It’s not still the early days of blockchain | Hacker News Reader

It’s not still the early days of blockchain

blog.mollywhite.net

554 pointsLiron1,054 comments

I'm increasingly seeing "web 3.0" as basically a two headed beast:

1) a way to part greater fools from their money until the hype has died out

2) a hot topic to drive clicks and discussions for nerds and, increasingly, the tech press, from other more pressing issues that exist in terms of tech and culture and finance

In other words, its a bullshit scam, can we please move on already?

When I was a young engineer in 2006, the marketing about Web 2.0 was in every tender for IT projects, so much that my boss created the “Web 4.3 dev community” in my city to point out the ridiculousness of it.

Every versioning of that idea is marketing speech.

Web 2.0 and 3.0 are not directly comparable just because they have similar names, a fallacy of equivocation.

Web2.0 might have had a silly name, but the idea of the web as something that the average user and company could contribute back to and use to communicate with in real time provided explicit value and convenience over existing alternatives (letter writing, door-to-door sales, in-person self-promotion, calling a pizza parlor, renting a physical video, long distance phone calls, physical plane tickets mailed to your house…)

I don’t see that with web3.0.

It's a way to authenticate yourself without a centralized authority. So right now it's being used to create exclusive communities, access to which theoretically has some value. In the future, there may be application ecosystems which operate solely against your wallet information, no need for registration. Maybe that has some value too - time will tell.

I don't follow the details of the web3 market closely, so not speaking in support or against here.

We've had "auth without centralized authority" for decades, and 99% of people don't care and won't deal with the hassle involved. see PGP, encrypted email, OpenID, etc etc..

The exclusive communities you mention only have value because of the hype and FOMO and high dollar amounts that people see being made on sales of "exclusive" NFTs or some such. Same as many of the many crypto pumps, same as the dotcom bubble, same as tulips. Same as it ever was.

> It's a way to authenticate yourself without a centralized authority

PGP did that 31 years ago though, faster and more efficient and without all the downsides?

> It's a way to authenticate yourself without a centralized authority.

I do that without any involvement of a blorkchain on a daily basis. Everytime I use my ssh key to connect to a server that knows my public key.

> It's a way to authenticate yourself without a centralized authority.

Can someone provide me with a clear example of this being implemented? AFAIK accessing blockchain from a traditional client(website/app) still requires going through a central node.

Did something change with 'Web3'? Pardon me for not being up-to-date but it's like one day I woke up and Web3 is all over the place it seems like well-coordinated, heavily funded campaign. How else can we explain this seemingly sudden trend of Web3?

I would like to create an online application which people could use by paying for its usage in bitcoin.

I assume it would make the application much simpler because there would not need to be any or very little user-account management, no sending bills or charging credit-cards. Just gimme them bitcoins. The user-state could be stored on the client-machine, unless they especially want to pay for us backing it up on the cloud. Still it could be backed up anonymously, identified by the wallet.

No more hacking, if there were no user-accounts or passwords there would be nothing to hack.

i suggest learning it properly before jumping to conclusions. everything has pros and cons. e.g. cars pollute but would you want to go back to riding horses? judge less, learn more

This is always the defense: “you obviously don’t understand it”. Or, maybe there is a good reason this type of article pops to the top of HN every other day. The skeptics have good reason to doubt the viability of all the hype.

Read the article by moxie on NFTs. It is so poorly designed that a jr JavaScript developer with 6 months experience would be ashamed of it. Don't "Go-and-lean" us. We are technology people here not your non-tech crowd that'll get scared and silenced by "go and learn"

I actually would prefer riding horses if it were feasible and safe in my community, thank you very much =).

I've learned enough at this point to know a scam when I see one, and I definitely don't need to go thru my history w/ software and tech bubbles and cryptocurrencies to explain why web 3.0 is full-on bullshit.

I've yet to see a "pro" for blockchain or NFTs that doesn't conform to the characterization you're trying to dispute. Care to offer one? I'm eager to learn.

I see more and more of this attitude these days: "Stop spreading disinformation. Educate yourself"

A useful contribution would be to point out how exactly the GP is wrong.

I can imagine the current international banking system get upgraded with a blockchain like technology such that you don't need a central bank of central banks.

But the web3 guys simply want to compare detractors to luddites

It's funny how HN is negative towards crypto and web3 (see all upvoted articles on the topic, and related comments). Yet can't seem to stop talking about it.

I get it, you don't like it.

