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I'm a software engineer, I understand the blockchain and crypto. I've been around Bitcoin since 2010.

And yet I still don't know a single high utility use case for the blockchain. People keep saying it's the future but I can't really figure out how regular banking, accounting, or general software applications can't do the same basic task as one on the blockchain - but quicker and at a lower cost.

For a moment, forget about the "so we can track things forever" and "not based on trust" - those are more ideological than anything. Why should I use the blockchain right now?

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It's all explained in https://youtu.be/xCHab0dNnj4 — the ONE and ONLY thing a public blockchain is useful for is censorship-resistant payments.

Which might include good things (donation to your favorite whistleblower or buying weed or whatever) but definitely WILL include bad things — for example it is uniquely well-suited for paying ransoms, hence the ransomware explosion!

Again, this is the ONLY thing. It is horrendously bad in every way, there's just no other choice for this kind of usage.

Aren't "censorship-resistant payments" part of "not based on trust" thing - which gp excluded as legitim explanation?

These are different, and both are very important technical terms. It's not correct to exclude them. "Not based on trust" is the precise reason why proof-of-work mining exists.

> censorship-resistant payments

... that are useless unless you can also buy something you need with the contents of your cryptowallet. Which is a big if, although clearly the answer is sometimes "yes".

You can buy actual money on the exchanges, so you "can" "buy" anything. That's why the assholes who write ransomware accept bitcoin.

But if you do that, the payment is no longer "censorship resistant", because the exchanges deal in government controlled currency.

What about the ability to hold your savings in a currency that's prohibited by your government?

Places with high inflation often have capital controls that make it illegal to hold foreign currency. You see your savings get cut in half every year and there's nothing you can do about it.

It would be great if there was a political solution where governments don't impose capital controls on their people. But in the mean time, crypto allows you options to hold a more stable currency (e.g. stable coin), or at least one that doesn't only go in one direction.

> People keep saying it's the future but I can't really figure out how regular banking, accounting, or general software applications can't do the same basic task as one on the blockchain - but quicker and at a lower cost.

There isn't.

I think a lot of people falsely think that Web3 is going to consume Web2 and everything will go on the blockchain and be decentralized.

It just won't... we will still have centralized products, much like we still have "read-only websites" but, we are going to see a large increase in decentralization.

I feel that we are the "early 1990's internet" stage of decentralization. There were (apparently) article after article, denouncing the internet as a fad, that it will be dead any day, just for <x>, just for <y>, "The internet is tearing apart the fabric of society"...

Decentralization, in my opinion, is an inevitability. If the human race becomes multi-planetary and space-faring, we will need to be able to run independent nodes of services while keeping individual nodes honest and accurate.

Do I believe BTC or ETH will be the winner? Probably not. But the huge explosion in decentralized tech and allowing technical individuals to sharpen their sticks for it will definitely lead the way for a better, healthier world. I believe the same for Hyperloop; it might fail but ultimately we will win because we have excited a huge number of people about high-speed travel along with having knowledge about what worked.

And the multi-planetary argument is just one argument. We are on the cusp of a huge upheaval in government and society imo. We are at all-time peak of distrust among individuals, corporations and the gov't. The only way forward is going to be trust-less systems where everyone can inspect why and how things are working.

I don't think that 2031 will look anything like 2021, just like 2011 didn't look like 2001.

I really wonder about this decentralization. If you really think of it all of the big players are already decentralized. The whole cloud is about decentralization. Hot swapping to new location when some datacenter goes down... Routing your traffic to nearest one to save fractions of cents on data transfer. I see no reason why this wouldn't work with multi-planetary system too?

The whole blockchain just seems so inefficient way of doing it. And with NFTs we aren't even putting data itself on the chain. Shouldn't whole point is that the data is there and will live forever on the chain, just latest node telling who owns it is updated as needed?

I feel what you are describing is redundancy, not decentralization. Decentralization is inherently inefficient imho.

> We are at all-time peak of distrust among individuals, corporations and the gov't. The only way forward is going to be trust-less systems where everyone can inspect why and how things are working.

I agree there's a lot of distrust in society but maybe not all-time peak because to interact with so many moving parts in our complex environment today, I think we may be trusting of more things. But perhaps that's for another conversation.

