Hacker News Reader

Comment by kelnos | Hacker News Reader

> Whatever your stance on cryptocurrencies are, what is of little dispute is the business opportunities they have created. Binance and Coinbase are large, successful companies. Poloniex was sold for ~400M.

I find this argument a little weird, because I think we can all agree that bubbles and fad tech isn't really great for society as a whole. If you believe cryptocurrencies aren't a fad and actually provide useful benefits to real people (which does not include "we built a company that does crypto stuff and made a bunch of money"), then ok, fair opinion, but I don't share that view. To me it just looks like a big house of cards built on something that is fundamentally not that useful or valuable, but is propped up mainly by speculation. Building a company on top of it that is sold for $400M is great for the founders and investors in that company, but doesn't mean that crypto itself is useful for society.

I apply this to other things, too... there are ton of lucrative, successful businesses built on top of and around internet advertising, but I think that entire ecosystem is a huge net negative for society.

View on HN

How can you not see what the importance of this new infrastructure? I come here and read these comments and am just at a loss for words at this point. Forget Bitcoin and look at Ethereum. This tech is so powerful I am in some ways scared of it and you call it a fad. The gulf between our interpretations drops my jaw to the floor :)

Can you name some use cases that aren’t trading crypto derivatives or crypto debt?

Ethereum is certainly more interesting than Bitcoin but the use cases so far seem to be more speculation.

One use case:

Buying something without a credit card online.

Finally, I can purchase something without recourse in the event that I'm defrauded.

With Ethereum? That seems like one of the least interesting possible use cases.

* For one, Bitcoin can do this too (though not in many places)

* For two, you can’t do it in many places

* For three, you already can buy online with paypal, prepaid debit/credit, and other checkout solutions, for less fees. You can buy a prepaid credit card useable online in any convenience store for a low fee....

I don’t think this is what OP meant.

And you bought the crypto itself with magic?

With cash

You want to know how you get bitcoins without magic? Mining, trading, buyinc frik

Sovereign identity, DAOs, NFTs (not just the art stuff which atm is a little cringe but game items, land registries, deeds), stablecoins (usdc, dai, yes there is also wilder experimentation here).

I think people can quickly get dissuaded by some negatives like lack of scaling or environmental issues. These are real but are being solved. We really need communities like HN to engage because if proponents are right then the change will be vast and we are unprepared.

My personal favorite outcome is playing out right now. When a tech company is successful they capture near 100% of the value, despite leeching content off users. Ethereum based projects generally share rewards with the community of users that make the protocol/network successful. Applications are forkable, not just the code but the community, too. The community is in control.

And what are some example use cases you can do with those things, or that people are using them for? Genuinely asking. I see people very excited about things like DAOs, but most descriptions seem to be about inter crypto use cases.

With the early internet it was easy enough to see there were use cases like “instantly send a letter to someone across the world” or “order a book not stocked at your local store” or “go directly to Nintendo’s website and read their info”. I remember doing this last one as a kid in the library and was instantly taken with the internet.

What are some similar ELI5 use cases of the Ethereum chain and those names you mention? Other than intra crypto loans, derivatives etc

https://seekingalpha.com/news/3680926-binance-launches-trada...

Liquidity for things that don't normally have liquidity.

Example: like wrapped Bitcoin, you could create wrapped Wine. Say you've got $1 million in a wine cellar. Create a wrapped token which allows you to use it as collateral or provide it to a liquidity pool to generate revenue.

Now your wine is earning you interest. Something like this may already exist...

Same for Tesla stock above. Now that a TSLA token exists you could provide to a pool for interest since it doesn't pay a dividend.

Commodities and future contracts on them have been around for a while now.

On your wine cellar?

Goldman Sachs did it years ago.

https://www.businessinsider.com/goldman-accepted-fine-wine-a...

> Now that a TSLA token exists you could provide to a pool for interest since it doesn't pay a dividend.

Explain further. Why would you be able to have the benefits of owning wine or TSLS and also earn interest on it. That’s your cake and eating it too.

There must be a risk element to the liquidity pool. What risk exposure are you taking by depositing TSLA stock there that you can’t get through normal finance?

> Sovereign identity

Not a real problem. Any civilized country has solved identity already.

> DAOs

A solution in search of a problem

> NFTs

Speculative. Game items, land registries and deeds are a solved problem. If your jurisdiction/company hasn't solved them already with Postgres and hardcopy it's because it's not interested in solving it or it's not a real problem, just a minor annoyance.

> Not a real problem. Any civilized country has solved identity already.

Jesus Christ. So the only problems that matter are the ones in "civilized" countries? What does that even mean?

Perhaps it means that this is a known problem with known working solutions. Countries that haven't solved identity are ones that either don't want to or can't, generally due to a mix of corruption and poverty.

