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Comment by luhn | Hacker News Reader

Re "early days," servers as clients, etc: There are a lot of very real problems with crypto, and the solution always lies in new technologies. Slow settlement and high gas fees? L2 networks. Limited global TPS? More L2 networks or alternative L1 chains. Wasteful energy use? Proof-of-stake. No connection to real world data? Oracles. Relying on centralized APIs? Light clients are in the works. Can't trust that you'll get an untampered version of the dapp? I don't even know the solution for this but I saw a very complicated flowchart about it, so I assume there is one.

Every layer adding more complexity and more fingers in the pie.

All the while, nothing ever actually seems to get fixed. Like, high gas fees has been a conversation for years and clever people have made dozens of solutions, but everybody seems to still use vanilla Ethereum.

And these problems don't seem to be the usual problems of new technologies dealing with limited feature sets and primitive tooling, these problems fundamentally undermine the whole point of blockchain. It's not like you can only make simple distributed apps and more advance stuff will arrive as the space matures, you literally can't make a practical, truly distributed app at the moment.

The more I learn about web3 the more it seems like vaporware, and the end result will be a bunch of web3-in-name-only, VC cash-grab apps.

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I'm sorry, it's difficult for me to find a truly charitable interpretation of this response. But I'll do my best.

Blockchains started very simply. Famously, Bitcoin's whitepaper is just a couple of pages long. Simple systems are nice, but they can't solve every problem. As problems were discovered, solutions were proposed. Most solutions were themselves the simplest solutions to a given problem, so naturally, as new problems are found, new solutions almost always introduce complexity. This is not unique to crypto - see, for example, HTTP, or HDMI…

I can't see a world where this wouldn't happen. Ideas usually start small and simple. Additional capabilities introduce complexity. That is not a bad thing.

Also not a bad thing: people taking different approaches to identified problems. Ethereum saw congested L1 and didn't want to sacrifice decentralization, so they focused their effort on L2. Other developers thought differently, and adopted faster, less decentralized L1s. Great!

> you literally can't make a practical, truly distributed app at the moment

Another issue is that the goalpost is ever-shifting. We have truly distributed apps. Because they were successful, they got used, and on one particular L1 that meant expensive competition for block space. Does that make the achievement invalid? Or does the fact that most popular browsers currently don't have built-in integration with ENS and IPFS, allowing for decentralized frontends, also make the effort invalid?

Again, I struggle with truly charitable interpretation of your argument.

"Successful" is an ambiguous descriptor. What do you have in mind when you say that? From where I sit, ENS and IPFS are unambiguous failures. Do you disagree?

Ok I'll bite. Why are ENS and IPFS failures?

Because they don't work. They're too slow and unavailable to meaningfully address the goals they were meant to solve.

That's my opinion. But you didn't give me yours.

> This is not unique to crypto - see, for example, HTTP, or HDMI…

HTTP and HDMI provided actually useful things to regular people despite their shortcomings. Crypto has been solving technical problem after technical problem for over a decade but has yet to offer anything useful to a non-enthusiast.

> Another issue is that the goalpost is ever-shifting. We have truly distributed apps.

And the only thing they are useful for is moving crypto around between enthusiasts. "Make something useful for regular people" should not be difficult goalpost for something that claims to be world changing.

>Crypto has been solving technical problem after technical problem for over a decade but has yet to offer anything useful to a non-enthusiast.

This is too dismissive of Crypto. I’m not a crypto bro but Bitcoin did actually solve a real problem: a completely digital decentralized immutable record. I hesitate to call it a currency, but it created something that was digitally scarce . The economic value it created can be seen in the Silk Road or in ransomware.

At one point the internet was also a problem looking for a solution too so I don’t think it’s a fair criticism of the technology.

> Bitcoin did actually solve a real problem: a completely digital decentralized immutable record.

That doesn't describe a problem though, it describes a technical solution.

> I hesitate to call it a currency, but it created something that was digitally scarce.

My comment was about web3 really and the associated hype, not so much cryptocurrencies themselves. I agree there's something there, though not entirely convinced it won't always be illegal sales or scams.

> At one point the internet was also a problem looking for a solution too so I don’t think it’s a fair criticism of the technology.

I see this repeated a lot but it's just not accurate. E-mail was invented within like 2 years of the internet and immediately allowed universities to exchange messages with one another. It doesn't take a networking enthusiast to see the value in sending a textual message instantly across the globe. Meanwhile I've never seen even a description of a web3 product that doesn't rely on architecture or politics to explain why it's useful.

As a non-enthusiast I agree with your points. I’ve heard a lot about cryptocurrencies since 2010 and I’ve never had a need to use them. Paying for goods or services on a black market might be a valid use case, but I, like vast majority of people, have never needed to do that. Smart contracts sound like an interesting concept, but again, I don’t really have anything in my life that could use them in the foreseeable future.

> That doesn't describe a problem though, it describes a technical solution.

