Blockchain, the Solution for Almost Nothing
thecorrespondent.com
thecorrespondent.com
If you want to buy a 4chan pass, you'll find there is no option to pay in EUR or USD. Cryptocurrency only. Is this because 4chan is operating an illegal business? No. It's because they cannot process payments using the traditional means.
Controversial websites get financially censored all the time. Here are a few that come to mind: Kiwi Farms, Wikileaks, Backpage, 8chan, Bitchute, American Renaissance. I'm sure other commentators can chime in with more. Calling blockchains a solution to nothing is pretty offensive to the those who rely on it to pay their expenses without another realistic option.
Not to mention, anonymous cryptocurrencies such as Monero protect both the recipient -and- the sender from financial censorship. I wouldn't want to end up on a public list or have my bank account closed for donating to a controversial person or organization.
And Monero could not provide the excellent privacy that it does without a distributed ledger authenticated by proof of work. When a Monero user spends money, he randomly samples the blockchain until ten dummy transactions can be found and combined with his real transaction in a construct called a ring signature used to obscure the true sender. This only works because the user can secure his own copy of the blockchain. If he had to ask someone else for those dummy transactions, that someone else could use process of elimination to identify the authentic transaction in the user's ring signature.
KYC is an invention by financial systems that have nothing to do with Bitcoin and it's intended use. Nobody holds custody over Bitcoin but the privatekey owner. KYC/AML are scams. They do not exist within Bitcoin. This is simply speculators adhering to a financial system that does not control them. There is absolutely no need at all to ever adhere to KYC/AML as they exist in traditional banking, and not in Bitcoin. Folks that don't understand how to use Bitcoin outside of that traditional system for some reason are constantly pining for regulation. This is anti-Bitcoin.
People want to convert between fiat currency and BTC, that’s why they end up interacting with these regulations.
You can’t currently live only using BTC, but even if you could, the public ledger of every transaction would make it pretty easy to figure out your scheme and come after you anyway whenever you tried to convert the money to actually do anything.
There are other altcoins like NANO which are a better fit for actual transactions.
https://www.youtube.com/watch?v=iVNyr4Q3jq4
Agree that there's no way to reach a 100% homogeneous cryptocurrency economy and that exchanges are necessary. As an example, taxes are always paid/priced in the state's currency. Even if we could reach that point, I doubt it could be done by an entire economy switching their billing over to BTC overnight. Exchanges facilitate adoption.
Cash is still better
This argument comes up everytime blockchain are discussed, but I don't believe it is true
I could theoretically pay 4chan using crypto money,but I argue this is not a solution
First of all, it's not the straightforward, very few people on average can do that on their own
It requires a computer with a connection, they are ubiquitous I understand it, but it's still a very hard requirement
But most of all, what do I do with the crypto if the baker doesn't accept them?
I have to change them into a fiat currency valid in my country and I have to do it in my name (or the company name) because it's illegal to do it in some other people name it's also illegal in many countries if you are a company use a third party to shelter the origin of the money (you pay X who then donates to WikiLeaks)
at that point we are back at square one
It's a valid point, but it's like saying e-mail in the 90's was not a good replacement for mail because if you want to forward it to your aunt you still need to print it out and mail it. If adoption improves those problems go away.
My point is also that adoption won't improve because the benefits are limited and most of the times there is no benefit at all
e-mail solved a problem: communicating rapidly
sending letters was slow, costly and error prone
sending an e-mail was immediate, free and if it got lost re-sending a copy was effortless
Bank to bank this can take 3-5 business days (agreed, western union can be faster, but less convenient) and, depending on your payment processor, can easily cost 15% on the transferred value.
So I argue that, similarly like with the mail to email example, money to emoney is faster, cheaper and safer.
They transfer real money, immediately available upon receiving them.
International money transfer follow international regulations, you can make them speedier by breaking rules, which is usually not what you want if you receive or send money abroad legally (imagine a mom receiving money from her son having to explain why she received it from unofficial crypto channels)
International money transfer is insured, lost crypto are lost forever.
International money transfer it's a highly regulated market users have the rights to be informed of the cost of the operation before starting it, costs also include exchange rates (the operator does the operation for you, you send X and the receiver receive dollars or pound or euros directly, crypto don't include that), taxes collected upfront (crypto skips that) and of course service fees.
International money transfer also pass through IRS (or the equivalent agency there is in other countries) for amount higher than a certain threshold, to avoid money laundering.
Crypto skips that.
etc. etc. etc.
That's why it costs more.
But it is also more secure and less suspicious for the authorities.
E-mail had no such downsides.
Just like a Bitcoin transaction (unless you're excluding it from "real money" because of it's low adoption, but that's not a technical limitation).
> International money transfer is insured, lost crypto are lost forever.
Is it insured against your own mistake when selecting the receiver or amount? I doubt it, and that's the only way you'll lose crypto during a transfer.
> International money transfer it's a highly regulated market users have the rights to be informed of the cost of the operation before starting it, costs also include exchange rates (the operator does the operation for you, you send X and the receiver receive dollars or pound or euros directly, crypto don't include that), taxes collected upfront (crypto skips that) and of course service fees.
Actually crypto can do all that (minus the taxes) and it's actually the standard, assuming you're exchanging between different crypto-currencies and not Bitcoin -> Euro. As for taxes it's just a question of making a wallet that automatically pays the correct tax to the taxing agency address.
> E-mail had no such downsides.
E-mail definitely also skips lots of steps of snail-mail:
- It can't send any physical items
- There's no government agency monitoring your mail for tariffs evasion or other unlawful activities.
- You can't just say you don't want to receive ads by e-mail and then sue the companies that don't comply
- There's no registered mail
- Etc, we could probably come up with other limitations
We'll see if that's true the day all the "minor" limitations are solved.
Today bitcoins cannot be spent, due to technical limitations and psychological ones (high fluctuations make it impossible to know how much you are really spending)
Bitcoins can be stolen by simply hacking (or losing) a device, your money can't, unless it's cash.
But you usually don't keep all your money in cash in the same place, as you do with bitcoins.
etc. etc.
Hacking/phishing/social engineering into private bank accounts is quite common, probably more than into cryptocurrency wallets.
It's easy and highly encouraged by every cryptocurrency wallet to backup your wallet seed, so losing a device is not a problem unless you ignore that advice.