So I agree with your last point: let's all please move on.

I’m pretty much convinced that crypto stuff is a scam. Still, I want to question the mob. We only get better understanding, doesn’t take anything away.

I like hashing things out but whenever there is a huge bandwagon effect, I am increasingly getting more skeptical. Happy to be wrong but we need skeptics that question mob mentality.

There are several recent examples of this: 1) Inflation 2) COVID origins (Lab leak) 3) Zero-COVID policies and lockdowns.

I always question these things - what if we are wrong?

Well as long as there is a lot of tech hype about it we will continue attempting to cut through the bullshit buzz words and point out the good and the bad and the worse.

>let's all please move on.

We don't do that here.

A few months ago I agreed with her entirely. Tether is an unbacked fraud and NFTs are being front-run [1, 2]. The mid-level marketing Ponzi vibe is crazy. The latency of applications on the blockchain is atrocious. But more recently after learning from and interacting with people building in the space my assessment changed. There is an interesting intersection between tech, communities, and economics. There exists a transparency in the open-source code of smart contracts that will disrupt the current gatekeepers like the internet did.

Certainly, there are problems, but some things will live beyond the crash that is coming and change things in ways no one can be sure of. The internet started in the 1960s and was opened up commercially in 1989.[3] It feels like we are somewhere between 1995 and 2000. The energy feels similar with people trying to shove old paradigms into a new world, vaporware companies, and insane investments. I don’t think we’ve seen the top and it will likely make the crash of 2001 look small by comparison. I may be wrong, but if I’m not, it still is early.

[1] https://bitfinexed.medium.com/tether-is-setting-a-new-standa... [2] https://twitter.com/Foone/status/1457749433844568066 [3] https://en.wikipedia.org/wiki/History_of_the_Internet

I'm sorry, I'm not trying to call you out personally, but this is itching my brain something fierce so I have to blurt it out, and hey, it's the internet. A little derailing never hurt anyone.

It's amazing to me how universal the "I used to be a non-believer" line is in evangelism. From the classic "I used to be an atheist but I've been born again" to all the members of political party A claiming to have been a member of party B before seeing the light to technological evangelism.

It just jumps out at you after awhile.

That’s a nice little Kafka trap you’ve constructed to disregard the people who change their minds away from what you think. So every time someone changes their mind and uses their previous opinion as informative you are going to non-committally imply it’s “evangelism?”

It’s a dangerous attitude because it has a paternal edge to it. Any “enlightenment” naturally leads to seeing others as unenlightened.

Alternatively, what if they simply learned something new which caused them to change their belief in something? It's better to focus on what caused their mind to be changed (it may or may not be bunk) versus focusing on the fact that their mind changed at all (which can certainly be a good thing).

it goes both ways – "I used to be religious, now I am an atheist"

(I was also against crypto/blockchains when I first learned about them last year)

The parent's perspective does not come across as an evangelist's though. Quite the opposite. It's balanced, seeing the hype for hype, seeing the flaws, and yet seeing that there is still some truth and potential buried in there. The world is grey.

You know, it's funny. I've worked in and around analytics for a long time now, and I've had the thought that blockchain enables the following.

1) A common "universal" transaction data source

2) A shared, readable format

So the thought occurred to me that as soon as blockchain apps/currencies became popular, people would want analytics on them. There would thus be a startup opportunity for unprecedented analytics visibility into transactional data from a third party without needing to build bespoke integrations into high security/compliance systems.

If a blockchain backed currency was widely used, a third party could easily estimate the real-time sales flow of every brick and mortar store location. You could have real-time auditing and quarterly tracking of both public and private corporations available from a third party. Asset transfers, smart contracts, and their real world equivalents could be instantly monitored - allowing the early detection of emergent supply chain bottlenecks.

The problem with all of this is that in the 5 years since I had this idea, the only use cases for BTC and other cryptos has been price speculation. The market for such analytics products is effectively zero.

Blockchain analytics are a big sector. Companies like Coinbase and Binance have spent billions acquiring blockchain analytics firms.

Additionally, I think there is big money in selling blockchain analytics to governments for the money laundering, darknet markets, and fraud sector.

https://www.coindesk.com/markets/2019/02/19/coinbase-acquire...

https://www.coindesk.com/business/2021/04/30/coinbase-to-acq...

https://www.cnbc.com/2021/09/09/mastercard-to-buy-blockchain...

https://www.coindesk.com/markets/2019/12/03/binance-acquires...

