact in which they don't have counterpary-risk problems before transacting.

Before PoW was invented, there was no way of doing this.

Now, thanks to layer2 technologies, PoW will start becoming much more (orders of magnitude more) energy efficient.

How is that a bad idea? Make something possible, and later make it sustainable. So long as there's demand for that something, then it's a good idea.

There are two sides to a trade, and typically Bitcoin only handles one of them. Buy some food with Bitcoin and it still might taste bad or make you ill.

Even for purely financial transactions, any kind of loan or investment still has counter-party risk.

So even if a crypocurrency worked perfectly, it doesn't solve very much.

> There are two sides to a trade, and typically Bitcoin only handles one of them. Buy some food with Bitcoin and it still might taste bad or make you ill.

You have this same problem with any form of money. The problem I raised is counterparty-risk when holding your assets (before transacting).

> Even for purely financial transactions, any kind of loan or investment still has counter-party risk.

Yeah, that's why maybe loans should have higher interest (right now, the low interest is artificial, because the bank is really making more money from the fact that it's working as a fractional reserve, not from the interest it gathers from loaning you money).

> So even if a crypocurrency worked perfectly, it doesn't solve very much.

It solves just one thing. Granted, it's not a silver bullet. But there are never silver bullets. Every single invention that humanity achieves, just improves the world a little tiny bit. Cryptocurrency does this as well.

It does not solve anything. It's true that cash and bitcoin both avoid a narrow slice of counterparty risk. But that's not a whole problem, just part of one. As a currency, Bitcoin is an abject failure. Even big proponents admit that: http://avc.com/2017/08/store-of-value-vs-payment-system/

Bitcoin made no practical dent in existing legal financial transactions because it's not better for the great majority of use cases.

Because PoW doesn't have an answer to selfish mining attacks?

> Proof of Work is the only way for people to transact in which they don't have counterpary-risk problems before transacting.

> Before PoW was invented, there was no way of doing this.

If I pay with my credit card and am scammed, I just let them roll back the transaction and let the other side prove their case.

With Bitcoin, that mechanism is _impossible_.

We're not talking about Bitcoin here. I've personally created cryptoassets on the ethereum blockchain that support enforcement freezing and reversing transactions.

The fact that Bitcoin doesn't is primarily down to the ideology of early adopters, not technology reasons.

Genuinely curious: how much does it cost per transaction and how many transactions per second can you execute?

It always puzzles me when people point out that cryptocurrencies are used for illegal activities.

Cyptocurrencies were not designed to facilitate illegal activities. Yet every fuddite makes it seem so.

Every single fiat currency in the world is/can be used for illegal activities. Do we discard them? Care to wager which currency, USD or BTC; is used more for illegal activities? No, I didn't think you would. But media and fudders will repeatedly point out that it's cryptos that are used to transact illegal things.

> The same was said over and over on the nascent days of the internet

Do you shysters read from a script or something? Is this the counter argument you guys always use to try to squelch criticism?

Bitcoin is more than 10 years old. That is ancient in tech. It has yet to be used for anything besides an excellent vehicle for running scams.

>Bitcoin is more than 10 years old. That is ancient in tech

It's also a blink of an eye for a paradigm shift.

> If you can invent a reliable alternative to proof-of-work distributed consensus there is a multi-billion dollar opportunity there.

But Bitcoin only does 7 transactions per second. You can't say it's an alternative to something extremely larger.

The efficiency of mining on CPUs doesn't matter if you don't pay for the electricity.

> My bet is that the whole thing ends up being a tax on people who've forgotten their 17th century Dutch history.

Tulip Mania lasted 6 months

I have a sneaking suspicion that if tulips allowed masses of investors in less-than-open markets around the world to stash/protect assets from their overbearing governments, as well as facilitate the purchase of AK47s and money laundering, that the online tulip trade would be ongoing.

Fundamentally: people aren't buying BTC because online coins are pretty, they're investing in an alternative distribution model whose value is 'fixed' by willing parties on the other side who also rely on that distribution model. Yes, it is the Tinkerbell Effect, but a Tinkerbell Effect backed by centuries old markets of surprising strength (weapons and drugs, just to start with).

The value isn't the thing being exchanged, it's the ability to exchange.

Or you can just use graph theory to make PoW efficient & more secure[1][2]. Skip to page 11 of [1] for a quick visual summary.

[1] http://kadena.io/docs/chainweb.pdf

[2] https://www.youtube.com/watch?v=p1OFJOrgRWw

This looks really interesting. Thanks!

> creating an open distributed platform. It’s up to us to figure out what to use it for.

This is putting the cart very much before the horse.

I have no objection to people researching, experimenting, playing. Godspeed. Spending billions creating a technology that sounds cool but may be useless, though, is absurd.

We didn't get the Internet because somebody said, "Hey, let's spend billions wiring up a lot of computers and see if it's good for anything." The Internet's growth was driven by an expanding set of very specific use cases.

> If you can invent a reliable alternative to proof-of-work distributed consensus there is a multi-billion dollar opportunity there.

Trust.

Just use any authentication/authorization solution, contracts, the rule of law, reputation, everything we've always used to deal with varying degrees of trust.

Utter lack of trust is not a problem people have.

If you want to apply blockchain technology to anything real world (as opposed to coins that only exist _in_ the blockchain), then you need trust anyway whenever there is interaction (e.g. when someone inputs data, you need to trust its true anyway).

It's really only useful for coins, that are themselves less useful than existing money.

It was an interesting mathematical puzzle to solve, shouldn't have been made reality.

This is the right answer. It's frustrating that folks can't see it.

And how is that working out?

I agree that it doesn't seem useful outside of money, but when it comes to money, feel free to trust this. I don't: https://global.spdrs.com/content/dam/spdrs/etf-blogs-images/...

I mean, you can call it bad, but it provely works for the thing that it intended to solve.

That thing being sending censorship resistant, electronic financial transactions.

If you don't believe me that this worked, then please go back to 2010 and tell me a better way to donate money to Wikileaks.

At the end if the day, I could send money to Wikileaks, and there were no other options that worked at the time.

The points that you brought up don't really matter, because Bitcoin has been around for 8+ years and we don't see those attacks happening.

I don't care about the theoretical. I care about the practical. Come back to me with that attack vector once it actually happens on the live network, and money going to Wikileaks or whoever ACTUALLY gets censored.

> I mean, you can call it bad, but it provely works for the thing that it intended to solve. That thing being sending censorship resistant, electronic financial transactions.

But it doesn't appear to do so.

