Why blockchain is not yet working (2018) | Hacker News Reader

Why blockchain is not yet working (2018)

as1ndu.xyz

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I think the #1 reason blockchain doesn't work is very simple - the technology is broken beyond fixability. This article is two years old, but the same variations of these excuses always come up when the crypto ideologues are grilled on why their utopiaic vision hasn't come about, for all of blockchain's existence. Blockchain is awful for most things compared to a centralized or distributed database: it is inefficient, untrustworthy due to decentralization, a huge resource hog, and morbidly complex to implement.

The only good use cases that come to mind is if there is some particular reason for you to evade the conventional and easier systems of communication and storage. The lesson is: you should evaluate technology on its merits, not its politics. Three classic sources on the blockchain question immediately come to mind:

http://doyouneedablockchain.com/

https://imgur.com/a/RlUj9Ed

My personal favorite:

https://twitter.com/vgcerf/status/1019987651301081089

> the technology is broken beyond fixability

[citation needed]

Crypto ideologues are a strawman. Anyone working on the actual tech agrees that blockchains are useful if, and only if, you can't rely on a single party and need a decentralized, trustless append-only database. Otherwise, why bother with the extra complexity? That's the whole point of blockchains, after all.

Technology choices are complex set of trade-offs, even within the blockchain space.

Right, the problem is that almost no one needs those features and those are mostly anti-features for modern software.

Correct. The problem is there's virtually nothing that actually benefits from those things. A strong case case could be made for a truly decentralized global currency and maybe smart-contracts, but not "a store of value" or "revolutionizing supply chain bookkeeping".

Note that both use cases (decentralized global currency and smart contracts) rely on altruism which cannot be guaranteed by human actors but is entirely deterministic within the chaos of humanity (with a sufficient number of honest actors) using a blockchain. That is the value prop: distributed consensus with "quick" convergence toward an agreed upon truth.

Transactions between banks need clearing and settling. Many systems run on a periodict (like half an hour) net settlement, some are even slower. Blockchain is a perfect firt for those usecases.

There is a reason JP morgan is developing quorum

Or they could just start doing real time settlement, something which the banks are working on.

There are two distinct classes of system pushed under the label “blockchain”: the kind like Bitcoin are enormously complicated by trying to be used between untrusted parties. The systems which are potential viable are much less expensive because all of the parties in their system are known and trusted at least to be subject to contract law. All a bank needs is public key encryption and Merkle trees, and while that might be branded as a blockchain for marketing purposes that doesn’t make it the same.

Blockchain is like NoSQL.

NoSQL was a nice buzzword to bunch up web caches and log processing tools for analytics, especially for the creepy-spying-ads corps.

The blockchain niches seem to be much, much smaller than what it's sold for. Once the dust settles (~5 years from now) it's likely that not much will be left behind an all this money spent on it will have been wasted.

Heck, NoSQL databases have wider applicability than blockchain and few people consider them a major technological revolution, let alone a social or economical one.

> "The only good use cases that come to mind is if there is some particular reason for you to evade the conventional and easier systems of communication and storage."

* Nailed it *

I've long said the killer app for blockchain already exists: international money laundering and untraceable transfers.

This also happens to be the precise use case where folks want to "evade conventional and easier systems".

Until you need international remittances or business payments.

Then, Crypto at its worst is far better than international Wire Transfers, etc.

This claim is often made and it just makes no sense to me.

Let’s say I’m invoicing someone abroad for $100k USD.

Today they send me a wire transfer. It costs about 25 USD (fixed fee, but in this case 0.025% of the transaction, i.e. negligible) and normally completes the same day.

The payment is made in the currency of my invoice, so I’m guaranteed to receive the right amount. (Any currency exchange is the sender’s responsibility. But a lot of companies maintain accounts in various currencies, so they probably have USD at hand.)

How does crypto payment improve anything here? Exchanges just add extra steps. The extreme volatility of Bitcoin means that, by the time an exchange is processing my $100k withdrawal, it might be worth $90k. It’s not a useful currency if it goes up and down 10% in a day.

If it wasn't an issue then this wouldn't be happening:

https://news.bitcoin.com/central-bank-of-nigeria-orders-bank...

An African central bank is suspicious of cryptocurrency. How is that somehow evidence that wire transfers are difficult?

I guess if the use case is “I want to send $1M from Iran to an American who will distribute the money to Nigerian accounts”... Then yes, that is presumably easier to execute in crypto. But there are also pretty good reasons why countries want to keep an eye on that kind of flows.

I see you've never lived in an African country. Remittances of any kind, even between neighbouring countries, is slow, painful and depending on which country on the continent you're in may not arrive at all. I haven't lived in Asia, South America or even certain parts of Europe but I imagine you may find similar conditions there as well.

As someone who has had to make international payments in the US$20-50k range semi-frequently, Bitcoin is by far the easiest way to do it.

Your story about it being easy and cheap to do via remittances or whatever is pure fiction. Any traditional mechanism is at least two of slow, expensive, and onerous.

It is not pure fiction. I also send transactions semi-frequently in those ranges and have never had an issue. Sure, I have not sent them to Africa and that might be where the differences in experiences lie.

I don't work in Africa, but in SE Asia. I have had countless problems getting medium-sized (tens of kUSD) FX transfers to HK,SG,TH,etc. on a reasonable deadline.

I'm genuinely curious where you're sending money that a wire transfer using IBAN+SWIFT doesn't work but Bitcoin does.

What country has the banking infrastructure to support easy $50k-equivalent withdrawals from a local Bitcoin exchange, but not for receiving wires?

If you don't want to get screwed on FX, you need to use a brokerage intermediary with entities in both currency domains. Direct international wire usually causes problems. So if I'm sending FX, it looks like

US Bank -> Wire -> IBKR -> Wire -> SG Bank (or whatever)

Usually this takes at least 5-9 business days end-to-end. (Wire delay, withdrawal hold, wire delay on the other end.)

A bitcoin transaction takes a few minutes, and if your counterparty doesn't want Bitcoin, there's probably an exchange with an entity in the destination country, so you only need to wait for the second wire delay.

It doesn’t make sense that you don’t want to pay FX rates but would happily accept the payment in Bitcoin whose rates fluctuate much worse.

Some banks charge up to 2% for currency conversion, but surely that’s better than the 10-15% lottery involved in Bitcoin? Unless you want to have a gambling aspect to your invoices.

I am not teetering on the edge of poverty so I would rather increase my volatility a tiny bit and stay EV neutral (or, more realistically, positive, since we’re talking about BTC) than incur a guaranteed substantial EV loss.

My suspicion is that your mental model for comparing volatility and loss is incomplete, given that you didn’t mention anything about the size of the transfer compared to your wealth, or anything else about local risk-aversion/utility convexity.

So you do want the gambling aspect because you’re not poor and you believe Bitcoin mostly goes up.

That’s fine, but I don’t think it aligns with what most people want from their money transfers.

I don’t want it, but I’ll tolerate it given the benefits.

Why not just use a stablecoin for the transfer?

What’s the benefit? A stablecoin is like an account at a weird unregulated bank from where you have to move the money to a real bank to use it.

How does using one of these products let me access the money faster than a wire between the sender’s USD account and mine?

Wire transfers take multiple business days, at least in the US, at least for me every single time I do one. Individual banks may also put restrictions on your domestic wire transfers. Maybe it's different for you since you're a business, but as an individual, there's a lot of friction in sending money to my friends.

> unregulated

Depending on your perspective, this is either a feature or a bug. In my opinion, a big feature.

> you have to move the money to a real bank to use it

Well yes, that's one of the main hurdles right now caused mainly by lack of adoption. It's not a fundamental problem with the tech; in fact, it's the very kind of problem that would be solved by it going mainstream.

> How does using one of these products let me access the money faster than a wire between the sender’s USD account and mine?

This one is easy: 6 Bitcoin confirmations takes about an hour, and only a few minutes for Ethereum. Much, much faster than wire transfers.

To be clear, this is primarily a US problem.

I live in New York now, but previously I lived in Europe and UK. Bank transfers there are instant. If you want to send 20k EUR from Finland to Spain, it can be done immediately, 24/7, with minimal fees. Same in UK for GBP transactions.

So it’s perfectly possible to do this without a cryptocurrency. It takes some political will though. But then again, it also takes political will to prevent cryptocurrency exchanges from being shut down if they truly threatened central banks.

US wire transfers seem to depend entirely on goodwill of banks. I regularly send wires between Wells Fargo and Schwab, and they always complete in a few hours. Yes, it sucks that banks get away with bad service. But routing money through unregulated cryptobanks isn’t a long-term fix because the regulators will come for them.

There was once I transferred money from Bitcoin to a Bitcoin cash address accidentally. The money was lost forever. It was a weird reason due to being syncing , but yeah you could lose money just like that while most people wouldn’t be able to explain it or understand it.

That has been solved with more user friendly wallets. If you're using a Qt wallet you'd think you knew what you were doing. The Qt wallet actually even tells you not to do anything until it's done syncing so you must have closed that overlay and ignored that warning. User error, that's your fault.

Actually i got no such warning. But your explanation re-enforces how easy things can go wrong.

This is a great example of why Bitcoin has failed: you do not build faith in a financial system by reportedly telling people that any mistake will have no way to correct it but they will be mocked for not being perfect.

Better than, say, Transferwise or XE.com? Can you explain how?

There isn’t a list of allowed vs banned countries?

Now you are back at the "evading" use case. BTC works better if you want to send six figures to somebody in Iran. That remains a pretty small use case.

I do international business payments all the time and most of them cost 0.15 EUR and are easy to both accept and send. More expensive ones (those outside the EU) can cost 3 EUR and have a exchange fee of 0.5%. And as far as I can tell prices are going down. I had to pay 0.3 EUR in 2019. Most transactions take like 2 bank days, but that is no big deal since most invoices are for 14 or 30 days.

To me it is unclear what issue there is to solve unless your country has messed up banks.

The globally shared ledger is not a place for untraceable transfers.

Monero solves that problem.

This is the typical argument on a very technical board such as HN where blockchain is synonymous with a specific implementation. But that's an outdated way to think about blockchains. Yes, Bitcoin's implementation is a huge resource hog and slow. But for most newer projects "blockchain" just means an auditable trail of state changes. Whether you implement this with the shiniest newest db paradigm or some simple SQL database is irrelevant for most people in the economy. However the fact that we now have a global consensus over the ownership of digital assets that's something new and valuable. And that consensus didn't exist in a meaningful way in the past; at least not in a way that was accessible to the public - there were always gate keepers involved. In that sense blockchain is not about some fundamental technological revolution, it's about the introduction of digital ownership that's accessible to anyone.

> But for most newer projects "blockchain" just means an auditable trail of state changes.

you mean, the 1979-model Merkle tree? I concur that in a lot of marketed "blockchains", the closest to a useful bit is the 1979-model Merkle tree.

Even more trivial, single-leaf Merkle trees is all that is needed.

Even less if you look at NANO and IOTA.

> ownership of digital assets that's something new and valuable

Doubtful, because ownership only makes sense in a context of scarcity whereas digital assets are in infinite supply.

How are blockchain assets, whose scarcity is defined by the protocol and agreed upon by all participating node operators, infinite in supply?

Edit: Arguing in good faith... you could suggest changing the protocol, sure, however you would need follow that particular blockchain's rules for gaining consensus about changing the rules first.

Yes, but it's an artificial scarcity. Like you say, these assets are only scarce because all the participants agree that they're scarce. This is different from physical objects, which are scarce because of the laws of nature.

I'm not sure why that distinction is important. Value is realized in use of a complete product and are not represented by the sum of its parts. (Value is not zero sum. A log and a plank together can arguably provide more value as a slope than the log and the plank can provide value on their own.) Sure, you can decompose the system to remove artificial scarcity, but that's part of the product. The market has manifested it into existence because it is valuable and users trust the protocol sufficiently that it will not be changed from underneath them. And without evidence that the protocol is brittle enough to allow rules to break, that trust in the protocol is more valuable than any human's promise.

I have no idea what you're talking about :(

You could've focused on responding to my first sentence, but maybe you're not interested in engaging in honest discourse? Best of luck!

I think the question is less about "can it maintain a (premise of) scarcity" and more "are the scarce tokens worth having?"

There's plenty of things that are scarce but essentially worthless. There's no robust secondary market in Penn Central Railroad timetables, the little plastic caps that SNES cartridges came with, or copies of the May 18, 1986 edition of Arizona Republic.

Having a built in utility factor is a very strong way to answer the "is it worth having?" question. It provides a stickiness to the asset, rather than just being a pump-and-dump vehicle.

Gold says "I'm worth having! I can be made into jewelry and really good connectors for premium audio cables."

The paper dollar says "I'm worth having! I can keep the IRS from sending you to jail."

Hell, even MMORPG gold says "I'm worth having, because you can trade me for a Sparkly Unicorn Rainbow Dragon of Death mount."

Different cryptocurrencies are making a wide range of cases, ranging from "I can let you transfer value cheaply and quickly across borders" to "I can let you buy contraband goods without an obvious paper trail." And a lot of these claims are still to be proven or fully realized.

It's entirely possible we're barking up the wrong tree with blockchain. Maybe there's a killer app for it that's not currency, but the current trends seem to be predominantly about it. (It feels like a lot of the supply-chain-tracking and registry-of-ownership hype died down)

Bitcoin already forked once and magically duplicated the digital assets. I profited quite handsomly as a result. The scarcity is not enforced by the protocol it's enforced by community agreement.

How is that different from the USD, the scarcity of which is enforced by the USG?

Disagree. Bitcoin forked into other tokens, but the original token's guarantees have not changed. The other tokens are free to function independently of one another but there was never a guarantee (by the protocol or agreement) that Bitcoin would be the only token in existence.

Your profit was actually made possible by others adopting these other tokens which is entirely external to Bitcoin's protocol or community's desires. And as we've seen with some Bitcoin spinoffs, forking does not guarantee profit.

So Blockchain is a fancy word for something like a Git repository?

Yes. See the sibling comment about Merkle trees.

> Blockchain is a fancy word

Blockchain is a funding key word.

There, fixed that for you.

We’re now in the phase where the underlying technical term is being diluted down to meaninglessness in order to dodge around the well publicized failures of specific examples.

I'm absolutely aware of the shortcomings of the currently most popular blockchain technologies. But calling specific implementations (like Bitcoin or Ethereum) a failure when people are paying thousands of dollars each block to use it is pretty bold.

I don't think something's success or failure hinges on whether rich people like it.

Well, except for tradable financial assets...which are by their definition beauty contests for rich people’s saving/investment dollars.

Success or failure of financial asset is independent of their current price, otherwise Bernie Madoff was providing a valuable financial product in 2007.

It’s individual trades that depend on the price because they have finite endpoints. However, assets are owner independent and therefore based on their long term value proposition.

> But calling specific implementations (like Bitcoin or Ethereum) a failure when people are paying thousands of dollars each block to use it is pretty bold.

And people were willing to pay hundreds of dollars for plush toys with the appropriate tags preserved in plastic. Bubbles are a thing, and the crowd can be wrong. To pretend otherwise is silly.

More fundamentally, the original promise of Bitcoin was that it would act like a currency. It has failed at this. You can tell because all of the advocates have shifted over from “money of the future” to “it’s a store of value”; a subtle admission that it’s not actually functioning like a currency.

And there are cryptos like Nano that fulfill this original promise.

Technology evolves over time. Just because its not perfect at the first go, doesn’t mean it should go in the trash.

> Just because it’s not perfect at the first go, doesn’t mean it should go in the trash

The converse is also true; just because it’s an improvement over past failures doesn’t mean that it’ll actually work.