I'll present a problem that that solution solves. That cryptographically backed record establishes a closer approximation to the abstract idea of "ownership" than anything has before.

I was a pretty naïve first-time home owner in that I was surprised to learn about something called "property tax". "property rent" would be a better description, since its not a one time fee (like most taxes) but something you have to pay to a government entity in perpetuity. Don't feel like paying it? You get booted off "your" "property".

Title theft and fraud are also a thing, and we even have "title insurance" to help mitigate falling victim to it.

Neither of these things is possible on a cryptographic blockchain (eviction or theft). Ownership of the NFT cannot physically be altered without the owner's volition. Establishing a link between the NFT and the underlying asset is certainly a problem, but it's not one that blockchains are attempting to solve.

> Ownership of the NFT cannot physically be altered without the owner's volition.

Until you own a house on the NFT and realize that NFTs has literally zero relationship between you and the object you "own".

I'm sorry, I still don't get it. What is the problem with a house ownership that crypto would solve? Would it eliminate the property tax? Would it eliminate an eviction if I don't pay the property tax? Would it eliminate one type of ownership fraud without introducing a new type of ownership fraud?

It would eliminate

1. forfeiture without volition (https://en.wikipedia.org/wiki/Civil_forfeiture_in_the_United...)

2. title theft/fraud (https://old.reddit.com/r/legaladvice/comments/pyhjwv/home_fo...)

3. Many of the needs for title insurance (https://www.investopedia.com/terms/t/title_insurance.asp)

It doesn't need to do much else to be obviously beneficial. Keep in mind that once upon a time the entire internet functioned without https. I have no doubt many of the same arguments against crypto(currency, tokens) were also made against cryto(graphy) not long ago. A vast majority of users of cryptography still subject themselves to side channel attacks (stupid passwords, phishing) and yet somehow still benefit from the existence of https without even realizing it.

Since a lot of people still get hung up on the need for a link between an NFT and an underlying asset, consider that we somehow establish the exact same kind of link between a fancy piece of paper (a title) and a plot of land. If you forewent some of the (imo misled) notions that blockchains need to be 100% "trustless" and decentralized, and you JUST upgraded your county's title database with a blockchain, and you accepted that various forms of government are going to have to enforce a lot of it, hopefully it is evident how (1) (2) and (3) above now go away or at least change significantly.

> 1. forfeiture without volition (https://en.wikipedia.org/wiki/Civil_forfeiture_in_the_United...)

Only if the authorities ceded their power to the blockchain, in which case this situation is unlikely to arise. If the sovereign power in the area says you don’t own it, a record on someone else’s computer doesn’t matter much.

> 2. title theft/fraud (https://old.reddit.com/r/legaladvice/comments/pyhjwv/home_fo...)

By replacing it with electronic fraud, which is much easier to do at scale and harder to disprove. If a good phish / zero-day gets you a house’s worth of money, even more people will try it.

> 3. Many of the needs for title insurance (https://www.investopedia.com/terms/t/title_insura

It only solves the question of transfers, possibly but currently not at lower expense than your local government. It doesn’t solve the analog problems which are the most important reason to have title insurance, such as surveying errors, and you also have new problems like the possibility of someone claiming a malicious transaction years ago.

> Only if the authorities ceded their power to the blockchain, in which case this situation is unlikely to arise.

Great! Let's do it. It might take a few thousand years but this doesn't represent a problem with blockchain technology. The authority can and should still be around to enforce the blockchain, but they should still have to respect it.

>By replacing it with electronic fraud, which is much easier to do at scale and harder to disprove. If a good phish / zero-day gets you a house’s worth of money, even more people will try it.

This is an argument against electronic records, not blockchain specifically. They are side channel attacks.

> and you also have new problems like the possibility of someone claiming a malicious transaction years ago.

What do you mean by this? Maybe an example would help.

> This is an argument against electronic records, not blockchain specifically. They are side channel attacks.

What makes it a blockchain problem is removing the safeguards. If you are saying the blockchain is an immutable record controlled by individual private keys, you are saying that any mistake is permanent. If you allow corrections, you don’t need the expense of a blockchain.

> > and you also have new problems like the possibility of someone claiming a malicious transaction years ago. > What do you mean by this? Maybe an example would help.

I go to buy your house. You show me the chain saying you own it. A month later, someone says you phished their grandfather who was in hospice (or that the transaction was made by a spouse without approval, etc.) and now there’s a dispute about whether the transaction was authorized. Traditionally this is handled with third parties who can confirm that, say, they had everyone in the same room and checked ID. Moving to a model where access to a private key is all that matters requires similar solutions before you can say it removes the need for title insurance.

> What makes it a blockchain problem is removing the safeguards. If you are saying the blockchain is an immutable record controlled by individual private keys, you are saying that any mistake is permanent. If you allow corrections, you don’t need the expense of a blockchain.