1. It cannot meet demand, so folks are recreating existing point to point financial networks and then using the chain in the event of reconciliation. These define a new topology as surely as credit card companies redefined the topology of modern digital economies.

2. It appears that it is very easy to gain a secret majority and do all sorts of nasty things, in addition to freezing out miners.

P.S., if I had a magic wand that could make WikiLeaks disappear in a sweeping curtain of sulphuric fire, I'd stick a bell on the top and wave it happily until my doctor informed me my RSI was fatal.

OK, so it appears that you don't support tools that allow people to get around censorship. That's fine, but that is literally the point of Bitcoin. You just don't like the use case.

At the end of the end, it has been working for 8 years, and it is the best tool out there to solve the problem of censorship resistant financial transactions.

This is proven by the fact that even though people want to shut down payments to places like Wikileaks they are still happening So the purpose is to subvert people and groups like you, who want to stop these payments, and yet the payments and money still flows.

The nasty things that you claim COULD happen, AREN'T. This is proven by the fact that groups like Wikileaks still recieve their money.

My definition of "working" has nothing to with theoreticals. It has to do with the practical, historical examples. And the historical example is that these groups are still receiving their money, so by definition it did work.

Or in other words, if it really doesn't work, as you claim, the how come it its working? As defined by the fact that it is literally the best existing tool out there for this usecase. (IE, visa and mastercard will block your money, and yet bitcoin still works)

If you disagree, fine, go ahead and try to stop my money going to places that you don't want it to (ex, such as Wikileaks). Report it to the NSA or whoever, for supporting "russian propaganda", or whatever. Betcha won't succeed.

> K, so it appears that you don't support tools that allow people to get around censorship. That's fine, but that is literally the point of Bitcoin. You just don't like the use case.

You cannot try to shame me into saying a technology that's been proven to have a major security flaw doesn't have that flaw. It's precisely because I care about this more than you that I can accept that bitter pill and you cannot.

> My definition of "working" has nothing to with theoreticals

Then you are a sucker, and you deserve to lose what you put in. Still, I hope you'll be okay, mmkay?

> Or in other words, if it really doesn't work, as you claim, the how come it its working?

Well, aside from the fact that its not working very well at all... It's prototype-level technology escalated to national limelight because of initial interest from a lot of questionable and probably illegal people. Unlike previous things like the internet, the value exchange mechanism is very direct, making it much more attractive for money laundering.

> As defined by the fact that it is literally the best existing tool out there for this usecase. (IE, visa and mastercard will block your money, and yet bitcoin still works)

I'm fairly sure the cost of a dozen viable stolen identities to use as money movement channels is MUCH cheaper than the transaction fees on bitcoin, so it's not like the enterprising criminal doesn't have a classical, high performance, downmarket option.

Bitcoin in particular is libertarian chic and anarchist crypto-religion. Ethereum has MUCH more interesting properties, but still needs several years to bake.

> If you disagree, fine, go ahead and try to stop my money going to places that you don't want it to (ex, such as Wikileaks).

If you really wanna donate to a bunch of authoritarian-loving pro-rapist people with such bad opsec that a single twitter actor blew a core comms network wide open? Be my guest. Crypto-fash it up.

> I'm fairly sure the cost of a dozen viable stolen identities to use as money movement channels is MUCH cheaper than the transaction fees on bitcoin, so it's not like the enterprising criminal doesn't have a classical, high performance, downmarket option.

Ok, and in 2010 did the average person have access to such a network?

I personally didn't have access to those things. Thats sounds pretty difficult, actually. But what I DID have access to was bitcoin. And it worked! And it didn't get censored like visa or mastercard was doing.

Thats the usecase. Me sending money to wikileaks. I cannot think of any other plausible way for me personally to send money to wikileaks back in 2010. Stolen identities sounds like it would get me sent to jail, and it seems hard. No thanks. Bitcoin was easier. (A dollar for a transaction fee is still cheaper than cross country money transfers, actually.)

> Ok, and in 2010 did the average person have access to such a network?

Yes. It was called IRC.

>1. It cannot meet demand, so folks are recreating existing point to point financial networks and then using the chain in the event of reconciliation. These define a new topology as surely as credit card companies redefined the topology of modern digital economies.

Are you talking about the Lightning Network?

While it has a different topology and its own limitations, I wouldn't call it a replication of existing systems. It's an extension of the blockchain transaction concept more than anything.

Users can still make trustless payments without relying on a third party. The routing nodes do not require trust due to the hash time locked contract system.

> Users can still make trustless payments without relying on a third party.

You need to establish each tunnel on chain, as I read it, this requires a commit to the block. So any time you want to open a payment to a 3rd party you need a btc chain transaction. I'm happy to be wrong here, but that's how I read it, and if so then that's not really gonna fix the problem at all; it's just going to make more not-actually-decentralized services.

Maybe it's an okay thing to imagine a world where there is a primary chain for major institutions and then brokers on this chain using lightning. But I gotta confess I was sorta signing up for something more revolutionary than "disrupting visa with a new visa."

Lightning network payments can be routed through other users/nodes. So you only need one "on chain" transaction to then be able to send those funds back and forth to any other user in the network.

eg: Alice opens a channel with Bob. Charlie opens a channel with Bob. Alice can send payments to Charlie by having them routed through Bob (in a trustless way using Hashed Timelock Contracts).

There are valid concerns around what the topology looks like and how efficient it is to find optimal routes through a large network. These are the problems the developers are working on though.

"Just put your life savings on chain and we'll solve the traveling salesman problem?"

Or am I misunderstanding?

Haha. Well that's why the amounts of money people are putting in the network right now are very small. It's certainly not something anyone recommends using for large payments, at least yet.

I think many people envision it something like an account balance you top up as you need to.

None of this should have much of anything to do with investments. I don't "invest" in crypto in the same way that I don't "invest" in the Euro, or even in the US dollar.

I put the vast majority of my money in the stock market. And I have some money in other currencies, centralized services like venmo/paypal/ect, and yes, a bit in crypto. Currencies which I then use to spend on things.

The point of a currency, yes even cryptocurrencies, is to SPEND it, not hold it.

completely agree re your argument that the point of cryptocurrencies is to SPEND it. all the hodling isn't making cryptocurrency adoption easy. but also def a lot of work needed for solving scalability issues and making cryptocurrency spending more end-user friendly.

> then please go back to 2010 and tell me a better way to donate money to Wikileaks

Regular SWIFT wire transfer always worked. The blockade applied to VISA/MasterCard/PayPal/Western Union.