The main thing I'm curious about is your statement that the only way forward is thru trust-less systems. I personally believe we could also try to increase trust in other people and institutions.

Why do you think the only way forward is thru trust-less systems?

> Why do you think the only way forward is thru trust-less systems?

<hand-wave-y weirdo ranting about social trust>

I don't think we _can_ restore trust as you suggested. I think that social media and the "modern internet" has broken humans. Humans, in my opinion, are incompatible with trust outside of a very small circle of people. So, we need to move to a system where no one trusts anyone or anything, data is either strictly controlled by an individual person (the biological person, not a corporation or any other legal funny business) or is freely open for everyone to see.

I think that Fake News is largely only able to propagate because there has been a failure in trust. It's not (entirely) an educational problem, it's a problem that the system is opaque, the participants are opaque and the distributed trust the world was built on no longer works because we are no longer dealing with a disconnected population that only build strong forms of trust within themselves across generations. We are still working on the assumption of trust or using biological signals to determine trustworthiness of a person or fact. That's _really_ bad when people don't know what or who to trust because society assumed implicit trust would work.

We have to move past a web of webs trust-wise where each web has only a few edges to other webs ("I trust this individual to speak for me") and move to a single web of each node (person) having to reach consensus with other nodes using transparent, consensus-reached facts.

I think we _could_ do make our gov't and officials completely transparent but that still relies on trust & honesty to report what's happening without bias (which, imo, isn't possible for humans).

</hand-wave-y weirdo ranting about social trust>

> Why do you think the only way forward is thru trust-less systems?

Trust is easily broken or exploited. We are better off if each node, either biological or not, determines from provable and transparent facts ("this was agreed upon by 51%+ of trusted nodes") rather than being expected to implicitly trust opaque facts ("trust us... the money is definitely there. ;)")

> We are better off if each node, either biological or not, determines from provable and transparent facts ("this was agreed upon by 51%+ of trusted nodes")

In this hypothetical, what if the 51% of 'trusted' nodes conspired to lie? Also, I'm confused how the nodes would be 'trusted' if the system were truly 'trustless'—trusted by whom?

Do you not think that we would have to trust things that we don't understand? Even if I had in front of me all the transparent data about how a SpaceX rocket worked, I wouldn't be able to tell if it were true without relying on someone else I trusted to have more knowledge.

> I think we _could_ do make our gov't and officials completely transparent

Maybe I just see it differently, if something is completely transparent and I have all of the knowledge (and understand it), I wouldn't define that as 'trust' but rather 'knowledge' or something alike. For me, 'trust' has an inherent uncertainty to it, a doubt, where I choose to believe in spite of that doubt.

I trust that this message arrives to you the way that I send it, because I trust that Firefox is not tweaking the input, I trust my ISP is not injecting/removing text that I send, I trust that HN is showing you what I typed, etc. I have some idea based on how you're replying that those things happened, and yet I'm still trusting that it will work each time I send something, despite having not much idea how it works at each level.

> I think that Fake News is largely only able to propagate because there has been a failure in trust.

I agree that many people are trusting certain people/institutions less than in the past. I disagree that opaqueness is causing distrust, as I again believe that there is little if no 'trust' when things are completely transparent and known.

Personally, I think this has more to do with the cause:

> Trust is easily broken or exploited.

I think many of us have felt betrayed, ignored, cheated, lied to, abandoned, etc. Things have happened to us that have hurt us and made us feel afraid that people don't really care about us or actively are trying to hurt us. I do think this part can be changed. I think we can get better at apologizing, at forgiving, at mending our relationships.

I say this because I don't think truth is that connected to trust. I think if you tell me the truth (let's say truth = >99% of people believe it's true, as 'objective truth' can be really hard to pin down), and yet I don't trust you, then it doesn't matter if you tell me the truth or not, I will believe it's a falsehood. Conversely, if you tell me a falsehood and yet I trust you, then it doesn't matter if you tell me a falsehood or not, I will believe it's the truth.

From this perspective, trust is less about an 'objective truth' and more about one's personal subjective experience, often colored by the emotions one experiences based on different stimuli.