My issue with crypto has always been fundamental; I don’t think crypto fans really have a good grasp on what motivates the average person, because most crypto fans[0] are ideologues, and like many ideologues they struggle to recognize that not everyone shares their values. Decentralized and trust-less speaks to engineers, but your average person has no idea what that means and doesn’t really care either. Plus a lot of the consequences of crypto currency design are absolute anti-features from a consumer perspective; nobody wants to find out that losing their password means that they’re broke, or that they can’t reverse a fraudulent charge. Your average consumer wants those features, and is willing to give up decentralization, something they didn’t value, to get it.

0 - At least those fans of crypto that want to see it used as currency. As compared to those crypto fans that want to do whatever it takes to make the number go up.

Is Elon Musk bitcoin fan? How about Mass Mutual? BNYM? Pretty funny the language used, fans, seriously 6th most valued currency in the world is relegated to plush babies status. At least people have stopped with the tulips and that talk. Same talk and yet bitcoin acceptance keeps growing day by day, how do you explain that? Is everyone else wrong?

> Is Elon Musk a[sic] Bitcoin fan?

Yes. He also is a Twitter shitposter who got in trouble with the SEC for promising to take Tesla private at $420 a share, a number he picked because it was funny, and was also involved in the GME nonsense a few weeks back.

If you’re pointing to men like him as serious figures pushing for bitcoin’s adoption, then it’s time to stop and rethink a lot of things.

> yet Bitcoin acceptance keeps growing say by day, how do you explain that?

Bitcoin speculation grows day by day. People want to get rich (in USD I’ll point out) with it. Actual usage of Bitcoin as a currency is not growing.

As always, gimme a call when I can buy a latte and groceries with it. I’ve seen literally one place with a “we take Bitcoin” sticker, and the receptionist had absolutely no idea why it was there or what it meant.

> Is everyone else wrong?

Why couldn’t they be?

>As always, gimme a call when I can buy a latte and groceries with it.

Same problem as when you're in let's say Uzbekistan and only have Rubles, an exchange has to happen in order to spend your Rubles in local currency.

Not going to try and disuade your from your position but bitcoin is not going anywhere and might as well accept it.

Why do I have to "accept" a currency that nobody around me is willing to receive in exchange for the goods and services that I want? Heck, why do I need to "accept" anything about a currency at all? I didn't "accept" credit cards into my life or world view, I just got one when it was convenient for me.

It's supposed to be money, not a religion. I don't need to accept bitcoin into my heart, or something strange like that.

> didn't "accept" credit cards into my life or world view, I just got one when it was convenient for me.

That's all I'm implying with accepting. You'll get bitcoin when it makes sense for you. Nobody is forcing you to do anything, but like I said bitcoin is here and your lack of acceptance doesn't hinder it.

I wish cryptocurrency payment processors supported many more coins, but I understand how they can't support everyone's pet coin. I do wish I could pay for more things with Nano, though, it's amazing how you can pay for things instantly without any fee.

No, I see blockchain as a social technology. The current, trusted system for tracking ownership is a state-governed system. The account balances we have, share registers of companies, residential property registries, etc.

Blockchains offer an alternative system (outside of government run systems) to keep track of ownership. Now, in my opinion there's little to gain of replacing those existing systems - they are working just fine. But for a new asset class (notably digital assets) blockchains will work very well.

Again, the important change is the change in social consensus. If you told someone 5 years ago that you hold a certain token on the Ethereum blockchain nobody would have cared. If you today ran a registry of tokens on your github repository nobody would care. But if you hold a token today on the Ethereum blockchain then people are willing to pay for it.

That's a question I asked myself a few times.

The fundamental part of a blockchain is that each block signs the previous block, making it very difficult to rewrite history. And it is exactly what git does.

We could implement a cryptocurrency on a git repository. Just commit and push 'I am X, here is the proof, send Y gitcoins to Z' whenever you want to do that.

The only thing git is lacking compared to say, bitcoin, is a builtin way to select the "origin" repository. In most git-based projects, there is a global consensus on a central location. In bitcoin, it is automatically selected based on who wasted to most computing power on a pointless cryptography problem.

Well yes, the chaining uses the same known data structures. The innovation is the consensus mechanism.

Perhaps GitCoin should be a thing.

>However the fact that we now have a global consensus over the ownership of digital assets that's something new and valuable.

It's also completely contrived. Being digital means infinitely replicable, or thereabouts. Do we really need this game of artificial scarcity?

People used to talk about things like property records, but if this realm of artificial scarcity is going to interface with the realm of actual scarcity in the real world, it's still going to need the systems of adjudication that already exist in the real world.

Code is law. But law is not code, otherwise legal disputes would have long since been settled and we wouldn't need systems of courts and various legal avenues to surface new areas of contention and revisit old areas in new light.

If the above wasn't an issue. How do you get past the resource hogginess? These things are currently handling a minuscule portion, if that, of what their proponents propose they take on, and they are already comically massive resource hogs. How can they scale?

For the record, I don't think code will be law, ie. that blockchains will replace our current system of adjudication. Rather smart contracts will be changed to allow for an interface with the current system, for example via a master key held by the originator of the smart contract.

Regarding your second point: Look into newer projects like Solana, Polkadot or Cardano which are already live and have much better scalability.

That's an interesting idea, but in what situations is it superior or preferable to just signing a traditional contract, and taking any disputes to a court?

Cross border maybe, but then what court would you go to?

> Look into newer projects like Solana, Polkadot or Cardano

Are these newer projects more or less built with the same vision? What is their reason for being?

Censorship resistance would be nice, so would laws against private censorship in certain areas. Distributed mechanisms of censorship resistance would be more trustworthy and transparent. But people find information in centralized locations, be it a library, or Twitter, etc.

Is there legit headway towards combining beneficial aspects of distribution with the efficacy of centralized platforms? What are the mechanisms that keep it running and the incentives involved?

> Code is law.

What does this mean?

It was something “smart contract” proponents used to say, maybe still do.

When I say code is law, I mean “law” in the physics sense. We can code, print “hello world”, and know exactly what the code will do. We can write code up to some threshold of complexity and know exactly what it will do in all cases. Like how given certain information about a physical system we can calculate trajectories or whatnot up to some threshold of complexity.

I was making the point that civil law is a different kind of law from this physics sense of the word.

With more clarity, code is physics law, but civil law is not physics law, i.e. civil law cannot be fully ported to computer code.

Maybe I'm wrong and all civil law could be translated to computer code. Might that make for a better world? Even if possible, there's so much inertia in the system with lawyers and judges wanting to keep their job which is another human complexity that would have to be worked through.

Civil law can't be fully ported to computer code, but enough of it probably can. Most contractual issues don't get anywhere near a court. They're resolved via negotiation and alternative dispute resolution (and there's normally a contractual obligation to go this route before resorting to the courts). Dispute resolution is incredibly expensive, especially when you're dealing with multiple jurisdictions. Lawyers and judges haven't managed to stop parties using mediation and arbitration services offered by people who aren't legally trained, such as economists or people with extensive domain experience.

But smart contracts would change the way contracts are written, as they're often intentionally ambiguous for a variety of reasons. There's also the problem of "oracles", but we already have a profession for translating real-world events into legal ones (notaries).

> Code is law

Oh please! Remember the Ethereum fork? It's mob rule at best.

If code was law then the founders of Ethereum would be broke having lost their fortunes to the genius that exploited a bug in their code.

If you claim that a blockchain is just an auditable trail of state changes (i.e. a Merkle tree) Then the proponents of blockchain technology chime in on how it's more than just that. It's also a matter of consensus for that technology. And in point of fact the consensus mechanisms of most blockchains are terrible. Highly inefficient, vulnerable to majority attacks for different types. The "idea" of a globally consistent audit trail for digital assets that can survive in an adversarial environment is great. The most popular implementations all seem to be terrible.

Of course its inefficient. Thats the tradeoff.

I guess servers are terrible computers too because you can’t carry them in your pocket?

Or phones are terrible computers because they can only stay powered for a day or two?

Blockchain is horribly inefficient in almost every regard. But thats the trade off.

Neither of your examples are tradeoffs. Both my computer and my phone are excellent at their jobs with little in the way of downsides. Bitcoin is bad at it's job with lots of downsides.

It only looks better than the alternatives if you live in a place where the economy is heavily mismanaged. If you're currency is only better than the absolute worst economies in the world don't expect all the people in better economies to look favorably on it. Except perhaps as a way to further exploit those in terrible economies by speculating in that currency and driving high volatility in it's value.

You keep moving the goalposts between "blockchain the technology" and "Bitcoin the currency". If you want a trustless auditable log, your best option is a blockchain. What's a better alternative?

Actually Bitcoin keeps moving the goalposts. First it's a currency, next it's a trustless auditable log. All I need for trustless is auditability. All I need for auditability is a public Merkle Tree. I fail to see what actual real world value the PoW and associated approaches actually add.

> You keep moving the goalposts [...] What's a better alternative?

> Actually Bitcoin keeps moving the goalposts.

Okay.

If you have a rebuttal, let's see it. Mockery is childish.

Still waiting for your rebuttal first.

There is nothing "trustless". Our world is social by structure, all our actions contribute to various kinds of trust. Blockchains aren't trustless they're just unable to internally express trust relationship: there is always trust in the devs, in the exchanges, in the miners, in the other holders. There are political events like "blockchain forks", protocol upgrade, parameter changes..

So much for the trustless auditable log. Btw "auditable log" is easy (eg certificate transparency), the hard part is deciding what goes in it.

Having said that you always trust something, you better do it consciously and run some real consensus algorithm like raft or stellar consensus protocol.

I think you've misinterpreted what Bitcoin's "job" is. Although the initial impetus was definitely to set up a new type of currency (something I'd agree it fails at) it has long since moved to behaving as a store of value, or a commodity. At this it excels.

The tradeoff GP is referring to is efficiency for security. If you have a distributed, "trustless" network you unfortunately have to trade your efficiency for more security.

Then we, as engineers, have failed in explaining things.

A blockchain is a linked list where each element of the list contains the hash of the previous element. It's basically a degenerate Merkle tree. That is all that it is. It isn't a metaphor. It isn't throwing off the shackles of an overreaching government, nor is it a takeover of our society by militant right-wing conspiracy theorists.

It's a data structure.

A Merkle tree is just one component of a blockchain. It also requires: a byzantine consensus mechanism, a p2p network stack, public key crypto, and a set of economic incentives to keep it going.

You can't build a public database on a Merckle tree without being able to agree on what goes into it.

That is a cryptocurrency. The work coming from the people at Hyperledger, who are also using blockchains, is an ordinary database complete with access controls. It uses the same data structure but without any of the political goals and with many different design decisions.

A blockchain is just a data structure. It isn't even a very interesting one.

In common parlance "blockchain" isn't well-defined: it just refers to something that's, like anarchy, dude, whoa....

You can't remove the consensus mechanism part and still call it a blockchain.

Tell that to IBM.

Maybe it meant that for some people sometimes, but the general public never knew about that meaning. Even Wikipedia claims:

> The first blockchain was conceptualized by a person (or group of people) known as Satoshi Nakamoto in 2008.

So "degenerate Merkle tree" is not enough, it also needs consensus mechanism, byzantine failure tolerance and so on.

Insisting on meaning of "blockchain" which is different than commonly accepted will just make all arguments more confusing.

Immutable databases are much more interesting than Blockchain, it's time for the hype circle to move on https://adlrocha.substack.com/p/adlrocha-immutable-databases

> a huge resource hog

One observation that I recently saw:

> Bitcoin is such an environmental disaster it really is a crime against humanity. So what does Tesla do with their $1.5B in revenue last year from clean car credits sold to other automakers? Put it into “Destroy the Planet Inc”

* https://twitter.com/ncweaver/status/1358780808144723968

> https://imgur.com/a/RlUj9Ed

This decision flow chart is Figure 6 of NISTIR 8202, "Blockchain Technology Overview":

* https://csrc.nist.gov/publications/detail/nistir/8202/final

See page 53 of the PDF ("42" at the bottom of page, 'physically').

If you need a handy guide to give to someone to explain blockchain (though not crypto currencies), it's hard to go wrong with send people this link.

For a more finance-y, the CFA Institute has a useful white paper:

* https://www.cfainstitute.org/en/research/foundation/2021/cry...

I have been in the blockchain space for about three years, and there is an explosion in tech and innovation in the last six months. Visa, Mastercard etc... are integrating, bank regulators now allow banks to connect to public networks. It just astounds me sometimes how people can be so confident in a review of a platform type and done so little research. I urge you to take a second look. Blockchain is primed to disrupt the financial industry.

Disrupt but how? Can you point to a specific example or use case?

More transparent than the opaque financial industry. You as a user completely own your assets, with your public key. Yes blockchain wallets/public keys are bad UX, but at the same time they give you actual ownership of your securities/index funds. A person can have access to the same financial products that banks have access to, because they cost a fraction of a price to run then they normally do on CEX and instead of waiting for 3 days for a transaction to complete, it completes in 5 minutes. I could go on and on... Essentially blockchain makes financial products faster, cheaper and more accessible. No middlemen involved and a transparent audit trail.

> You as a user completely own your assets, with your public key.

Cool. Why is this a thing tons of people want?

> A person can have access to the same financial products that banks have access to, because they cost a fraction of a price to run then they normally do on CEX and instead of waiting for 3 days for a transaction to complete, it completes in 5 minutes.

Which financial products? How many people want those things?

For BTC to disrupt the financial industry I'd expect there to be a huge number of people who want its features over the alternative. But where are they? Where are the billions of people who want to manage the storage of their own wealth or trade derivatives daily?

They don't know they want it, till they know what it means. It means independence from central exchanges, it means the money in your savings account of .01% interest account can now be directly leveraged by loans on Aave, which return 5-9% interest. No middleman managing your money. Your assets can be directly accessed by people who need it.

Defi loans are not actually useful though. You overcollateralize 150% of your ETH or whatever, to get say 100% back in some stablecoin.

But you could have just sold the ETH in the first place...? If it truly is a "currency" then why are you taking a currency loan on your currency? That's like putting up $150 of collateral to get a $100 loan, it makes no sense.

Unless it's not a currency, in which case this is just a margin loan - I think my speculative asset is going to go up in price, so I will take out a loan against it instead of selling it. Which has only two use cases: I need the dollars and I'm avoiding paying capital gains, OR I want this margin loan to speculate on more cryptocurrency!

That's a pretty small use case compared to like, "loans" in general. Plus if/when the ETH/USD price crashes, all of these loans will get liquidated and push the price down further. I fully expect a "portfolio insurance"-Black Monday type crash if ETH ever falls by more than 30%.

Web3 is definitely the new wild west of the internet. I agree there will be wild price swings, but it will stabilize as more people are onboarded.

DEXs and PLFs still lack integration into the traditional finance infrastructure. Outside of escrowed p2p sales of cryptocurrency, centralized exchanges are the only FIAT on and off ramps.

If stablecoins, custodial or noncustodial gain widespread adoption, DeFi will remain as a niche for hardcore crypto fans.

> If stablecoins, custodial or noncustodial gain widespread adoption, DeFi will remain as a niche for hardcore crypto fans.

Why? It seems the exact opposite to be — if stablecoins gain widespread adoption, there will be a lot more exposure to DeFi because you have stablecoins already and can directly partake in DeFi.

Right now the biggest hurdle is fiat -> crypto conversions and back, stablecoin or not. If you already have stablecoin because it’s widely used, then that won’t be a problem anymore.

I ought to proofread my comments before submitting, apologies.

Unless stablecoins, custodial or noncustodial, gain widespread adoption, DeFi will remain as a niche for hardcore crypto fans.*

I don't think you understand the relationship between interest rates and risk. The reason that bank savings accounts have low interest rates is that they are zero risk (FDIC). Any asset class with a 5-9% expected return carries a substantial risk of losing you principal. In other words, sometimes borrowers default.