The problem is that entry points in the network (exchanges) are censored or will be and you need exchange to actually extract money to spend, living in a authoritarian country. You can argue that people can use pure bitcoins by themselves, without fiat money, but that means that there should be an infrastructure where organizations accept and process btc, and they aren't doing it due to technical limitations of blockchain. It will only function as a "resistance coin" until there are some unaudited exchanges or some freedom in movement to go to other country for your money etc. If/when country will go "full dictatorship" btc won't be able to provide any useful utility.

In my opinion, the most notable innovation of Bitcoin is the incentive and PoW-reward for the continued upkeep and health of the network, and I often wonder why so much of the literature around blockchains misses or glosses over this fact.

The scheme neatly solves the free-rider problem that plagues other distributed systems, where your continued usage of the network can be ensured by your active participation within it.

>The scheme neatly solves the free-rider problem that plagues other permissionless systems.

FTFY

A parallel example would be various P2P filesharing protocols which was plagued by freeloaders from day 1, and had to come up with various schemes to regulate the user's contribution. The simpler solutions are not exactly Byzantine fault tolerant (user profiles in ed2k) whereas the more elaborate mechanism typically requires a centralised record keeper(private trackers, etc).

A lot of the inefficiencies of PoW are necessary to keep the network permissionless, and conversely you don't need PoW if the system has any kind of entry requirement.

Just to restate because I was not expecting to have to have this post pop up to top of thread: The selfish mining paper shows a significantly worse result than 1/3. I feel the need to lay this out very plainly because folks may not be in on that joke.

It's a joke at 1/3rd because that's sort of a naive threshold of for the BGP anyways.

Bitcoin was supposed to provide a stable solution where distributed actors could come to consensus on a ledger. That's how it was sold in the original paper. Majority attacks against the system will always exist, but the paper mentioned proves that the Bitcoin proof of work algorithm is much worse than we realized, and (more troublingly) that bad actors are harder to detect than it was passively assumed.

I think blockstack is one such application: to register an identity without relying on any central party for that. Basically anything where you need to make a very small number of transactions to store information that will be cryptographically secured in a decentralized manner.

While the definition is exact, it’s a pretty narrow one. I understand that people are tired with all the hype and naturally want to counter it somehow.

But don’t let it blind you, blockchain technologies will deeply change our societies. It’s a trust machine: it creates trust where there is none. Trust being one of the pillar of our civilization, the scope of its applications is wider than you would expect.

Edit: thanks for the downvotes... if your confirmation bias can’t handle a contrarian, respectful point of view, i’d seriously question your rationality as a member of this scientific-related community.

In most situations trust between two parties can be obtained by means of a third party they both trust.

That’s how the banking system has worked for centuries.

The use case for a blockchain is narrower: it can be used to establish trust between two parties in absence of a trustable third party.

Exact, and we have seen how well this third-party trust system worked during the last financial crisis just a decade ago.

Which system failure from that crisis does blockchain technology fix?

Sudden cascading lack of trust?

Blockchains can reduce counterparty risk in a transaction, but there's no technical solution to the fact that trust is required between, for example, a lender and a borrower. The idea that you can just sprinkle some blockchain dust and avoid financial crises is naive.

>but there's no technical solution to the fact that trust is required between, for example, a lender and a borrower.

No, it does not. However, if someone lends bitcoin to a borrower, it does not involve third parties, and therefore cannot "run" like a fractional reserve bank.

Of course it could. How could anyone who cares to lend individuals or small companies have so much of their own money that they can just do that with their time? They start this thing called a "bank" or "investment group" or "hedge fund" (etc.) and they use other people's money to invest or provide credit and either return an agreed amount over time (interest) or whatever they manage to gain - a fee (ROI - management fees, which is usually % of $ under management or % of profits gained (more rare)).

What you're suggesting is we get rid of credit and investing other people's money or, rather, that we use a system which makes that system impossible.

Financial organizations will be able to provide zero-knowledge proofs of their aggregate resource commitments, including distributions of credit score attestations. Organizations can lend to each other on the basis of those.

> Financial organizations will be able to provide zero-knowledge proofs of their aggregate resource commitments, including distributions of credit score attestations. Organizations can lend to each other on the basis of those.

This is pure meaningless buzzwords. Blockchain doesn’t solve any problem in the financial space besides providing a means to conduct financial fraud.

GP referenced technology, you said the technology was "buzzwords" and then insulted Blockchain with ad hominem. Grow up.

Zero-knowledge proofs can be provided to show trustless distributions of data (credit score attestations for example, or resource commitments), and can definitely lead to things like the ability to share trustless commitments. FWIW, only ZCash really uses zero-knowledge proofs right now, and even then just for private transactions (a subset of all transactions made in ZCash). Maybe read a bit before attacking something?

Unfortunately his comment is what passes as "sound analysis" on bitcoin and other cryptocurrencies for the moment. In a few decades statements like that will be cringe-worthy.

In a few years that statement will be completely mainstream. ZKPs are going to revolutionize finance and other accountability structures, with or without blockchain.

Of course it can.

Someone (A) can loan Bitcoin to another person (Bank), with the terms that if he asks he can have it back at any time, and he'll also receive a small percentage of interest each year.

Bank can then lend 90% of the money to a third person (C), betting that A will not ask to get all his money back at the same time. To decrease this risk, he does this with lots of people so he is covered in case only a few ask all of it back (but still is in trouble if too many of them do at the same time).

A still has money (his assets are very liquid as he can ask for them back at any time, very liquid assets are what we call money), C has money, the sum is more than the initial amount, so money was created through fractional reserver banking.

That's all fractional reserve banking is, and nothing about Blockchain prevents it.

>That's all fractional reserve banking is, and nothing about Blockchain prevents it.

Implicit in my comment was the idea that it would be a bad idea to start a fractional reserve bank which used a currency of account that wasn't available in infinite supply from a nearby government.

Also, I merely stated a way in which Bitcoin could be used as a sound bank, not that all possible banks which use Bitcoin are sound.

Not at all. Blockchains don't protect against poor investments or too much risk in any way. If we had a run on the banks you might have an argument but that didn't happen.

The lack of trust stemmed from complex derivative contracts which allowed people to create bets on thing they did not own with massive upsides. The cascade was in the contracts creating disproportionate problems in the books of banks + the fact that the CDOs themselves were falling apart in value.

Something like this could have easily* been created via ETH and automatically cascaded without and brakes and caused a chaotic meltdown that would be TRUELY destroyed the trust, not in ETH, but in the other people which we could lend money to and stop the growth of the economy which credit is built on.

* in a world where we used ETH to make these contracts normally as we do today using English and our existing Property/Tax/etc. laws.