That makes sense. I think the need to correct mistakes, and mistakes I concede will definitely happen, is debatable. There are benefits to some for correcting mistakes and costs to some for it as well. Figuring out whether the benefit exceeds the cost is way out of my scope.

This reminds me of another problem that I've I haven't seen mentioned yet. https://www.newyorker.com/magazine/2021/12/13/half-a-billion... In a fixed supply cryptocurrency like bitcoin these kind of losses will inevitably lead to deflation.

> Moving to a model where access to a private key is all that matters requires similar solutions before you can say it removes the need for title insurance.

You're right, and I was careful not to say "all" of the needs for title insurance.

I think its worth considering the possibility that not being able to correct even that emotionally charged dying grandfather case, and instead seeking recompense between the two parties most directly involved in the crime (the grandfather and me in your example) is OK. For example, I'm now required to purchase a newly minted and desirably worthless "restitution" NFT from the grandfather for the price I sold the house (or the market value, or w/e is fair), or I go to jail. If we try to backtrack the whole transaction, you are now probably being harmed as well. Is that really better? What if we figure this out 10 years after the initial sale, and the property has changed hands 5 times already. Good luck rolling that back.

Edit: I have just started reading the bitcoin whitepaper and at least half of the introduction is about the possible benefits of the irreversibility of transactions. https://bitcoin.org/bitcoin.pdf

Looking at this thread it's not clear if any one of the 3 examples you provided (civil forfeiture, title fraud, need for title insurance) would benefit from crypto technology today, and it's not clear if they would ever benefit from it (3 thousand years from now is not a good argument).

I hope you realize how unconvincing all this sounds to a non-enthusiast. Without a killer application (like email for the internet) I'm afraid crypto isn't very useful, and it's been 13 years without a killer application.

What exactly isn't clear? How cryptography works / benefits people? How applying cryptography to ledgers and ownership databases works? Or how it's all going to be enforced?

By the way I'm not pro crypto in that I'm not trying to convince people to put money into it. I think the energy costs of all crypto token systems are prohibitively high right now. That, and the deflation problem I personally think are the biggest unsolved problems in Bitcoin right now.. But somehow I can't even get past what a cryptographic ledger is and how it's beneficial on this forum, of all forums. Yikes.

I've been patiently explaining my understanding of the ideas behind crypto. 3Blue1Brown seems to be favorably received on this forum, so maybe this will help educate you: https://www.youtube.com/watch?v=bBC-nXj3Ng4 NFTs are a natural extension of a cryptographic ledger as it's explained in that video. It's just adding non fungible tokens to the otherwise fungible bitcoin tokens being exchanged on the blockchain, and we'd like those non fungible tokens to represent real world objects, rather than just USD.

Aside: I feel like we're in the dark age of cryptocurrencies right now. People are just incredibly unimaginable. I imagine 7,000 years ago there was a guy named Bob who wanted to trade his apples for some oranges. A girl named Alice wanted some apples but didn't have any oranges so instead she offers a piece of gold jewelry. Most of the Bob's on this forum would tell her to ** off. But there was some Bob who accepted the gold jewelry realizing he could then exchange that jewelry for Tom's oranges. Suddenly we went from a barter society to one that uses a currency.

Eventually we stopped using gold as a currency and started using slips of paper with lots of fancy counterfeit protection mechanisms like blue and red threads and fancy inks. Along comes cryptocurrency with mathematically provable counterfeit protection mechanisms, and no one sees the benefit. I just don't get it.

It's very clear how cryptography benefits people. We are not discussing that, we are discussing cryptocurrencies and blockchains and cryptographic ledgers. And we are not looking to explain how all that works, because first we need to identify real world problems which would be solved by those technologies, and yes, somehow you can't get past how they are beneficial. You have provided three examples, but others have questioned whether crypto would solve them, and I don't believe you have provided adequate arguments to defend your position. It was fairly easy for me to understand the motivation behind cloud computing, or stock market, or credit cards. Blockchains originally sounded like it might be something as significant. Yet many years later nothing particular useful has materialized. And it's not even clear if it ever will.

> and I don't believe you have provided adequate arguments to defend your position.

We'll have to agree to disagree then. Maybe a more relatable and simpler problem would help, this one exclusively with cryptocurrency (no NFTs):

I can print a piece of cotton/paper that looks like a US dollar bill, manipulate it and with enough effort make it look convincing enough to fool someone in to thinking its a real dollar, then go to the store and exchange it for some good. I simply cannot do that with a Bitcoin.

If you want to debate whether or not fabricating a dollar bill out of something significantly less valuable than a dollar bill is a problem that needs solving, find someone else.

If you want to debate whether or not you can fabricate a Bitcoin out of nothing, you're now entering the realm of theoretical mathematics. I am not an expert in that, but the crypotgraphy and cryptology classes I took as an undergrad ~15 years ago were good enough for me to trust it.

If you want to debate whether that singular problem is worth a system like Bitcoin, you're probably on to something but it seems like we haven't gotten to that point yet.