> But you usually don't keep all your money in cash in the same place, as you do with bitcoins.
I don't, I have them split into multiple wallets, sort of like my fiat money.
I carry a small amount on my phone but most of the BTC I own in on a cold/hardware wallet. That stays home just like the debit card for my main bank account.
They are not common and you don't lose any money, if they are stolen from banks.
> It's easy and highly encouraged by every cryptocurrency wallet to backup your wallet seed
That's not protection, that's just preparing for the worst, hoping for the best.
> I don't, I have them split into multiple wallets, sort of like my fiat money.
You are not an average user then
And that's why you show symptoms of survival bias
> That stays home just like the debit card for my main bank account.
You debit card cannot easily be used to steal money from you even if someone steals it physically
Also, about how common some scenarios are in the UK: https://www.statista.com/statistics/586715/share-of-cyber-se...
> You are not an average user then
any statistics to back up your claim?
> You debit card cannot easily be used to steal money from you even if someone steals it physically right, because especially since covid-19 you are less and less asked for your PIN when purchasing with debit / credit card
Yes
And it's quite easy
And that's why it's more secure than any crypto currency out there
> Any statistics to backup your claim?
Crypto currencies are used by a small minority of the population and a small minority of them have gone further than trading them
So if you have some stats to backup your claim that "it's easy to have many wallets and backup your seeds" for the general population, I will gladly look at them
Cards are insured, if someone uses your card and it's not you, you simply call and block the card and the amount is refunded
You have up to 180 days
My bank sends me an SMS everytimey the card is used and they call me everytime I use my card in anomalous ways (for example when I'm away from home, it's a red flag for them and they call to ask if it's me using it in another place, of course they must have some kind of model for that, they don't call when I'm away for work)
Can crypto offer that?
>It requires a computer with a connection, they are ubiquitous I understand it, but it's still a very hard requirement
In your example you are paying 4chan. You already have a computer with an internet connection.
>But most of all, what do I do with the crypto if the baker doesn't accept them?
You could sell the cryptocurrency for cash using localbitcoins. Or you could sell it for a gift card. Or you could anonymize the funds and give them to a trusted party to sell at a KYC exchange. Then the cash is withdrawn from the bank and delivered to your organization. As far as I'm aware, there isn't anything illegal about this.
And of course, you could just spend the cryptocurrency as is if the merchant accepts it.
To be fair, it might be quicker to verify cash payment by mail than a crypto payment.
Western union and other money transfer services have been doing it for decades.
Many immigrants in my country use them to send money back home
If you were in tech before ethernet and TCp/ip (ipx/spx, netware, ring networks, etc) you wouldnt believe hos far we will get.
That's my view of blockchain. Naysayers are just people not knowing better or people with interests.
Blockchain as a current tech may suck (shit... bitcoin is so inefficient...) but there's people doing R&D on this TCP to improve its efficiency and effectiveness.
Except I had my first internet connection in 1994, have worked all my life to help companies transition to digital economy and I believed internet and e-commerce were going to work because they solved a problem
Bitcoin doesn't
> but there's people doing R&D on this TCP to improve its efficiency and effectiveness.
10 years after the only killer app for crypto is avoiding taxation and buying drugs online (if we exclude paying for ransomware, which I don't consider a killer app)
10 years after internet was born (some say it's 1983, some say it's 1990 when TBL release the first version of an HTTP server) had already changed the world and had many killer apps (email, FTP, NNTP, DNS, gopher among the more popular)
P.s. my first experience with networking was in high school, a 1mb token ring local net in the computer science lab filled with IBM pcs with 4MB of RAM running OS/2
P.p.s. my first programs were written in Rexx and C
Kiwi Farms:
"Kiwi Farms, formerly known as CWCki Forums, is an American Internet forum dedicated to the discussion of online figures and communities it deems "lolcows". The targets of threads are often subject to doxing and other forms of organized group trolling such as ongoing harassment and stalking, including real-life harassment by users."[1]
Backpage:
"Backpage was a classified advertising website that had become the largest marketplace for buying and selling sex by the time that federal law enforcement agencies seized it in April 2018. [...]
Backpage's adult services sections became the subject of an investigation by the Federal Bureau of Investigation, [...and other agencies] over accusations that the website knowingly allowed and encouraged users to post ads related to prostitution and human trafficking, particularly involving minors, and took steps to intentionally obfuscate the activities."[2]
Bitchute:
"BitChute is a video hosting service known for accommodating far-right individuals and conspiracy theorists."[3]
American Renaissance:
"American Renaissance (AR or AmRen) is a monthly white supremacist online publication founded and edited by Jared Taylor. It is published by the New Century Foundation, which describes itself as a "race-realist, white advocacy organization"."[4]
That's all a little more than "controversial" - most of this stuff is plainly illegal and has led to real-life harm. There were good reasons why those sites were "censored".
[1] https://en.m.wikipedia.org/wiki/Kiwi_Farms
[2] https://en.m.wikipedia.org/wiki/Backpage
[3] https://en.m.wikipedia.org/wiki/BitChute
[4] https://en.m.wikipedia.org/wiki/American_Renaissance_(magazi...
"Its CEO, Carl Ferrer, pleaded guilty to charges of facilitating prostitution and money laundering, acknowledging that "the great majority” of the adult advertisements on Backpage were actually advertisements for prostitution."
So there seems to be admission that the site's main purpose was prostitution and money laundering, whether or not the other accusations are true.
As for the other sites, I don't know the intricacies of US law, but "it's technically not illegal" is usually a bad way to make a case. Those are communities dedicated to cyberbullying, extreme-right wing views and white supremacy. All those things are documented to have cost lives and in many countries are either already illegal or close to becoming that.
In any case, those are not the noble dissidents in authoritarian countries that Blockchain advocates usually argue with.
(As an aside, the legality and ubiquitous acceptance of pornography and the illegality of sex work is a weird inconsistency in modern culture that I really don’t understand.)
Free speech protections in the US are pretty strong, but I’d suspect the harassment from that farms site is probably illegal.
Credit card processors are within their right to refuse to support white supremacy content (which I think is reasonable). BTC enabling these people isn’t great, but it also enables people in situations where it’s the government that’s objectionable (someone taking money for a blog about banned topics in China or Saudi for example).