Imagine you woke up one day to discover your bank account has been raided by another country's government. Just like that, $1 in every $16 of your supposedly safe money is gone. If you're wealthy enough to have more savings, it could be $1 in $10. Is it a nightmare?

The terms of the Cypriot bailout (and bail-in) are as simple as they are startling. Germany will cough up about $13 billion, and, in exchange, Cyprus will levy a "one-time" tax on bank deposits to raise an additional $7.5 billion. This tax will take 6.75 percent from insured deposits of €100,000 ($129,000) or less, and 9.9 percent from uninsured amounts above €100,000.

https://www.theatlantic.com/business/archive/2013/03/everyth...

The financial crisis didn’t start in the banking sector, it started in the finance sector.

And I cannot really see how a blockchain could have prevented it... I would be interested in hearing ideas about this!

When you have a public transparent record of the kinds of financial shenanigans that were going on, it can be audited very easily and put a stop to. The financial crisis was not avoided because all of the sketchy activity was hidden from sight.

Some bitcoin advocates think that blockchain-based financial products will somehow provide credit while solving the problem of systemic risk, which doesn't seem possible to me.

Others think that credit is just a scam and the main utility of banks is storing money and processing transactions, which is absurd. (In this scenario bitcoin takes over these functions and the financial system is no longer necessary.)

Does your view fall into one of these categories?

"Others think that credit is just a scam ... which is absurd" I understand that companies probably can't leave without it but I as an individual never took any loans in my entire life and not planning to get one. I don't like the idea and I see as it can get peoples life miserable, you constantly see people whining about paying the mortgage and credits even here because they basically chose, thanks to loans, the lifestyle they can't afford and because of how the whole thing works they can't easily get out of it.

What evidence do you have that blockchain based technology will avoid the financial crisis to come? If anything, the blockchain advocates I have seen so far, are just as phony and greedy, if not more, as the bankers out there.

>The use case for a blockchain is narrower: it can be used to establish trust between two parties in absence of a trustable third party.

It doesn't though. Now you're requiring a trusted (not a given) block chain that involves at least one third party but most likely many more at a high cost with more waste than traditional means.

It does, in these hypotheticals we assume a mature blockchain, and the 'third parties' in this case is the network itself. In non-PoW implementations, there is no more waste than traditional means.

>> third party they both trust

Ah yes, it's turtles all the way down.

Third party trust has been the best solution in the past to establish trust. Blockchain tech has introduced a new solution that has been proven. As a business, if you have to choose between using a third party for trust or using a distributed trust-less system, and both are comparable in cost, what would you do?

> Trust being one of the pillar of our civilization

Very true. But I would argue that blockchain is a technology that obviates the need for trust between humans (by delegating it to a technology), and therefore erodes civilization.

I would argue that double-entry accounting is a technology that obviates the need for trust between humans (by delegating it to books and arithmetic), and therefore erodes civilization.

> i’d seriously question your rationality as a member of this scientific-related community.

Speaking of science, do you know of any peer reviewed paper that concludes that the blockchain “creates trust where there is none”?

Successfully trading value with an anonymous third party over the internet, without fear if them renegging, seems to be all that's required to demonstrate this.

Before bitcoin this wasn't possible without trust in a third party, as far as I'm aware.

No paper needed.

What makes you think Bitcoin will remain anonymous? At the end of the day, nothing prevents banks from end-to-end encrypting payments and thus making our bank transactions anonymous. The reason they don't is because people don't care, not because "blockchain tech" is needed, whatever that means. On the flip side, if we as a society decide that anonymous online payments is a net negative for the good of society, then making bitcoin mining, trading and acceptance illegal basically kills it. At that point, literally only criminals would use it, and even then its use is debatable because if the speculative use case is dead and the developers are all anonymous or in jail, I don't think bitcoin's value could hold long enough for a criminal to buy it, send it, and then sell it successfully without losing a significant amount of the initial value.

Anyway, we're both speculating here. Like I said, if "science" is going to be brought to the table, I'd like to see the science backing your claims. For example, do you have research showing that no trust is required to make bitcoin work? Can the system survive without us trusting the developers, chip manufacturers and miners?

Bitcoin's privacy isn't very powerful so I wouldn't be worried that some government would rule it illegal based on that.

Consider the scenario where you go to a grocery store, your transaction points to your face because of surveillance in the store. Buying something online, your transaction points to your physical address. You'd still have to trust the people you trade with, otherwise you lose anonymity, and your transactions and amounts can be traced. Now they know how much you earn, how much you spend, where you spend, when you spend, etc. It's very hard as an average consumer relying on Bitcoin to avoid being traced without trusting another third-party, e.g. an exchange or similar service that allows you to "cut connecting strings".

> Bitcoin's privacy isn't very powerful so I wouldn't be worried that some government would rule it illegal based on that.

The most populated country in the world had no issue making all cryptocurrencies illegal. If we can't find something useful and non-criminal to do with Bitcoin, I wouldn't exclude the possibility of at least mining being made illegal. Why should we spend so much of our planet's resources for proof-of-work if it's only to fuel crime?

There is no rationalizing with people so blinded by the promise of getting rich quick from Satoshi’s glorious bitcoin. People who have drunk the koolaid can’t be reasoned with.

Interesting. I trust my bank waaay more than I trust any of the cryptocurrencies. So I am not sure your premise about creating trust where there is none holds.

This is largely what I would have said if nobody had posted it yet. That "narrow set of problems" are still extremely influential problems that will have a powerful impact on society.

> It’s a trust machine: it creates trust where there is none.

Can you describe to me a situation where blockchain actually does this. Please be as detailed and specific as possible.

I keep hearing this claim, but everytime I look into cryptocurrencies, I see a wild west full of scams and snake oil, so I'm not sure I understand what is meant by 'trustless' in this case.

It's interesting how blockchain became so incredibly hyped though isn't it? Something to do with money (bitcoin) and some new technology perhaps?

I wanted to find out what was going on, so I literally applied for a bunch of blockchain jobs just so I can talk to these people on the phone to see what they're all about. I end up asking really basic questions like: "So why are you using a blockchain instead of a normal database?" or "What problem are you actually trying to solve?" It is actually embarrassing; I feel like I'm being abrasive on the phone by asking such truly basic questions, yet they always seem so startled by these kinds of questions and assume I'm somehow incredibly intelligent and perceptive to ask these basic questions.