> A person can have access to the same financial products that banks have access to

Like reverting transactions? Handling of disputes? Fraud detection?

> Essentially blockchain makes financial products faster, cheaper and more accessible.

You literally mentioned bad UX just a few sentences ago? How that makes it more accessible than existing systems?

Cheaper? What's the transaction cost at any given moment in time?

Faster? Credit card transactions are instant these days, have no fluctuating costs, and carry an added benefit of, you know, customer and seller protections.

Anytime now. We’ve been told the revolution was around the corner for years.

It turned into a 1 trillion dollar market three weeks ago. DeFi has been on an upward trend for the past 6 months. It is happening. Banks were just allowed in January to start interacting with public blockchains, so give that a year. The regulatory walls are dropping and accessibility is increasing with the likes of Visa and Mastercard.

I find it very entertaining how suddenly Visa is a good thing, the moment they wanted to offer a crypto card. All this after how many articles decrying Visa and other “legacy” financial institutions?

Also, the idea that Visa is going to help the Blockchain finally scale is ... well, let’s just say that you’re not supposed to enthusiastically endorse what the detractors have been saying for years.

It's a stepping stone to create adoption.

Yes, I went from Coinbase to managing my own wallet. Coinbase was my stepping stone, but now with my own wallet I have access to so many other products without Coinbase taking a fee and products that Coinbase doesn't offer. Coinbase helped me understand what was possible, now I have graduated to liquidity pools, staking and DEX's.

Weird how I got so many minus points for an actual experience.

Where "creating adoption" means "hopefully the price of the speculative assets I own goes up"

I think a great use case is for distributed storage and control of home automation products, with an open protocol on top of it. When I have lock in to one vendor and they go bankrupt, device has lost control but also my historical data. If this was all via a distributed model, I could grant access to a new app/company to take over control. Even if they don't close up, I could still give access to other integration partners to gain see my historical data for some kind of processing.

seems like you could just do this with some sort of open source or shared standard that different providers use

Yes, but this is where politics comes into play. If you're a Google/Amazon/Samsung/any big player, why would you stick to the open standard when you could just change to a proprietary standard for more lock-in and profit?

With a blockchain-based standard, you could make vendor buy-in permanent and enforceable. The only way that one of the big players could win in this new normal is if the products on their proprietary standard are better (in merit) than the entire marketplace that implements the blockchain standard.

but why would they agree to that blockchain standard in the first place? it’s the same issue

You could do that with any widely-adopted standard. No blockchain required. Remember that even IBM at their late-1980s juggernaut status couldn't put the genie of the ISA bus back in the bottle.

I think the trick to lasting open standards is to provide only a MVP ecosystem at launch. No one vendor is strong enough to close the platform behind them. Again, like the IBM PC, their product both needed and spawned a galaxy of add-on and compatible products, providing enough of a force to protect the open standard.

Why do you need a blockchain for this? This just sounds like a shared data format.

There is no <explicative deleted> way I’d put my home automation in a public ledger. We have enough problems as a society with cloud enabled security cameras being used as bot nets and to harass people. A permanent ledger of what happened in your home is a mind bogglingly awful idea.

Buy home automation products with local control and no internet communications at all. Ideally with an open protocol, and open source control software.

Same protection against vendor death/depreciation/etc, and on top of that your data is more secure, the system survives internet outages, and you don't have to mess with the immense complexity blockchain adds.

Remote access, if you even need it, can be done through a thousand other methods (direct IP address, tunneling proxy, VPN, etc etc).

> “The only good use cases that come to mind is if there is some particular reason for you to evade the conventional and easier systems of communication and storage.”

This is the number one model for valuation of Bitcoin-like cryptocurrencies. Say you live in Venezuela and dealing with custodial intermediaries in your local fiat currency is completely untenable. You can’t store money in gold or other precious metals. You can’t keep it in a bank account. You can’t transfer it (with fees) in a foreign exchange market.

All these things require dependency on the local fiat currency (plus more for custodial fees if dealing with anything like gold or stocks or bonds), not even factoring in issues of the fiat currency’s own extreme volatility and transaction fees. Banks being trusted central parties or Visa being able to process 40k transactions per second sure won’t mean shit to you at that point.

But with Bitcoin you can drive across the border and actually buy milk or medicine, no fiat currency involved. You’ll happily see the volatility and slow transaction process / high fees as a worthwhile overhead cost for independent purchasing power outside of your local fiat currency.

Now, of course this is a rare and small use case by volume and by market cap in comparison to normal functioning fiat currencies. At any given time only a small amount of the world demand for financial transactions would fall in some destabilized government zone where independence from local fiat currency is materially important and having a preemptive stock of cryptocurrency holdings really matters. And somewhat lesser there will be some small market for people with extreme risk aversion preferences or “prepper” outlook (eg, “What if the US dollar collapses?” - most of us don’t care to hedge that extreme tail risk, but some people do care).

The total demand for currency holdings like this will obviously be much lower than any total market cap of a major fiat currency.

But it may still be higher than the total market cap of cryptocurrency today - that completely depends on your personal take on forecasting and speculating.

In other words, there are several straightforward and uncontroversial reasons why buying and holding cryptocurrency rationally makes sense. You could happen to be wrong about the speculative future demand for this type of transaction capability. You could be wrong in the magnitude of the forecast. But being wrong doesn’t make it irrational hype or conceptually broken from first principles, as you foolishly assert. There are many very uncontroversial, directly obvious and rational reasons to speculatively buy and hold crypto, depending on your personal appraisal of that market and future demand for that transaction capability.

> You’ll happily see the volatility and slow transaction process / high fees as a worthwhile overhead cost for independent purchasing power outside of your local fiat currency.

Don’t stablecoins solve the volatility problem, and NANO solves the slowness/transaction speed aspect? Granted, these features can’t be combined just yet. But they are available separately

> But with Bitcoin you can drive across the border and actually buy milk or medicine, no fiat currency involved.

I still don't understand why the government of Venezuela is so bad that it's literally leaving their people without the necessary means to buy milk, where "government has been able to partially block internet access to citizens by using a system that allows them to restrict selected content that may threaten their power over the country" but allows people to use untraced bitcoins...

By what means can a government restrict use of Bitcoins that you hold in your own hardware wallet? You can run your own VPN at home. I don’t believe it would ever be practical for any government, of any size or sophistication, to prevent use of Bitcoins.

Governments are deeply incapable of stopping even just basic crimes and fraud. If they can’t stop overtly criminal acts often committed with no technology to assist in obfuscation, why would anyone believe they can (a) detect network traffic somehow related to Bitcoin and (b) trace it back to an individual and (c) prove that individual has broken some law? Let alone to do this to perfectly law-abiding citizens conducting perfectly legal purchase of Bitcoin.

Your point is very bizarre to me. Are you suggesting a government so incapable of managing fiscal activities that it descends into hyperinflation crisis is somehow magically super competent at extremely bespoke and difficult internet traffic surveillance of legal cryptocurrency transactions they have no reason to need to invest in expensive capabilities to monitor in the first place?

> You can run your own VPN at home.

they can block VPN traffic

> Governments are deeply incapable of stopping even just basic crimes and fraud

that's just silly

in my countries there are 270 homicides every year on a population of 60 million people

do you think it's luck?

> detect network traffic somehow related to Bitcoin

because it's stupid easy

> prove that individual has broken some law?

do you really believe that in places like Iran or North Korea they really need to prove individuals broke some law?

> Are you suggesting a government so incapable of managing fiscal activities that it descends into hyperinflation crisis is somehow magically super competent

if they are so incompetent, why are they in charge then?

if they are so incompetent, how did they manage to censor any media channel, including the internet?

remember that "poor" countries aren't really poor, regimes keep the population in poverty but they still handle a ton of money.

> the technology is broken beyond fixability.

Saito fixes it (https://saito.io/arcade). There is no 51% attack and no scalability trilemma. So you have a network that pays for itself and generates a quantifiable cost-of-attack in all situations.

This doesn't answer your final question -- what the use cases are for a public network that cannot exclude users -- but isn't claiming there is no difference between that and permissioned networks the same as saying that Linux will never catch on because it is competing with Windows?

Openness is the bazaar.

I think the real innovation is permissionless

Yes you could get permission.. but it would take time. What if you want to do some random thing over a weekend? You’re not going to want to ask permission

Asking permission also opens the giver up to an implicit risk. Not just in a legal sense, but if you need to ask a mid level manager for permission they have nothing to gain and everything to lose

Putting everything out there on a permissionless chain with a rock solid set of predefined rules, it’s the hacker dream

I'm almost about to think people who just keep criticizing blockchain on wrong points are those who missed the investment opportunity to just get the steam off.

Blockchain on Bitcoin is meant to be inefficient. That's why there's a fair distributed race because it's a waste and no one has any head start or another motivation to mine to go ahead of the others.

You can come to think of something efficient and you should be able to start your blockchain and get funded well but criticizing is certainly the easy part.

The "lack of intuitive private key management" is worth expanding on.

Would it not be nice if you could, maybe for a small fee, have some trusted entity store your private key for you? One could perhaps imagine storing a printout of the private key in some kind of physical "safe deposit" box, to be maintained by such an entity? But maybe that is to cumbersome and we can do so entirely digitally? In that case I guess that said entity would need to demonstrate a proven track record of safely keeping a record of your net worth, as well as the various in- and out-going transactions between its different customers.

With the obvious possibilities for abuse, it is clear that such an industry would see a fair amount of regulations, and one can foresee never-ending tension between government, the established corporations, and potentially disruptive newcomers....

You just recreated consumer banking.

I think that's their point. There's a lot of discussion that 'banks will become obsolete with crypto' that forgets that banks are not the currency, they just manage it. If crypto becomes widespread banks will keep on existing, they'll just move to manage cryptocurrencies.

Banks are not just managing money. They are distributors of newly minted money via loans. They are not distributors of crypto and the Fed are not involved (or at least necessary) for the creation of new crypto.

> Banks are not just managing money. They are distributors of newly minted money via loans. They are not distributors of crypto and the Fed are not involved (or at least necessary) for the creation of new crypto.

So in the brave new post-Fiat world we're thinking of, how does getting a mortgage work, exactly?

The house I'm in was financed by my wife and I purchasing a plot of land, for cash, then offering that land as security to a bank, who then created a loan for a fairly sizable chunk of cash with which we paid a builder to construct the house.

In the all-cryptocurrency world, who creates the crypto in the getting-a-mortgage process?

> The house I'm in was financed by my wife and I purchasing a plot of land, for cash, then offering that land as security to a bank, who then created a loan for a fairly sizable chunk of cash with which we paid a builder to construct the house.

This begs the obvious question: contract law is all about enforcement. Clearly no one would be right to dispute you own this land and home, you have the deeds and the tax history, which could all be hashed on to the blockchain right now for a nominal fee. But the fact is that the State is what upholds the court system and the need to prove this and they hold the threat of theft and violence if you don't comply and arbitration in their 'legal system' is expensive, slow, and arcane. People being thrown out of their own homes they paid for in full in 2008 was real because the banks created all these complex derivatives and no one knew who owned what in the those CDO and MBS. So when things got messy, and the banks claimed the home the sheriff's showed up and did what they always do: rendered unto Caeser. You may pay your taxes that directly pays their salaries but they work for the State, not you the resident and home owner.

This is why we don't need technologists in Bitcoin as much as we need other professionals like legal people to help create an automated arbitration system, divorced entirely from the whims of Mankind: you can clearly prove you've owned this land and home and when you made the purchase(s) for it and the tax history in a timestamped and verified way on the the ONLY immutable ledger, amazing... but we cannot and do not have an enforcement system to ensure you are entitled to keep this land and home should an adversary come and take it other than violence.

And this needs to be solved, which is why I would hope HN would be a good breeding ground for such thought instead of this endless non-sense about Bitcoin is just for speculation, as if hedgefunds and FOREX markets aren't a hotbed for illicit, corrupt and even more complex legalized forms of gambling in the fiat Word. And have caused the collapse of the economy countless times in just the 20th and 21st Century that always ends up in hotwars in the end, fought mainly by the people who ironically just wanted to protect their homes from 'foreign adversaries' when it's most often the domestic threat they should have been most vigilant about.

Hell, most people don't even realize that the FOREX is the biggest Industry in the entire World, and yet people just forget about things like LIBOR interest rate rigging when it's convenient and time to bash Bitcoin on here.

We get it, you missed out on making billions in fiat by ignoring it, get over you not going to be Chamath or Elon and help build the future we all want and maybe have a chance of creating a post-scarce World.

> help create an automated arbitration system, divorced entirely from the whims of Mankind

No. That is simply not possible with anything resembling today's technology. We'll have flying cars on a Mars city before automated arbitration on real world matters.

> help build the future we all want and maybe have a chance of creating a post-scarce World.

Except fixed supply currency is going back in the other direction. And the hard parts about eliminating scarcity have nothing to do with the monetary system.

Besides, you still haven't explained how lending works with bitcoin but without banks making up extra bitcoin.

Note: using bitcoin to refer to any fixed supply currency, whether it's bitcoin, Eth, gold or anything else.

> No. That is simply not possible with anything resembling today's technology. We'll have flying cars on a Mars city before automated arbitration on real world matters.

I don't disagree about its current feasibility, but I think that's mainly so because of a distortion of incentives and that so many are invested in this model (the few) despite how horrible it is (to the detriment of the many) as so many people are incapable of doing anything else at this point.

They would sooner die than consider opting for something that they know will end their way of life if successful and this terrifies them rather than excites them about starting something new in life; the sad reality is the legal system is already getting disrupted as we speak all over the World and it's innovating at the edges, but also manifests as distrust and disillusionment and lost of confidence in even basic things like anti-masker, vaccine conspiracy, and refusing to follow curfew and business closures and can lead to having the National Gaurd in Washington DC due to the storming of the Capital by imbeciles fomented by Trump.

All of these are legal matters that are complicated and messy, without a doubt, but the current legal system is to blame for why so many loss confidence as it cannot solve them either, and we can easily be overrun with a 'burning of Alexandria' situation if we don't attempt to solve these problems. And I mean in the next decade given how fast things are escalating not just in the West but in Asia: Thailand, Hong Kong and Mynmar are all in revolt right now for obvious break down in trust with thier systems and legal systems. The CCP is the benefactor from these disolving in the region as they can expand their influence in the turmoil and they simply don't care how corrupt their legal systems are or how they appear to the outside World and will disappear you if you resist which is where I think this is all heading.

> Except fixed supply currency is going back in the other direction. And the hard parts about eliminating scarcity have nothing to do with the monetary system.

WHAT?!!!

This smacks of outright detached privilege only HNers can conjure up from its ivory tower, go to countries that suffer from hyperinflation and still suffer from severe capital controls after that period all of which prevent wealth creation before you make such a claim.

Otherwise I cannot take you seriously as your ignorance is almost palpably painful to me... I've lived and worked in Eastern Europe in the last decade and I went to baja before the revaluation of the peso in the 90s quite often as tourists, and the amount of poverty is incredibly sad... it was crazy to see how my single dollar bill bought 1000s worth of X in pesos down there. I honestly would buy absurd stuff like 10kg of packaged laundry detergent because it cost something absurd like 96 cents and I had a story to tell when I got back to school.

Ill still remember to this day how upset I felt as a kid using quarters on the arcade machines outside the store instead of going to the counter and exchanging my USD to credits for 'free play' tokens, and then suddenly realizing how spoiled I was and how the $10 I spent in that store after a few hours probably helped feed the owners entire family for a week. It's funny how much those experiences make you grow up, and I fear you cannot relate.

What you have just said is just beyond belief and I cannot seriously take what you say serious.