> I can print a piece of cotton/paper that looks like a US dollar bill, manipulate it and with enough effort make it look convincing enough to fool someone in to thinking its a real dollar, then go to the store and exchange it for some good. I simply cannot do that with a Bitcoin.

This is true but rare because it’s harder to do than it might seem and the U.S. Secret Service is quite good at shutting down counterfeiters. This costs less as a fraction of the economy than operating the Bitcoin network does, and it still provides true anonymity.

Thank you. All I was looking to do was convince someone that crypto does indeed provide a theoretical benefit, so that the conversation could evolve from "crypto SUCKS, and it doesn't do ANYTHING GOOD, and its a SCAM (read: I lost money speculating), and I DON'T LIKE IT", to: are the problems that crypto solves worth the costs.

Other problems/solutions aside, there is probably some gas fee that would make crypto worth it just for anti-counterfeiting. Do you have any sources for a numeric estimate on what counterfeiting costs the US economy?

Yes, counterfeiting is a problem. But just to clarify, to solve it - are you proposing we replace US dollar with bitcoin? If you are, have you thought this through? Has anyone? Do you think this will happen in the foreseeable future?

Thinking this through is exactly what I want the conversation to be about. I'll help you out:

[2006] "Counterfeiting of the currency of the United States is widely attempted. According to the United States Department of Treasury, an estimated $70 million in counterfeit bills are in circulation, or approximately 1 note in counterfeits for every 10,000 in genuine currency, with an upper bound of $200 million counterfeit, or 1 counterfeit per 4,000 genuine notes.[1][2] However, these numbers are based on annual seizure rates on counterfeiting, and the actual stock of counterfeit money is uncertain because some counterfeit notes successfully circulate for a few transactions." (source: https://www.treasury.gov/about/organizational-structure/offi...)

I think Bitcoin representing the totality of USD is infeasible, but there may be some adjustments or optimizations to the transaction costs associated with it that make a new currency seem more reasonable (no less scary, certainly, but fright is an emotion and economics is mathematical).

(edited quote to be more relevant to cryptocurrency specifically)

I'm confused, is the problem counterfeit currency, or counterfeit goods? Because if latter, I don't see how crypto is relevant, and if former it does not seem like such a huge problem: https://en.wikipedia.org/wiki/Counterfeit_United_States_curr...

Fixed my quote. At this point I'm having a conversation with myself, so mistakes are bound to become more likely. I'll probably revisit this in a few days (or just take my thoughts elsewhere) but for now I'm out!

Awesome! I find it really pleasantly surprising when people take time to sit and think about things rather than reacting quickly, so regardless of whether or not I find myself agreeing with whatever conclusions you reach, I appreciate you doing this :)

> That makes sense. I think the need to correct mistakes, and mistakes I concede will definitely happen, is debatable. There are benefits to some for correcting mistakes and costs to some for it as well. Figuring out whether the benefit exceeds the cost is way out of my scope.

> This reminds me of another problem that I've I haven't seen mentioned yet. https://www.newyorker.com/magazine/2021/12/13/half-a-billion... In a fixed supply cryptocurrency like bitcoin these kind of losses will inevitably lead to deflation.

This to me is the big question: you could solve a lot of these by introducing trusted third parties but once you've done that it really raises the question of whether you need the full blockchain level of processing overhead or some kind of distributed ledger. Lots of people have been in situations where they were mugged, an elderly and/or impaired family member made a mistake or was taken advantage of, etc. and they were able to recover by proving this to a bank or similar institution. It can be painful but it's an important option to have for most people and I think that's going to be a key impediment to people trusting a system. I do this professionally and I'm not sure I'd want to commit to something where someone who gets my private key with a zero-day can do whatever they want.

> The authority can and should still be around to enforce the blockchain, but they should still have to respect it.

Why?

I’m serious, by the way. This seems like the same sort of thinking I see in supporters of various anarcho-x-isms, where whichever x is substituted in, it is somehow retained despite the anarchy.

You might like the shiny new thing, but anyone whose job it is to enforce the things shiny does, can do that at much lower cost by using the current mechanisms instead of the shiny.

Because that cost is, at least theoretically, offset by additional benefits. I'm not arguing in favor of reduced authority. People seem to conflate decentralization with anarchy.

I'd like to be able to not even have to think about this happening: https://www.reddit.com/r/personalfinance/comments/pywwnp/how...

I'd like to know that when I sell something on Craigslist, the currency I'm receiving for my good isn't counterfeit.

I'd like to know that when I receive $50 on Venmo/Paypal out of the blue:(https://www.reddit.com/r/personalfinance/comments/q60vnv/ven...) I don't have to wonder whether that $50 is legitimate, or about to vanish when Venmo realizes they got scammed. Better hope you didn't send the $50 back to the scammer, because somehow your transaction is more "authentic" than the scammer's, and Venmo's still going to disappear $50 from your account.

Oh and if someone writes me a fraudulent check and I cash it out, I'd better have some lawyers ready.