Generally what happens is as follows. Some business MBA type people watch a TED talk or read in the FT that blockchain is the next big thing, so they go out and look to hire "blockchain evangelists". Evangelists is the word they often use, and that sounds about right because it is just like a religion sometimes. Then I only end up talking to the business people about these projects, because that's all the people they have. I won't name them, but I've had conversations with huge firms or startups that both equally talk utter nonsense. One large firm told me that they're working on "permissionless and permissioned blockchains for everything from auditing to wine". While for a small startup I once asked: "why are you using a blockchain for this instead of just having a database?". The answer I got was "well... our customers aren't really technical people...". I told them perhaps they should look at something like Google's certificate transparency rather than blockchains, and they echoed back to me "Oh we are definitely looking at certificate transfer!" (Transfer, not transparency.) It's astonishing.

To summarize, huge firms tend to have people who just want to get paid so they always say yes to whatever the clueless MBA person asks, while startups tend to mostly know it's bullshit but go along anyway because there is a lot of $$$ involved, particularly with ICOs.

I really like the idea of phoning up the recruiters to find out more about a technology!

We have a Blockchain meetup group in my city, however its mainly about cryptocurrency investments than any actual blockchain technological innovation.

To be honest I'm more onboard with cryptocurrency, even though obviously there are way, way too many of them (Kanyre-West coin anyone?) becuase at least blockchain actually solves a very specific problem for bitcoin: decentralized peer-to-peer currency. It's when you get blockchains for sexual consent and tracking your bananas in Laos that really annoys me (both real proejcts btw)

As part of my job, I often have to convince business folks that they don't need to buy a fucking private blockchain (from IBM of course, because they're old enough to think that no one ever got fired for buying IBM). This is very close to the arguments I make, and adds some excellent, articulate points!

This is happening at both of my companies now. I'm almost to the point of telling them to buy it just so they can tell their golf buddies they're using blockchain too.

Pro-tip: do an "experiment" with blockchain (built in house to keep it cheap) so they can tell their golf buddies they're looking into it. Make sure it's compared to a sane solution, because then they can feel superior for having "insider knowledge" that it's pointless.

These are all very excellent points. I would go even further: “The only viable application of blockchain is cryptocurrencies” (and cryprocurrencies have a whole different set of problems).

By arguing that there is only a “narrow set of use cases” you open the door for the counter argument “yes, but MY blockchain startup is not bullshit”.

I isually use the argument “show me the increase of profit margin specifically by using blockchain technology”.

I so far have not gotten a satisfying answer.

I think there are also use cases that revolve around using a blockchain as a public database and API for the transfer and security of data.

Obviously, you could do this without using blockchain IF you could get the top 20 players in vertical X to agree on what that looks like. However, using "blockchain" as an excuse to get the project funded and get buy-in from those same top 20 players so they can talk about blockchain at the next board meeting is an enabler of practical problem solving. Sometimes you have to take the path of least resistance.

This guy makes a lot of good points, but at heart, this is a false appeal from authority. Every distributed system makes a set of tradeoffs. If you were to design a distributed system with the same tradeoffs as a blockchain (single global state, and very low trust of node operators), you would end up with something that has similar performance characteristics as a blockchain.

Arguing that these tradeoffs are not good is perfectly valid. For instance, this guy feels that you should be willing to trust your bank with your money, and Microsoft with your code execution, in return for better performance. Valid opinion.

The problem is when he comes in with this hand wavy stuff about how him and his very smart friends think this and that and they are distributed systems engineers so you should listen to them. It’s not a technical question, it’s a basic question of where you want to place your trust, and a distributed systems engineers opinion is just as valid as that of UI designer, a teacher, or a janitor.

I don't think that was the point of the article at all.

The point is that distributed systems engineers know already about these sets of tradeoffs, and many of the alternatives to them, and with that wider perspective see few, if any, reasons to recommend blockchain.

Meanwhile many the people going around hyping up blockchain know very little about the tradeoffs and alternatives, and are definitely _not_ recommending blockchain because it's the right set of choices in each of the tradeoffs.

Like - picking randomly - KodakCoin[1], he would argue (and I would agree), definitely did not choose to use blockchain because was the database that made the most sense for their needs. Indeed, it's probably a terrible choice compared to the alternatives.

(Except, perhaps, for optimizing for"hype factor" as seems to have worked considering their stock price, in which case the best thing to do might actually be to lie and _say_ you're using blockchain, and then... not.)

[1] https://en.wikipedia.org/wiki/KodakCoin

> The point is that distributed systems engineers know already about these sets of tradeoffs, and many of the alternatives to them, and with that wider perspective see few, if any, reasons to recommend blockchain.

It's not really a technical question. People who like blockchains like them because of that set of tradeoffs. Beyond obvious scams and stupid corporate hype (by most of the same people who misused "cloud", btw), people understand the tradeoffs.

I don't think that distributed systems experience qualifies you to do any more than understand the tradeoffs, and these specific tradeoffs are understood well by a very large number of people already.

Thank you. This is what I've been telling people forever. Blockchain technology is revolutionary for a very specific and narrow set of use cases, and outside of that it ranges from a crappy solution to completely irrelevant.

I think people are severely underestimating the value of a single source of digital signing and chronology, as well as the network effects of interoperability. Time will tell ;)

also to the point of specific design decisions, there are plenty of models that will evolve including arbitrary protocols on the Filecoin Merkle forest, so I'm not worried about that

also find that distributed systems experts tend to fail to see things through the lens of cryptoeconomics, which was nakamoto's fundamental innovation. it's about provable behavioural security

I agree. Imagine a frontend developer connecting to the internet and with a couple tools like truffle and his crypto wallet, that dev will immediately have access to so much information and logic through smart contracts via one interface, that it blows my mind. It's still young but it's going to be ubiquitous and pervasive. At least I'm 90% sure it will be ;)

I'm a frontend developer. So let's assume I've connected to the internet with "a couple of tools". Which information and logic (???) are now available to me that were previously inaccessible?

I don't think they're severely underestimating it. Look at the market capitalisation of cryptocurrencies, and how much is being invested into new blockchain-based applications, via venture capital and token sales.

Do you people just come here to shill bitcoin? This stuff reads like some MLM brochure.

Market cap in the crypto space is a joke. It is super easy to manipulate and poeple (like you) fall for it.

First of all, a market cap of $300 billion could not be spoofed. The trading volume is enormous, and far beyond what any conspiracy of price pumpers could fabricate, and there is plenty of anecdotal evidence of significant fiat investments being made into cryptocurrency all the time.

Second, me saying people are not underestimating it is not an endorsement of it as an investment. If I were endorsing it, I would say the opposite; that people are underestimating it.

>First of all, a market cap of $300 billion could not be spoofed.

Market cap number is irrelevant to whether or not it is spoofed. That's just the current trading price * the outstanding coins.