In many hostile countries just getting your money out without it being taken by bad actors can be hard.
This resilience is a strength of BTC which can be used for good or evil. It’s also clearly an existing use case of the blockchain.
Even if it was, shouldn't the decision to shut it down come from the courts / police, and not PayPal / VISA?
Or what civilized people call "preventing money laundering".
What you are saying is that blockchain allows you to break the law.
One quick example: Patreon vs Sargon or Patreon vs artists that produce works with nudity. In these cases, things users were banned for did not happen directly on their platform and weren't even mentioned on their platform. I list them because they're easy to google but there are others.
Do you consider those situations to be something other than censorship?
If you got a few hours of free time you should really check out this project out.[4]
Disclaimer I am a cardano(ada) holder and I actively take part in this project as a pool operator.
[1]https://iohk.io/en/research/library/ [2]https://twitter.com/BetterStake/status/1296217244217868289 [3]https://twitter.com/search?q=cardano%20Raspberry&src=typed_q... [4]https://github.com/input-output-hk
You also only get privacy with transactions between two z-addresses, and those require a fair amount of resources to generate (I think HW wallets can't sign those transactions due to computational limitations). Most zcash transactions are between t-addresses which don't have any benefits over BTC (they're public).
https://bitcoin.stackexchange.com/questions/49115/whats-the-...
As far as cardano, I'm skeptical of proof-of-stake compared to proof-of-work (though I might just not understand it fully). Proof-of-work seems like the main BTC innovation against abuse and a lot of the coins that use stake (stellar lumens, tezos) seem like they drop the defining characteristic of BTC decentralization in order to get faster transactions. Without proof of work you don't really get true decentralized protection from the system itself, you have to put trust somewhere. At least the tezos putting coins at risk approach is interesting. The cardano website also really sets off my bullshit alarms: https://cardano.org/
FWIW this is rapidly improving. The main thing we need to implement Zcash-style private payments is a Merkle proof in a zk-SNARK, so that we can prove ownership of an account in the Merkle tree without revealing the account. So the proving cost depends heavily on our choice of hash function.
Since most SNARKs operate over large finite fields, traditional bit-oriented hashes are a poor fit, but the designers originally went with SHA-256 anyway to be on the safe side. More recent versions of the Zcash circuit use Pedersen hashes, which are much cheaper and still provably collision-resistant (assuming discrete log hardness).
Future versions will probably use more specialized hashes designed to minimize field operations, like Rescue [1]. There's also the idea of using an embedded GKR protocol to verify gMIMC hashes with a very low incremental cost [2], although it might be overkill for Zcash-style circuits.
I saw in your profile you work on Mir, are you also involved in Zcash?
>>photos of Hoskinson with his mouth open taking selfies in various parts of the world
Honestly don't really know how to answer this. For someone who isn't interested in cardano you seem spend a lot of time stalking a blockchain ceo ;)
>> disclaimer: I hold none of either
congratulations!
Then people saw bitcoin made money so thought if you stick blockchain on something else maybe some of the money dust will rub off. Less good.
Once the next major depression comes in, a form of cryptocurrencies will gain traction again. People are fed up with big banks and centralized power.
But if the code is already written, meets the project requirements and is easy to deploy, why not?
I agree that if they're private they're equivalent to a customized database system, private blockchains aren't interesting but it doesn't make them useless, it's simply another way to solve problems that could already be solved before.
Also I don't think there is any significant energy consumed. There is no mining or anything like that. You have to pay for extra network traffic and more disks, simply because you're going to have more copies of data, most likely, but it's not so large amount of energy.
Second would be more profitable for the owners of that db, so there is a motivation to do it in that way. In many of the countries outside of US/EU it's a popular practice.
Would it, though? Google tells me that India has a population of around 1.4 billion people. Let's assume each person has one phone number, and each phone number requires one kilobyte of number-mobility-related data. Then the database would need to store 1.4 terabytes of information.
1.4 terabytes doesn't seem like an impossible amount of data to store. That fits on a consumer hard drive! Dell will sell you a single server with that much memory! Request volume doesn't seem like a huge issue either, since porting a phone number is something people do extremely rarely.
Or for that matter, recording of call details for billing between operators?
In a traditional database setup, the "transactional method to update it" would be sending a request to a central server to update the database. The central server can be run by whatever regulatory body or industry association is responsible for number portability -- ideally, this would be the group with legal authority to overrule whatever the computer system says anyway. It wouldn't need to handle a large number of transactions per second because people don't change phone providers very often.
You could imagine doing it with a blockchain instead, but you could also imagine doing it using a Yahoo Groups email list -- that doesn't make it a necessary or good solution.
> It wouldn't need to handle a large number of transactions per second because people don't change phone providers very often.
That makes it fit blockchain quite well, actually.
I mean, I can imagine government wants this, so if such ideas comes from government you're going to have such regulatory body. But otherwise, if it comes from operators itself, they don't want to introduce such entity, and they don't want to award one of them as an ultimate boss to rule all of the numbers. Blockchain, at least, gives them a chance to continue to be equal.
But as this article articulates so well, that’s a red herring. Like, you can come up with all sorts of wild scenarios where central authority can be bad. But ultimately, these are scenarios you’re unlikely to encounter in the real world, and if you do, there are much simpler solutions.
Blockchain technology always reminded me of that XKCD about cryptographer expectations vs. reality (https://xkcd.com/538/): it’s solving a problem that only really exists in fantasy for 99% of the population.
Ther database will hold only entries signed by telco companies. Some rules will apply on what happens when a number changes.
Everyone gets access to the raw database, and to query the database.
In case of mismatches there will be an agreed arbitration process, with agreed upon fines to the party no being responsible. This or some other contract.
This sort of solves the problem.
The key win in the blockchain - is the decentralization. But we know, in the real world how to arrange cooperation using centralization. it works. It's done every day. So this case is mostly useful when you want to avoid regulation.
Another win of the blockchain - a lot of work has been done verifying that it is secure. It probably is the mose secure system for those sort of problems. And that's a good reason to use it in many places.
Let's say you get a computer virus that steals your banking credentials and transfers your money to someone else's account. In the traditional banking system, it's often possible to reset passwords and reverse transactions, especially if you catch the bad behavior quickly. With Bitcoin, your money is gone forever and it is mathematically impossible for you to ever get it back.