I can address lending as that is already a thing, BTC is the collateral and fiat is the lent out. But the short is we just revert to a satoshi standard rather than whole Bitcoin (satoshi is 100 millionth of a Bitcoin)... But I seriously don't feel like I can muster the energy to go into depth as to how that would look like because of how struck I am by that statement.

I'm not trying to be a SJW trigger queen, but that is just so painfully ignorant that my head literately hurts now and I have to get offline for a while.

> I don't disagree about its current feasibility, but I think that's mainly so because of a distortion of incentives and that so many are invested in this model (the few) despite how horrible it is (to the detriment of the many) as so many people are incapable of doing anything else at this point.

The problem is, at this point it's like arguing for communism. It's an utopia. It could happen but I wouldn't bet money I'd lose sleep over on it.

It's probably more likely that an asteroid will hit the planet and we'll all go extinct before you're able to change the minds of most of humanity.

Heck, communists even managed to get a hold of a global superpower which actually tried to take over the world and they still lost! Good luck with Bitcoin/cryptocurrencies :-)

>>This smacks of outright detached privilege only HNers can conjure up from its ivory tower, go to countries that suffer from hyperinflation and still suffer from severe capital controls after that period all of which prevent wealth creation before you make such a claim.

Hyperinflation is merely the symptom. If you think you can cure a failed state by treating it's symptoms you are just going to make things worse through ignorance.

>What you have just said is just beyond belief and I cannot seriously take what you say serious.

The unfortunate reality is that the problems lie much deeper than in just something as irrelevant as the currency.

Think about it. If you can buy 10kg of laundry detergent for $1 how come that country didn't simply export its ultra cheap products and grew its economy that way? You know, like China. Why is China different? It's easy. China had competition in Hong Kong and an easy model to copy and most importantly, the government did copy the working model and invested into a capitalist China.

Here's the thing. Governments can make and break their countries. A crappy deflationary currency will never achieve anything.

For the first part, I'll just say that you vastly overestimate our technical abilities if you think we could even specify the problem of arbitration in such a way that a computer could solve it, nevermind actually implement the solver. You've chosen a relatively simple case (proof of property) but arbitration in general is much more complex.

For hyperinflation, I have been born and continue to live in Romania, a country that went exactly through that in the 90s, to the extent that a loaf of bread that was initially maybe 10-20 ROL would cost 10k ROL. I remember as a child not being able to afford popcorn when going to the park with my grandparents, or my grandfather selling his old car and buying the family's first color TV with the money. I remember living as a family of four in a 2 bedroom apartment (my parents had their bedroom, while my brother and I shared the livingroom until we were in our twenties).

But that wasn't the problem of our economy, it was just what kept it (barely) working! If we couldn't go to hyperinflation, we would have simply not payed salaries or other debts.

The problem of the economy was that we had sold most of our communist-era industry for parts in a quest for 'privatization' and a 'free market', and were left not being able to produce locally or export almost anything. Even today, we are a temperate, extremely water-rich plains country that imports a good segment of its food - to the absurd degree that we are importing fruit from Holland and Israel among others.

Of course, poor governance and corruption played a huge role as well. The government promising ever higher pensions and salaries for state employees, the works. But those problems would not have gone away if people were getting bitcoin instead of Lei.

Scarcity is a problem of production, not of money. Money itself is almost immaterial. If we could produce enough food, water, energy, cars, fridges, computers, furniture etc. for every single person on Earth, and all of their children, to have all they need at the same time, we could renounce money entirely, Star Trek style.

You have a terrible understanding of economics (and of the plight of people who lived through hyperinflation, like myself) if you think that people in a country experiencing hyperinflation would fare any better if they could trade in BTC instead of the de-valued fiat. The only ones who would be better off are the rich, whose reserves of cash would not suddenly lose their value. But people who live off wages would see pay cuts and eventually just stop getting payed if the currency were forced to a global standard instead of suffering inflation.

Note: there may be cases where a country, often a dictatorship, simply prints money out of stupidity, and also forces the population not to trade in foreign money. This is not the most common cause of hyperinflation, and it is significantly better fixed by BTC, since that is more or less as easy or hard to outlaw as the ownership of dollars.

Oh, and guess what - the country got richer and better without the currency having to go through deflation! In fact, bread still costs 10-20k ROL, and a PC still costs 40-50 million ROL, we just 're-branded' our currency to RON at a fixed 1:10k RON:ROL exchange rate to make the numbers more manageable. We started having productive industries with products that others wanted to buy, and governance got better (we still have huge problems and some of the poorest regions in the EU, but that is besides the point).

> For the first part, I'll just say that you vastly overestimate our technical abilities if you think we could even specify the problem of arbitration in such a way that a computer could solve it, nevermind actually implement the solver. You've chosen a relatively simple case (proof of property) but arbitration in general is much more complex.

I'm not saying it's realistic with the current model, but these are all just software problems at the end of the day, what makes it slow, arbitrary and inefficient is the Human component. I look forward to a World where we can count judges and lawyers on a single sheet. The US's problem is regulatory capture from vying interests and lobbyists, that won't be possible if a smart contract is what is needed to approve or decline as their is no Human to corrupt, and while that seems insane just look at how much is done Online from the brick and mortar World from the 90s.

> For hyperinflation, I have been born and continue to live in Romania, a country that went exactly through that in the 90s, to the extent that a loaf of bread that was initially maybe 10-20 ROL would cost 10k ROL. I remember as a child not being able to afford popcorn when going to the park with my grandparents, or my grandfather selling his old car and buying the family's first color TV with the money. I remember living as a family of four in a 2 bedroom apartment (my parents had their bedroom, while my brother and I shared the livingroom until we were in our twenties).

That's for the context, I worked with many Romanians when I did my Ag apprenticeship in Germany; Dictatorship and the collapse really took a toll on that Society that people still pay to this day.

> But that wasn't the problem of our economy, it was just what kept it (barely) working! If we couldn't go to hyperinflation, we would have simply not payed salaries or other debts.

That's a very Central Banks apologist view, that I think doesn't hold up to reality, but you're entitled to your opinion of how you've internalized the experience. Also consider that as Romania entered the EU it still isn'e exactly immune to the many maladies that came from entering and the PIIGS nations showed how detrimental not having control of your currency is when Germany will devalue it to support its export based economy.

> Scarcity is a problem of production, not of money. Money itself is almost immaterial. If we could produce enough food, water, energy, cars, fridges, computers, furniture etc. for every single person on Earth, and all of their children, to have all they need at the same time, we could renounce money entirely, Star Trek style.

I agree, but I think it's only a part of it, but the need to discuss such lofty goals as post-scarcity is an absurd notion when you're dealing with such challenges as mass hunger and poverty in your life. Productivity and efficiencies are not a big concern when you cannot afford basic things like food/water/soap, which falls on deaf ears. Having at least a stable currency, which I'd argue you don't have, nor do I in the US despite it being the World's Reserve currency and represents opposite sides of the spectrums. I agree, with you conclusion, though: money is means not an end. We're still in the transitional phase, Bitcoin represents another vital step toward the need to do away with the concept of money (even the immense abstraction of it, ans all it is private keys/data).

> You have a terrible understanding of economics (and of the plight of people who lived through hyperinflation, like myself) if you think that people in a country experiencing hyperinflation would fare any better if they could trade in BTC instead of the de-valued fiat. The only ones who would be better off are the rich, whose reserves of cash would not suddenly lose their value. But people who live off wages would see pay cuts and eventually just stop getting payed if the currency were forced to a global standard instead of suffering inflation.

Do I? I mean one of the things that is remarkable consistent in these hyperinfalted currencies is captial controls, in which the central banks refuse to allot more than X amount of YOUR currency per day, and even in the EU will make transaction above an arbitrary amount is illegal. Hell, in Cyprus they had bail ins, in Spain their was talk about 'corralito' which is essentially the same thing. Do I need to talk about how horrendous the situation in Greece was, which uses the EUR and still suffered the same situation.

I'm not trying to make light of your situation, far from it I actually really sympathize with you, but I've dedicated the last 19 years of my life to addressing this very core problem and lived and worked in these countries and assessed them with these type of analysis.

> Oh, and guess what - the country got richer and better without the currency having to go through deflation! In fact, bread still costs 10-20k ROL, and a PC still costs 40-50 million ROL, we just 're-branded' our currency to RON at a fixed 1:10k RON:ROL exchange rate to make the numbers more manageable. We started having productive industries with products that others wanted to buy, and governance got better (we still have huge problems and some of the poorest regions in the EU, but that is besides the point).

No, you didn't: but this also helps me see what the core of your logic fallacies are particularly with the omissions of the trade requirements from being a core EU nation, and your dismissal of being the poorest region in the EU is much more poignant than you are making it out to be.

Coinbase and al. also do exactly this though: when you buy bitcoin on an exchange, Coinbase gives you an IOU for bitcoin, with zero transaction recorded in the blockchain it's only when you want to actually take these bitcoins out of your Coinbase wallet, to move them to your own bitcoin wallet, that a real bitcoin transaction exist. In the meantime, there can be more bitcoins owned on Coinbase than real bitcoin in existence, exactly like a bank. (And commercial banks have existed is the US long before the Fed, which was relatively late invention (1913) designed to avoid /limit the scope of financial crisis).

> I think that's their point. There's a lot of discussion that 'banks will become obsolete with crypto' that forgets that banks are not the currency, they just manage it. If crypto becomes widespread banks will keep on existing, they'll just move to manage cryptocurrencies.

> You just recreated consumer banking.

While I personally detest the notion of such a model, and things like GME show why that is: I realized that after 10 years we really are going to have to simplify this tech to that level in a way that it's indistinguishable to the old model if we are onboard them at all. Which is why Kraken taking the lead in this is happening [0].

We collectively opposed this system so much that once we on boarded all the nerds we had a massive blindspot and didn't take pause and realize that the immense complexity to work and use Bitcoin on an everyday basis would be near impossible for the average person who struggled with HS math. And that's often who needs this tech the most, as they often the first to fall victim to the pernicious and illegal actions of banks with things like compounding overdraft fees, mortgage scams etc...

I was used to having to use run a full node on QT with no smart phone for the first 4-5 years so it's all simple to me now, but that is all relative to where you start and when I started I couldn't even code enough to do more than a simple 'Hello world' command but with time I became a founder of a fintech start up and then developer and consultant at a multi-national corporation because this tech evolved so fast and demanded I keep up, so it was a massive learning curve but more than anything I was ready and willing to learn; which I KNOW most people don't want to do.

HN is also a very good cross section that makes me keep coming back at ATHs because even amongst tech workers many keep talking about how 'bad' the tech is without taking the time to even look into it beyond the sensationalist headlines the media makes up as fact and they repeat the same tired narrative, and they too are reluctant if not entirely incapable of undertaking what we think is 'simple' but also the best deterrent for the inherit corruption of the fiat World and also the basis of OPSEC and is best inculcated in a simple mantra: not your keys, not your Bitcoin. Out thinking your enemy and creating new way to route around their absurd system is exhausting, and spending time playing factorio and with legos is fun.

You'd think for a place like HN that is so quick to pat itself on the back for learning a new programming language and boasting about it here in some perverse form of virtue signalling as an autodidactic impresario they'd be the first to see the immense novelty Bitcoin holds (and to an extension it's Blockchain and it's verification, and consensus model) and the fun challenge to understand it would be and ultimately why some of the world's best cryptographers (who at their core have to love to solve complex problems and learn new skills along the way) work in this space. This sentiment is a total contradiction to the philosophy the early days of Silicon Valley had, but has given way to this more petty and servile wave of infantile 'technologists' that are beholden to FAANG so this is clearly what happens when even 'smart people' get things wrong: they try to justify their errors with these campaign smears. Which is why I'm glad so many are leaving CA, hopefully it can go back to it's cypherpunk roots it had in the 80s and 90s.

So, rather than commit to endless Pyrrhic victories trying to fight this with ideological fervor and an unfounded hope people will just eventually 'learn on their own' I realize that time is the most pressing issue, COVID was just a reminder how quickly things can change for the worse, and we should just offer these service as an inevitability for those whose mindsets are not apt to a paradigm shift.

It's crazy to see just how many on HN are incredibly jealous and over all envious about Bitcoin's success, you'd think they would be elated that open source tech is what disrupted finance, but then you realize how many are only 'successful' in Life because of their monetary net worth measured in fiat and how they ignored or simply dismissed Bitcoin because it was too complicated. Their work is not their own, and they are beholden to their employers for identity and purpose, and Bitcoin is just a reminder of why it might have been a waste of time when M1 and M2 spikes happen.

For those of us who worked in Bitcoin professionally we can point and extrapolate the value we derived from it, and some of us can even point to landmark legislation, thought to be impossible, that had to be changed in part because of our efforts and that gives us a form of satisfaction they will never have. So even if it wasn't the safe, or even profitable undertaking sometimes it was worth it because money may be important but it isn't everything.

We got two of the biggest names in Fintech (Musk and Dorsey) on our side, one being the richest man on the planet stating crypto will be used on Mar's economy; but we really need the new wave of users so we should also just acquiesce and create the walled gardens and gaurd-railed sandboxes they so desperately pine for, in hope that one day they could remove the training wheels if they so choose.

They thought they had it so good, for so long, so now when something comes along and shows them that their jails are opened they suffer from a sort of anxiety when they're not in one, so I say: lets just build it for them, but give them a key they can keep inside and use if and when they are ever ready, while the rest of us continue to operate as we always intended Bitcoin to be.

What are core competencies for moving into blockchain work?

Depends on what area. Depending on where you're focusing in the blockchain industry any of the following can be important: cryptography, large scale distributed systems, economics / game theory and designing incentive systems, programming language design, pure functional programming (because smart contracts can't have side effects), frontend development, UI/UX design, and on and on.

Ultimately dapp (I hate that term but have long since grudgingly accepted that it's become ubiquitous in the industry) development is just normal web app development except that you might also be making AJAX requests to a blockachin and possibly also writing your own smart contracts. Writing your own smart contracts is a somewhat distinct skillset, but the rest of it is just normal web app development.

> What are core competencies for moving into blockchain work?

That's too broad a question, and really depends on the ecosystem, but I'll narrow it down for you if you want just want one obvious use case and I can expand as I go: verifiable proof of ownership.

Something like Melvin Capital shorting 138% of GMS's stock would be impossible in a properly regulated Market, one that prohibits endless speculation and the wanton destruction of Capital for the sole purpose of making money gambling to take a business down as the outstanding shares cannot simply be willed into existence if they need to be cryptograhpically verified and exists solely on a blockchain, but most likely a sidechain/colored-coin system that still has the same properties.

Naked Short selling maybe technically illegal, but that is in name only and in continues unabated to this day, hell the SEC refused to look into this obvious collusion between various hedge funds (citadel/melvin/Steve Cohen) but speculation about trying to go after Elon for taking to Social Media and talking about Bitcoin is enough to warrant a possible investigation?

Also, deed ownership, be it land or property: government's entering hyperinflation and dissolving is a perfect time for asset forfeiture on a national level (nationalizing) by the vying faction and is responsible for so much unnecessary misery and wasted Human Capital: I wish I still had this interview that really touched me it was with Suboi, a now famous Vietnamese rapper, but relatively unknown at the time and her parent's issue with trying to convince the Vietnamese government that they owned the home before the War happened but they tried to make all kinds of excuses to repossess it as she was growing up: its the basis for her song 'Đời' talking about her father's attempted suicide and thier monetary troubles as a result of this dispute with the government.

Same thing happened in Katrina with FEMA and settlement checks as ownership of the home had been on a legacy basis that had roots from sometimes from colonial times.