> People seem to conflate decentralization with anarchy.

Heh, I’m sorry I guess I phrased that badly. I’m saying there is an authority in all anarcho-x-isms, one which proponents ignore.

My intention was to suggest an analogy of that hidden authority in blockchains, in that everything blockchain can do, can also be done cheaper by having a trusted party do the conventional stuff, and in some cases — such as legal disputes, where you have to bring in a trusted mediator — you end up with all the weaknesses of both the conventional approach and blockchain.

> I'd like to be able to not even have to think about this happening: https://www.reddit.com/r/personalfinance/comments/pywwnp/how...

We all would, but blockchains don’t prevent that. If anything it makes the problem more likely, because the current status quo is reversible in a court when sufficient evidence is supplied, but in the blockchain, possession of the private key is ownership.

Private keys get lost and stolen all the time even for relatively trivial things; in the case of property ownership, even if the private key is permanently offline — e.g. existing only in the form of a QR code on a sheet of paper in the bottom of a locked filing cabinet stuck in a disused lavatory with a sign on the door saying “Beware of the Leopard” — for something as valuable as property, you can bet it would be stolen.

> I'd like to know that when I receive $50 on Venmo/Paypal out of the blue:

To which the direct counterpart is: what happens on a blockchain if you get scammed and want your money back? Do you really want the authorities to do what the blockchain says, or do you want your money back?

>To which the direct counterpart is: what happens on a blockchain if you get scammed and want your money back? Do you really want the authorities to do what the blockchain says, or do you want your money back?

I think you're misunderstanding this particular example. If someone sends me ~$50 BTC out of the blue and then somehow contacts me to say "oops can I have that back?". There are only two options with a block chain: (1) I send it back or (2) I'm up $50. With Venmo, and this has happened to people, there's (3) I send the $50 back, but the original $50 was from a pending deposit that was fraudulent, so Venmo decides I owe Venmo $50, and now I'm down $50, the thief is up $50, and Venmo is square.

This will probably come as a tremendous shock to a lot of people in this forum but Venmo is going to look out for itself before it looks out for you. There are many cooperative scams (of multiple people vs Venmo) and it is not always easy for Venmo to determine exactly what is going on or who is scamming who.

Replace "Venmo" with "Coinbase" and you could have the exact same scenario in the future. "Oops, sorry we messed up, the fraudster's transaction got rejected and he didn't actually send you $50 in BTC like we said he did. What, you already initiated a payment of $50? Tough luck".

This is a Venmo problem, not a "fiat currency" problem.

I agree that it is a "Venmo problem", but more broadly it is a "human controlled/authority financial system problem". I do think something analogous could happen with Coinbase, particularly because your interactions with Coinbase require the use of centralized financial systems (bank account info or credit card info). I also think Coinbase holds and can access your private key. Correct me if that's wrong.

What's more important is that you aren't required to use Coinbase, or even anything like it, to use cryptocurrency. In fact sites like Coinbase defeat at least some of the point.

> you aren't required to use Coinbase or even anything like it, to use cryptocurrency

That's a purely academic argument; It's like saying that "you aren't required to have a Visa or Mastercard card in order to make purchases online". Technically speaking that statement may be true, and you may even find hermits that don't have a card... but, in any practical sense, everybody does, and that's how they do their online purchases.

> you may even find hermits that don't have a card... but, in any practical sense, everybody does, and that's how they do their online purchases.

It never stops. :( A person's tiny subset of experience is rarely indicative of anything but that, a subset. I conduct every transaction I can via credit card for two reasons: cash back and protection via the ability to revert fraudulent transactions. But I also have known rational, "techy" (SWE) people who refuse to use them. And I know way better than to attempt to project my experience on "everybody".

https://www.theglobaleconomy.com/rankings/people_with_credit...

I mentioned "in every practical sense" - I'd bet that those that don't have credit cards don't do online purchases either, in the vast majority of cases (>95%). But indeed, that's true in the western world - I might be worng for Africa and Asia/China where mobile-only payments are more prevalent.

France is an example of a western country with < 50% prevalence according to that site. I think you might still be biasing your estimates (the 95%) due to your own experience.

Amazon.com, for example, accepts checking accounts and retail purchased gift cards for US residents.

That just credit cards ([edit] From your own source, roughly 85% French had debit cards[3]). According to statista[1], France has ~50% credit card penetration, but roughly ~100% have debit cards.

Also, digital buyer penetration was <63% in 2017 and is 78% now[2].

[1]https://www.statista.com/statistics/1098129/credit-cards-and...

[2]https://www.statista.com/forecasts/891312/digital-buyer-pene...

[3]https://www.theglobaleconomy.com/rankings/people_with_debit_...

It’s not a misunderstanding per se, rather I’m saying there are other scams besides the one you’ve listed, specifically ones which have basically the same effect, but if you follow the blockchain as word-of-God you they’re not fixable, and if they’re fixable you’re not following the blockchain.

https://xkcd.com/325/

I see.