There is no future in third party analytics because any "blockchain" that is globally adopted and used for more than shitcoin speculation will be zero knowledge

Making all their real-time sales data public, and thus available to their competitors, doesn't seem like something most companies would want.

If the blockchain does enable this, wouldn't that just lead either to 1) companies not adopting blockchain, or 2) some solution for hiding the data and defeating third-party analytics?

You were right, blockchain analytics was a great startup opportunity and there are already a bunch of companies, like Glassnode, doing blockchain analytics.

You also seem to be missing a lot of interesting stuff happening with cryptos if you think it's exclusively price speculation.

> There exists a transparency in the open-source code of smart contracts that will disrupt the current gatekeepers like the internet did.

Could you elaborate which gatekeepers it will disrupt?

IMO social media needs competition but I don't think it will be disrupted by blockchain or decentralization. It will be disrupted by a continued pursuit of competition by doing things like supporting net neutrality. That keeps the playing field level and prevents current big players from becoming further entrenched. Big tech's monopolies are encouraged by lower-level-monopolies owned by Comcast and the other internet media conglomerates. To solve the problems higher in the tree we should get at the roots.

It is somewhat disruptive to banks. You can invest stable coins and get interest for example which is higher than bank interest. And the operator doesn't need to spend a fortune applying for banking licenses for each country they operate in.

> A few months ago I agreed with her entirely. Tether is an unbacked fraud and NFTs are being front-run [1, 2]. The mid-level marketing Ponzi vibe is crazy. The latency of applications on the blockchain is atrocious. But more recently after learning from and interacting with people building in the space my assessment changed.

I feel like a lot of the cryptocurrency critics commit the "fallacy fallacy". That is, they have the following reasoning: people believe crypto is good because of X, X is false, therefore crypto is not good.

Yes, there are a lot of people who are into crypto because they think it's a way to get rich quick. Yes, there are a lot of guru technical analysts who sell bullshit dreams on their Youtube channels. Yes, there are a lot of criminals who use cryptocurrency. Yes, crypto attracts a lot of charlatans and snake oil men. Yes, there are a lot unbacked stablecoins and shitcoins.

Given the above, it's easy to dismiss all cryptocurrencies as a scam. But when you dig a bit deeper, you'll find that there is true technical and financial innovation. For me, Bitcoin's potential to be a programmable money without government or central authority is a very powerful idea. The idea that you can be your own bank and do p2p electronic money transfers without an intermediary. That has never been possible before.

I could go on but my point is that even if there are many wrong reasons people like X, it doesn't necessarily mean that X is wrong/bad.

Everyone doing P2P transfer and bypassing traditional banking institutions is a powerful idea... but ultimately everyone needs to agree on a single medium of exchange, otherwise efficient market pricing is too hard.

And it's debatable whether fiat will ever whither and die. The Government will ultimately have to endorse a currency for tax purposes, and they'll always seek to control the inflationary environment so they can maintain a workable budget and keep public services afloat.

Just a century ago or so, banking was only for large corporations. Commoners and small businesses all used cash and exchanging bits of valuable metal was the norm. I mean, believe it or not, we had good reasons to abandon that simpler system in the first place. Things are better now. Markets are more efficient.

No one should be suggesting that 100% of crypto is a scam and that there will never be anything useful in the crypto space. Vitalik seems the be operating with best of intentions and IMO the threat of decentralized money has already effected the central banks in their thoughts around inflation.

My main problem is similar to the original article here. In 2014 Bitcoin was "The future of micropayments" 6 years later and now the narrative is that "Layer 2 networks are the future" It would be great if the crypto people could stop talking about how great the future will be and just deliver what they are promising

>But when you dig a bit deeper, you'll find that there is true technical and financial innovation.

I will give you the technical innovation, but I really have not found anything financially innovative about cryptocurrency. What does crypto do that traditional currencies or payments systems don't? The only thing I see is that it largely replaces the old financial elite with a new financial elite and maybe under the right circumstances reduces fees for transferring money. That seems to be it unless you count circumventing financial regulation as a financial innovation.

Nah, it’s like this: people believe crypto is good because of X, Y, Z, A, B and C. All of them are false, except for C in some odd circumstances. Therefore, the current state of crypto is not good.

> But when you dig a bit deeper, you'll find that there is true technical and financial innovation.