But in the example above that could still be easily fixed, you'd just need the companies involved to agree to reverse the mistake, as they are the miners of the chain.
So a database?
> AFAIK it is live and actively used.
Most things people seem to think are running on blockchain tech turn out not to be, so I'd be interested in any evidence here. Nonetheless.
> operating a database for that scale would be very complicated
They're already operating a database, so at most this is an argument that a traditional database tech wouldn't work, except...
...this is only a few billion rows, at most, right? With minimal data? It would totally, totally work. We're at a scale where a copy of "MySQL for dummies" is going to explain everything you need to know here. A moderately large number of people in this thread probably work for companies that have traditional databases that work at a larger scale or with higher demands than this.
But if you consider it more like an easy to cluster database with free, tamper-proof backups, it makes a lot more sense.
There is no problem with performance until schema changes are made, requiring a careful migration strategy plan (this is why DBAs get the big bucks.)
Source: DBA.
There's a few such systems in production - in practice, they tend to use a private Ethereum or Hyperledger as a back-end data store, and 100% of the use case for using a blockchain for your private back-end data store is being able to say "blockchain!" in the press release.
With this particular case, it maybe be solution to fight corruption (just a guess). Centralized trusted control of all phone number of a country is a huge power and a magnet for different types of corruption. So maybe the difference is that in your country the magnitude of corruption is lower than in India, or easier to handle because of size.
I don't know about corruption levels in India. I am under the impression that the level of corruption in my country is rather tiny, so this could very well be the explanation.
Stablecoins: I remember plenty of commenters being quite certain that volatility made cryptocurrency unusable. And yet a short time later we have successful decentralized stable coins.
DeFi: Just in the past months Uniswap has rivaled centralized exchange volume as a decentralized exchange. It's permissionless composability appears to be spinning off an interesting group of experimental financial instruments.
These are a couple huge concrete examples of successes that make the ~show me something real~ argument difficult for me to accept. Nobody has built skyscrapers yet, but skyscrapers aren't built in a day. We have some pretty solid architecture going up it seems.
And if you've been following the space long enough most of this article is tedious and inconsequential:
1) "For instance, hundreds of links to child pornography and revenge porn were placed in the bitcoin blockchain by malicious users."
This is a tired argument from 2013 which nobody cares about: https://www.wired.com/story/why-porn-on-the-blockchain-wont-...
2) "Also, in a blockchain you aren’t anonymous, but “pseudonymous”: your identity is linked to a number, and if someone can link your name to that number, you’re screwed. Everything you got up to on that blockchain is visible to everyone."
Blockchains have many different properties. Some have more stringent privacy measures than others. Many HN readers are likely familiar with privacy coins employing things like zero-knowledge proofs or ring signatures. Not to mention the burgeoning research into the implementations of homomorphic encryption. How about Harvard putting your genome on the blockchain in such a way where you retain full control over it's rights? Doesn't sound completely useless to me: https://nebula.org/whole-genome-sequencing/
3) "The fact that no one is in charge and nothing can be modified also means that mistakes cannot be corrected. A bank can reverse a payment request. This is impossible for bitcoin and other cryptocurrencies. So anything that has been stolen will stay stolen."
First of all huge amounts of digital theft occurs today that goes unreversed. Also infrastructure reducing errors in cryptocurrency is being improved all the time. Transaction finality has cons but also pros and can be modified. And one can also imagine insurance for these types of losses becoming commonplace.
4) "And then there’s the environmental problem."
This is probably the most legitimate concern so far. All I can say is I hope we get serious about investing in clean energy production as a country/globe. Many things use energy, including cryptocurrency, and that isn't stopping anytime soon whether we like it or not.
5) His complaint that a specific project is not using the blockchain correctly and individuals couldn't explain the blockchain well isn't very convincing.
Of course lots of experimentation will fail. Pets.com didn't make the internet wrong. And even the experts have trouble describing possibilities that don't exist yet. If that isn't reminiscent of the early days of the internet then I don't know what is. If you've seen Bill Gates get mocked by Letterman while trying to describe the early internet then you understand this difficulty.
It's worth remembering that this area is still incredibly young. If you can't at least see the potential then maybe you aren't looking in the right places. Like here: https://a16z.com/2018/02/10/crypto-readings-resources/
People are claiming to be excited about DeFi because everyone loves unregulated derivatives and lending at insane APYs, but I think the real reason this has taken off is because the UX makes the future feel so real and achievable.
I'm just scratching at the surface now, but it's clear we've come a long way since bitcoin. I won't be shocked if it turns out bitcoin becomes seen as worthless old technology, but blockchains will never go away.
There's an experimental browser that provides this functionality for all kinds of websites, not just financial ones. You set up an account once when you install the browser, and then you can use it for one-click logins.
It's made by Alphabet Inc, but I can't seem to remember what it's called. Vanadium? Manganese? Ultron? Something like that anyway...
Seriously, go see what the process looks like. Just by not being full of A/B tested bullshit and free of regulation, you can get a glimpse of the future.
It feels powerful in a way that registering a Google account doesn't.
Well clearly someone cares
>2 How about Harvard putting your genome on the blockchain in such a way where you retain full control over it's rights?
I've never understood how the argument of putting private data on the blockchain is "good". To me this has seemed to be one of the worst ideas that is constantly pushed. It makes one strong assumption: the security of the network is and will always be unable to be decrypted. This seems naive. I am much less concerned with a centralized database where encryption of my data can be updated as new standards are adopted.
> Stablecoins
At the rare times I see people accept crypto as payment the options I see are: Bitcoin and Ether (and maybe bitcoin cash). I've never seen stable coin. Never seen stable. So not only is it not in practice but you're also illustrating my point about
>> You can talk all you want about solutions to some of the (minor) problems addressed here (ignoring the rest of the problems) but unless it is in use then the article's commentary still stands.
Great, you checked off one of the many boxes and created a coin that no one uses. Personally I don't count that as a success. (We can say the same thing about ZKP coins. I've never seen it accepted as payment anywhere) You need to check off ALL the (major) boxes in a single coin.