Perhaps I am simply suffering a tragic failure of imagination, but I fail to see how adding a blockchain changes things substantially.

Being able to identify people via blockchain either requires them to remember some esoteric passphrase or an ID card with the identifier on it which...solves absolutely nothing.

> Countries that haven't solved identity are ones that either don't want to or can't, generally due to a mix of corruption and poverty

It's not a known problem because each country has its own context. That's like saying US healthcare problem can be solved just by doing what nordic countries do.

I'm not arguing for blockchain.

Most of the problems solved are not at their first iteration of solution. There will be a next one for most of them as well. None can deny that the crypto field opens opportunities for the next iteration of solutions

I do deny that they open up any opportunities.

Even if they might do things better (which I don't see that happening; solutions are objectively slower and more cumbersome than centralized databases with audit logging), they appear to solve "problems" that aren't really problems.

There's a lot of things that classify as annoyances and inconveniences in the world. That doesn't mean that I'm willing to dump a boatload of cash to solve them.

Identity isn't currently a technological issue. Microtransactions aren't a technological issue solved by blockchains. Ledgers of most things in general don't have a trust issue that's solved by blockchains.

Technies being techies think that technology solves a lot of issues just by existing while completely discounting the issues of trust and control in institutions themselves.

Most blockchain problems are actually governance issues.

This happens every time I ask for use cases in these threads. It is always something just over the horizon.

The early internet immediately allowed people to do cool stuff that was explainable if someone had a moderately open mind. If wasn’t vaporware.

Thank you. This mirrors my experience to a T. It's always those same empty sets of phrases

"Just imagine all those possibilities."

"It may not be there yet, but the smartest minds are working together on it."

"How can you not see what the importance of this new infrastructure?"

"DAOs, NFTs, [insert new useless crypto tech of the day]"

If, just once, they could just provide a single real use case that would actually improve my life... I get it, crypto is great for buying drugs on the internet, money laundering, riding the hype train, speculative investment, and so on. But I just have never seen any real legitimate use case that would benefit from crypto.

Buying drugs sex and hitmen online wasn't cool enough for you? You sound like a dork

We've banned this account for repeatedly posting unsubstantive comments. Not what this site is for.

> land registries, deeds

I hope that will never happen. We really don't need anyone to end up in a situation where a key is lost and they can neither prove they own something nor sell it legally. Also, "transfer your home by mistake" scams. And have fun trying to figure out how to deal with dead owners.

The other aspect of these is that, unless we're also going to eliminate the possibilities of courts ruling on things, the reversibility features of land registries and deeds is a feature, not a bug.

Husband and wife divorce and the courts rule that the husband gets the deed to the house and the wife gets the Ferrari. Husband refuses to transfer the Ferrari's deed. Now what?

Unless you mean that the land registry continues to exist but uses a public blockchain as their database? In which case... why? If they did decide they wanted it all public, auditable, and in the open, they could just publish it as a signed text file every day and anyone who cared could mirror it.

Don't get me wrong, I think there's some really cool possibilities in the space, but lots of the things that get proposed are fundamentally subject to court orders. Unless we change the law so that judges can't say "I don't give a shit what the 'blockchain' says, A belongs to X and B belongs to Y, and anyone who won't play ball can sit in jail for contempt until they get on board," there won't be much point in keeping track of those assets on a blockchain.

Have you ever heard of OpenLaw? https://www.openlaw.io/

Court systems, even traditional ones, can interact with Ethereum. At the end of the day, Ethereum is just a ledger. We humans are the ones that enforce laws and social contracts, Ethereum just helps with the (automated) bookkeeping.

If you want bookkeeping where entries can be rewritten by designated parties, then why would you want ETH / distributed consensus? What does it give you in that case over the existing database with a public mirror?

Also laws change. What you signed in an ETH contract today may be completely different than what's legal / possible to enforce tomorrow.

Because you trade and automate assets through contract logic. The benefits of contract composability on Ethereum mean that the velocity of money increases because now assets can be manipulated by logic without an intermediary. So if someone wants to borrow your asset, you can deposit it into a contract and now can lend it out peer to peer, and have interest acrue on an ongoing basis. Assets can be more easily "put to work". This is exactly what banks do with your money actually, only with Ethereum it's easier so liquidity / velocity is greater with assets because they can easily move around. It needs to have decentralized consensus because otherwise it's not credibly neutral.

If a law changes and affects an on-chain asset, then that logic will need to be reflected on-chain, otherwise the involved parties won't come to agreement in the real world. There are ways to make contracts upgradeable on Ethereum while still preventing someone from stealing funds, like through a multi sig wallet, perhaps with lawyers holding some of those keys. It all depends on how it's structured, but the benefits of using Ethereum (or something like it) are clear.

You keep saying "asset" as though this means anything. Say my asset is a bulldozer.