Ah yes. The good old "just google it". There's literally not a single "dig deeper" resource on the internet that explains the need for blockchains/cryptocurrencies etc.

But sure, there are a lot of "innovations" with recursive circular "innovations" (like currency speculation, HFT and flash loans, all of "innovatively made available" by regurgutating the same fatasy tokens and pretending they are worth something)

I have wondered for awhile why the crypto mega-whales in my vicinity are trading USDT at par or better over the last year or two.

My conspiracy theory is that when insiders trade a distressed asset at par or better it’s often a bailout expectation that’s really being traded.

Who has unimaginable access to financing, a “stablecoin” going so/so, and a primary line of business critically dependent on Tether, like, I don’t know, a massive exchange with the highest volume pairs all sharing USDT as quote?

It’s not that hard. When Bitcoin goes down, people like tether because it’s “safe” at $1. So bitfinex makes more tethers and trades them for bitcoins. When Bitcoin goes up, bitfinex sells the Bitcoin and gets dollars.

It’s fractional reserve banking swapped around, with no reserve requirements. The market is the bank.

And because bitfinex is not obligated to redeems tokens for $1 they have no risk. It’s in their interest to keep the market price at $1 because the longer it runs the more money they make but if there’s a run on the currency they can just shrug and go home with their bag of dollars.

The price of things like USDT are effectively set by Tether rather than the free market. If Tether have billions of US$ and offer in the market to buy back USDT at 1:1 then that's what they price will be near enough.

What you've described is metastasized moral risk. We could argue that maybe some risk should be rewarded. But not all risk, such as spending billions in beanie babies as a corporate strategy.

I mean Binance has BUSD no?

> There exists a transparency in the open-source code of smart contracts that will disrupt the current gatekeepers like the internet did

Ah yes. How can we forget the community-audited and vetted smart contracts that ended up draining its users' wallets of all their money. Transparency!

Well, as opposed to hearing "oops our black box implementation of your information got hacked", I honestly don't mind the trend of "read the contract, it is code". Sure it can be misleading, sure it can be intended to trick someone. However, code is law, and even backdoors are "code". Instead we should fix the backdoors so that code can be reasonable "law".

Every time a nascent technology bubble crashes (dot com, AI winter, crypto...) speculation gets reset, scams and projects with no future get wiped out, and the space gets healthier.

And yet you still don't name any actual useful applications!

The Ethereum world computer has 300,000 nodes, and yet has 1/5000 the computation power of a single Raspberry Pi 4.

Except for actual cryptocurrencies, all the "web3" applications could use boring old 1980s vintage cryptography, be just as distributed, and run ten thousand times faster and cheaper.

----

So far the only way anyone has ever made any money from cryptocurrency is to sell it to someone for more fiat currency. In fact, in real terms, it has net lost money because of the huge amounts of electricity expended.

So once people such as yourself purchase cryptocurrency, they know in their hearts that the only way they will make more is if further people buy into their Ponzi scheme.

Therefore, your comment above.

The big question in my mind: is this the internet in 1997 or expert systems in 1982? It could be the next big thing. Or it could be an interesting idea that was oversold and overhyped, that never really disappeared but became irrelevant as its real value became a commodity that found its way into the software of established companies.

The worrying thing (for me) isn’t which one it is. The worrying thing is that so many people seem incapable of even making a creditable attempt at answering that question and analysing its fundamentals. This has opened my eyes to how many people only think through the prism of “well, this has got really popular lately, and the internet did that too, so this will be the next big thing even if I don’t know why!”. Survivorship bias is very very real.

> is this the internet in 1997 or expert systems in 1982? It could be the next big thing. Or it could be an interesting idea that was oversold and overhyped

...and then returned a few decades later to be oversold and overhyped some more, this time as "Deep Learning" or "AI".

Seems the alternatives on offer are scam or scam. (Or scam, scam, scam, ham, eggs, and scam.)

A nitpick is that [2] isn't front running. Front running is where you figure an institution is going to buy lots of some stock and get a buy order of your own in first, typically done by brokers.

Making fake trades to make the price look like it's going up can be called market manipulation in this case I think. This is also called painting the tape. A similar but slightly different scheme is wash trading where you basically sell an asset to yourself to make it look like that's the price and that there is trading volume going on. There's a lot of this kind of thing going on with NFTs.

> All that to say, a lot has changed in the technology world in the past six to twelve years

It sure has. But not really that fundamentally, since 2009.