The reason I started listing problems that I think crypto solves is because it seemed like many people were either not aware of or not acknowledging the existence of them. This was leading to lots of misinformed discussion. I'll summarize what I think are my least controversial conclusions, primarily for my own sanity.

Cryptocurrencies have the following benefits:

- No one (authority or otherwise) can seize assets that exist and belong to you on the blockchain, from the blockchain, without knowing your private key. People can seize your assets only outside the blockchain. People can lay claim to your assets inside the block chain, and attempt to coerce or induce you to transfer them, but they can't do it themselves. How useful can that be in practice? I don't know and am not discussing it. It's a discussion worth having, but only if people truly understand and acknowledge the prior statements.

- Some subset of all scams, namely those involving reverted and repeated transactions, become impossible. Because by definition blockchain transactions are "non-reversible" and prevent "double-spending". (control F either quoted term: https://bitcoin.org/bitcoin.pdf)

- Counterfeit is impossible (ex: you cannot fabricate a bitcoin out of nothing).

Cryptocurrencies have the following drawbacks:

- Immense energy consumption.

- Increased complexity over almost every existing financial system.

- A propensity to attract scammers that build scams on top of or around blockchain technology (but with a few notable exceptions, not IN it).

- Mistakes can't be fixed by an authority. They have to be fixed through the cooperation of all those involved.

> Ownership of the NFT cannot physically be altered without the owner's volition.

Yes it can, if something nefarious happens - phishing, an account hack, etc. As soon as the account changing the record is compromised (e.g. NFT owner account), the NFTs are gone with no central authority to get them back. E.g. https://www.vice.com/en/article/qjb4nq/investor-says-bored-a...

The real estate example is interesting, how does changing a record work? Does the home owner do it, or some central authority?

> Establishing a link between the NFT and the underlying asset is certainly a problem, but it's not one that blockchains are attempting to solve.

Ownership that translates to the physical world is the only thing that matters. In the digital world, everything can be copied. There is no ownership.

Ownership happens only, because in the real world, some authority/court/government (as a proxy for society) acknowledge your ownership.

Now you’re saying that blockchains don’t even try to link the ownership part to the underlying asset. What is it good for then?

>In the digital world, everything can be copied. There is no ownership.

Actually I think you've got it backwards. In the physical world, molecules are fungible. I can take one carbon atom out of the Mona Lisa painting, replace it with some different carbon atom, and most people would call it the exact same Mona Lisa. Maybe one day an atom-level reproduction of the Mona Lisa will be possible. The whole point of the Non Fungible in NFTs is that they are mathematically not interchangeable.

I'm getting philosophical now but I'd argue ownership in the physical world is inherently flawed, to the point that "ownership" is a meaningless ideal. You are extremely limited in your ability to affect various forms of matter in the universe. This includes affecting matter in a way that most people would think represents "ownership", for example transporting some good from one location to another location that we'd say puts it in your "possession". Some individual can come rob you. A government can seize your assets. A meteor can annihilate the planet. And there is next to nothing you can do about it.

But you have supreme power to affect the data that is associated with your wallet on a cryptographic ledger (subject to another person/wallet that you are engaging in transactions with), as long as your private key is truly private, and as long as cryptography is mathematically sound. I think that's kind of cool.

This strikes me as a very strange argument. If physical ownership is moot because we don't have ultimate control over physical reality (at least, not to the point of bossing giant meteors around), why does that not also apply to the physical interface to the systems that allow a more "pure" form of ownership?

You have supreme power "as long as your private key is truly private", but that is obviously impossible. At minimum, your key must be known to at least one device that you did not design and don't fully control - the one signing transactions on your behalf.

Let's suppose that you completely eliminate all supply chain issues by building your own hardware wallet from a box of scraps in a cave or something. Congratulations! You have now embedded your "supreme power" in a physical object, and your ability to exercise control depends entirely on the model of physical possession and ownership that you have declared unsound. Hooray?

> why does that not also apply to the physical interface to the systems that allow a more "pure" form of ownership?

Maybe it does. My argument is that the best we can possibly do wrt "ownership" is this mathematical ideal. Maybe a more natural conclusion from this argument is that ownership of any form is moot. The optimistic interpretation of this is that one day we'll end up in some kind of star-trek-esque universe where no one wants for anything. The pessimistic interpretation is that we are all ultimately slaves to the powers that be.

> at least, not to the point of bossing giant meteors around

Completely aside, I realize you are just using my own example here, but this made me chuckle because after I wrote what you are replying to I learned of https://www.nasa.gov/planetarydefense/dart

There absolutely could be rent/tax as well. Say you had to interact with a smart contract to do things with your title. That contract as well as having fees to execute at all can also take a cut. This is quite common already.

I used the example of property tax to challenge the idea that I had (and assume a lot of people have) of "ownership".

With blockchains, you own an NFT. Period.

