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Comment by armchairhacker | Hacker News Reader

wrt blockchain I was actually thinking of peers getting payed with cryptocurrency for participating in the p2p network and storing/providing non-blockchain assets.

I assume it's easier to calculate and submit micropayments with a cryptocurrency than to connect with a real bank and do them with real money. Plus peers can trust that they get the correct payment for the amount they contribute to the p2p network, especially if the payment is via a smart contract.

The one big advantage of blockchain I know of, is that a group of people can negotiate some sort of payment (e.g. I do X work I get Y coins), and once they agree, nobody can break the negotiation. So assuming everyone understands what they're doing, they will get automatically payed and nobody will run off with all the money (of course if people don't understand what they're doing, they can get scammed like the many many crypto scams we've seen so far).

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> wrt blockchain I was actually thinking of peers getting payed with cryptocurrency for participating in the p2p network and storing/providing non-blockchain assets.

It’s easy to imagine where the money goes out, but where does the money come in?

Obviously the answer is “the users” but that’s the problem: Not many users are going to be interested in paying ongoing fees just to exist on a social network when they can get the same thing for free.

There will always be a core group of true believers who will pay for these networks, but the networks aren’t very useful if it’s limited to a small group of people willing to go through all of the trouble and keep paying just to exist on it.

This is the big question that a lot of the web3 conversations conveniently sidestep: How much is it going to cost? Everyone seems to assume some hypothetical future blockchain that costs very little, but the bottom line is that you still have to incentivize all of the nodes and peers to keep the data and you need to do so in a decentralized manner that will always be orders of magnitude less efficient than hosting on a standard cloud server. That inefficiency is expensive.

>...the bottom line is that you still have to incentivize all of the nodes and peers to keep the data and you need to do so in a decentralized manner that will always be orders of magnitude less efficient than hosting on a standard cloud server. That inefficiency is expensive.

I'm not sure I agree that it will always be orders of magnitude less efficient. I think if you have enough decentralized nodes you can get closer to the ideal painted by "edge computing". I also think people wouldn't mind storing information in a decentralized way as long as it's cheap enough to do so. It kind of reminds me of the transition of most companies to cloud computing -- "why pay a subscription for a server when I can pay a one time cost for my own?"

Although people slowly began to see the benefits of paying proportionate amounts of money for arbitrary usage patterns, having a dedicated team for hardware availability, and the ease of scaling out, it did take a while to get there. Just like those who have come to understand the benefits of cloud computing, I believe people will come around to favoring decentralized models for some use cases. I also believe the amount of data most people generate and use on the web is so minuscule that the storage costs will be so cheap to pay for that people will worry about it as much as they do a purchase from the McDonalds dollar menu.

Blockchains may be generally less efficient for storing and processing lots of data (though there are specialized blockchains for storage, for GPU rendering, for computation, and so on), but the flip side of this is, do most users of web2 services want their data collected, processed, analysed, rebundled, and resold to the extent that it is?

In some cases, maybe. But I think what pays for the servers running all these services is the advertising industry. Whether you like it or not, you are paying for the services you use, but in ways that are often opaque to you. Even if you agreed to let Facebook use your data, you have no transparency into what exactly they're doing with it, and you don't benefit from it beyond access to their platform. In many instances, you'd be fine with a subset of the functionality (do we really need AI-curated news feeds designed to keep us infinitely scrolling)?

> but the flip side of this is, do most users of web2 services want their data collected, processed, analysed, rebundled, and resold to the extent that it is?

Facebook doesn’t sell user data. Google doesn’t sell user data. Twitter doesn’t sell user data. They sell ads. The user data is strictly kept internal to the company because selling it would weaken their market advantage.

This is one of those weird myths that has been propagated by fear-mongering journalists and politicians. You’d think tech people would be the first to call out this logical error, but for some reason it has been embraced as the ground truth despite being trivially easy to fact check.

> Whether you like it or not, you are paying for the services you use, but in ways that are often opaque to you.

In 2021, the trope that “If you’re not paying, you’re the product” has been repeated to everyone a thousand times over and it’s old news.

But paying for a product doesn’t mean that your data and usage patterns aren’t still being extracted for profit. Just look at smart TVs.

Blockchain doesn’t magically change this fact. It’s theoretically possible to design systems where certain types of data are obscured or encrypted, but it’s a huge leap to assume that web3 services will, by default, encrypt everything and obscure access patterns. Just look at how easy it is to track Bitcoin transactions between wallets publicly.

Yes, many users DO want (or at least do not care enough to walk away from services that abuse) their data to have all those things done to them because they get to use the service for free. The concern over use of private data is restricted to a very small subsection of the population, and the vast majority will be more than happy to keep using free services that abuse their data over paying for something with a subset of features the free option has.

> do most users of web2 services want their data collected, processed, analysed, rebundled, and resold to the extent that it is?

People vote with their feet. At least today, the answer is "yes." A compelling alternative may change their mind. A blockchain-based social media network is difficult to image doing so for the majority of people.

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