If 99% of the people holding the coins do not trade, that means 1% is manipulating the price.

Hah yeah. Extreme example:

I make 1 gazillion "Moodle-coin". I sell you one for 1$. Oh snap, Moodle-coin is now worth a gazillion USD.

The trading volume is what determines how plausible it is that the market cap is spoofed. It's literally the second line in my comment:

>The trading volume is enormous, and far beyond what any conspiracy of price pumpers could fabricate ..

You can't spoof a market price at the volumes that the major cryptocurrencies trade at.

I mentioned the market cap because it is generally associated with trading volume, so gives you an idea of how much the asset is being traded.

Trading volume can easily be faked in unregulated exchanges. These exchanges aren't exactly trying to ensure people aren't trading out of multiple accounts against themselves.

Look at the entire USDT fiasco for an example.

Trading volume across a diverse range of exchanges cannot be easily faked. Large exchanges with institutional investors, like Coinbase, are not going to fake their volume.

>>These exchanges aren't exactly trying to ensure people aren't trading out of multiple accounts against themselves.

Many of them verify ID and don't allow people to have multiple accounts.

Also, people pay fees on every trade. All of this volume being a conspiracy by people, working on a dozen exchanges, and willing to pay millions in fees to each exchange just to pump up its volume, is highly unrealistic.

It's not how conspiracies work. There needs to be a way to enforce a pact for a pact to be successful. No such method exists for the thousands of traders across the world.

There's room for more choices than that. E.g. you can do transactions off-chain and keep some relevant state yourself, with an exit plan to the public chain in case of cheating. Examples include state channels and Ethereum's Plasma.

I've found my life is a lot happier and I'm a lot less frustrated if I replace "blockchain" with "distributed database" in my mind any time these types of discussions come up. Technically they're different, but what is actually potentially revolutionary about everything happening right now isn't the hash chain, it's the idea of moving apps to distributed databases, self contained databases and away from the database tech of old. This could apply to consumer apps, enterprise apps, pretty much anything. When I think about it that way, I'm much more ok with the broad overuse of the term blockchain.

On the bright side, we can stop calling it a scam and start calling it a religion soon

There's only one use case for blockchains: creating ecosystems. Solving a customer's problem is typically not something you do on your own, you need to collaborate in ecosystems. Having one company dictating what rules and technologies are in effect in the ecosystem is risky (e.g. ecosystems created by Amazon or Facebook). A blockchain democratises the collaboration, at the cost of efficiency. So at its core it's a governance technology, and a trade-off between efficiency and security of your ecosystem.

Blockchains are just a technology. The point is to look at use cases that are now viable because of the ecosystems we create.

I was recently asked to give a short presentation on "what is blockchain" at a session with government agencies who wanted to formulate a position on whether they should do anything with blockchains.

And my conclusion was almost exactly the same as this post: blockchain is part of a set of specific technologies you need to solve the very specific problem that Bitcoin solves. Another thing without which Bitcoin wouldn't work is the PoW stuff. If your requirements are different, then many of those other technologies are still relevant but blockchain is not. And if you are not a digital coin, your requirements _are_ different.

This happens with most of the technologies. Remember the days when AJAX was introduced? every other site was being ajaxified. Tech companies were promoting it as if something very unique arrived in this world. Later it was found that Microsoft was using it in outlook for long time, it's just they failed to coin the term for it. Same seems with blockchain and as usual IBM is at it's best to cash this hype for enterprises who are already customer of their products one way or other, specially Middle east countries.

The blockchain enables a set of use-cases around trust, value exchange and cryptoeconomics. With these building blocks, there are a number of companies working on amazing projects that are truly revolutionary.

https://vitalik.ca/general/2018/04/20/radical_markets.html

Here's my case. I have problems trusting any centralised cloud service out there that is significant for my privacy. I have problems with Pocket, because it knows what I read.

If data would be stored on the decentralized nodes and accessible over the smart contracts, my zen would be way closer.

But wouldn't that change your data being readable by Pocket to your data being readable by everyone?

I fail to see how that's better. And if encryption is the solution, there could be encrypted centralized or decentralized apps.

Readable by everyone != decentralised / blockchain

Blockchain code literally runs in an open source, open memory environment. Which means you can guarantee the execution of code without interference.

But that non-interference comes from exposing all the information it operates on to the public. Otherwise, you wouldn't be able to maintain a consensus.

(if you encrypt your data, then nobody else can see it, but you can't do anything with it on the chain and you might as well store it in S3 or wherever)

Technically, fully homomorphic encryption exists (and may someday be practical)

But still, you could have a centralized service that involves client-side (potentially homomorphic) encryption and stores (and in the case of homomorphic encryption, does operations with) the data on their servers. So that shouldn't give a privacy benefit from blockchain over centralized servers.

You would get a privacy benefit in the sense that the computation provider would not learn anything about the data you gave them. However you are right that centralized computation providers are equally constrained (ie don't learn anything) as blockchains in this regard.

>Here's my case. I have problems trusting any centralised cloud service out there that is significant for my privacy. I have problems with Pocket, because it knows what I read. If data would be stored on the decentralized nodes and accessible over the smart contracts, my zen would be way closer.

The problem is that most users don't agree with you. In fact, most users don't know enough to know to care about this. Those that do very often favor convenience above all else.

Blockchains don't solve the problem any better than existing centralized providers; in fact, they can literally only do worse on any dimension most users care about.

Is IPFS for you?

I am a distributed system engineer. I worked for aws... I agree with that bitcoin blockchain is only specific for electronic payment system. But its design concept is quite interesting, could make quite huge impact.

The shortest I have been able to explain it as:

If you want an append only log with arbitrary (including malicious) actors then use a blockchain. Otherwise you may want to avoid the huge costs associated.

Only some projects have utility in the blockchain Actually, some of the are Augur or Cryptocup.io

As original link is not available, posting the content from Google Cache for future reference

Thread by @clemensv: "I've talked to a lot of distributed systems engineers (who build cloud-scale stuff) from across the industry about blockchain. While most pl […]"

I've talked to a lot of distributed systems engineers (who build cloud-scale stuff) from across the industry about blockchain. While most platform folks I talked to are perfectly happy to help with frameworks that help selling product or services, ...

... and some even rode the crypto wave to make some hay, I have a hard time finding people in the distributed systems platform community who believe that blockchain is even remotely as significant as the hype wants to make us believe.

Engineers at the center of the industry understand the qualities of append-only logs, understand signatures and non-repudiation, and understand consensus protocols. They understand that those are a few building blocks from a large toolbox and that there are choices for each.