Lastly, and most vivid to me is over coming censorship, but specifically financial censorship: I did it and I could write a book on the matter. But suffice it to say, I was really touched by Paxful's work recently as they just built their 4th school in Nigeria instead of 'moonboi'ing it' and buying 'lambos' with the wealth their startup created and have instead focused on help build the the Nigerian economy and it's entrepreneurs to create wealth all while their Government is actively trying to deem it as the source of all it's problems, not least of which ~12 inflation per annul that is a direct result of poor monetary policy coupled with even worse insular laws and ossified fintech solutions.

My most ambitious and craziest goal/aspiration of all is something Elon just made possible with adoptiong Bitcoin and making it clear a crypto will be used on Mars: Bitcoin serving as the medium of exchange for inter-planetary trade and commerce, and a settlements network.

Banking even in the West doesn't even work on weekends or past 5pm and people are just assuming we can keep carrying that corpse on our backs as we are slowly getting closer to becoming an multi-planteray species is beyond me and I cannot emphasize how critical that will be in just the next 2 decades.

Voting is another one that should also be clear, given Trumps fomenting of violence in the capital reminding why its best to have open and free elections that can be verified by anyone in real time. Several countries have attempted this so I'm not going to into depth as the information exists, and that's just focusing on what we've created in the last decade, I think the next 2 are going to be an even more interesting ride as I cannot even what is next and this tech moves so fast.

UBI would be another one, but to be honest Aurora failed and we didn't gain much useful info from it's failure, so this is one we have to wait for Nation states to fail (even more than the US has with unemployment apparently) at and we can quickly iterate from there as the technology is just way more robust and capable now.

> Something like Melvin Capital shorting 138% of GMS's stock

It didn't short 138% of GME stock. GME short interest increased to 138% while Melvin and many other hedge funds were shorting it. Melvin didn't do that singlehandedly.

> Naked Short selling maybe technically illegal, but that is in name only and in continues unabated to this day, hell the SEC refused to look into this obvious collusion between various hedge funds (citadel/melvin/Steve Cohen)

There is no evidence these firms colluded or engaged in naked short selling. Naked short selling is when you sell short a security without first entering into a contract to borrow the security. Short interest is orthogonal to naked short selling.

> It didn't short 138% of GME stock. GME short interest increased to 138% while Melvin and many other hedge funds were shorting it.

You corrected yourself to include that they weren't alone, but whatever... but that still doesn't change the fact that this would be impossible to do if it were a blockchain based system with these parameters built in, you cannot fictitiously create more of something that exists in order to benefit you or your industry and then suspend trading when things get out hand in that blockchain environment, as its completely out of your hand and the fraud in impossible to forge. And clearly with a trillion dollar market cap, and growing, we proved that it pays to play by the rules.

> There is no evidence these firms colluded or engaged in naked short selling. Naked short selling is when you sell short a security without first entering into a contract to borrow the security. Short interest is orthogonal to naked short selling.

Ok... we're done. This is going no where, keep downvoting as that seems to be your only recourse but you being blind to this obvious reality that SEC is selectively applying the Law (which also happens to apply to OTHER Naked short selling) isn't changing the fact of how obvious this collusion was and nothing I say will change that.

You want to pretend these markets are fair, go ahead, and I'm not going to waste my time... But my points for Blockchain based tech solutions that exist are already there and your make believe arguments notwithstanding will not make them go away.

I'm not making normative statements about what's fair or not fair. There are legitimate and reasonable grounds for criticism of capital markets. I'm correcting your specific positive statements, which I quoted, because they're incorrect. I don't have anything to say about blockchain or the rest of your comment.

> I'm not making normative statements about what's fair or not fair. There are legitimate and reasonable grounds for criticism of capital markets. I'm correcting your specific positive statements, which I quoted, because they're incorrect. I don't have anything to say about blockchain or the rest of your comment.

Ok, I stand corrected, and I don't mind accepting that, but that doesn't diminish the value of my response; none the less I appreciate the correction.

> but that still doesn't change the fact that this would be impossible to do if it were a blockchain based system with these parameters built in

Why? Shorting above 100% doesn't "create more of something". Why would a blockchain based trading system prevent me from short selling a stock based on what other people are doing? I've got the stock in my wallet. It was loaned to me by Bob. I can sell it to you right now. Why can't I sell it?

> Why?

Because it adds no value when shorting is nothing more than a predatory model to extract wealth from the useful (entrepreneurs) to the useless (speculators). Consider the World's riches man only became so when the speculators made Tesla the most shorted company.

I think this shows, once more, that the Capital Markets as we're forced to believe are anything that and more a massive casino with reckless gamblers with connections to central banks endless money printing. And that's my problem with this more than anyting else, it's not fair, its not efficient it's a forced construct by the entrenched powers to create even more entrenched and systemic gaps in wealth and Society.

Do I really need to talk about 2008?

Been around this forum probably since it's inception and have noticed the same in regards to bitcoin. I mean the parent poster is saying there is no use for a technology that's been around for 12 years and underpins ~$1T of value. Reminds me of this quote copied from internet:

First they ignore you,

then they laugh at you,

then they fight you,

... and then they buy bitcoin

Also noticed the same in regards to kubernetes, only in the last six months has it become "acceptable", and yet it is everywhere and used for everything. Just plain ignorance. But, as the above quote tries to show, lightly, eventually Bitcoin wins.

Seriously, the skepticism here convinces me that there’s still time to buy before everyone realizes what a good idea it is after all

Not everyone ignore Bitcoin because they love fiat or can't handle the disruption. Some do it because enabling a stronger uncontrolled brand of capitalism sounds like replacing a weaker poison with a stronger one.

> Not everyone ignore Bitcoin because they love fiat or can't handle the disruption. Some do it because enabling a stronger uncontrolled brand of capitalism sounds like replacing a weaker poison with a stronger one.

The fiat World is not Capitalism, it's so far detached from it that even comparing it to that shows just financially illiterate most are; but it's true Bitcoin doesn't solve many things, least of which is financial equality, but that is why founders and early adopters should be awarded: we took all the risk and built the infrastructure.

What differs is we have a vested interest in the new adopters succeeding and applying their Human capital and resources to this to create a more sustainable that does ensure it is FAIR. The Fiat World is incredibly unfair, and that is what i think keeps so many from even seeing the many benefits of Capitalism, which I subscribe to (Anarcho-Capitalism) but I understand is inherently flawed.

Still, its far more sustainable and beneficial and has already proven to be able to accelerating the advent of renewable energy and more distributed approaches to problem solving without the need for a centralized entity. And for most of my Lifetime that was never thought to be possible, outside of open source tech online, let alone something that could shift the very paradigm for a non-destructive system that treats Capital like an endless dole from the State and Central Banks based relationships.

I've been focused on being a multi-planetary Species but the truth is if we haven't solved this glaring issue caused by fiat we have no way of colonizing a planet if we have a business cycle bust/collapse and hyperinflation every 8-15 years, and the aver age of fiat currency is 40 years, which is nothing since Mars will take centuries to millennia but most of the proponents of this fiat system cannot even fathom this, let alone the need for the developing World to enter industrialization and higher standards of manufacturing for us to even have SLIGHT chance and making this happen.

Again, I don't think most people are financial literate, let alone deep thinkers on more than just the basic question like: why does my iphone cost so much.

> servile wave of infantile 'technologists' that are beholden to FAANG so this is clearly what happens when even 'smart people' get things wrong: they try to justify their errors with these campaign smears. Which is why I'm glad so many are leaving CA, hopefully it can go back to it's cypherpunk roots it had in the 80s and 90s.

So true. I wish I had had the opportunity to live in the golden age cypherpunk CA of the 1970-1990s.

> Their work is not their own, and they are beholden to their employers for identity and purpose, and Bitcoin is just a reminder of why it might have been a waste of time when M1 and M2 spikes happen.

So true. If only they could listen. But they are too emotionally invested in their mistakes. So they try to find meaning and happiness with the peanuts that are thrown at them.

> They thought they had it so good, for so long, so now when something comes along and shows them that their jails are opened they suffer from a sort of anxiety when they're not in one

Thanks a lot for taking the time to write that. It helps me understand them better.

Like you, I have tried to understand the people who single hand reject crypto on HN.

My conclusion is that it is due in part to the golden jail (good paying job in FANG tech) + not wanting to bite the hand that feeds (corporate overlords / governmnent) + intellectual laziness coming from a mix of a golden jail + old age (most people here seem to be over 40) - but the icing on the cake is this anxiety.

I have talked with some people like arcticbull (a HN permabull on all things crypto) and he said he also has the irrational fear of being defrauded.

I think it is a manifestation of the anxiety you describe: the fear their effort were meaningless.

> lets just build it for them, but give them a key they can keep inside and use if and when they are ever ready

The airdrops were like that. I have seen myself very intelligent people sell their airdrops for a handful of dollars. In a way, this free crypto was lost on them. They got a few burgers. More patient people got at least a car.

If you have friends you want to help, don't give them crypto: they will immediately sell it, regardless of the price, because they are afraid of the variance and not very rational. They are the kind of people who would eat the seed gains instead of planting it. They are unable to think long term (maybe from growing up poor, or having to work a job to get money?)

Instead, keep the crypto for them, and bestow a part of it when the time is right, in fiat, at an amount you think adequate to their immediate needs. You can always give them more later.

It is sad, and as a Californian (SoCal) with family ties to the valley from that golden era I hated the SV post 2000s and what it represented.When my time came I left for Boulder as the system there looked entirely alient to me made up by only money hungry people willing to defraud useful idiots at VCs. Again, Silicon Valley hits too close to home if you've ever been there for a reason.

But I always thought giving them the benefit of the doubt was the best strategy only to see how absurd it was for being so trusting... still I think it doesn't matter, we have so many of the Silicon Valley king makers on our side, YC included, so they will just follow when the time comes.

I wish I could find the academic research paper, but their was study on massive paradigm shifts throughout History and it concluded that in some of the most momentous, from things like the US and French revolutions to the migration of users from Myspace to Facebook, it was only between 5-15% of a studied populace to make them successful, and the rest just follow what those aforementioned do.

This is incredibly sad to me, because while I detest the spying business models this generation of SV guys work under, I always respected their intelligence which is why I keep coming back here, now I'm seeing they are susceptible to the same rationalizations that we see in the so called 'normies' that made ultimately made us bond despite disagreeing on talents/skills/interests as technologists.

Still... I think we're only now entering the enterprise and institutional adoption curve, they have a chance to pivot and use their immensely bloated salalries and still do ok, but I don think that is what is the core issue: they have delusions of being Chamath, or Elon being some low tier coder not realizing that the paradigm they function in is antithetical in ever creating another wave of Chamths let alone another Elon.

They will sabotage you and your startup, and even short the living fuck out you if you're already public while praising your efforts in public, if they have the slightest chance and fund both sides so that at best they will use you to get a fat IPO exit for something as stupid as doordash that relies on consolidation of any Industry for Megacorps.

How is private key management a problem when there are so many battle tested hardware wallets used by millions of people?

They have no basis. They want to detest it without learning. Either that or they looked into it a few years ago and have no idea how much has changed since then.

Because with a bank, you are never going to lose $240 million because you forgot the password to your hardware walllet.

In fact, you house can burn down and all your documents might get destroyed, and you'd still have access to your money, eventually.

Smart contracts were supposed to make that easier, but this got blocked by the scalability issues. The current hope is for MPC which might get consumer-usable products without a SPOF: you have private keys on personal hardware, but if you lose them, there's a recovery procedure with multiple independent authentication channels — e.g. 3 out of 5 notaries from separate jurisdictions must recognize you and sign their parts. Plus a lot of friendly logic like time-outs etc.

Look up "social recovery wallets" (i.e. Argent).

Here's an article by Vitalik Buterin himself making a case for it: https://vitalik.ca/general/2021/01/11/recovery.html

Key escrow is already a thing. I recently helped a friend recover his wallet, and luckily he had his private key escrowed.

Is it already a thing my grandmother can use? She has a working bank account but doesn't understand that minimizing gmail doesn't delete here emails.

The UX is getting better every year. It's like saying the internet was doomed to fail because your grandma couldn't use it in 1990

No it's not. The adoption rate in 2021 is way faster than in 1990. Most people weren't required to adopt a tech in 1990 to live their normal life, while in 2021 it is a norm to constantly be adapting to new tech.

The adoption rate is faster because people can communicate easier. It's not at all comparable to the state the tech is in.

I'm not saying that bitcoin is doomed to fail for this reason. I'm saying that "key escrow already exists" is a bad argument.

Too many people are missing the dry humor in this post

Well the post does appear to hint at a more serious issue - but it might not be easy to make it precise.

Here's how things are looking in 2021:

(1) Scalability Issues

Solved - there's a plethora of high-throughput chains in development, either based on sharding or pipelining/MVCC/optimistic concurrency. Some projects like Solana use GPUs and JIT compilation to achieve well beyond 50k tps in a distributed network.

(2) Lack Of Intuitive Private Key Management

Little progress. Ledger and other hardware wallets make things easier, but it's still far from intuitive. Non-technical holders typically use centralized custody providers.

(3) Contract Security

Some progress. Smart contract exploits still happen almost every week, but there's a robust set of best practices, safe-by-default standard libraries, and specialized auditing companies which make it much easier to write bug-free contracts, if you're willing to invest the time and effort.

(4) Consensus Algorithms Are Wack

Solved very thoroughly. There has been significant progress in byzantine fault-tolerant consensus, like Tendermint consensus[1] used in the Cosmos ecosystem, providing strong consistency and instant finality.

(5) Privacy

Many developments around zero-knowledge proofs and similar methods, but I don't know how viable those are.

(6) Price Volatility

There's a number of trustworthy stablecoins like USDC pegged to fiat currencies. Other than that, tokens are still highly volatile and only useful as a high-risk investment.

[1]: https://atrium.lib.uoguelph.ca/xmlui/handle/10214/9769

is there a good resource that you recommend that goes more in depth over advances like these? I think my opinion on cryptocurrencies and blockchain in general is severely out of date

Start with a non-Bitcoin crypto and understand its components and how its supposed to work. Most of the core principles carry over to other cryptos.

Ethereum.org and the the Ethereum blog would be my suggestions as a primer.

> 1) Solved: [... it's] in development

Wait what ?! Imagine saying this on a daily meeting !

I genuinely think HN is subject to what Clay Christensen put as "disruptive innovation" when it comes to Blockchain and friends (strange to say that for a community as opposed to a company).

I understand that many on HN think of the many ICOs as Ponzi schemes, and other tech (like identity, DBs, VPNs, apps, or even alternate WWW) built on top as smokes and mirrors; but the industry being built around it is very real even if niche. There's a lot going on (including research) and it seems to me like, one fine day, like how ARM sneaked up on x86, Blockchain is going to take HN by surprise. And then, the disruption would have truly arrived.

It isn't like the best sounding tech wins anyways.

Would be nice to have a decentralized HN . I m sure it exists

That is speculation at the moment, a lovely fantasy to imagine to come to fruition for any technology; a market cap that has reached $1 trillion including price manipulation, I'm unsure it warrants that valuation - and arguably it's not simply that high due to price manipulation.

I do believe blockchain could help us solve some fundamental problems - but only if it's tied to real trust and democratic processes.

Bitcoin is a blockchain that's been structured to inherently be an MLM, and if you think through to the conclusion - say once 50% of the population has bought into Bitcoin, and now a growing majority require the remaining society to adopt Bitcoin to realize their gains - to unnecessarily, unreasonably transfer wealth from later adopters weighted towards earlier adopters - then you can how conflict will occur when the remaining 50% of society don't want to be left holding the bag, with no one else to then buy more Bitcoin for the last adopters to get wealth transferred to them; and this is why it also mimics a Ponzi scheme - it's just that there isn't a single controller liker Madoff, but instead it's controlled via a global, decentralized system that anyone can participate in.