</counter hand-wave-y weirdo ranting about social trust>

Yes, I believe is easily broken or exploited. Do you believe it cannot be rebuilt?

> Decentralization, in my opinion, is an inevitability. If the human race becomes multi-planetary and space-faring, we will need to be able to run independent nodes of services while keeping individual nodes honest and accurate.

I think this is the most overlooked aspect of decentralization efforts. The conversation we've been having since the dawn of BTC quickly devolved into applying the legitimate criticisms of BTC specifically, to the concept of decentralization as a whole, instead of accepting that it was an experiment which proved "good enough" to scale without too much friction or technical failure.

The concept has already evolved substantially in the past decade, and these experiments will continue to inform how we handle decentralization when it finally becomes critical to societal function, which is inevitable for the reasons you mentioned and more.

> I feel that we are the "early 1990's internet" stage of decentralization. There were (apparently) article after article, denouncing the internet as a fad, that it will be dead any day, just for <x>, just for <y>, "The internet is tearing apart the fabric of society"...

It's true that those articles existed but I think there were two key differences: they were written by [generally] old people who weren't at all conversant with the technology and were recognized as such by many people at the time. It was widely recognized that the dotcom stocks were overheated and some of the companies had no chance but at the same time most people were buying PCs and internet connectivity because there were tons of things they _did_ want to do.

That situation is generally reversed today: the people who understand technology are highly skeptical and the people most bullish about cryptocurrency do not show much sign of understanding either the technology or the markets where they're looking for buyers.

The strongest parallel I see now are the cryptocurrency bulls sound exactly like this sales guy I knew 1999-2000 who was convinced that the primary reason to buy a stock was how much the share price was increasing. Sadly, he neglected to cash out before the crash and ended up substantially in the red.

Regarding decentralization, I think it's important to consider how the internet has become less decentralized over time. The situation in the 90s was far more distributed but the centralized solutions have won out in many spaces, and it's not just well-funded rent-seekers but also factors like cost, reliability, support, and often even performance. I'm philosophically inclined towards open standards and distributed protocols but I have to say the experience has generally not lived up to the dream.

The incentive structures enabled by web3 (in addition to distributed state) can solve the issues that led to the failure of the decentralized web.

At least I see a path for this to be true.

Can you explain in more detail? It won’t help with the technical issues I mentioned, spam is still a big challenge, and blockchains add new failure modes related to the inherent performance and reliability limits.

There is an interesting argument about micro-transactions. The practical challenge there is getting the price to be enough below the cost of credit card transactions to spur adoption, especially since the processors have plenty of margin to cut since their overhead is so much lower.

The bigger problem is one of market: beyond the questions about restricting sites to people affluent enough to pay for those micro transactions, it’s unclear how many people will actually pay as much as advertisers for most sites. This has been tried a number of times over the years but there have been relatively few successes.

Sure - I find this stuff super interesting and went from an open minded skeptic to cautiously optimistic (and have a positive long term view).

I think urbit’s approach to spam makes sense. Non-zero cost IDs (cheap) in the form of NFTs that grant network access and a pseudonym. This makes spam no longer economical because spammers can be trivially blocked. Pseudonyms also accrue reputation.

It basically moves auth and network complexity into the OS layer under an abstraction which makes application deployment way simpler. No distinction between a user and a server also fix a lot of the other broken things that cause federated systems to centralize or end up DOA to be avoided.

In the ETH world, decentralized state and the ability to incentivize network nodes and development via tokens and programmatic money make it possible to push back against the things that advantage centralization.

The issue is the protocols have to be good enough to solve a lot of this stuff, the old web didn’t do this well for the reasons you suggest and administering Linux servers is way too hard.

I understand the dismissal of technical people because crypto is filled with know-nothing scammers and gamblers, but it’s worth taking a closer look. There’s lots of interesting stuff happening in the space. A lot of people dismissed the web in the 90s too. There can be a bubble and a crash, but still be underlying tech there that will have a big impact.

> A lot of people dismissed the web in the 90s too. There can be a bubble and a crash, but still be underlying tech there that will have a big impact.

Yes, I always think of Google in that way. They just powered through the dot com crash by being really useful.

I'm sure there are examples of this in crypto.