> 3
Is your comment seriously that "stealing happens, so it doesn't matter if we make it easier?" Seriously? Many people I know, including myself have had CC info stolen (often not our fault, other sites get hacked and dumped). Getting that fixed is pretty simple with a centralized source. I couldn't imagine having a significant chunk of my savings in an account that could be removed and not returned. The FDIC guarantees I'm safe with at least $250k and I'm pretty confident I'm practically safer than that. I get a lot of safety, stability, security, and privacy with fiat currencies. None of those are perfect, but cryptocurrencies need to check all the boxes here (plus fast transactions) to replace it. Better in a single aspect but worse in others does not warrant replacement and that's why we see it.
> 4
Please stop with the lemmings arguments. You also have to consider the utility of the electricity use. Cryptocurrencies aren't providing much utility. They aren't saving lives. The AC in your house has more utility.
> 6 (not a typo)
You ignored one of the most important arguments. Time. That has been a killer feature of cryptocurrencies since the beginning and people have been shouting that it will be solved with POS, POB, whatever. It is still non-viable unless the transaction times are brought down to at least a few seconds.
> It's worth remembering that this area is still incredibly young.
It is, but it is also very much hyped. Many technologies get hyped when young and go bust. In fact, this is more common than the other way around. So read my comment as asking for compelling reasons to think blockchain isn't one of them. Your argument has just been assuming I don't know about all the things you listed. Sorry to break it to you, but I already did. I feel confident many other HN users did as well.
- Getting money out of China. Buy into a mining consortium with yuan, get a fraction of the bitcoins, sell outside China for dollars or euros. You're manufacturing and exporting, which the government of China likes.
- Extortion. The ransomware extortion business depends on Bitcoin.
- Drugs. Delivered to your door in a plain wrapper.
What are the transaction costs like on BTC these days? I'm surprised many people still bother with BTC given the enormous costs I've seen.
https://ycharts.com/indicators/bitcoin_average_transaction_f....
https://www.blockchain.com/btc/tx/d56ae8052711ac81cb68a0ccf3...
Replace `out` with `{in|out}` and China with `<any country>`, and now we're in agreement.
> - Drugs. Delivered to your door in a plain wrapper.
Sounds like a much better experience than getting shot when trying to get your dose (if you're an addict).
Bad news travels fast, so there's lots of criminal subgroups. Bitcoin and crypto are dwarfed by financial speculation and DeFi.
And the anonymity is guaranteed by design. You just send your billions through a couple of mixers registered to phony IDs and it they magically get obfuscated because hey, other billionaires do that every day as well.
/s
> extremely volatile asset with ~2x price swing within recent couple of years
Can be hedged with futures. Also S&P 500 had ~1.5x price swings recently and no one cared. The derivatives market has solved the problem of volatility in all markets not just Bitcoin.
There are already several billionaires who publicly say they have lots of BTC, prob many more who don't speak up. Jack (8B), Chamath (1B), Paul Tudor Jones (6B), Winklevii (1 B), Peter Thiel (2B). Eventually it will be known as the tax haven coin (already kind of is) and that will be its killer app.
A US wealth tax would obviously apply to BTC holdings too.
I am confused. In your view of the world, does KYC/AML not exist at bitcoin exchanges?
Noble goals. Still, blockchains are inherently limited to the digital world. No amount of digital freedom or security stops you from being oppressed by an unjust government, or robbed at gunpoint.
Taking Bitcoin as an example, there have been many cases of bitcoins being seized or stolen. The reasons behind these losses were much the same as the reasons people lose fiat currency. Someone with authority came and took it.
Frankly, I don't really understand what there is to "get". You can create a perfect system, but people have to operate within it. That means laws, and it means ceding authority to regulation.
None of this is to say that I am not interested in blockchain tech, and am not open to it as a solution. I just haven't seen a problem solved by it yet. I would be happy to be proven wrong.
I think these are some of things people think about it:
- Your country's financial system is unreliable or run by tyrants and the currency is bad. It might be hard to get a stable currency. Moving income into bitcoin could help you (people were doing this in Venezuela).
- Your country was invaded and crossing the border requires you to interact with corrupt guards that steal anything of value you try and get out. Putting your wealth into a bitcoin wallet can allow you to escape with it intact if you memorize your seed words (there was a story about someone in Ukraine that did this crossing the border patrolled by Russian guards).
- Bitcoin is deflationary, the coins are limited and scarce, but the currency is divisible. This means they should hold value over time. Fiat currencies are vulnerable to monetary policy of governments, bitcoin is less so. Bitcoin may increase in value in part because other currencies are decreasing in value.
- Ability to move money more easily than other deflationary assets like gold (which have other problems). Universal currency across different governments that can be converted into local currency.
All of this is primarily just BTC. I think there are other potential interesting things with ability to have an audit log of immutable transactions of a block chain generally. I think some of the other things are cool (urbit is using ethereum for IDs), but a lot of the other things don't seem to have much purpose beyond being cool. Faster transaction times? The strategy Dai uses to stay pegged to 1 USD is neat.
You know what unstable governments in the middle of a revolution don't have? Reliable power and internet.
> Your country was invaded and crossing the border requires you to interact with corrupt guards that steal anything of value you try and get out. Putting your wealth into a bitcoin wallet can allow you to escape with it intact if you memorize your seed words (there was a story about someone in Ukraine that did this crossing the border patrolled by Russian guards).
Sounds like a great way to get rubber hosed to death.
> Bitcoin is deflationary, the coins are limited and scarce, but the currency is divisible. This means they should hold value over time. Fiat currencies are vulnerable to monetary policy of governments, bitcoin is less so. Bitcoin may increase in value in part because other currencies are decreasing in value.
Deflationary, for consumers, is bad. I am also not convinced bitcoin in nearly divisible enough to actually be world currency. (And that's ignoring the fact that it would need something like 7 orders of magnitude improvement in throughput)
It's reliable enough actually (people are currently doing this). You also don't need it up all the time to move value into BTC.
> Sounds like a great way to get rubber hosed to death.
There isn't a way for them to tell that you've done this, and in the case in the Ukraine it allowed him to get out with his wealth intact: https://www.forbes.com/sites/tatianakoffman/2020/06/13/why-b...
> Deflationary, for consumers, is bad. I am also not convinced bitcoin in nearly divisible enough to actually be world currency. (And that's ignoring the fact that it would need something like 7 orders of magnitude improvement in throughput)
I don't think it'll be used for frequent transactions unless they actually can fix the time/throughput issues, but that doesn't mean it's useless. There could potentially be a future where you move BTC to some other currency with faster transaction times in smaller amounts for immediate or frequent use.
