Real talk with a Blockchain Engineer

As to #3 cutting out the middle man...how about in the case of corporate stock ledgers and how the market currently works with brokers, stock trusts and stock custodians?

For example in the Dole case which showed even a publicly traded company when scruntized has issued nearly 30% more shares than there was outstanding. If instead of the current system with brokers, stock trusts, stock custodians a corporation used Blockchain for issuance of stock, such an error could never happen right?

Just in case you aren’t familiar with the Dole case it’s pretty famous, even the Delaware Court of Chancery Judge said Blockchain would have prevented this issue, which is likely wide spread in all publicly traded companies.https://www.google.com/amp/s/www.nytimes.com/2017/03/21/busi...

The Dole case doesn't seem to have been an admin error so much as short sellers who borrowed Dole stock and then sold it and then defaulted on paying back what they borrowed. Probably more an issue with the borrowing / lending regs than the admin.

It sounds like any centralized database to track ownership of shares would solve this though, and then you wouldn’t require third party proof of work or run the risk of losing your shares when your usb flash drive breaks

Most all public traded shares exist in the form of digital shares in a database/databases.

I agree that Blockchain is more often in search of a problem. But in the case of publicly traded shares, where the current system is broken (like the Dole case and others have shown double spend is real in Billion dollar publicly traded companies) and there are multiple expensive middlemen, p2p/immutable shares sound like a winner.

Digital currency can only be the #1 use case if we find a generic, uniform way to pull in real-time real-world data of which we can verify its confidentiality, integrity and availability.

There are several known solutions which attempt to solve this problem; oraclize, bluzelle, chainlink, ...

How do you see this? Do you think the #1 use case can be achieved without having a secure, high available oracle?

Another topic I find interesting is the recent discussion on XRP: "Banks won't want to shift around hundreds of millions of dollars on a public available ledger."

How do you see this? Do you think fintech/banks can work use public ledgers?

Kind regards,

> Digital currency can only be the #1 use case if we find a generic, uniform way to pull in real-time real-world data of which we can verify its confidentiality, integrity and availability.

I'm not sure I understand your point here

> Do you think fintech/banks can work use public ledgers?

The only reason they'd want a public ledger is for transparency with end users. This isn't high on their priority list but more importantly there's too much at stake to leave the protocol up to anonymous public participants.

Consortium chains make a lot of sense in these private B2B transfers. Which is the goal of something like Stellar as the only incentive to run a node is to keep the ledger/service lively. It is also a better engineering tradeoff to have a dedicated chain to process Txs only you care about and not have it degrade from cryptokitties. Lots of blockchain projects are moving to this parachain model. E.g. substrate, tendermint, plasma protocol

> There are several known solutions which attempt to solve this problem; oraclize, bluzelle, chainlink, ...

There's also projects such as Blocknet which are developing a blockchain interoperability protocol to enable interaction between different chains and microservice architectures.

Thanks for your thoughts! It appears some states are already legally recognizing smart contracts. Contract legality is determined at a state level because there is no federal contract law: https://www.technologyreview.com/s/610718/states-that-are-pa...

Good further reading to understand smart contracts from a US legal perspective: https://corpgov.law.harvard.edu/2018/05/26/an-introduction-t...

Also Ricardian contracts if anyone is interested: https://en.m.wikipedia.org/wiki/Ricardian_contract

> It appears some states are already legally recognizing smart contracts

That's good to see.

FWIW I don't like the idea of a future where we need special solidity lawyers to verify some code matches its legal obligations. Which is why the Ricardian format is so appealing. It should be accesible to all

Btw thanks, that harvard link is a good read!

You dont need blockchain to cut the middleman out of indusrty X.

Counterexample: electronic peer-to-peer money transfer. You simply couldn't do it without a middleman before Bitcoin. Now you can. What value you place on the ability depends a lot on the privileges you currently enjoy.

However, this only works given another property that you didn't mention: censorship-resistance. This requirement disqualifies most other "blockchain" project. This is what most "cryptocurrency investors" still don't get.

> You simply couldn't do it without a middleman before Bitcoin.

How many people transfer Bitcoin without middlemen like Coinbase.

The fact that it's almost never done doesn't discredit that it will always be possible.

Coinbase is also able to operate their business without asking for permission thus censorship-resistant in contrast to the experience of trying to start a bank from scratch

>Coinbase is also able to operate their business without asking for permission

That’s not true in the slightest. Coinbase has all sorts of licenses (permissions to operate) without which they would be shut down for multiple violations of law from money transmitter business violations to Broker/dealer issues. Look at all the Coinbase customer dissatisfaction (accounts missing, funds never deposited, transaction didn’t go through) there would be plenty room for competitors except for the barrier to entry (permissions/licenses required). Not to mention Coinbase complies with KYC laws and as a result turns over said customer data to the IRS as part of its ongoing compliance to keep its permission (licenses in goodstanding) to operate.

It's possible via fiat too, by using cash.

? That doesn't really change anything.

Blockchains are really unimpressive technologically. I think this is why so many in tech are pretty negative towards them. It's a crappy database, it's an inefficient payment system and so on...

However the few interesting properties that they do have make for a big difference at scale if you look at it in a broader context.

> Its a datastore with some cryptographic identity checks and tamper proof guarantees. It can't prove that a package made it from A to B or that it stayed at some ambient temperature IRL. It only records that someone attested to that, not whether its true. An ordinary database will do for an audit trail.

Sure, there are no inherent features which directly enable that. However with a regular database can you give access to absolutely everybody (even if you have complex access control rules)? Can you incentivize people to interact with this database in a given way? Will people trust the data? Can you make people believe that your system is going to be around for long enough? Can your system be safe from regulatory risk?