I’ve been in the same boat for a long time, and still haven’t seen an application that’s compelling. But I think I’m starting to warm to the ecosystem, despite all the obvious silliness, so let me run my thinking by you to see if it’s crazy:

Blockchains don’t really let you do anything useful that you couldn’t do before. But they make some things much easier and more accessible, by a big enough margin that they unlock some kinds of broad experimentation that weren’t really feasible before.

Take what I assume will eventually be a category-defining use case, “Facebook, but owned and governed by its users.” With some imaginative lawyering, you could build that in a durable way today. But it would take capital and know-how most kids in dorm rooms don’t have access to. It’s like how the launch of AWS didn’t let you do anything that was _impossible_ to build with on-premise hardware, but it unlocked a lot of innovation anyway.

Right now Ethereum is a very shitty version of Lambda plus DynamoDB, but with some interesting primitives around payment, ownership, and governance baked in. I actually have very little faith in the Ethereum roadmap given some dabbling I did in it a few years ago, but there are competing protocols with much much better performance and developer ergonomics, so they’ll either catch up or get replaced like a bad operating system.

"Facebook, but owned and governed by its users" Only good in theory, not in practice. A Facebook or Twitter built on blockchain will be too expensive. The PoW requirement will make it expensive to add new posts to the chain. Over time, as more and more people join the network, the cost will only increase. Yes, noone will be able to ban the President of the US from this network but only select few who can afford to pay the huge gas fees will be able to post.

The other side of that is abuse: if no one can be stopped from posting, that means no one can stop spammers and other phishers, prevent things like revenge porn which are required in many jurisdictions (e.g. how would it go if you couldn’t ban Nazi content in Germany?).

Whether or not that system could even function, it doesn’t sound like something many people would choose to pay for. It seems like it would be Usenet except far more expensive and slowed by the inability to function asynchronously.

One of the most practical things seems to be to skirt around existing financial law.

Seems one could (more easily) run unregulated lotteries, raffles, gambling, Ponzi schemes, money laundering, public securities, etc.

I don't mean to imply this is all because people want to do heavy criminal activity, some may just be trying to avoid the bureaucracy.

Regardless, I see it skirting laws just as Uber and AirBnB kinda did the same thing for taxi medallions and hotel regulation, respectively.

This isn't why you should use the blockchain, but I do see one concrete useful scenario for it: keeping track of things like shipments between companies that don't trust each other.

As goods move around, if you receive a damaged or bad item, you have an immutable, easily accessible paper trail of claims that people have made about the good.

It solves the oracle problem by sidestepping it: what is on the blockchain isn't truth, but verifiable claims various people have made about the truth. Easily accessible for lawyers in resulting lawsuits.

It is also something that's actually very hard to solve with a traditional database in a centralized manner, because then you have to trust whoever runs the database to not falsify records.

It also doesn't suffer from a lot of issues that public blockchains like cryptocurrencies face, like limited transaction volume or warming the earth for mining.

There might be other reasons why it wouldn't work out, but it seems like an actual useful tool there.

What does a blockchain add over simple PKI? The latter is far more efficient and it can run offline so you’d have the possibility of, say, a factory or farm giving something to a truck driver with limited or even no network connectivity — something like a Yubikey could do the crypto more securely with the power budget of a solar cell.

Taking from the other sibling comment, this seems to be the sort of thing I mean:

https://certificate.transparency.dev/howctworks/

In your example, how do you handle updates when a certificate expires or needs to be revoked? The Yubikey won't have internet with that power budget, so you'll have to manually update it.

Whenever you update the Yubikey, just update it with a snapshot of whatever certificates you care about from a blockchain like the link above. The Yubikey itself doesn't have to be a fully-participating node.

That's certificate transparency, which few blockchain proponents seem to consider a blockchain — and the developers of Trillian definitely don't class it as such as per https://transparency.dev.

I think that is a useful concept and that's not terribly far out of line with what I was proposing — the main idea was that the useful part is basically the chain of signatures for a transaction but that it's only worth so much infrastructure because so much of the system depends on real-world activity outside of it. If my driver signs receipt of your goods by having both of them wave a key over a phone, that is useful information but there's a cap on how much value you can see from it because it doesn't say whether those statements were honest. The types of blockchains proponents outline are too expensive for that but something like what CT does could be useful — the key part being that it's kept small, efficient, and allows offline operations to handle limited connectivity.