How is an automated ethereum contract going to lend it out and ensure its return in good working order, or pursue damages if it is not?

Say my asset is actually just a lump sum of regular US dollars, which I would very much desire to be returned to me as US dollars plus interest so I can my US taxes with them at a later date. How is an ethereum contract going to actually ensure I get my US dollars back, or have resource to pursue them, seeing as how no mechanisms of US dollars are dependent on ethereum?

The asset won't be the bulldozer, but ownership of the bulldozer. How did the natives of the Yap islands know who owned which Rai stones? Through social contracts. The same would be the case for bulldozer ownerships on Ethereum. It's just a way for you to prove to other humans (or programs) that you own the bulldozer. If you sell the bulldozer in real life, then presumably the buyer would want the ownership. The difference here is where the ownership data lives, not necessarily who issues it.

There are stablecoins backed by USD reserves, like USDC. Again, the ethereum contract is only a ledger. The people responsible for giving you USD is going to be Gemini who control the supply of USDC. You having proof that you own USDC allows you to withdraw USD.

There are of course stablecoins that are not backed by USD, but rather backed by ETH directly and the USD peg is maintained through arbitrage, oracles and control systems implemented in the contracts.

> There are stablecoins backed by USD reserves, like USDC. Again, the ethereum contract is only a ledger. The people responsible for giving you USD is going to be Gemini who control the supply of USDC. You having proof that you own USDC allows you to withdraw USD.

This still depends on trust. The blockchain doesn’t verify the backing. And USDC’s attestation is rather late.

Well, yeah, it's a centralized stablecoin. The advantage is that it can be used in Ethereum contracts in DeFi. If you want a stablecoin with no trust assumptions (other than the protocol and governance), there's MakerDAO's DAI.

Except you keep talking about automation of assets but you haven't answered the question: how does the delivery, and return of the bulldozer work?

How does the delivery and return of my USD work?

At every junction the answer is "well you trust another party and..." - so why is ethereum needed in the process at all? All of this is just companies providing an API for a service (which generally they don't, now, because it's complicated to orchestrate such a thing).

Ethereum is not contributing anything useful here, because everything important is "trust this person" - at which point I'm really just "hiring a lawyer".

Your bulldozer would need to have a chip installed that can connect to Ethereum and read off who the current authorized operator is. The operator and the owner would have to have cards that contain keys that speak a protocol that the bulldozer understands. Once the loan time runs out, the bulldozer locks out the renter.

The GP is describing a system kind of like Zipcar - you go online, you enter payment, and Zipcar allows your card to operate a car for a period of time. So, you might say, so what, we already have a Zipcar, why replace it with the blockchain?

Because if Zipcar goes out of business, all the cards and hardware on Zipcar cars are defunct. If all the hardware talks to contracts on Ethereum, there's no Zipcar to go out of business - you buy the hardware once, but the operation of the system happens on Ethereum, not in Zipcars' SQL database.

If we're after velocity / speed of movement, why not just add APIs to existing services. Changes would be immediate and required setup would be so much simpler.

Why do I want my contracts publicly accessible on a blockchain? All else equal, I specifically don’t want that at all

You can use zero knowledge proofs if you really want to conceal the information in a contract, but still prove to the world that you've fulfilled that contract. If you're using public Ethereum, then presumably you want your contract to be public.

Short list:

- Pseudonymous Transactions - Multiple Accounts - International Transfers - Customization (smart contracts) - Micro Payments / Internet money - Privacy - Low entry (Phone, internet) - Peer 2 Peer and decentralized - Free Software - Programmable

- Pseudonymous Transactions / Privacy

- Multiple Accounts

- International Transfers

- Customization (smart contracts)

- Micro Payments / Internet money

- Low entry (Phone, internet)

- Peer 2 Peer and decentralized

- Free Software

> Pseudonymous Transactions / Privacy

Not really tech problems; you're bound to the limits of the law

> International Transfers

Not a tech problem; international trx are dropping in price as competition increases; tech doesn't change anything here.

> Micro Payments / Internet money

There is no way to scale the tech to the volume where it makes sense for microtransactions.

I'm not really seeing these as problems fundamentally limited by technology.

You can scale Ethereum by running computations off-chain and submitting batches of zero knowledge proofs on-chain. StarkWare https://starkware.co/ is the leading layer 2 for zk proofs. There are also other platforms that use other zero knowledge techniques to batch computation and sends proofs of that computation on-chain.

> - Micro Payments / Internet money

Isn't eth terrible at this? i have $12 USDT stuck on an eth address because i need to spent $30 worth of eth to send it. That's not even including the fee I'll incur when i have to send eth to the address to fund it..

Censorship-free distributed storage (using Ethereum & Filecoin)

I wouldn't rely on that one. As cool as Filecoin is, LE can query who has a given file and chase them and their ISP until they no longer advertise that file. Without secrecy you can't have a censorship-free solution.