It’s not a Ponzi scheme any more than any other investment is a Ponzi scheme. Once 50% of society buys gold, who’s going to realize their gains? Except for gold speculators, the point isn’t necessarily to just realize gains, the point is to own an asset whose value is guaranteed not to disappear, even if it fluctuates.

Granted, gold has a stronger guarantee than Bitcoin as of now. But that doesn’t make Bitcoin a Ponzi scheme.

>but the industry being built around it is very real even if niche. There's a lot going on (including research)

What are some concrete examples?

I think most of us who are critical are still interested, because we do see things that are going on, and we ask ourselves, are we missing something?

But we seem to run into the same road blocks again and again.

“Solutions” seem to come from people subtly or transparently “talking their book,” that is, they have an undisclosed vested interest in you not thinking too much about those roadblocks.

What is some fruitful research being done in the areas of well known roadblocks? What are some application areas with a genuine pathway to viability and no better non-blockchain alternative?

I think smart contracts are actually extremely novel in the form they take in Ethereum EVM, Tezos, Cardano, DAML and Pact (I'm author of the latter). TBH I'm a little frustrated with the evolution of smart contract langs post-2017, as I think Ethereum's dominance has made most engs/projects uninterested in innovating.

If you look around, it's actually very hard to find a genuinely small language you can embed in your runtime, and offer to users. Lua is a common suggestion, but Lua doesn't let you lock down IO, or code loading (that is, without writing your own interpreter and changing semantics -- what's the point?). A truly pure smart contract language gives the containing app full control over the entire runtime.

Smart contracts to me are a modern stored-procedure language that you embed directly into your app, and give you a 100% deterministic way to store long-term state, including code. "Application DBs" like sqlite don't scratch this itch (for instance sqlite doesn't have SPs). Plus, smart contracts are metered (usually), which allows for a cost-model and prevents against DOS. This plus the turing-incomplete angle makes them reasonable to open up to the world.

Erlang and lambdas come to mind, and I can argue why they're different too. But this is already too long :)

>But this is already too long :)

Not at all, I appreciate the info.

Cardano I believe uses PoS of some sort.

What is the thinking about what keeps these distributed application servers running? Is it still mainly the mining reward model?

What sort of applications most excite you? Are there places the distributed model works better than the traditional? Are there applications the distributed model enables that the traditional does not?

And vice versa, what are the limitations of the distributed model? What things just aren't feasible? Could you build Twitter or YouTube like systems?

> Cardano I believe uses PoS of some sort.

Yes, but smart contract languages (Plutus in Cardano's case) generally are unrelated to the specific consensus algorithm of the blockchain platform.

> What is the thinking about what keeps these distributed application servers running? Is it still mainly the mining reward model?

In general, public blockchain platforms run by incentivizing the operators within the system itself. PoS and PoW are different versions of this (staking v mining).

> Are there applications the distributed model enables that the traditional does not?

Crypto, and DeFi (decentralized finance), is conducting a huge "live beta" in decentralized corporate governance and finance. There is a crapton of innovation happening with financial engineering and exchanges, completely new models like Uniswap (constant product DEXs) or new versions of existing things, like on-chain options.

Is it world-changing? No, or not yet certainly. But by construction, DeFi can only happen on a decentralized smart-contract blockchain, so it's genuinely new.

> What sort of applications most excite you?

Outside of crypto, there are many areas within industries which require the sharing and use of data across multiple organizations, markets, and even intra-industry. Think of Healthcare and the multitude of data sources, processes, and interaction between parties. In areas like this, where multiple parties have many different roles and responsibilities in a shared business process, I think the opportunity for private blockchains is promising. I admit that these are niche use cases and the use of these type of applications has not taken off yet.

Do note that these types of applications are very different from the decentralized implementations seen in the crypto sphere. These are the private, permissioned models that people speak of.

In that case they don't need a blockchain, they just need a database.

Daml is a nice functional smart contract platform, with the ambition of smart contracts being really contracts. This is a few years old video about the original idea: https://vimeo.com/219723741, and this is their web site: https://daml.com. Today Daml is integrated with the Canton synch platform, and can connect several kinds of blockchains and databases: https://www.canton.io.

>What are some concrete examples?

I like how you can use a PoS blockchain to earn interest on your coins. Cardano can do this without moving your coins to another wallet, xlm can do it but you need to trust the other party. Currently there are enough people in the world without banking access that this could make a huge difference to them.

An ICO is a framework for a criminal conspiracy to defraud. As outlined in the evidence gathered by the SEC on Ripple.

Make some outrageous sales pitch that experts in technology would describe as vaporware

Sell your utility tokens. A worthless type of token

Buy some fake articles and pump the price. Dump on the suckers that bought your tokens

Pay for a exchange listing on a junk exchange. Pump the token and dump on the suckers that bought it

Exits, rinse and repeat

By your logic the stock market a scam because of penny stocks.

Penny stock is a utility token redeemable for an unproduced good?

Penny stock is a utility token representing governance in a company as well as the privilege of taking its profits — much like crypto governance tokens are.

Wrong. Utility token gives you no equity. It's a gift card voucher to use a network

Ah, my bad. I didn't realize those were different from governance tokens, which are more directly analogous to stock.

That being said, just because something is commonly used for fraud doesn't make it illegitimate. There are fraudulent companies in real life, though usually there's more legal recourse to go after them.

Governance tokens I haven't seen so much. Don't believe they are sold as or the same as equity in a company. How they are different from equity could be very important to their value as an investment

All are fraudulent from the 20 or so I've looked into or talked to the founders and realised they were criminals

Sounds like you either have a horrible method of finding projects to approach or, given your comments here, no matter how legit a project was you'd still think it's a scam due to cognitive dissonance.

Some tokens distribute usage fees to token owners.

The ICO scammer often markets the tokens as equity or money but they are gift cards to use the network

Penny stocks are companies building perpetual motion machines and magic derivative technology with no trade-offs?

Bitcoin has been running non-stop for the past 12 years, used by tens of millions of people,has a market cap of 1 Trillion and all that while protecting the human rights around the world: https://www.reddit.com/r/Bitcoin/comments/ldyy7s/bitcoin_is_...

But even if you are clueless enough to think that Bitcoin and blockchain isn't working at least you should appreciate all the breakthroughs in cryptography like Zero Knowledge proofs, networking like libp2p, distributed storage like ipfs etc. that emerged from the evolution of cryptocurrency tech.

Bitcoin has all of the problems listed in the article and is, arguably, not yet providing the social value that blockchain could.

Not sure how a high market cap is a counter argument to that.

Especially considering market cap is a totally made up number and if everybody tried to get out at once they would get a fraction of a fraction of it. (1) But it's pointless to tell this to a cryptofreak because they're so heavily invested in it they make zealots look reasonable.

(1) not to mention the fact that as soon as there is volatility exchange sites go down, even the bigger ones.

Wait until you find out what happens when people try to take out their money all at once from banks... I remember back in the day when people used to call early internet users internetfreaks and zealots. Now it's the same with Bitcoin. Whatever...

Yes, we all remember well what happened e.g. with Mt Gox.

Not sure what your point here is - as if panic and runs on the banks were somehow magically prevented by crypto.

And the hilarious part is, we actually have regulations like capital requirements and FDIC insurance and central bank lenders-of-last-resort to prevent bank runs? Whereas crypto has... none of that? And unaudited Tether pumping >$1B into the crypto ecosystem every week

If everyone tried to get out of any asset at once the price would tank. That’s how markets work.

The market cap is a counter argument because it shows the trust people, and lately corporations put into Bitcoin as a store of wealth and a hedge against inflation. The market cap proves that bitcoin/blockchain/cryptocurrency enthusiasts put their money where their mouth is.

I hardly doubt you'll find any enconomist working in those corporations fearing inflation. Inflation has been a non-issue since the 1980s. https://en.wikipedia.org/wiki/United_States_Consumer_Price_I...

And yet...

https://wtfhappenedin1971.com

That page reminds me a bit of time cube :)

Here is a good introductory article about the topic:

https://slatestarcodex.com/2019/02/25/wage-stagnation-much-m...

TL;DR: Inflation plays at most a secondary role, the majority of the effect is a result of stagnant real wages, i.e. the capital owners kept a larger share of the productivity gains.

Thanks, that looks amazing. It's gonna take me a while to digest it though. :)

Does the article conclude that the correlation with the US going off the gold standard, and consequent change in monetary policy, is completely spurious?

It is mentioned in passing, but not discussed in depth. I don't think it plays a large role (mostly because it was a consequence of the economic development - they didn't just went off gold because they felt like it), most importantly because the same curve can be seen in other industrial economies in the same period - which didn't use gold before. I guess the computer revolution plays a large role, significantly altering many industries and the character of many occupations. Collective bargaining couldn't keep up fast enough, and thus wages and profits decoupled.

Thanks for sharing your perspective. I've read the entire article but it seems to discount the thesis that the technological revolution played a primary role.

It seems to me that like most macroeconomics issues, it's a multivariate phenomenon, so correlational studies can only get you so far.

Do you have books you would recommend on the subject?

The technology angle in the article is not quite what I meant. Alexander looked at how low-skill jobs and high-skill jobs developed, i.e. the new demand for high-skill jobs was not enough to get a higher share of the profits, but what I meant is that this also changed the landscape and structure of companies itself. The introduction of computers changed how companies organized themselves, enabled outsourcing etc. Companies before often were very vertically integrated, and the digitalization enabled organizations to spin off subdivisions into suppliers etc., which made it harder for unions to achieve higher wages. (A bit amusing that that went so far that vertical integration nowadays is all the rage again, with Tesla as the most vocal. We went full cycle after Ford started it 100 years ago :)

Sadly I can't seem to find the article anymore, but there was a publication by Robert Brenner that showed that the fundamental changes of the early 70s also affected Soviet Russia in quite similar ways.

Edit, sorry, forgot your literature question. I think the two important keywords are Fordism and Post-Fordism, as economic literature usually seems to use these terms to describe what changed before and after the early 70s. The Wikipedia article on Post-Fordism lists a few theory lines and their authors: https://en.wikipedia.org/wiki/Post-Fordism

USD went off the gold standard in 1971.

Market cap means nothing. I can create 10^32 coins out of thin air, sell one coin at 1$ to one customer. And the next thing I have is a coin with higher marketcap than bitcoin.

That's what makes PoW (with no premine) coins more honest. No coins out of thin air, and the price derives from actual demand for the coins that anyone can mine.

To get recognition as the coin with the highest market cap, you’d need to have it actually traded on an exchange. How many people on the open market are going to buy your coin for $1 on an exchange? There you go, your coin is worthless and has a market cap of roughly zero as determine by the open market exchange.

> How many people on the open market are going to buy your coin for $1 on an exchange?

Even if 1 client per year buy it (let's say my token purpose is to give to access to private content on my website), then my marketcap is still 10^32 $, because marketcap is just the number of supply x the last traded price of my coin.

And yes, we both agree, marketcap has 0 value. It was just to make a point that using the marketcap as argument makes no sense.

> Even if 1 client per year buy it

What about the people who try to sell it after buying it? If they have to sell it for 10^-32 $ before someone buys it then that immediately drops your market cap to just about nothing.

> And yes, we both agree, marketcap has 0 value

No, I just explained why marketcap correctly values your coin as absolutely worthless.

> The market cap is a counter argument because it shows the trust people

See also Enron, WorldCom, Nortel, Bre-X (for the Canadians out there).

> […] and lately corporations put into Bitcoin as a store of wealth and a hedge against inflation.

Given its volatility, I'm not sure how useful it is as a store of wealth. Less than a year ago it lost half its value in two days (before the recent run-up):

* https://www.cnbc.com/2020/03/13/bitcoin-loses-half-of-its-va...

If you think inflation is coming, then you need to stop working in economics and/or finance, as you're burning up returns hedging against it, at least in the US/industrialized world. The last time it was a problem was >40 years ago (mostly due to OPEC):

* https://fred.stlouisfed.org/series/FPCPITOTLZGUSA

Outside of specific circumstance, deflation is the predominant force:

> But Inflation is not inevitable. There are numerous countervailing forces that have been at work for much of the past 50 years. The three big Deflation drivers: 1) Technology, which creates massive economies of scale, especially in digital products (e.g., Software); 2) Robotics/Automation, which efficiently create more physical goods at lower prices; and 3) Globalization and Labor Arbitrage, which sends work to lower cost regions, making goods and services less expensive.

> Put into this context, Inflation is periodic, driven by specific events; Deflation is consistent, the background state of the modern economy. To fully understand this requires grasping how scarcity and abundance act as the drivers of the price of labor and goods. My suspicion is many economists who came of age during earlier eras of inflation fail to discern how the world has changed since.

* https://ritholtz.com/2021/02/stop-stressing-about-inflation/

Funny I actually viewed the 2020 BTC drawdown (and subsequent rapid recovery) as my number one buy signal for the current crypto bull market. In a time period when the Dow loses almost 13% in a single day and the fed has to use every move in the playbook to maintain liquidity, crypto holds its own with no fed assistance at all.

As for inflation, I’m guessing the exact opposite argument to yours was being made in the 80s.

Or you could say that cryptocurrencies are incredibly correlated with the stock market and thus don't actually serve as a hedge for risk at all

>As for inflation, I’m guessing the exact opposite argument to yours was being made in the 80s.

By definition, inflation is what happens when demand exceeds supply. If the fed keeps flooding the market with cheap credit the expectation is that the money is invested into more production, either by machines or by foreign labor (i.e. in China). Prices stop growing because supply outstrips demand. That's why the fed is failing to create sufficient inflation. Supply side stimulus is causing the opposite effect and at the same time it is leading to an asset bubble.

Maybe you should try to read the linked page.

How much of that usage and market cap is actual usage and how much is financial speculation?

There's been research done to show that multiple times just a few people manipulated the price of Bitcoin to its heights - https://www.bloomberg.com/news/articles/2021-01-14/research-... - and the Bitcoin community main mantra is "HODL" and they call themselves the "army of the HODLers" for a reason: they're waiting for enough of society to be manipulated/trick people into thinking the history of the "steady" increase to "$100,000+" is because people many people are actually valuing it (which they're arguably not) - using that as a proof point to decide to buy; which has been done by 1) misappropriating Bitcoin as being akin to a stock in the stock market, especially the term ICO - "Initial Coin Offering" vs. Public Offering, and 2) misappropriating the term currency calling them "cryptocurrencies" - in an attempt to additionally legitimize it.

I believe Bitcoin likely started to exponentially take off when the online marketing forums started rallying to put their efforts behind promoting it. Eventually then the VC-finance industrial complex joined in - and mainstream media then has been promoting it as if Bitcoin et al are stocks and a new currency. All the while the army of HODLers is growing - all incentivized to promote Bitcoin et al, and those who speak of a counter-narrative aren't financially incentivize to do so, and actually should fear doing so due to the mob; a partner at a top, international investment firm, Ray Dalio at Blackwater recently said as much - "while those who are against it (which are a few scared souls cowering in a corner)" - in his article "What I Think Of Bitcoin" - https://www.bridgewater.com/research-and-insights/ray-dalio-...

The VC-financially industrial complex with billions have started to jump into the speculation game, the MLM, and with their billions I believe have stared to attempt to invest just enough to offset crashes in price - along with the "army of HODLers" learning to be more obedient and listening to their war mantra of HODL, along with Coinbase likely purposefully engaging in price manipulation by multiple times making their platform unaccessible to users - so those who would impulse sell when the price starts to skyrocket are blocked long enough for them to instead hold; I'm guessing Coinbase also have a certain amount of large buy orders from large institutional investors that they manage, and they use these funds in part to counter a crash from happening.