Just because a lot of blockchain tech is filled with people running ICO pump and dump scams, speculators, and an enormous amount of bullshit in general doesn't mean there isn't also some cool stuff going on too. There's a lot of nonsense, but there are also some real current applications, and I think, some real future potential.
Universities are failing and we've got bored, super smart kids running around 'hacking' and scaring the shit out of everyone.
The recent twitter hack wasn't impressive, it was stupid.
1) ICO - a way to raise money in a distributed manner outside the traditional financial system (think Banks and VCs).
2) Defi - a way to borrow and lend (and much more) outside the traditional financial system. One example, Banks get as much as 16-20% return on your depoiste -- you might see 1% of that. Defi solves that by removing the Bank and you can capture all of that yield. You can lend literally with a click of a button and see returns with every mined block. Take the money back any time you want.
3) Governance - there is a big social benefit if we figure out all the edge cases and the correct implementation. Many benefits in voting, real-world governance, and open source (what to work on next, what gets funding).
4) Many many Comp. Sci. and Cryptology advances; see byzantine general problem, zero-knowledge proof, and many more. Just one example of a company doing lots of research: https://iohk.io/en/research/library/
[1]https://www.ycombinator.com/companies?query=cryptocurrency
Why mine (fool's) gold when you can sell shovels?
Like once you figure out who is who, everybody can know for whom everybody voted?
-Votes aren't verifiable by everyone.
-Privacy
Just to name a few.
The Duverger's law for example states that there is a strong psychological component, beside the mechanical one
If the vote process is effortless the elector is less involved and that's why going to the ballots is still the favourite way to engage voters
If a system promise to be unbreakable and solve every voting fraud problem, voters will be less careful when voting
Etc. Etc.
Elections are not primarily a technical problem, it's a social rite they are like the rites of passage in ancient tribes
We have laws for a reason.
What you're talking about doesn't seem to be an ICO but an IBO (Initial Blockchain Offering?). Most ICOs use a token on an already-established blockchain (e.g. ETH), so then there's no need to run a new network of nodes for it.
I'm really surprised by how uneducated you think HN readers are. My BS alarm goes 100% every time I read about how "Blockchain Technology" is going to solve world peace or whatever.
ICO - literally billions of dollars raised by companies each year. All done on the blockchain.
Defi - 6 billion dollars locked in defi (lending and borrowing) - 10x grown in the last 12 months.
Hundreds of paper have been published - advancing cryptology and Comp. Sci.
That proves nothing. Billions of dollars are wasted every year betting on companies with BS business plans that end up failing.
> Hundreds of paper have been published
That only proves that it is a fashionable subject in Academia. A way for academics to get funding and getting papers published. Nothing else.
Kinda like all those AI startups that aren't actually using AI.
When it comes to a quasi-banking or quasi-wallet system, I find it easy to visualize that the blockchain holds accounts with balances, and there are transactions which move money between accounts. Blockchain's decentralization and write-only properties help because no single entity can make your money disappear, and no entity can rollback a transaction.
What is going on with other use-cases of blockchain? What does a supply-chain system actually store on the blockchain? The SKU list? The price of SKUs? The stock level of each SKU in each warehouse? What?
> So much energy that the two biggest blockchains in the world – bitcoin and Ethereum – are now using up the same amount of electricity as the whole of Austria.
Also, most currency transfer being digital is a non-sequitor Businesses still need to move the money from their location to the bank regardless of the volume of transfers done digitally.
https://www.vice.com/en_us/article/ywbbpm/bitcoin-mining-ele...
There is energy in certain places (underground, hydro) that cannot be transported to wherever journalists are writing their papers as they spitball electricity calculations.
https://news.bitcoin.com/how-big-hydro-power-partners-with-b...
China’s southwestern Sichuan province, a mountainous region that is estimated to have over 50% of the Bitcoin network’s total computing power
https://www.coindesk.com/bitcoin-mining-hash-rate-rainstorms...
Ethereum allows for the usage of unique and real items in the digital world. Money was obvious as it's impossible to have internet money if you can just ctrl+c and ctrl+v it to make copies. A bit of money is unique and can't be copied and thus is real and useful in ways previously digital information wasn't.
You can own a digital object or digital representation of a real object and use it on the internet. God's Unchained is a collectible card game like Magic the Gathering where the cards are digital, the rare cards are provably rare, and the players can trade the cards on any market out there or even take out loans on their valuable extra rare cards. This concept applies to many things including cars, houses, collectible fashion apparel, and anything else that there needs to be only one of.
DeFi is already re-creating all of the capabilities of the existing financial system but built on neutral and fair rules where no one person or company can arbitrarily change them and you always keep fully control of your assets.
There's too much to write but there is something here and it's worth reading about it with an open mind as it's very likely going to be important in a decade or so.
That's a long article itself but this might be a good starting point: https://consensys.net/blockchain-use-cases/ Consensys is run by an Ethereum co-founder and one of the most prestigious organizations in this space, so that page might seem intimidating but it's good, factual information.
Ethereum allows for the usage of unique and real items in the digital world. Money was obvious as it's impossible to have internet money if you can just ctrl+c and ctrl+v it to make copies. A bit of money is unique and can't be copied and thus is real and useful in ways previously digital information wasn't.
You can own a digital object or digital representation of a real object and use it on the internet. God's Unchained is a collectible card game like Magic the Gathering where the cards are digital, the rare cards are provably rare, and the players can trade the cards on any market out there or even take out loans on their valuable extra rare cards. This concept applies to many things including cars, houses, collectible fashion apparel, and anything else that there needs to be only one of.
DeFi is already re-creating all of the capabilities of the existing financial system but built on neutral and fair rules where no one person or company can arbitrarily change them and you always keep fully control of your assets.
There's too much to write but there is something here and it's worth reading about it with an open mind as it's very likely going to be important in a decade or so.
Ah, yes, that was Amazon's mistake. Accepting Internet money has meant that I've been able to just email them photocopies of the same money over and over. Hahaha, it has been the perfect crime. I hope Amazon never embrances Ethereum and I can keep getting free merchandise forever.
It's not at all like handing someone some cash, I never "signed up" to my local grocery store and I don't need to login to make a purchase, I can just hand them some cash.
https://www.facebook.com/notes/facebook-engineering/tao-the-...