The Ethereum smart contract can advertise the file in perpetuity by being memorialized on the blockchain in an irrevocable way

You'd have to embed the whole file in the blockchain for that. At that point Filecoin is not relevant. That's not censorship-free either - the use of Eth network can be banned too. And LE or govs see who to target too.

> You'd have to embed the whole file in the blockchain for that

No, you don't. The eth contact can control ownership of and permissions to the Filecoin files.

> Eth network can be banned too

Banning the entire network is different than granular censorship of individual files

> And LE or govs see who to target too.

Anonymity is also different from censorship.

You are talking about a lot of adjacencies and "what-abouts"... There are at least half a dozen projects in this vein at the moment, so I'll kindly leave the rest as an exercise to the reader

Eth can't really control filecoin file. Eth nodes are not serving the file. If you go after the nodes which do serve it and remove copies, eth won't have you.

Anonymity is different from censorship, but censorship is trivial in networks where you ask "who has this file" and everyone points at the actual nodes which store it, with public IP addresses.

NFTs!

Maybe that might make you question your assumptions?

I mean, we've had a decades of cryptocurrency and just one actual application has arisen - crime. Money laundering, tax evasion, purchasing illegal items, and that sort of thing.

When it comes down to it, cryptocurrencies say that people trust some obscure algorithm that almost none of them could evaluate over society and governments.

It's a bad sign.

Crypto is a better version of gold and a store of wealth that whose supply isn't at the whims of central banks.

Gold has a purpose. Central banks may pretend that gold serves no purpose in a modern economy, but they still hold on to trillions in gold. I hope eventually they'll get around to holding a crypto currency like Bitcoin. They're just upset they don't have a head start in accumulating a reserve.

Gold is shiny pebbles people are willing to pay money for. Crypto is spreadsheet cells people are willing to pay money for. Well, some amount of money -- mostly Tether though, which is likely in turn backed by the same crypto lol. It's really an open question just how much new real money is flowing into crypto.

It's all pretty clear in the settlement Tether signed [1]. Particular note are #17, #20, #36, #43-46

[1] https://ag.ny.gov/sites/default/files/2021.02.17_-_settlemen...

I don't know what the point of your comment is.

There is a need to have a medium of exchange for trade. Barter has its limitations. For all of history, people have created new forms of money for exchange. The primary characteristics you would need is scarcity, clear ownership, transferability and fungibility. Gold serves this purpose, and Bitcoin even more so.

The fact that gold is a shiny pebble is not adding anything meaningful to the conversation.

If you owned all the gold, people would still want to buy gold. If you owned all the Bitcoin, nobody would want to buy Bitcoin. The only value stored is the network of people pumping it, and the only question is how long it’ll take them to move on to the next thing.

Neither gold nor bitcoin are particularly good for the purpose you are suggesting -- that's why gold was replaced with fiat currency. Because fiat currency was better. Bitcoin chasing after gold's position is unfortunate because of course, fiat is better than gold.

The characteristics you need for a medium of exchange are:

- fungibility.

- the ability to hold its value for exactly as long as you need to hold onto it. Any longer than that is a non-goal.

- stability/predictibility.

- the ability to adjust to shocks, and a changing population.

- low cost of transactibility.

Scarcity is a non-goal. Clear ownership is a non-goal except in as much as possession is 9/10th of the law.

Basically none of these apply to gold, and basically none of these apply to bitcoin. That's why nobody uses it as such.

The first use of gold as an exchange was 550 BC.

Our fiat money has been around since the 1970s with staggering blowups

Come back to me on 2500 years and we'll see who has the better track record.

Generally speaking we don't need to wait as long as the previous iteration existed to prove the new generation is successful.

For instance, I think it's fair to say e-mail is a success, even though the first postal system was established under Cryus the Great in 550 BCE in Persia. The first e-mail was sent in 1971. Are you saying we won't be able to declare victory on e-mail until the year 4492?

You are right! So I should invest in emails right? I'm sure emails will get more valuable as time goes on.

Well I hear "bitcoin is TCP/IP" and for some reason people are trying to buy that lol, so can't lose.

A useful currency is not one which increases in value.

Sure. I think people will be sending physical mail to each other longer than using pop3 smtp and imap

Obviously. However, that doesn't mean email isn't trivially an improvement lol. And it certainly doesn't mean we need to wait two thousand years to make that claim. C'mon now, that's patently ridiculous.

> The fact that gold is a shiny pebble is not adding anything meaningful to the conversation.

Not the parent's argument, but TECHNICALLY speaking Gold as a shiny pebble can be used for jewelry, wiring, etc. It TECHNICALLY has utility.