With literally every other form of ownership in this world: You own things subject to your adherence to laws and rules, and your trust in the person or entity at the other end of your transactions, and various other people/entities involved in the transaction.

The difference is actually quite subtle, but still important.

What you say of NFTs isn't true. You could absolutely be legally compelled to transfer an NFT. All the blockchain makes trustless is the transaction. You know that the person sending you tokens in exchange for your NFT can't pull a fast one mid-transaction. Outside of that your ownership is still only as firm as your ability to defend it. As we see from everything from rug-pulls, NFTs being stolen and markets (with by far the most significant volume) banning them.

Being compelled to do something legally (do this or go to jail) and having it spontaneously happen to you without your consent or knowledge (a government entity gains access to your checking account and you lose access to it) is still a distinction worth making in my opinion.

I thought the idea underlying all of crypto[currency/graphy/whatever] is that as long as you have exclusive access to your private key, you control what happens to your information.

Property titles are interesting things.

Consider the title to some property on the blockchain.

What happens in the following scenarios to the title ownership when:

  * the owner passes away with heirs
  * the owner passes away without heirs
  * the house burns down and the hard drive holding the private key is lost

How does the title on the blockchain get transfered to a new owner in any of these situations?

Finally an interesting problem. Off the top of my head I'd guess you'd issue a new token to executor of the estate and establish that token as representative of the underlying asset rather than the original token.

If that can be done, can it be done through other processes? Like eminent domain? failure to pay property taxes? divorce settlements? property lien?

If a title-token on the blockchain can be changed through external systems that don't involve the transfer the title-token itself - saying that the old token is no longer valid, this new one is the valid one, how does the blockchain protect against title theft or fraud?

If there is the ability to mint a new title-token for a given property, what's the point of it and what advantages does it have over the existing records?

I suppose it could work a little bit like freezing your credit report. There is a school of thought that a credit report should be frozen by default (to deter identity theft) and only unfrozen for certain major events.

So with crypto, you could get benefits analogous to a default-frozen credit report, plus the ability to do some transactions, and would only "unfreeze" (ie give up the protection of crypto) for these rare, ultra catastrophic events such as loss of life, loss or compromise of private key.

> If that can be done, can it be done through other processes? Like eminent domain? failure to pay property taxes? divorce settlements? property lien?

So no it wouldn't be done for any other processes. You can still attempt to induce transfer of assets (there is still a legal and punitive system). But "ownership" now has a stronger meaning.

>> Bitcoin did actually solve a real problem: a completely digital decentralized immutable record.

> That doesn't describe a problem though, it describes a technical solution.

The problem is that we can't seem to form consensus in a world inundated with technology. Bitcoin and other chains have shown that you can create a state that reaches consensus under specified rules that are enforceable by computation and not violence.

Yes it has many problems, and the consensus is limited to the blockchain "world", but I envision a future where block chains can be valuable "truth" layers to the computation stack that society operates on.

Practically, I believe blockchains can be solution for creating online decentralized identity (https://www.microsoft.com/en-us/security/business/identity-a...), which will help solve our information consensus problems (https://consilienceproject.org/democracy-and-the-epistemic-c...).

I also believe they have much to offer in modernizing the financial system, and providing better ways for governments to implement monetary policy.

The problem is that we can't seem to form consensus in a world inundated with technology.

I have no idea what you mean. What is the problem?

> I see this repeated a lot but it's just not accurate. E-mail was invented within like 2 years of the internet and immediately allowed universities to exchange messages with one another.

This is untrue. Look at my answer here https://news.ycombinator.com/item?id=29847559 .

But still, the point is that even ARPANET solved real problems: instant message exchange in text form, without the need for specialized telegraph operators, is a real problem with real value for anyone who can afford it - even at the scale of ARPANET.

That was being done by teleprinters, from the late 1800s. The UNIX concept of the TTY comes from teleprinters and teletype.

But it is true. It is pretty clear that "Internet" in this context means "ARPANET", built in 1969. First email was sent over ARPANET in 1971.

ARPANET was built to solve a very real and clearly defined problem - connecting computers over a shared network. Here's the original problem statement:

For each of these three terminals, I had three different sets of user commands. So if I was talking online with someone at S.D.C. and I wanted to talk to someone I knew at Berkeley or M.I.T. about this, I had to get up from the S.D.C. terminal, go over and log into the other terminal and get in touch with them.... I said, oh man, it's obvious what to do: If you have these three terminals, there ought to be one terminal that goes anywhere you want to go where you have interactive computing. That idea is the ARPAnet.

Source: https://en.wikipedia.org/wiki/History_of_the_Internet#ARPANE...

To me it seems like crypto still hasn't found its killer application, 13 years after its creation.

> At one point the internet was also a problem looking for a solution

1. The internet was a solution to a very specific problem. Go and educate yourself on what ARPA was doing, will you?

2. Crypto peddlers keep equating cryptocurrencies to the internet. And never ever equating it to Juicero or Enron even if all signs point to that.