This same price manipulation happens in the stock market - https://www.reddit.com/r/videos/comments/lg0ial/jim_cramer_e...

I also believe Tesla's recent acquisition of Bitcoin was to seem aligned with the growing mob of HODLers - who you don't want to be maligned with if you want them to speak positively about your product and buy your product, or in reality be less critical of you and your company because you're then financially aligned; Elon Musk recently tweeted "Bitcoin is almost as bs as fiat money" - https://twitter.com/elonmusk/status/1340588909974200321

Unfortunately the world may go mad, greed taking over, regulatory capture occurring where a generally small amount of people could lead to trying to engage most of society in helping realize whatever value Bitcoin et al reaches - unreasonably and unnecessarily transferring wealth from later adopters to earlier adopters. It could be the next war to be fought after tyranny is solved - Bitcoin in fact making tyranny easier as you can't implement policy like the Magnitsky Act; it's always a non-response when asking a pro-Bitcoiner to address this question/problem.

I believe an organization needs to be started and funded somehow to put a concerted effort to organize and educate people by creating, compiling, everything necessary - and making whatever easy to understand educational material to go along with it - and to be promoted, along with as a resource for people to reference when they're in discussion with others.

The money transfered from late adopters to early adopters is the massive amounts of old money mad from the wealth of kingdoms and colonialization. Personally I think having an infinitely divisible, fixed asset, protected by cryptography and not statutes, is a democratic upheaval of captured financial systems. You dont need blood, legacy, heritage to capture these assets, just information.

Maybe having physical wealth ripped from my family multiple times in the past 150 years makes me feel this, this asset is a bit more useful than gold or jewelry when dealing with an uncertain future.

I like that you brought up money of old - and find it disturbing that people are happy to repeat the same pattern - "they did it, so why can't we;" two wrongs don't make a right.

So great, we have regulatory capture of financial systems - and you want to replace it with a system that can't protect against bad actors via financial punishment for known bad behaviour e.g. via the Magnitsky Act? Don't you think that's a problem?

You like Bitcoin because it allows you revenge - but the problem is it's not taking out revenge on the people who may deserve it, it's taking it out on all of society. That's disturbing that you, and I imagine others, aren't thinking critically of those consequences - or if you are that you don't care; in fact this is a fundamental element of Bitcoin and how the mob/"army of HODLers" grows - the price drops and the buy people who bought later, at or below the current price, have now lost money and haven't realized any - so they are now entrenched in the MLM scheme.

Do me a favor and watch some of this class by the future SEC head https://ocw.mit.edu/courses/sloan-school-of-management/15-s1...

I dont think the current thresd we are on is useful and you are misunderstanding my point of view. The class above gives some background to my points of view on Bitcoin and Blockchain.

Ultimately, I think blockchain is an interesting technology that necessarily has value, hopefully our regulators can understand its nuances and find ways to channel it to provide more security to every human around the world, (like vaccines or education) than the currently impeded(for whatever reason, its gotta deal with alot of red tape and hundreds of noncoordinated jurisdictions) financial systems.

There is value in having centralized and decentralized finance. The world rewards/will reward recognizing that.

citation needed, most of the increases in global wealth and output are due to technological innovation and increased trade and improved governance. If you are going to claim that all the worlds wealth is just extractive you are going to need a big source for that. Most economic historians disagree with you.

> all the breakthroughs in cryptography like Zero Knowledge proofs, […] that emerged from the evolution of cryptocurrency tech.

Zero knowledge proofs date back to the mid-eighties.

Yeah they sure have. Running GPUs endlessly to execute thousands of transactions per day. Do you realize how ridiculous that sounds? You can literally run a pub-sub equivalent of BTC for 1/1,000,000,000 of the cost involved in crypto and a million times more performant while preserving all the benefits touted in cryptos. The reason why we don’t have this isn’t because we can’t. It’s because the financial institutions are too entrenched. And the same institutions have taken over the cryptocurrency space. Do you not see what’s happening?

> You can literally run a pub-sub equivalent of BTC for 1/1,000,000,000 of the cost involved in crypto and a million times more performant while preserving all the benefits touted in cryptos

Explain how pubsub is impervious to the operator of the pubsub shutting down, due to governmental pressure or otherwise.

To the scalability issues section I'd add the environmental aspect. It has already been reported that by some estimates Bitcoin today consumes more energy than Argentina, and that's with an estimated 1 million active wallets per day. Argentina is home to about 50 million people.

This means that in order to have Bitcoin serve as the daily currency for all of Argentina's 50 million people would at least 50-tuple its energy consumption. This is comically absurd. It's thankfully not achievable or economical with the energy resources we currently have available, because pursuing a 4,900% increase in energy consumption would be disastrous.

If crypto sees any widespread usage I think it'll be as the backbone of financial systems, for big transactions between institutions. In that space I don't see much incentive for people to adopt it— there's already a good level of trust amongst the parties, various levels of transaction verification, and it's mostly all digital already.

[1]: https://www.bbc.com/news/technology-56012952

[2]: https://www.bitcoinmarketjournal.com/how-many-people-use-bit...

[3]: https://en.wikipedia.org/wiki/Argentina

> This means that in order to have Bitcoin serve as the daily currency for all of Argentina's 50 million people would at least 50-tuple its energy consumption.

How do you justify this linear extrapolation?

This is like saying we shouldn't build or invest in computers anymore because they cost so much and take up whole rooms full of space.

Bitcoin is version 0.1 of a new way to record and share a common ledger. The cost and energy requirements are simple tradeoffs that are completely configurable to the applications needs.

Go look at all the alt coins out there, blockchain tech does not require the same levels of decentralization as Bitcoin, many work off more centrally controlled systems, not all require huge amounts of energy to mine blocks, and many are extremely aware of the need to be an environmentally friendly solution.

Like I get it's a very valid criticism to make about Bitcoin.

But it's such a contrarian for the sake of being contrarian thing to say and completely ignores ten years of alt coin and defi evolution.

Feel free to keep bag holding those "federal" reserve notes, they'll pay off one day I'm sure.

Not really, most of the centralized ones could just be replaced with a mysql server and have the same properties. Notable exception being some of the proof-of-stake schemes, but its not like that's a scaling tradeoff but a totally different approach.

And 64k memory should be enough for everybody but banks can't share a single MySQL database.

They can try, but they would need an impartial intermediary.

As someone that got shafted by the gme shutdown, I would have loved to be trading over a block chain unimpeded by "regulatory oversight".

Well i agree that the energy cost is immense, it doesn't scale with number of users but mining power.

Energy cost scales with value of coins produced. As the price of bitcoin goes up so does the cost of energy and equipment used for mining. Market searching optimum.

This will be fixed at some point, but the point when rewards get low is very far away... So if Bitcoin were really come the one true currency with global market cap, the costs would be enormous...

Everyone (except Bitcoin) agree that Proof of Stake is the way to move forward. Even Ethereum is migrating to pure PoS consensus.

This solves the environmental aspect, thankfully.

Hundreds of PoW altcoins disagree. PoS is not a coin distribution method either.

Hundreds of PoW altcoins are doomed: https://www.crypto51.app

Most PoW coins that have been 51% attacked go on merrily with little to no price suppression. The worst effect is much longer deposit confirmation times on exchanges.

How many of these hundreds of PoW altcoins are used for making payments for real products and services? Let's say single transaction a day over reasonable period?

The energy argument has been debunked over and over again.

I recommend you read this thread by Yassine Elmanjdra (analyst at ARK Invest): https://twitter.com/yassineARK/status/1360343382556483587?s=...

This "debunk" is bunk in at of itself - have you actually looked at the presented arguments? They are ridiculous and make no sense whatsoever (e.g. comparing PoW with literal gold mining - as if gold were a currency...).

Of course, I've read everything, including the article by Nic Carter [1] (which I highly recommend) and all his related articles on the subject.

The comparison with gold mining is quite apt actually - one of the use cases for Bitcoin is to act as a store of value and hedge against inflation, precisely like gold.

[1] https://www.coindesk.com/the-last-word-on-bitcoins-energy-co...

> The comparison with gold mining is quite apt actually - one of the use cases for Bitcoin is to act as a store of value and hedge against inflation, precisely like gold.

Ahem, the primary use of gold is jewellery, not a hedge value against inflation. That's where the vast majority of all mined gold ends up (plus some in electronics and medical applications).

That's not entirely correct. Less than half of the demand for gold is for jewellery, and only a tiny percentage is used for technology. Almost half of it is held in vaults to act as a store of value. [0]

Regardless of what the percentages are, the price of gold is mostly determined by speculation. It varies wildly during periods of economic uncertainty. Arguably, not because there's more or less demand for its industrial use cases, but precisely for the reason I mentioned: a big part of its value derives from being perceived as a safe haven for storing wealth and as a hedge against inflation.

Bitcoin positions itself as a direct competitor in that sense. Its main narrative in the past few years has been "digital gold" or "gold 2.0". It has some of the same properties of gold (scarce, difficult to produce) and some better ones (fast and easy to transfer, easily auditable, impossible to steal or confiscate).

I don't think Bitcoin is suited to be used as a currency to i.e. buy coffee. But it doesn't have to do that in order to succeed. Stablecoins are a better tool for that use case.

[0] https://www.statista.com/statistics/299609/gold-demand-by-in...

The tweets you linked to link to another source [0], and are mostly paraphrased from that source, which makes the following argument:

"Does Bitcoin justify its energy usage? Does it add enough value? So far, the market says it does."

That doesn't "debunk" any argument about energy use, it only tries to justify it.

[0] https://www.lynalden.com/misconceptions-about-bitcoin/

Disingenuous. That's not the only argument that is being presented.

There's some muddled thinking going on there. The source doesn't make the argument that Bitcoin isn't energy intensive. If that's an issue for you, you should re-evaluate your views on Bitcoin, but denying it doesn't change the fact.

Otherwise we're just arguing that "water isn't wet" and what the definition of "is" is.

I'm perplexed. I don't think we're looking at the same content. Perhaps you haven't read the entire thread but just the first 6 tweets?

I don't think he understands the concept of efficiency. More efficient means doing the same thing at a lower cost. What same thing does bitcoin do at a lower cost compared to what?

> This means that in order to have Bitcoin serve as the daily currency for all of Argentina's 50 million people would at least 50-tuple its energy consumption.

That's not how Bitcoin or any PoW works. The amount of energy used is not a direct function of number of wallets. It is not either a direct function of number of transactions.

The only intermediate step is the fact that the amount of currency in circulation needs to raise. As that isn't possible with bitcoin, the price has to rise. And that increases the incentive for throwing more recourses into mining.

"This means that in order to have Bitcoin serve as the daily currency for all of Argentina's 50 million people would at least 50-tuple its energy consumption."

This comment is beyond dumb and just showcases that you have no clue whatsoever about how bitcoin works. Bitcoin's power consumption doesn't go up when more people use it. It goes up when more people COMPETE for the production of the next block, meaning when there are more miners.

Also more than 50% of bitcoin's power consumption already comes from renewable sources.

Also youtube and online gaming need many times more power and I'd argue that a global, open, permissionless financial network is far more important.

No, it isn't dumb. The monetary base currently provided by bitcoin is tiny. If an economy would switch to bitcoin as it's currency, the amount of BTC in circulation would need to gain multiple zeroes. As bitcoin has a fixed cap, that would mean the price would rise. And that, in consequence, would make mining way more profitable, with newcomers entering the field and established organizations to employ more resources. And that increases the power needed.

> Also more than 50% of bitcoin's power consumption already comes from renewable sources.

You are tweaking numbers here. The only source I've found, It says 39% and it's from a shady crypto website that make a living promoting cryptocurrencies [0]. And if you look deeper in the source [1] they quoted it says "A total of 280 entities from over 50 countries across various regions responded to the surveys.". So this study is based on surveys they sent to companies... Without anyway to verify their answer. This study has 0 value.

Renewable energy is way more expensive and not reliable.

https://cointelegraph.com/news/report-76-crypto-miners-use-r...

https://www.jbs.cam.ac.uk/faculty-research/centres/alternati...

Bitcoin is the mongodb of finance: You like its features but in reality most people don't need them.

Mongo's scalability sounds great until you find yourself reimplementing a relational database for your 1000 users app.

Bitcoin decentralisation sounds great but must people don't need it. You just need a less evil and less corrupt government and better fintech.

You're curing the symptoms, not the cause.

  Bitcoin decentralisation sounds great but must people don't need it. You just need a less evil and less corrupt government and better fintech.

your second sentence inadvertently convinced me I need bitcoin

That less corrupt government will provide 1000% gains for everyone. Bitcoin will give that only to those who buy it aka rich people.

I can’t tell if this comment is disingenuous or just naive.

We’ve been trying to create less corrupt governments for hundreds of years.

oh wow, are you straight from Disneyland?

> The popular blockchains only don’t offer transaction finality i.e you will never be 100% sure that you have gotten funds.

> You can only be probabilistically to a high degree (but with zero guarantee) that you have received your funds.

All cryptography depends on it being probabilistically difficult to guess the secret. This is an exceptionally weak criticism of blockchains.

I think the concern here is some group rewriting transaction history via controlling > 50% of the hash rate, not guessing crypto keys.

4. Consensus Algorithms Are Wack The popular blockchains only don’t offer transaction finality i.e you will never be 100% sure that you have gotten funds.
You can only be probabilistically to a high degree (but with zero guarantee) that you have received your funds. This is because in major consensus algorithm called Nakamoto Consensus, the miners elect the chain with the most computational work that are with in the same protocol i.e consensus rules.
For instance imagine your bank tells you that you that, “there is a 95% chance that we might have your life savings, however you may also not poses it in 5 years in case we discovered that the chain with the most work does not have your transaction in it”

Yes, I don’t think anyone wants to keep their life savings in such a bank.

Sure, and the probability that all of your atoms will teleport one foot forward is not zero. But it's sufficiently zero that we say it's zero, and we're rarely proven wrong.

It took awhile to become comfortable with probabilistic algorithms, but some (small) familiarity with physics helped. Nature is probabilistic, and seems to work.

This isn't a great counterargument, but honestly none of these arguments seem very persuasive. I'm not a blockchain fan, but it's like... "if someone steals your wallet, they'll get all of your money!" Well, duh. Everyone knows this and seems fine with it.

1. Scalability Issues The current bandwidth, i.e the data that can be transmitted through a blockchain with in a given time is simply too bounded for main stream adoption.

Ethereum for instance does a maximum of 13 transactions per second. Visa on the other hand can do 24,000 Transaction per second and peak over 40,000 transactions per second.

No mention of Lightning network to solve this. I've been out of the crypto game for years and even I know "Lightning is supposedly the solution." Did that ever pan out?

6. Price Volatility Very few people simply don’t have the stomach to hold a financial instrument that drops by over 50% with in a few months.

https://i.imgur.com/WWzTlGb.png

> Nature is probabilistic, and seems to work.

I think what you mean is that the currently most successful model of the physical world is probabilistic, but this doesn't mean that nature is.

Mm. That's an interesting way of looking at it. But the assumptions are laid out by Feynman: https://www.youtube.com/watch?v=QRE0GxT6Zbw&list=PLgRI7D_FXE...

Although I'd love to urge everyone to sit through all six hours, I recognize this isn't too practical. So -- with apologies to Feynman -- I'll have to do a poor job of translating:

- The scientific method means that we are never certain we're right; we're only certain we're wrong. But (as with Newton's laws) it's pretty incredible we can last so long before we're proven incorrect!

- The world seems to obey mathematics. But math != physics. One helps the other; discoveries in math have applied to physics, and vice-versa.