Bitcoin has no inherent utility. ETH (and derivatives) on the other hand can power a smart contract which actual real business value, but the fact that it has a currency associated to it is generally meaningless.

yay, now it's at the whims of connectivity to a global computer network and cheap energy (not only in the past, but also in the future).

Calling it a bubble is essentially an unfalsifiable statement, there's no way to really disprove it. Many would very much disagree that it is non useful, especially on a forward looking basis (the same way a money losing unicorn is still worth a billion dollars). At what point is it no longer a bubble?

Cryptocurrency/web3 is at its core just technology. Fundamentally, the technology is still not that far advanced from the early Bitcoin days, but the little that is currently implemented successfully allows for ponzis and gambling. Cryptocurrencies currently trade for over $2 trillion, most of that value may indeed be a net negative for society, but that doesn't say anything about the core technology in itself. If cryptocurrency didn't exist, people would be trading tulip bulbs or pumping stocks like TSLA to $700B (oh wait...).

This may be a relatively lawless environment, but as for its current atmosphere, blame the world's central banks, not the crypto builders who are mostly as disgusted by the current situation as sidelined observers.

Decentralized networks have the potential to resolve many of the issues we techies love to complain about. Only a tiny percentage of that $2 trillion is allocated to teams actually working on solving these issues (Binance and Coinbase definitely aren't a part of it), so please try to reserve your judgment when you see developments coming out of crypto. Most of it is under-developed, over-hyped, and just an extension of the tech-bubble ponzi, but some of it will actually change the world. In the same way Tesla is actually positive to society overall and we shouldn't shun their cars just because the company's stock is a meme used in zero-sum-game gambling.

> Decentralized networks have the potential to resolve many of the issues we techies love to complain about.

I continue to hear this yet I never get a _single_ convincing example from DeFi advocates.

Just take Uniswap for example. Now imagine that every asset on the planet could be represented by a fungible or non-fungible token. You can put a Uniswap plugin into any browser and you now have a universal way to swap between any assets you want, 24/7. You could buy real estate, bonds, gold, stocks, currencies, all from your browser.

Now obviously this is not quite a a reality today. Most things exchanged on Uniswap are crypto tokens, but there are a lot of synthetic assets today, like mTSLA (which is a synthetic share of TSLA) and many more. So now I can hold stocks in my Metamask account today. Sure, it's only price exposure, it's not like TSLA has dividends anyway.

And then there's the oracle problem when it comes to real world assets, but this is solvable with existing legal systems, and soon, crypto legal systems like OpenLaw.

So yeah, Uniswap is my go to example of the power of DeFi.

> You could buy real estate, bonds, gold, stocks, currencies, all from your browser.

I'm not sure what world you live in where the biggest problem with buying a six-figure investment instruments is that _I can't do it from my browser_.

There's about a thousand things more important in my mind when it comes to investing. For a day trader this might be a problem. For decades-long instruments it isn't.

All the things you mention have issues that go beyond a browser. You could log on to a real estate page and buy a house and that's technically possible, and digital token doesn't do a damn to improve the experience.

I am a thousand times more likely to run into legal permits issues, KYC and anti-money laundering forms, getting stuck reading contractual obligations that certain assets require, etc.

That's easy for you to say, but there's plenty of people on this planet that don't have access to any financial markets. Now with a smartphone, browser and internet connection, they can buy exposure to US equities without a brokerage from any country.

But it's so much more than that. Have a little imagination. Digital assets could very well be the dominant forms of assets in the future, so easy access to markets to trade these is important.

You just disagree that this has importance, but the market says otherwise, since people are very interested in using Uniswap, and volume will only grow from here. It's undeniable that this is a usecase, and I remember only a couple of years ago that HN would say that Ethereum is completely useless, and yet here we are.

> Now with a smartphone, browser and internet connection, they can buy exposure to US equities without a brokerage from any country.

1. While this is technically become realer and realer every day, it's becoming less and less logistically due to regulation.

2. Eventually people will realize that the frictionless experience of crypto is also its greatest security risk[0]. Why do you think the Winklevoss twins store their wallet backup codes in...you guessed it...BANKS! ha.[1]

The Winklevosses came up with an elaborate system to store and secure their own private keys. They cut up printouts of their private keys into pieces and then distributed them in envelopes to safe deposit boxes around the country, so if one envelope were stolen the thief would not have the entire key.

[0] - https://gist.github.com/chitchcock/1281611

[1] - https://www.nytimes.com/2017/12/19/technology/bitcoin-winkle...

Community-governed vs. advertiser-dictated networks. Free markets. It's a wide topic, I'm surprised you can't find a single usecase you would use or think makes sense.

If it can help you imagine some, take the decentralized primitives: a money/value transfer network, a reputation network, a content delivery network.

Starting from those, many currently gimped online services could be replicated in a way that incentivizes behaviors which benefit users, more than the platform owner. Local economies that currently function only through local, unscalable networks of trust could be brought online.