The answer to all these question is a very qualified yes. However when you think about them it's pretty obvious it's going to be hard. Say incentivizing people. You can surely assign rewards to people, have a little virtual currency/credit system. But you can see how the more sophisticated it gets the more you're creating something blockchain like. Which is also why private, hybrid blockchains or non-blockchain decentralized shared database systems are interesting btw.

The point is - none of these features or problems are inherently technical. They're more social than they are technical. The questions I posed are just food for thought, there are so many more aspects one could consider.

Uhm, from reading your post I don't think you fully understand how any of it works..

> We sign the papers because then its enforcable by law. Keyword "enforcable". If the legal system agrees a cryptographic signature on a digital record achieves this purpose then its as good as the paperwork.

I'm a big Bitcoin fan. I think some other cryptocurrencies are great too. But real estate is the most misguided use case for tokens/blockchain. Courts must be able to override a ledger when necessary because the real world is a messy place. Courts cannot just shrug and say "oh gee I guess it is too bad that the defendant has decided not to comply with the court order and execute a blockchain transaction. We will just be angry and impose penalties but the blockchain will remain the true authority that supercedes ours."

The legal system cannot/must not "agrees a cryptographic signature on a digital record achieves this purpose then its as good as the paperwork" -- or, rather, if it does, then it must still remain centralized and operated by a trusted authority. If it's trusted, then you don't want or need a blockchain.

The point I'm making is we can agree some paper is truth or that a distributed ledger is truth. Failing to send a transaction should void the sale in the first place e.g. Hashed time locked contracts. With some proof of authority logic we can facillitate updates to the ledger by courts or governing bodies i.e the same as adding some new paperwork currently

> Myth #1 Blockchain changes data ownership, giving power back to the consumer. Anyone who becomes privy to some data has some ownership of it. Blockchain doesn't change that. If you want to share something with only a few select people you need inherent trust or an NDA.

I disagree with this. It's clear in cases such as Facebook that data privacy is abused. Not only that, but users don't have much of an idea of exactly how their data is being used. In a P2P system powered by blockchain, I can set permissions for certain data my on-chain information to be accessible between different parties, whether that's a doctor or a friend on a social media platform. They can receive a hash an decode it locally to view whatever information I am granting them permission to view.

> Myth #2 Blockchain can revolutionize supply chain. Its a datastore with some cryptographic identity checks and tamper proof guarantees. It can't prove that a package made it from A to B or that it stayed at some ambient temperature IRL. It only records that someone attested to that, not whether its true. An ordinary database will do for an audit trail.

Again, I disagree. Custom devices are being designed to record information in a tamper-proof way and submit to chain.

> Myth #3 It cuts out the Middleman. You dont need blockchain to cut the middleman out of indusrty X. Any service trying to do this wants to be the new middleman with lower service fees cos' blockchain!

I disagree with this as well, in certain context. Yes, many of the newer projects are trying to run blockchains they're developing as businesses. In that sense I would agree. Where I disagree is where blockchains aren't services, but protocols. A marketplace protocol can cut out Ebay, a stack of supply chain protocols can cut out SAP, loaning protocols can cut out current loan services, etc.

For somebody calling themselves a 'blockchain engineer', it sounds like you don't have a great grasp on what the technology enables. Is this all doable today? No, but some of it is. We're still in the early stages where infrastructure and tools are being built out.

> I disagree with this. It's clear in cases such as Facebook that data privacy is abused. Not only that, but users don't have much of an idea of exactly how their data is being used. In a P2P system powered by blockchain, I can set permissions for certain data my on-chain information to be accessible between different parties, whether that's a doctor or a friend on a social media platform. They can receive a hash an decode it locally to view whatever information I am granting them permission to view.

I think the OP is saying that if anyone has access to the raw data at any point, then they have some sort of ownership. And this is actually true in your example. A person owns their own data (age, email, etc.), and then gives it to Facebook. Someone might expect privacy from Facebook, but since Facebook now has access to that data, they have some sort of ownership of it. And what do they do with their ownership? They sell it :). If you give your hashed data to Facebook, and allow them to decode it and read it, then they can still sell the decoded data because they now have access to and some ownership of the data.

I think that would tie in to the enforceable off chain point - if by law Facebook has to respect the permissions you give them, then yes they may have the ability to sell the data you allowed them to read but if you did not give them permission to sell it, then you would be able to pursue legal action.

Which of course would require proving that they did in fact sell it, but it shouldn't be prohibitively difficult to setup a mechanism for taking a data point and verifying whether or not the seller has been given permission to sell it - could have it so that who has access to a given data point and what their permissions are is part of the public record.

In my example Facebook wouldn't be able to decode it, only the user client side.

> Custom devices are being designed to record information in a tamper-proof way

Then the innovation is ONLY in these devices and they just as well can be used with regular encrypted DB.

A regular DB can't ensure the same things blockchain can

When's your ICO?

From a supply chain perspective I feel it will be revolutionary from the decentralized nature and all parties sharing a unified data set for let's say a shipment. Right now a shipment transfers from party to party to party all in their proprietary databases. Working off a shipment from one central point will drastically alter the way things work. As well with the coming wave of IoT, robotics and automation in/on everything automatically fulfilling and queuing the next party/parties in the chain will be a radical improvement. It is mind boggling how much manual, paper based work goes into putting that t-shirt on your back today. :)

Until blockchain can scale, or people can find a problem worth paying txn fees, Bitcoin will be the only coin with value.

What type of work do you do?

Currently, designing and building blockchains.

Awesome. Any repo you'd like to share?