- The heart of nature seems to be a purely mathematical construct, from which there is no escape. Many people have tried to model gravity as something other than the gravitational equation, e.g. suppose at every point in time there are particles shooting every direction simultaneously. Then gravity is merely us blocking these particles -- earth with respect to the sun blocks a certain fraction of particles towards the sun, and in fact inversely as the square of the distance. No math necessary! Unfortunately, doesn't quite work -- if it were true, the earth would have slowed in its orbit due to blocking the particles, and it wouldn't have lasted ~billions of years. So that's the end of that theory.

- The double slit experiment seems to prove that the world has no other model other than probabilistic (see lecture 6). There is some fundamental limitation preventing us from narrowing down nature further than this threshold.

- Every test designed to break this assumption has failed.

Therefore, I say that the physical world is probabilistic, and I will wager any sum of money you'd like to bet that it will still be true within, say, 200 years.

There is one interesting alternative: if everything in the universe is pre-destined. The complete absence of any kind of free will whatsoever. Every atom, every electron, every single subatomic particle, all predestined from the moment of the big bang til now. That seems to be the only way that it can't be probabilistic.

Yes, I completely agree. I think however that the point was that whatever we build out of our best available physical theories ultimately relies on probabilistic grounds.

Now on the other hand, we don't use quantum physics for every single human project out there, and for many human scale phenomena, we can act without concious probabilistic representations.

Have the right cosmic ray hit the right set of memory chips, and you will be super rich. That can happen in an entirely deterministic world.

I think its important to distinguish between realistic probabilities and unrealistic probabilities. If the chance is 2^-100 %, nobody cares. Bitcoin is a lot less secure than that, but its still not something i realistically would worry about.

> Everyone knows this and seems fine with it.

Are you sure? I believe a lot of people interact with blockchains through services like coinbase, without managing their own wallets.

>WARNING

>Before you proceed, please understand that the Lightning Network is still in the experimental stage. Do not put the money you can't afford to lose. There is a high risk of you losing the money.

https://docs.btcpayserver.org/LightningNetwork/ and a pile of other places - and particularly when someone points out that LN doesn't work very well, and that money gets lost to bugs way too often to trust.

The purpose of the Lightning Network is to serve as an excuse for Bitcoin's dismal performance. It is not a production-ready payment system, even to the degree that Bitcoin is.

Thanks! I've wondered how the lightning network fared over the years. Judging by the still-experimental state, the answer is "not well."

I think price volatility is the only reason it's not working as a normal currency.

Right now, these blockchain currencies are traded just like expensive wine, art or gold bar. It's a speculative money game. We can't use wine or art to buy some food for today. Most people don't even run the full node themselves. They relies on somebody else's node. In good term, they are investing, in other words, they are gambling.

It's just sad seeing a lot of resources and some brains are wasted on these gamble.

How could this be happened? When bitcoin was announced and it's first implementation was actively developed by someone or some group known as Satoshi Nakamoto, it was just a technically interesting non practical piece of attempt. But now... it's just a mess. Had I mined bitcoin in early days, I could be a billionaire. But the same thing can be said on buying the gold bar. It's not that technically interesting.

The first P2P boom invented a lot of practical services. File sharing, web hosting, audio and video streaming, video chat and all. They are all pivoted to central system for efficiency, but some services gained a few years of early head start experience thanks to the P2P. What blockchain achieved so far? Nothing. It just invented another gold bar. Totally useless but some people believes value in it.

I really wish people wake up and spend precious time and resources on something that introduce real value to the world. Blockchain? Wake me up if proof of storage space become practical.

You have obviously no idea what you're talking about. Bitcoin's block mining algorithm is excessively deflationary: it encourages hoarding instead of spending while disproportionately rewarding early adopters. That however has absolutely nothing whatsoever todo with the blockchain algorithm, which was/is truly innovative as a decentralized ledger.

There is nothing preventing cryptocurrencies from utilizing blockchain technology in combination with inflationary currency generating models, and in fact plenty of them do. They are less well known partially because they were later to the game, and partially because they lack the get-rich-quick pump and dump appeal of bitcoin and co.

It's a new asset class so it's in a huge growth phase. Over time it's volatility is beginning less and less and will continue to do so as the market matures.

The other main reason it is not a currency is that it only processes 5 transactions per second and they cost a ridiculous amount of money ($60 at the peak in 2017). Which makes it only usable for large transfers of speculative value, not like, buying your daily coffee. It's not a currency.

This is only true for Bitcoin, there are many others without the transaction bottleneck and the ridiculous fees.

> The first P2P boom invented a lot of practical services. File sharing, web hosting, audio and video streaming, video chat and all.

Have you looked into all the new developments with Ethereum and defi?

As the recent GameStop events have shown, it's uncertain who owns how many shares, settlement is slow and error/bezzle-prone, etc. etc. Plus I venture to guess that HFT algorithms do consume country-level amounts of energy as well. Unlike blockchain, it's not surplus electricity from renewables in faraway places. And all that energy does not even improve the whole ledger security.

But hey, unlike the filthy blockchain, it works!/s

Go read Money Stuff before you spread more misinformation about how the financial system works. There are no counterfeit shares, ownership is obvious except for cases like voting (because a short can pay a negative dividend but can't perform a negative vote), settlement is not error-prone and is slow on purpose (Russia tried real-time settlement and went back to T+2), HFT is literally just a service provider doing inter-temporal mediation between buyers and sellers rather than some evil money-stealing machine. Front-running is not real, naked shorting is super illegal with very few exceptions. If you can't tell me what part of Regulation SHO governs naked shorting, what the bona-fide market maker exception is and when they are required to fulfill a FTD, then you probably shouldn't be talking about this confidently in public.

I am confident we'll know more in few years. Something being merely illegal has never stopped anyone.

Scalability: While it can't do 25k transactions per second, my Raspberry Pi can validate 600tps with still some headroom. (ie 150x current maximum of BTC; it could actually do 2,2k but I wasn't able to reliably generate blocks because of the stochastic nature of it)

The barriers described in the article are very real, but there is also real work being done to remove them.

Is this what Gell-Mann amnesia feels like? I happen to be a bit into cryptocurrency, and day after day I see these super basic surface-level takes on blockchain get posted here and even upvoted to the top spot. Are the other popular submissions here, on programming languages, the internet, entrepeneurship and what have you of similar low quality, but I just don't have the experience in those fields to realize it? This is a serious question.

I'm having your same exact doubts. The quality of the conversation about cryptocurrencies here on HN is abysmal. Misinformation, or outdated information, is rampant.

Maybe that's the case for everything else that is discussed here, but I just don't have enough domain knowledge to be able to tell...

This is ironic, because your posts are part of the problem.

Very possible. In that case, joke is on me. :)

This happens a lot in topics that the HN community is interested in but not very knowledgeable in general. You can usually trust the top voted articles in programming and entrepeneurship because a lot of people here know about that. But, for example, in maths and music (I happen to know something about those) I see a lot of really bad articles and takes being upvoted.

I think it happens even for topics of programming and entrepreneurship. HN is not a representative sample of the software industry.

> Are the other popular submissions here, on programming languages, the internet, entrepeneurship and what have you of similar low quality, but I just don't have the experience in those fields to realize it?

Yes, absolutely. There's some niche topics that I happen to know a lot about, and the top stories and comments tend to be very superficial and/or plain wrong.

On the other hand, there's usually someone around to call out the inaccuracies :)

Technical content is generally of much higher standard. Although HackerNews sometimes feels a bit like an echo chamber with the type of content that gets popular.

I think there’s just too many crypto-sceptics here, and that’s a shame because crypto solved a lot of challenges they’re talking about, and is on the rally to democratise everything financial related. Something big that many people still miss on, but with about 0.5% adoption rate we’re at the early stage of the innovators stage. https://en.m.wikipedia.org/wiki/Technology_adoption_life_cyc...

Give it a few years until we get to the early adopters and for sure the quality of content will improve. It just needs more people reading about it and adopting it.

Yes, absolutely. Outside of extremely narrow programming niches, discussions on HN are generally very bad.

I don't think that's anything particularly unique to HN but is simply a fundamental weakness of the "one forum for all subjects" approach that HN takes contra Reddit.

A big part of why crypto doesn't work in my opinion is that it's hard to trust software and hardware with your money when you don't own the hardware or software or can't modify it freely. Nation-states take great care to ensure that you don't have exclusive rights to the things and therefore your entire life savings could vanish in the blink of an eye without so much as any guarantee of getting your value back. State backed fiat currency is by far still more valuable than crypto and the proof is self evident at this point.

Unrelated to the content, but I found that blog so visually appealing.

Author here. Thanks

Has there ever been a good break down applying Greshams law to Bitcoin? It seems like an obvious example of it at work-and that’s if we take the premise of Bitcoin at full face value.

Link https://en.wikipedia.org/wiki/Gresham%27s_law

Edit-it also leads me to wonder what the mature characteristics of Bitcoin will be? What happens when all possible bitcoins have been mined? No more transactions?

It seems like most of these problems are technical in nature, which can be solved with better silicon and design schemes.

I was very anti-blockchain for a while, but if you zoom out it makes a whole lot of sense.

The revolution that happened in finance was double entry bookkeeping. To me, the logical next step is to have everyone keep a immutable tamper proof, copy of the ledger synced, in agreement, all the time.

ironically the biggest issue with crypto as an actual currency is stability, which could easily be solved via a stable coin or something tethered. but there’s zero excitement about that and all the excitement is around bitcoin, because all people really care about is that it goes up up in price

The article mentions Ethereum several times, so here are some Ethereum-specific updates for 2021. It's still a work in progress but some progress has been made.

1) Scalability

For now, the big advance is a layer-2 approach called "rollups," several of which are in production already and able to handle several thousand transactions per second. Zkrollups do that without compromising security assumptions at all, but aren't quite to the point of handling arbitrary smart contracts. Optimistic rollups can handle arbitrary contracts but require a delay for funds withdrawal since they rely on fraud proofs.

About a year from now, data sharding will multiply rollup capacity by 23X. [1]

2) Key management

Vitalik agrees on this point and advocates social recovery wallets, where your friends and/or service providers give you some backup. Two popular wallets already implement this. [2]

3) Contract security

This one is near and dear to my heart since I've worked as a contract auditor. It's still a problem but less so if best practices are followed, and projects which did so are holding vast sums without issues.

Of the two examples they mentioned, TheDAO happened when Ethereum was less than a year old and nobody had realized the reentrance issue; also it was nasty, convoluted code, and didn't have a thorough public audit. Parity actually had two problems: they changed their wallet, made a simple mistake, and it slipped through because they didn't bother getting a new audit. That enabled several large thefts. Then they made another change to fix that, still didn't get a new audit, made another simple mistake, and that resulted in frozen funds. Both mistakes would probably have been caught by any decent auditor.

As usual, keeping the code simple and straightforward helps a lot.

4) Probabilistic consensus

The new proof-of-stake chain is probabilistic initially but every six minutes it actually finalizes. At that point transactions cannot be reversed without destroying 2/3 of staked ETH. Currently the staked ETH totals $5 billion.

However, so far this is running on the side, with real ETH but not actually running smart contracts or transferring ETH around. It will be about a year before rest of Ethereum migrates to it.

5) Privacy

Zksnarks are able to help here and Ethereum is getting better at implementing them efficiently, but privacy is not in wide use yet, partly because of gas costs. EY has done a lot of work on implementing privacy in zkrollups for corporate transactions on the public chain.

6) Price volatility

For people unwilling to deal with volatility, there are stablecoins on Ethereum, some implemented as derivatives over ETH.

[1] https://vitalik.ca/general/2021/01/05/rollup.html

[2] https://vitalik.ca/general/2021/01/11/recovery.html

This is an excellent response and I wish it was a bit higher up for people to see.

My only retort to your points would be that much of what you've described is still in nascent stages or at best, early go-live. I'm rooting hard for Ethereum to get ahead of some of these problems, but with all the noise in the community the last few years, it's difficult to determine what is actually legitimate and what is simply being oversold.

My hope is that the Defi boom will continue it drive attention and resources to the space that will help to realize some of this potential. Despite that, at the moment I still can't help but be a skeptic myself.

If crypto didn't trade for the amount that it currently does, no one would even attempt to justify what is an obviously irrelevant data structure (for 99.99% of cases).

BSV has solved 1,2 and 5. 3 is on the way and 4 is a non-issue.

There’s no accountability in blockchain. Proponents of crypto are unwilling to create a currency with specifications they preach without relinquishing the “wealth” they derived from early alpha versions.

No, blockchains are not the future, they are really the reason why one transaction can happen at a time in the whole world.

Even Ethereum 2.0 will have shards which will do away with this anomaly. The only reason flash loans even work with no collateral is because you can be sure nothing else is running on the “world computer” while your transaction runs, so you can roll it back with no risk except gas fees. Vitalik himself acknowledges this, the guy is quite honest and straightforward about its limitations:

Vitalik Buterin: Using Ethereum is expensive, and its blockchain is ‘almost full’ He also said blockchain's 'problem' is that every computer verifies every transaction

Actually blockchains are a first-generation technology that do global consensus for every block, which literally means all transactions in the world must go through one computer in the world (the miner) although it’s a different one each time. And the situation is actually worse, since you don’t know who would mine the next block in advance, every transaction must be sent to every potential miner! Imagine if BitTorrent had every computer store and seed every movie instead of using DHT.

The ability to send or loan arbitrarily large amounts for a fixed fee is a symptom of centralization. In a fully distributed network, transaction fees would have to be proportional to transaction size!

Almost every other protocol on the Internet does not have such bottlenecks in its design. No one asks how many emails or websites can be served per second. Blockchain is trying to secure every transaction using the entire network! That is why so much electricity is wasted just to do 7 transactions per second. The next generation of crypto will actually be able to power payments using embarrasingly parallel architecture. Until then, we have blockchain.

Ethereum is nicknamed the “world computer” for a reason. Gas fees are super high for small transactions like paying for coffee or voting in a secure election. Just one app KryptoKitties can clog up the entire network.

As one example, we built Intercoin apps on top of Ethereum (https://intercoin.org/applications) but we are not going to wait around for Ethereum 2.0 - which is blockchain also. Kik Messenger and others have long gotten off. Ripple, MaidSAFE and Solana use different technologies.

What's your opinion on Layer 2 technologies like ZK and Optimistic Rollups?

I think they definitely have a chance, but sharding is the best idea.

Unfortunately Bitcoin with Proof of Work will be around for a very long time as mining will be extremely lucrative for 100 years. Wasting more and more electricity for a legacy system to do store of value.

"Almost every other protocol on the Internet does not have such bottlenecks in its design. No one asks how many emails or websites can be served per second."

I think blockchain can be a good answer to problems that Bitcoin solves, however the blockchain used needs to not be designed as an MLM scheme with a financial incentive for its adoption, and designed to avoid other unavoidable pitfalls Bitcoin creates that we need to avoid. I think the current iteration of blockchain as Bitcoin only became the incumbent because of the MLM scheme, and that there is a non-MLM solution that can gain adoption - it just has to be understood by democratically elected decision makers first (save regulatory capture which will most certainly happen with the weight of the "army/mob of HODLers."

You touched on something that I have been trying to work out but don't nearly have the expertise to create.

Bitcoin requires PoW because it's implemented as back-pointers, where the global software states that everyone coalesces behind the tallest chain.

But why not just implement a linked list, where the next link is written into the current block, and whomever writes to that next block wins? You would end up with endless blocks, but we can use what we learned with ext2 fs, where we have a circular queue. Once the data has been consumed by the main datastore, it is consumed and is available to be written to again.

You can still store the entire chain in some cheap s3, and anyone who wants to ensure that every command was executed could do so, but most would not.

I would love to see this implemented with torrent technology, such that I could host a website database solely by paying a seedbox company.

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