Of course, if you believe everything is better done in a way that can be regulated by a central entity, then crypto as it stands won't do anything for you (although public ledgers do make investigations easier). Core to crypto is a belief that P2P networks are superior to centrally managed ones.

> Core to crypto is a belief that P2P networks are superior to centrally managed ones.

This. And maybe also that "automatic" processing (enabled by maths) is more efficient and solid than human beings, especially when it relates to trust.

Any "anti-cryptocurrencies" stance has IMHO to state why cryptocurrencies affect him/her author, or anybody else. Stating that it is useless is just an opinion. Many things are judged "useless" by many, let's for example take "billiard": there is AFAIK no solid and widely accepted "anti-billiard" stance. If there is no harm, there is no reason to ban.

The statement that P2P networks are superior to centrally managed ones stands far from reality. There is a certain class of problems where this is true. But like in most computer science problems, distributed systems have a ton of flaws and inneficiencies.

Moreover, trust isn't something mediated by computers. Trust is a question of human societies. Algorithmic trust is not arbiter of trust any more than the thousands of electronic trust schemes, which get gamed at some point or another and where human intervention is necessary for course correction given a measure of authority.

Computer systems aren't outside of human law or common principles of human trust or institutions. BTC and all those other networks are just as if not more vulnerable to being gamed as any other system.

> The statement that P2P networks are superior to centrally managed ones stands far from reality. There is a certain class of problems where this is true.

Yes, indeed. That's enough to be useful, they don't need to be better at everything.

> Moreover, trust isn't something mediated by computers. Trust is a question of human societies. Algorithmic trust is not arbiter of trust any more than the thousands of electronic trust schemes, which get gamed at some point or another and where human intervention is necessary for course correction given a measure of authority.

Yes, and P2P/F2F systems allow more human input in networks. Individuals are free to decide with whom to interact or not. This is more humane than letting a blackbox ML model be the arbiter of truth, decide who is a fraudster and should have their account frozen (Paypal), decide who should be silenced (Twitter), ...

> BTC and all those other networks are just as if not more vulnerable to being gamed as any other system.

Great, there's a $1 trillion bounty for when you decide to start gaming BTC.

Seems like the Theta token is the example that you seems to look for. Cancel culture is a recurring subject recently on HN, between Twitch which that will shutdown channels that infringed outsides of their platform and Youtube which demonetize so many kind of content... This solve both.

Blockchain tech is a next generation internet still in its early days. I don't think it will go away. What do you think these networks will look like in 20 years?

It might be a negative for society now (I assume you are referring to the shady nature of using it as an alt currency), but it's precisely the tech you need to provide an alternative against Facebook or other walled gardens many people love to hate on here.

It solves multiple problems at the same time. Content creators can get paid by design, tech is open an transparent and scalable. It's unlike anything we've seen before.

> What do you think these networks will look like in 20 years?

Exactly the same as it looks today. Because nothing has changed in the last 15 years either (Bitcoin was released in 2006).

> it's precisely the tech you need to provide an alternative against Facebook or other walled gardens many people love to hate on here.

How does cryptocurrency help with any of that?

> tech is open an transparent and scalable.

Citation needed.

Just as an example, have you heard of smart contracts? There's a cambrian explosion happening now among networks, everybody tweaks something to be different from others. I suggest you to take a look around, there's a shocking diversity.

> How does cryptocurrency help with any of that?

How can a globally spanning Turing complete computer help? I don't know, but we will see attempts.

> Citation needed.

Haha, I always forget we are at academic level of discussions :)

But for fun's sake, go to https://coinmarketcap.com/ click a random currency and click source code / read the whitepaper.

Smart contracts deployed to the networks are also open to be inspected, here, take a look: https://etherscan.io/address/0x00c83aecc790e8a4453e5dd3b0b4b...

> Just as an example, have you heard of smart contracts?

Yes. They seem to be a solution looking for a problem. What problems can you imagine smart contracts solving?

> How can a globally spanning Turing complete computer help? I don't know, but we will see attempts.

So the answer is "nobody has thought of a single way this helps, after 10 years of thinking about it".

> But for fun's sake, go to https://coinmarketcap.com/ click a random currency and click source code / read the whitepaper.

OK The first one I clicked was Qtum: https://coinmarketcap.com/currencies/qtum/ . The whitepaper link goes to a 404.

The second one I clicked was VeChain. https://coinmarketcap.com/currencies/vechain/ . It has no link to source code or a whitepaper.

The third one I clicked was Dash, which thankfully had a whitepaper. Let's check it out: https://github.com/dashpay/dash/wiki/Whitepaper

> Currently the Dash network has ~4,800 active masternodes [8]. By requiring 1,000DASH collateral to become an active masternode, we create a system in which no one can control the entire network of masternodes. For example, if someone wanted to control 50% of the masternode network, they would have to buy 4,800,000 DASH from the open market. This would raise the price substantially and it would become impossible to acquire the needed DASH.