I contributed to the start because they pitched themselves as 'unbreaking news', instead they're just another weak publication writing bad articles with catchy headlines (of which this is a good example).
Persuasion is everything The Correspondent was supposed to be and isn't: https://www.persuasion.community/
If you want to actually learn more about bitcoin, I'm part way through this and it's really good: https://www.amazon.com/Bitcoin-Cryptocurrency-Technologies-C...
To do so you have to convince others to sink their money into the sector, hence all the grandiose proposals, opaque jargon and solutions is search of problems...
Having fast micropayments payments running on data requests is useful for a wide variety of cloud applications, including but not limited to data transfer costs and queries to machine learning models, all without the need for "users" on the systems being accessed.
The way I'd put it is that the killer use case for Bitcoin is yet to come, which doesn't make it a solution for nothing, but more like a solution before its time.
https://developer.mozilla.org/en-US/docs/Web/HTTP/Status/402
It must be nice living somewhere where you can trust banks
Ctrl+c and ctrl+v
Take Gods Unchained for example: https://godsunchained.com/
It's as close to a real trading card game as possible, simply because when they produce 5 cards there are only 5 cards.
cough Cyprus.
https://en.wikipedia.org/wiki/2012%E2%80%932013_Cypriot_fina...
I'm here to tell you Bitcoin works, and does not need anything else. Bitcoin is not slow like many folks will tell you all day long, either. Bitcoin does not have high fees, either. Bitcoin is very sound "money," and not a great currency. If someone wishes to transfer money to someone else anywhere in the world, they simply tailor their fee to be low, and they send it for 40-60 cents and understand that it will confirm over the next day. (Yes, the mempool surges during times of heavy use, and yes it may take a little while longer, but just the same, millions of dollars can be sent with no third party for under $1 fee) The time itself for this does not really matter, as this could never be done prior to Bitcoin. Ask those sending money home to the Philippines or folks who are unbanked how many days a wire transfer takes, and how many third parties take a massive chunk in fees. Nobody controls your money in Bitcoin, and nobody takes a fee. (Nobody is taking your money from a BTC fee, the paltry amount is paying into the system to keep the miners mining)
It's nothing else beyond this, and nothing else is needed. Anyone can argue about this endlessly but Bitcoin solved it's problem it was designed for, and all else is just garbage tacked on by other people trying to strike it rich.
I have used Bitcoin regularly since 2011. I have purchased real, legal goods from folks in other countries over forums in escrow that could not be done otherwise without incurring very large fees. I've paid 30 people simultaneously with one multisend transaction, and one fee.
Everything else is irrelevant. Bitcoin is revolutionary. Just Bitcoin. It works and it works very well. You can continue to beat around the bush and apply fetishism all day, and Bitcoin still works the way it was intended.
I'd like to hear from people who have actually created solutions, not speculation about potential use cases or price action.
Blockchain is cool datastructure as an immutable log with proof work where integrity can be verified in a distributed manner by multiple parties.
It’s like quantum computers. Heavily hyped but only useful for a specialized set of problems.
Besides bitcoin are there any other blockchain apps that have large user bases?
That killer app might be elections or possibly decentralized trading of electronic assets like stock ownership.
I guess it depends which is the larger evil where you come from, the government or the criminals, whether to trust the central or the decentric authority.
First application of a blockchain is digital money which is free from a central authority. Here is real world scenario that happened in so many places. Your domestic currency is crushing, has lost 30% of it value already and is about to loose another 80%. You want to by US dollars and save what is left but you cannot because government temporary prohibited purchase of a foreign currency. I’m thinking about Russia, Belorussia, Venezuela and many many others.
Political activists get blocked by a banking system all the time. For example in Russia there is a “list of terrorists”, people on this list excluded form the banking system. This list probably has some terrorists in it but it also has quite a few activists in it as well. You can go to a protest, grabbed by a police and next day find yourself out of the banking system.
Decentralized money is at least partially a solution to issues arising form an authority abusing it powers as cryptocurrency cannot be blocked so easily. It does not have to be used much, it just has to be around.
Second blockchain application is smart contracts to simplify value transfer. For example shares offerings - when a company sells it shares to a bunch of investors. It often happens outside of an exchange, without IPO (search for Reg-A, Reg-D offerings). In this process a bank holds investor money until offering completes and a “transfer agent” hold stock in the name of an investor after. Bank and transfer agent are there only because of trust issues, someone has to guarantee that investor pays and receives shares. Investor cannot directly hand over cash to a company because it can fail to pay or company can fail to deliver it shares and then they will have to spend time and money in court. Both bank and transfer agent take their commission just because they trusted and licensed to hold value during and after transaction. These commissions are not small, a bank may take few percents for organizing an offering.
Shares can be issued on a blockchain and a smart contract can govern entire value transfer starting from escrow, to enforcing offering conditions and then to transfer of shares and money to counter parties. You can imagine banks might not be happy about loosing their profits but competition in democratic countries slowly but surely drives process in a right direction.
Similar examples arise all the time in international trade, trade clearing, interbank relationships, etc, etc. blockchain is a solution to all of this but maybe we need another financial crisis (when “trusted parties” became not so trusted) to speed up it adoption.
And if you think LARPing is pathetic then that's on you. While you go to your billion dollar church or watch your billion dollar sport or analyse your String theory or do your medieval sword fights in dress-up at castles.
1. Money 2. Zooko's Triangle
Your prior should be that anything else is some kind of delusion or scam.
Blockchain, big data, cloud computing, AI, and magic are roughly equivalent.
Don't waste your time reading it even if blockchain is weak.
Many think blockchain as a synonym for BitCoin and the like, while the central technology seems to be the distributed ledger.
However, with anything distributed, the network is only as good as it's participants. Which means, when thinking long term, it fails to give confidence in the system, because who knows, 20 years from now, will there by any participants in the distributed ledger?