A "blockchain" is a specific composition of specific choices for these building blocks that's suitable for a fairly narrow set of use-cases. The blockchain-specific consensus models are tailored to (a) all-around lack of trust and (b) convergence to a singular global log.

Convergence to a singular global log with many candidate writers and many replicas makes it hard to reach consensus and for that consensus to be propagated; PoW or PoW+PoS (cleverly) solve that by being intentionally slow.

The PoW lottery is probabilistically set up so that a singular mining winner can emerge and its winning block can be propagated throughout the network before another miner finds a competing solution (there can be many valid ones). The enabler for that is a time window.

The tradeoff the "nobody is trusted" blockchain model makes, is that it literally trades trust for time. It's slow by design. Giving consensus forming ample time is foundational. (I'll be happy to hear arguments that prove the contrary).

Once parties trust eachother to faithfully collaborate, the existing consensus models that we all use to build hyper-scale cloud systems become applicable and those can resolve even complex and contested consensus problems in a few milliseconds, largely gated by network latency.

Even if there's no all-around trust, there's often a neutral party that can supervise a transaction of two parties that don't trust eachother, but who each trust that party. "Sidechains" and "Private permissioned blockchains" are playing that trick.

However, once there's a trusted neutral party, that trusted neutral party can already establish non-repudiation by forcing authentication/authorization along with a content signature and only ever allowing appends. With any regular old database that the neutral party maintains.

The world's economy today is built on the very principle that accounting records are both safe from deletion and immutable in digital accounting systems. There's a clear sense of order. They are written to audit logs for non-repudiation proof.

The cryptographic chaining of records is a good idea to strengthen the immutability of the ledger as a whole, but it's not really superior to holding a ongoing full copy of the ledger in safe escrow. A signature chain can be done on any existing database.

The single global log requirement and therefore the global consensus problem completely falls apart in all cases where the problem is partitionable (FWIW "sidechains" are partitions). Turns out, that's true for most problems, otherwise nothing would ever scale.

Once you can use partitions, the consensus scope shrinks to the scope of the partition. When you transfer money from your bank account, the intial scope is just your bank, with the initial transaction to a clearing account. (FWIW, a "sidechain" is a clearing account). Easy.

For those familiar with (shall I say "classic"?) distributed systems architecture, it's amusing to see things like "sidechains" with local trust relationships emerge, because they are nothing but a reaffirmation of the partitioning principles foundational for a functional economy

Yes. The combination of decentralized operation, variable trust, and non-repudiation is very attractive. The world already works like that. There are easily 15,000+ banks globally and countless more businesses that maintain various ledgers. That's hardly "centralized".

"Centralization" is not when 15000 organizations are federated such that you can transfer funds between them. Yes, you need a banking license and audit in the local jurisdiction to be a bank. Because, as we see, some people are happy to separate other people from their funds.

The specific combination of well-understood architectural building blocks that make up "blockchain" is very well applicable, but nearly exclusively applicable to all-around trustless global ledger accounting problem (e.g. "coins").

Any other set of requirements is likely better addressed using a different combination of elements from the broad toolset that exists across the distributed systems platform landscape today. /fin

PS: I'm not an ideolog on this matter. If you're convinced that you need a blockchain, I'll surely help with the communication path if asked. I have the finest shovels.

Clemens Vasters 🇪🇺 (@clemensv)

First, I can't stand these people who qualify their logic based on "My crypto friends say ...", "All my start friends are saying ... ", "All my friends who are building distributed systems say ...", instead of 100% being responsible for their own words. I see them as lazy cowards who takes other people's words and transforms them into attention (a.k.a. retweets, viral posts, media mentions, ad revenue, etc.)

Second, some thoughts on this specific argument. This whole thread is based on an assumption that "skilled distributed systems engineer" is an authority when it comes to Bitcoin or blockchain.

Except they aren't.

I would even go further to say that the very developers who are working on Bitcoin protocol itself cannot be trusted as an "authority". They may be very good at cryptography and coding, but it is very difficult for one individual who has made a career out of a single expertise suddenly become an "expert" in all things combined (economics, coding, cryptography, game theory). Especially the economics part, if you're coming from a programmer background. A lot of programmers seem to THINK they understand how Bitcoin works after reading an economics 101 book, but the thing is, even the economists are never 100% certain about their theories. There's a good reason why there are multiple parties of thoughts in economics.

I once read a blog post from a guy who's very well respected in the Bitcoin community who wrote a post about "crypto keynesians" and "crypto austrians", and it was so obvious that he had no idea what he's talking about because he got it completely opposite. The post only made sense if you interpret what an "austrian economist" and "keynesian economist" is on an extremely superficial and shallow level, perhaps reading a couple of blog posts or investopedia articles on that topic.

I think people really need to be humble when they talk about this topic because I'm pretty sure it's really hard for one person with narrow expertise--unless she/he is very motivated to learn everything--to understand Bitcoin/blockchain as a whole. This is especially true for those who just have one expertise and never really delved into the rest because they think it's a bullshit technology even before learning about what actually powers it.

And I have yet to see a single person who's dived really far into learning everything Bitcoin is made up of and come away thinking this whole trustless ledger thing is a fad and a bullshit. Some may get disillusioned that the current existing solutions don't satisfy what they were promised, but even these people still they understand that this doesn't mean the whole idea of a trustless ledger is a sham. They would only think there's got to be a better solution.

The argument wasn't from the opinions of others as you read it. At some stage he wondered if he had gone mad or if the world had. In his discipline he probably knew a lot of use cases for SQL but could not see how Blockchain would help for any of his clients problems in many verticals. Of course he saw none. So he asked his mates. That is good, not lazy.

Note that blockchain and economy (or more precisely finance) are two very different things. Do not mix up blockchains and cryptocurrencies. The first is a distributed system creating a centralized log, the second is a class of (very classic, mostly unregulated) financial assets (which could be constructed on top of very different architectures). I'm pretty sure this guy doesn't even care about the financial asset thing, he is criticizing the blockchain from a computer-science pow.

> Do not mix up blockchains and cryptocurrencies. The first is a distributed system creating a centralized log

It's a _very specific_ distributed system creating a centralized log, namely one that absolutely rules out using any mechanism of trust. Only cryptocurrencies need that. It does so at huge cost in terms of security and efficiency.

> I have a hard time finding people in the distributed systems platform community who believe that blockchain is even remotely as significant as the hype wants to make us believe.

Right here! Take eBay or Amazon for example, the entirety of their business can be run as decentralized smart contract software. The blockchain is a distributed ledger whereby storing information is incentivized. It's unbelievably significant. The scale problems will be figured out and reliable and auditable databases will be the defacto choice.