Oh my god

> Bad actors could also run masternodes, but not provide any of the quality service that is required of the rest of the network. To reduce the possibility of people using the system to their advantage nodes must ping the rest of the network to ensure they remain active.

Oh my goddddd

Nobody making this has any clue about distributed systems, do they

Outstanding example of murdered by words.

So it's possible to find bad examples, I get it.

What problems smart contact solve?

With my brief experience, they compute the state of a transaction in which everybody agrees. Why is that cool? You don't need an authority to tell who is right.

> Bitcoin was released in 2006

It wasnt. It was released 9 January 2009

> What do you think these networks will look like in 20 years?

My prediction is that some useful inventions will be adopted by regular people ok with regular old reputation based trust. And then some actual useful things will happen.

I was reading a report from my country's central bank experiment with e-money. A PoC token thing with a one time use rule enforced by a trusted network of intermediaries. They expressed some discomfort with this being a scalability issue and also not allowing offline transactions in case of infrastructure issues.

Ironically I found myself thinking that this could be solved by a digital equivalent of cheques.

Since when does the head of the fed need to crackdown on bubbles?

BTC is over 10 years now, and the most powerful monetary authority in the world is now afraid of it. How is this slipping by people's minds?

The btc maniacs are winning.

I admire that controversial opinion, but would you really be comfortable with a federal authority telling you which software on your computer is "great for society as a whole" and which is a fad?

Oh I totally would if it were fucking up my country's attempts to meet the Paris climate accord.

But I'm not American and have no problem with a nanny state doing the right for society (crypto libertarians really, really hate society I have noticed).

How is crypto not useful? Is money useful?

Totally get your point here, however the counter that always gets me is the rate of quantitative easing in the US/UK. Not sure on accuracy of this but I've seen figures(cityam website) saying around 18% of all US dollars were created in 2020. There's a good argument that it's safer financially to put money into crypto. Personally I feel quite unsettled with both traditional finance and crypto at the moment.

Take crypto out of the equation, what are the implications of the fed issuing a programmable currency? Many financial services would become obsolete. What do I need a stock broker for? What do I need a bank for? You have Wall St and other sophisticated investors profiteering and competing against the general public, devaluing our purchasing power, making leveraged trades because they know the public will hold the bag. It's a system that exists to favor the few and it's time to disrupt the orgy.

Why are you asking this question here? While I agree with this idea, it has nothing to do with crypto.

Humanity already solved this problem: https://en.m.wikipedia.org/wiki/Tax

Most white collar crime is obvious and where the bodies are buried is largely known.

There’s simply no political will to do anything about it.

Crypto becoming mainstream isn’t going to change indifferent minds.

Physical reality is a thing. Burying our heads in ephemeral concepts is distraction, not change.

We need to fix how we select our representation.

Winner-take-all elections lead to weak control over who represents your interests. It's like being party to a lawsuit where one attorney represents all parties.

And you can't fire your attorney for four years.

In the single attorney situation, SELECTING the attorney would be the major struggle. And then that attorney has all the power. The parties would then have to lobby the attorney to win the case.

And that's why our elections have become such a struggle and why lobbyists can buy votes.

And that's why Wall street firms can call up their friends and get a multi-billion dollar bailout.

If the fed did a cryptocurrency, it would be backed by the full might of the US Government — and all the things that the government can do if it decides to print more money. This also includes military and police powers.

Which brings me to the other point: currencies are governed at both ends; at issuance and at use. If you use a crypto that’s not approved, the government can simply arrest you for using one of its competitors. The treasury could likely do this without even needing to issue new laws, just new guidance. Governance is the reason for the existence of the US Treasury and Federal Reserve. It’s a core feature of any currency and the government isn’t going to abandon that lever of hard power. They’re only going to do a cryptocurrency that gives them more power, not less.

All of the stakeholders you list have a vested interest in not being disintermediated. They’re also deeply embedded in policy creation. I can’t help but notice the way crypto evangelists speak of crypto is the way leftists speak of Marx: in very vague terms outlining a utopian vision of a new economic paradigm that is frustrated by the sticky realities of the momentum of money and power. The reality of Marxism is different from the utopia, as would be the realities of central bank crypto (hint: it’s gonna be authoritarian af).

I can see value in democratic nations agreeing to use a single global blockchain they've created, without an MLM-Ponzi structure redistributing wealth simply because of adoption/use (consensus by agreement, not through greed/financial gain).

Totally would never happen; it would require too many people to give up too much power. See also Brexit (the UK never fully integrated into the EU over this exact currency control issue).