Crypto is a bubble but it’s also a space solving difficult problems that will shape how the world transacts. It’s volatile because it’s difficult and hard to understand, but that doesn’t mean there’s no value.
financial apps on ethereum - https://defipulse.com/ - https://uniswap.info/home - https://compound.finance/ - https://nexusmutual.io/ - https://bloom.co/ - https://baseline-protocol.org - https://augur2.eth.link/
non-financial apps on ethereum - https://audius.org/ - https://ens.domains/ - https://decentraland.org/
popular newsletter - https://weekinethereumnews.com/
But anyways, DeFi has tons of use cases including automated crop insurance based on weather events, decentralized money markets for car loans, tokenized rental real estate, synthetic derivatives, standard savings and loans utilizing stablecoins, etc etc. The notion that blockchain hasn't found product market fit in 2020 is laughably outdated.
Its a mixture of “I don't respect this market and thats the only actual distinction” along with “I have no idea these criticisms are present in actual currencies as well as the stock market and commodities spot markets and credit market and derivatives market and collectibles market”
Eventually they move the goal post so far that they are giving actual relevant criticisms of blockchain technology, like scalability concerns
And then they get flipped into realizing they can actually contribute to the solution and spread awareness
And then in a few short years they have enough clout to raise capital in the space
Most economic activity in Defi is unregulated gambling, but I don't think that's necessarily a bad thing.
There are relevant criticisms of the space, but the relevant ones are exclusively inside the space and are distinctly not irreconcilable as it is permissionless to build or advocate for consensus changes to implement something that was built.
The external criticisms lack nuance and masquerade their observations as absolute limitations.
You replied to my other comment, so this is exhibit A of a useless higher standard levied exclusively on the blockchain space, without acknowledging every other asset class.
Even with you not considering that a problem, and congratulations for that, the point in caring deflects away from what is happening and every asset class in existence.
In currencies, M0 is the small sliver of the supply use for goods and services, with the entire M1, M2, MB all used for speculation and is largely illiquid.
In stocks, credit, derivatives and commodities the same distribution is seen.
Its not odd for cryptoassets to have the same phenomenon occurring.
The interesting thing is just the overlapping feature set of all other asset classes at once, as well as the additional unique nature of cryptoassets.
The DeFi space in particular is converting non-interest bearing assets into interest bearing ones. That has market traction, and it is permissionless and of unlimited size, caveat emptor and that's a personal choice which has nothing to do with the viability of the space.
My point is that the nomenclature isn't useful because its not different than other asset classes, but absolutely is used as an indictment against this asset class and market. Whether you and I are personally pragmatic about it as a personal choice or not.
a lot of people enjoy not playing by the rules.
https://www.coindesk.com/ethereum-executes-blockchain-hard-f...
See UASF for the success in community governance. This is good proof that the users are always in control, not miners or Vitalik.
[1] https://www.coindesk.com/binance-may-consider-bitcoin-rollba...
enjoy your user uncontrolled anarchy
do you have any response to > 50% attacks?
In practice the actual cost and the uncertainty of an attack ensures that it is almost never attempted in practice for secure* blockchains:
1. You would need much greater hash rate share than 50% for good chances(forgoing the block rewards $$ incase of failure!), the social coordination is the bigger challenge, see mining pool distribution[1].
permissionless: seems to be code for "lets you do things that are illegal"
programmable: not exclusive to blockchain
trustless: also attracts those that are untrustworthy (scammers, etc)
unstoppable: seems to also be code for "lets you do things that are illegal", and im sure the various people who are in prison and/or under investigation for their various blockchain related crimes would disagree with how "unstoppable" it really is
Let's take the Nazi's for example, because they are always the generic personification of an evil government. Had digital currencies existed in that time, it would not have been immoral for the Jews to transitional all of their wealth into digital currencies ahead of trying to flee Germany, though it would have certainly been illegal by German laws against the jews.
Instant payments don’t need a blockchain [1]. Avoiding financial regulation sends you to jail [2].
[1] https://en.wikipedia.org/wiki/Instant_payment
[2] https://www.theverge.com/2019/4/9/18302053/bitcoin-dealer-pr...
If Iran, Venezuela, and North Korea can barely avoid sanctions what makes you think a blockchain network can avoid something similar?
Ethereum is becoming increasingly anonymous. While not as good as Monero, it's still trivial to go in and out anonymously.
https://decrypt.co/40284/us-homeland-security-can-now-track-... ("US Homeland Security Can Now Track Privacy Crypto Monero")
As I think you were getting at, there’s enormous systemic risk with hacks and bugs. Now the contract ecosystem is so intertwined that a bug in one can cause a cascading effect. E.g a price feed which powers a DeFi platform could be hacked/attacked. Even a bug in a simple erc20 could have massive consequences since a lot of the contracts are intertwined
Its the interchangeably parts feature of smart contracts. Was missing before this year.
Analogous to how interchangeable parts heralded the industrial revolution.
The DeFi space would not be growing by orders of magnitude a quarter without that.
> premised on IANA handing over control of the DNS AND that hand over is to a premined cryptocurrency network so they can resell it?
Then not as far as I can tell.
If it's or, then yes. It looks like there is a 15% pre-mine: https://handshake.org/files/handshake.txt
Uniswap - a scheme for assisting with speculating in cross rates between various cryptocurrencies.
Compound - it pays interest. But who's paying the interest? It doesn't seem to make loans. Possible Ponzi.
Nexus Mutual - insurance against failure of smart contracts, based on smart contracts.
Bloom - "validate anything about anyone." A signing service for identity document / email / etc tuples.
Baseline - Main use seem to be sealed-bid RFPs.
Augur - "Your global, no-limit betting platform".
All of these are either gambling schemes or solve a non-problem.
Uniswap solves many problems (trustless cross-asset exchange, liquid markets without market makers, decentralized orderbook problem, decentralized price feeds, etc)
>Compound - it pays interest. But who's paying the interest?
People who want loans in cryptocurrency.
Smart contract coins like Ethereum will have tons of uses, especially for digital goods. You could easily cut escrow.com (and all escrow fees) out of the process of transferring domain names (and other digital goods) with smart contracts if a domain registrar got with the times.
Most people interested in cryptocurrencies have little to no interest in actual use cases. Investors simply want the price to go up. This is usually criticized as a "greater fool" investment strategy.
The article speaks to this. If there is any value in an cryptocurrency, it is up to the developers to divine it. Investors will eventually find a price equilibrium, but for now the ecosystem seems driven by hype, buzzwords, pozi-dapps and bubbles. NANO doesn't have any of that.
When you start looking at cryptocurrencies as code, valuation becomes meaninglessness.