Juicero was something nobody wanted – clearly not true of crypto.

Enron was a deliberate fraud where things were faked – certainly true of many (most?) crypto projects, but not true of the underlying technologies (Bitcoin, Ethereum, etc) and therefore not even close to being true for all projects in the space.

Equating crypto to Enron is like equating Enron to the stock market – "the stock market allowed Enron make money off their fraud, therefore we should get rid of the stock market".

> Juicero was something nobody wanted

People wanted it strongly enough to invest $120 million into it.

> Enron was a deliberate fraud where things were faked – certainly true of many (most?) crypto projects

Indeed. You're this close to getting the comparison

> "the stock market allowed Enron make money off their fraud, therefore we should get rid of the stock market".

Yes. Yes, we should. Stock market is pure speculation with little to no connection to the real world.

People thought other people wanted Juicero enough to invest $120M into it, but they were wrong. People actually want crypto, for various reasons.

You're not going to get many people agreeing with you on the removal of stock markets, and therefore I think that conversation is outside the scope of this conversation about crypto.

>1. The internet was a solution to a very specific problem. Go and educate yourself on what ARPA was doing, will you?

In the same way the original Bitcoin paper was a solution to a very specific problem. I was referring to the amount of useless companies that were created during the original dotcom.

>2. Crypto peddlers keep equating cryptocurrencies to the internet. And never ever equating it to Juicero or Enron even if all signs point to that.

Not sure what this has to do with my comment. My comment was specifically there is a decentralized solution to do commerce that is powered by crypto. To pretend that this doesn't exist is absurd. NFTs, and Defi are literally just asset speculation but at the very least there was a platform that transacted billions of dollars on top of Bitcoin (Silk Road). I can't say that Juicero ever created a million dollars of value for its customers.

> I was referring to the amount of useless companies that were created during the original dotcom.

No, you weren't. You literally said this: "At one point the internet was also a problem looking for a solution too"

At no point was the internet a problem looking for a solution.

> >2. Crypto peddlers keep equating cryptocurrencies to the internet. And never ever equating it to Juicero or Enron even if all signs point to that.

> Not sure what this has to do with my comment.

It has everything to do with your comment. Under an article criticising web3 you immediate response was to draw comparisons with the internet. All cryptopeddlers always draw comparisons between crypto and the internet. Or crypto and cars. Or crypto and some other world-changing invention.

And never ever do they draw comparisons between crypto and Juicero, crypto and Enron etc.

> My comment was specifically there is a decentralized solution to do commerce that is powered by crypto.

There is no such solution.

> at the very least there was a platform that transacted billions of dollars on top of Bitcoin (Silk Road).

1. I very highly doubt there were billions of dollars traded on SilkRoad

2. SilkRoad relied on a very centralised reputation system even as merchants there accepted bitcoin

3. All bitcoin "solved" was moving money for illegal activities, but not "commerce". Because actual commerce requires institutions of trust (even SilkRoad had a reputation system). And for legal activities it also needs reversebility of transactions and enforcement of rules.

Enough tooling has been built (IPFS, Polygon, etc) that we're starting to use these tools for computational biology, as part of @lab_dao

This wasn't possible 2 years ago! So I think they have made strides; it's just hard to see

> Crypto has been solving technical problem after technical problem for over a decade but has yet to offer anything useful to a non-enthusiast.

https://www.investopedia.com/news/hyperinflation-produces-su...

https://apnews.com/article/technology-business-venezuela-bit...

https://www.nasdaq.com/articles/turkeys-inflation-is-an-exam...

https://www.borgenmagazine.com/bitcoin-in-el-salvador/

> it's difficult for me to find a truly charitable interpretation of this response

> I struggle with truly charitable interpretation of your argument.

It’s the same for everyone when they come across a comment they don’t like. No need to tell us, just make your reply and everyone else can determine for themselves whether the response was charitable.

"All the while, nothing ever actually seems to get fixed."

Meanwhile, Bitcoin just works, and it is fairly easy to understand.

Every once in a while I try to get excited about Ethereum. They really do seem to think about a lot of interesting things and try to address them. But at the end of the day, it all just seems way too complex.

As for NFTs, I think they could just be colored coins on the Bitcoin Blockchain, which would also be easy to understand.

I’m sorry but to clarify a few points here, Bitcoin “works” technically, and it works as a speculation and black market vehicle. It has not replaced the US dollar. I don’t see people having a need to use it when shopping groceries, paying for concert tickets, etc even when the option to do so is there.

This is precisely the authors point.

The comment I was replying to was about technical problems, like high gas fees.

You can use fiat for speculation and black markets.

It would be weird to define "crypto works" as "people have to use it for shopping". It would be nice to be able to use it with more shops, but that is another matter. I know people who keep their savings in crypto and pay with credit cards that are backed by crypto.

Whether you "need" for example becomes an ideological question. If you agree with governments monetary politics, I guess you don't need it.

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