I almost think the several countries that remain in the EU which choose to avoid or delay joining the Eurozone are better examples. While the UK evidently had other concerns with EU membership besides the Euro, even pro-EU governments seem to encounter opposition when it comes to the currency union.

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

I agree. That's why China is doing it.

wow, the DCEP is the big brother version of crypto currencies; https://www.inaa.org/how-does-chinas-dcep-currency-work/

"Instead of relying on forecasts and estimates, the data collected by DCEP payments will provide China’s central bank with a treasure chest of information that can be used to monitor economic trends, predict consumer behaviours and resolve issues before they would normally reveal themselves."

Do you know more about the DCEP? who is setting the rate? How do they support offline transactions? Do they have contracts?

US is not the only country in the world. There are many countries whose currency and government are much weaker to fight such an adoption.

Exactly. I think all of the people that say "Crypto doesnt solve any problems" just live in countries with strong institutions which dont have the problems crypto solves. Even in those places though crypto is useful as a hedge against institutional failure.

Exactly, money is a reflection of power.

The majority of economic activity is not "programmable"--if I order a ship load of steel from some country, how is that contract going to be enforceable/verifiable with cryptoeconomic techniques?

Economic != financial, which was the point of the parent I believe.

Finance is one of the largest sectors of the US economy, it is central to its role in leading the world economy.

Additionally, finance is what controls and directs the economy. It is the business of money itself, in both the public and private sector.

Banks play a central role to any economy. Digital currencies can be centralized and controlled in the same way as any state owned enterpeise.

The vast majority of finance deals with "real" assets--stocks of companies (arguably blockchainable, like the Topl thing that a sister comment mentioned), commodities (e.g. futures), logistics, etc etc

Not sure how that all can be trustlessly secured with blockchain technology

That's not programmable today, but may be in the future.

Presumably the shipment has a series of checkpoints, which add some amount of traceability. There's also the potential for insurance for blockchain contracts.

I only recently learned about oracles, but I suspect we're only getting started on unlocking the potential of blockchain.

If there are oracles making the progress at each checkpoint along the way available from the blockchain, and insurance contracts for potential disruptions at each stage, your contract can ensure payment on delivery, and the supplier can be insured against any disruptions.

Who operates those checkpoints? Isn't there going to be some sort of implicit trust there? Even if somehow you built a machine that executes instructions that is verified on the blockchain, how are you going to make sure that machine's firmware is secure?

edit: I think this is a valid thing to tackle potentially as a company, but right now it seems impossible.

Any discussion of programmable currencies is always going to run straight into the oracle problem. It is extremely hard to join on-chain to off-chain things without dragging in a party that is implicitly or explicitly trusted. And the moment you do that, the purpose of cryptocurrencies goes away, as a single database run by the trusted authority is several orders of magnitude more efficient and convenient.

A firm created at Rice University is actually trying to solve exactly that problem. [0]

[0] - https://statistics.rice.edu/news/student-founded-blockchain-...

And how exactly are they going to blockchain-ify the coporation's interactions with other normal corporations?

I don't follow it at enough of a detailed level other than to know the UN is using it as a proof of stake concept for the transactions, and then reimbursing the token holder in their local currency (caveat - I think this is correct, but again I'm not involved with them at any detailed level).

You may also want to see these for more info:

https://www.forbes.com/sites/darrynpollock/2020/02/27/blockc...

https://www.businesswire.com/news/home/20201203005110/en/Tra...

> It's a system that exists to favor the few and it's time to disrupt the orgy.

I've got news for you:

BTC: 2% of the anonymous ownership accounts that can be tracked on the cryptocurrency's blockchain control 95%[0]

ETH: Just 376 People Found to Own a Third of All Ether Cryptocurrency[1]

[0] - https://www.bloomberg.com/news/articles/2020-11-18/bitcoin-w...

[1] - https://www.bloomberg.com/news/articles/2019-05-15/just-376-...

Are you familiar with the concept of cold wallets held by exchanges? https://www.longhash.com/en/news/3257/A-New-Way-of-Measuring...

I am. What's your point?

If you don't think crypto, an anonymous unregulated security, is being manipulated by a small amount of people then I have a bridge to sell you.

I think that OP's point was likely that many of these wallets are actually cold wallets for exchanges and institutions, rather than individual whales. The article's definition of whales is pretty loose anyway: "individuals who hold their assets in digital wallets and not on an exchange".

>What do I need a stock broker for?

You still have that stuff with crypto, just crypto exchanges not stock exchanges.

>What do I need a bank for?

Banks do two main things - taking savings and lend that out as mortgages. Crypto has been no good at part two.

Basically most financial services would still exist if in modified form.

P2P loans already exist and are only becoming more competitive as the market grows. This (Bitcoin) will cause a complete disruption of the financial system given enough time.

Reply on news.ycombinator.com