You don't need the wastefulness of a blockchain just to record a company's claims and hold them to previous claims.

https://certificate.transparency.dev/howctworks/

> Certificate logs are append-only ledgers of certificates. Because they're distributed and independent, anyone can query them to see what certificates have been included and when

That sounds like a blockchain? In the same sense that a git repo is also a blockchain.

At any rate, from what I can tell from reading that page, that's the sort of thing I'm talking about.

No proof of work, no competitive mining.

Only things I see are underserved markets. Which are either illegal or probably not big enough or there isn't enough pressure to make them work on global scale. Then again world is complex place and financial transactions between different regulatory environments are especially so.

The only good use case I found is a distributed primary key DB. If you don’t trust the party that would normally hold the DB, this could be useful. Mostly some contract stuff. People are getting hyped about selling in-game NFTs. I still don’t get this because the value of an item is determined by the game, not by the NFT “record”. If I can make a game where your “expensive” NFT item has no value, then what’s the point. But people have build out virtual value systems before. Art is a good example. Nothing of “utility”, but people value it nevertheless.

So reality is it’s mostly hype, but hype could turn into a long term value assignment. Or not.

Speculation? You believe you can get more fiat money out than you put in.

You could launch a token with a picture of a dog on and become a billionaire?

> track things forever

indeed, is that another word for "idle (unused and useless) all thinkable time"?

Or 'I can't think a usecase, but eternity may bring one along.'

Thanks for saying this. I started exploring the technology and the ideology of crypto and blockchain few months back and came to the same conclusion. A public, permissionless, PoW blockchain is inefficient by design and a private blockchain is pointless. Much better and cheaper solutions already exist.

Blockchain is solution to a problem that doesn't exist. It's more ideological than practical.

I wrote about exactly this - why you should care about the blockchain - here (1) and here (2). Curious what you think?

(1) https://mobile.twitter.com/viksit/status/1450518759387582472

(2) https://mobile.twitter.com/viksit/status/1452687368511655936

Here's a way to look at it:

Web 1.0 - Permissioned Read-only

Web 2.0 - Permissioned Read & write

Web 3.0 - Permissionless Read, write & own

Not only is that not what Web 2.0 was about, the idea that web 3.0 does "permissionless" versions of read & write, and also somehow "own", is hilarious.

You shouldn't. Don't use it.

Choice.

You should try writing a smart contract. I didn’t believe in the utility until I did that. You can think of a blockchain like Ethereum as a really shitty global computer. It’s so weak that all it can do is transactionally change a few bytes of data associated with a key. Using this shitty computer, you can implement a currency or some type of token system. The important bit is that it’s a shitty computer _now_, but maybe it won’t be so bad in the future. When you implement a smart contract, you realize it’d be pretty nice if you could run complicated programs on a global computer and not need to worry about running your own infra like a DB or hosting.

Try deploying the same contract on a different chain, like Polygon. It's a lot more fun. Super cheap, almost instant and is a preview of the future. If ETH 2.0 is like that it'll be a game changer.

> could run complicated programs on a global computer and not need to worry about running your own infra like a DB or hosting

You mean like serverless ?

Serverless is just the execution context. You still need to worry about data storage. As I said, I didnt understand the difference until I tried to build something. It just feels different than serverless. One thing is that you still need maintain your serverless setup. If you stop paying the bills, your app dies. That doesn’t happen on the blockchain.

Except those companies can decide to change the rules at any time and can kick you off. And that's increasingly on the basis of mob rule and authoritarian governments.

Single or even handful of global computers running everything sounds extremely scary... Something goes wrong or there is some issue and whole thing comes to halt with decent chunk of economy... Then fights start how to fix it. How to roll things back. What to reinstate. How that effects further things. What if at this point some physical transactions have happened?

Are we going back to 40s and world needing 4 computers?

This is what a couple of my former colleagues worked on under the name of "internet computer". No affiliation, but I find it interesting.

https://dfinity.org/

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