We already have reliable databases. Blockchains purport to offer trustless consensus. If that were true, it'd be a big deal. It's not clear that they do.

But why would eBay want a trustless consensus? Their entire business model is around being that trusted arbiter and broker.

Even off in darkweb land, companies exist to service and broker transactions that then fall back to the blockchain to reconcile payment. So presumably if you were correct we'd see that model emerging.

I've looked, but the inside of Tor is a big place. Maybe you've seen an example I haven't?

> We already have reliable databases.

not in the way that a blockchain maintains the final state and a clean audit log of every transaction.

Git does this, doesn't it?

(Not that people here appreciate my contention that GitHub is a "white label blockchain company")

Yeah that's true, and Github is really popular, I use it every day.

Well then: Git is a blockchain with proof of ownership for commits and it doesn't need multiple miners or anything and you use it every day with what I guess is acceptable risk.

Because it uses trust. I trust that only I can access my local Git repositories, and that Github's authorization does its job.

Which is absolutely great, but nothing new and not what people mean when they hype about "blockchain".

I find most folks don't mean anything they think they mean when they hype about blockchain, so I like to try and inject reality.

> the entirety of their business

only part of their business. their consumer-facing business is building trust, and issuing refunds.

so the non technical parts?

Why would eBay or Amazon want to change over to decentralized smart contract software? They already have working computer systems, so there needs to be great benefit to move to a slower less reliable system that will open them up to additional hacks as well as remove them from the intermediary positions of profit.

now we're going down an irrelevant path. it doesn't matter why an established company or bank would want to or not be based on a blockchain.

You're the one who said those two companies can use blockchains, so asking you why you would say something so bizarre was a perfectly reasonable question.

No established company will use a blockchain for a database, when there are real databases they already use. That was the point. Other than speculation, nobody really uses blockchains, and certainly not for mission critical work handling real money or real customers.

i mean another company besides amazon or ebay could, they wouldn't change anything

How is that significant? You can also run eBay or Amazon on filing cabinets full of paper; is that significant? in both cases the costs and complexity are insane.

No you can't. You'd need a person or people + filing cabinets full of paper.

You can't run a blockchain without miners either; we're both omitting things from our models.

you need the post office too - don't see your point

my original point is that there are distributed database engineers who are excited about the technology behind blockchain, hi!

If that is true what happens when all the bitcoins are basically mined out? That doesn't seem to jive.

Then miners need to recoup their costs entirely by transaction fees, or they stop mining and the network will be (even more) vulnerable to hostile takeover.

> Take eBay or Amazon for example, the entirety of their business can be run as decentralized smart contract software.

What advantage would that offer? How would that handle scams, and what reason do we have to think it would be cheaper?

Reliabky recording and auditing transactions has been a solved problem for a long time so a key question would be how a proposed solution would be cheaper or more reliable in a human-meaningful manner. As an example, a common non-answer is fraud but with smart contracts that requires a trusted third party so it’d be important to show that this would be cheaper than paying Amazon to fill that role.

There would be no way to raise fees or otherwise exploit their market position for rent-seeking once they had attained market dominance.

Can you explain why you believe that would be true? The system can’t prevent normal economics from functioning and while competition can act as a check, that’s equally true now – eBay and Amazon both have tons of competition.

Because the fees, and other properties of the platform, can be encoded in immutable smart contracts where they can't be changed.

That doesn't really answer the question: that prevents you from changing a contract after accepting it but it doesn't prevent someone else from saying that they will no longer sign contracts at old rates.

This is good because otherwise the system would be completely unworkable in the real world where prices and exchange rates change over time — for example, suppose that a shipping partner increases their rates to handle fuel price increases — you'd need a way to charge more for shipping as soon as that happens. The same would apply to anything involving cryptocurrencies with their wildly-fluctuating exchange rates which don't match the real money either side will need to use.

>>that prevents you from changing a contract after accepting it but it doesn't prevent someone else from saying that they will no longer sign contracts at old rates.

When I refer to a contract, I'm referring to the smart contract that operates a platform, like a market.

A market is a persistent platform, so the rules encoded into a smart-contract based market when it's created will apply indefinitely.

>>The same would apply to anything involving cryptocurrencies with their wildly-fluctuating exchange rates which don't match the real money either side will need to use.

Yes, but the fee charged by the platform can be a fixed percentage of the transaction volume it facilitates, so it doesn't have to deal with exchange rates.

The Blockchain is TCP/IP with History.

That's how you think about it and once you do that a huge amount of things open up. Some of those might not make sense to the current cohort of developers, proponents, and critics but the next coming generations will grow up with this normalized and will find plenty of ways to use it.

The most underappreciated part of the blockchain is its ability to create a secondhand market (not secondary) for digital assets. This means that digital assets will be able to increase in value if ex-owned by the right person (think an ebook who was owned by Obama. If you think this is far out I urge you to look at the art industry to understand how things with no inherent value gets traded for often insane amounts.

Collectors Cards (Crypto Kiddies) this is only the beginning and when I look at the kind of things my son care about it's fairly obvious that digital memorabilia is going to be a huge industry.

Digital Identity this is going to be the defacto standard in a few decades, decentralized is the future.

So hate it or love it. The blockchain is here to stay and there is nothing wrong with us not having found any real traction for it yet outside the speculation space, it will come because the fundamental properties are sound and useful.

It's worth spending many more billions on this to get it to to become the 2nd layer on top of TCP ip on the internet. That's my take on it.

Edit: I'm genuinely curious. Why the downvotes? Did I say something wrong?

>>The Blockchain is TCP/IP with History.

Great analogy. A canonical history is useful for preventing double spending, but also any kind of collaborative endeavor.

Without a shared history, there can be no consensus on the present state.

> I'm genuinely curious. Why the downvotes? Did I say something wrong?

"The Blockchain is TCP/IP with History" - this is just sound bytes, noise without any substance, technically wrong, and could have triggered most of your readers to stop reading right there and press the downvote button.

The title of the Post starter isn't technically right either so that's hardly a reason to downvote as that's not really the purpose of the articles.

Understanding bitcoin isn't about understanding the technology any more than understanding economics is about how you technically print money.

Analogies are very important and the analogy I use isn't that wrong and not without substance, in fact, I provide that.

I am not the only one who think of it like that https://www.wired.com/2015/01/how-bitcoins-blockchain-could-...

It wasn't the creator of TCP/IP that created Google, Facebook or any of the other big companies out there and it most likely won't be that either with Bitcoin.

You asked a question, I provided an answer. There is no point for me to discuss this any further.

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