A lot has changed in the blockchain space too. Just because you don't know about it doesn't mean it isn't true. A lot of those changes are on par with some of the tech advancements mentioned before my quote in the article. In 2009, you had bitcoin, so basically a distributed consensus workaround that enables artificial scarcity of fungible digital items. Today, you have sharded blockchains, triple entry bookkeeping, proof of stake, blockchains that handle incentivized file storage, alternate name lookup systems, purchasing compute power on an automated order book, liquidity pools (a major, major fintech advancement if you're not familiar with then), arbitrary code execution with a canonical record of it.

It is absolutely still early days.

Because these are decentralized consensus networks, there's inertia. Bitcoin is never going to be cutting edge. Because there's a lot of money to be made, there will be scams. Most of the "cutting edge" isn't cutting edge at all. But there are some real developments happening, allowing novel use cases, enabling very interesting things to be done.

I'm not a fan of the whole web3 concept. I think 99% of the selling points that the charlatans hype every market cycle are nonsense. But a little digging beyond an animated JS bloat landing page (a red flag all it's own) and you can quickly figure out what projects potentially have something and what's bullshit. Or you can do what I do and assume a project is a scam until proven otherwise.

> blockchains that handle incentivized file storage, alternate name lookup systems

It would be a shame if IPFS and Filecoin end up in the dustbin of history if the web3 music stops. They're the only reasonable non-financial applications of blockchain tech that I've been able to wrap my head around to date.

And IPFS isn't even really a blockchain tech. It's more a variation on bittorrent which predates bitcoin by several years.

Yep, they're great. I prefer IPFS without the incentive layer of filecoin, but it is interesting to be able to incentivize storage in protocol, and there's obvious use cases. Plenty of people pay google drive or Dropbox for extra storage. Democratizing access to the demand and supply side of that market is pretty cool.

There was a project called Golem aiming to do the same thing with compute, it was pretty cool last time I read about it. Not sure how far along it is, and I'm sure there are other projects aiming to do the same thing.

> Today, you have

snip

weird things no one gives one hoot about outside of the crypto shill word. All of this is just buttering the cat.

https://twitter.com/GossiTheDog/status/1476873668605186050

Well then what's the point of this discussion? The thread is "how has it advanced? How long can you call it early days?" If you just stop reading rebuttals as soon as they're mentioned you're better off talking to a wall, and you'd waste less people's time that way too.

Do we have proof of stake or do we have a lot of bitcoin folks avoiding criticism about the wasteful nature of most chains by claiming that proof of stake will fix all this.

How many coins are actually using proof of stake?

Why haven't the biggest including Ethereum done so?

The same reason Bitcoin doesn't implement every tom dick and Harry's supposed solution to every technical problem. The big boys have to get it right the first time. Again, inertia.

Ethereum does have proof of stake, a protocol called Casper FFG. It is currently live on the Ethereum beacon chain, waiting for consensus to move the entire network to it.

There are lots of smaller projects trying different protocols they call proof of stake too, as well as different proof of whatever they came up with for whatever reason. Most of them are veiled centralization, some of them are interesting for one reason or another. I'm not here to shill networks or coins so I won't be tossing names around.

Right now Ethereum has 9 million ETH deposited on its proof-of-stake network, worth about $30 billion.

That's running in parallel to the main network, which is still mining. Code to merge the two and eliminate mining is currently running on a public test network. Previous upgrades have all taken less than a year to go live after the launch of their public test networks.

I’d say most of the coins today are proof of stake

Changes in the implementations are not the question. It's application that she's skeptical of. Who has found a reason to use Blockchain for anything other than cryptocurrency?

I actually witnessed one attempt. An actual Fortune 100 built a Blockchain for their public communications. Mostly just an excuse to show off their street cred. It landed with an absolute thud. Nobody cared.

One idea that I am fond of is Nym, an implementation of the high-latency mix network Loopix[0], but with incentives for nodes to act as mixnodes and message providers, using a model in which users pay nodes for their bandwidth. The goal being to provide strong anonymity in the face of a global passive adversary.

[0] - https://arxiv.org/abs/1703.00536

I’m not a crypto fan, but I’m not sure what that example demonstrates. A company made an overengineered gimmick just to show off their street cred; nothing came of it, just as they expected, and it was a waste of the engineering. I’m lost as to how this reflects poorly on the engineering technique.

Comments like these make me wish hackernews had a follow button.

You leave the article with a certain conception and sometimes it's utterly shattered in the comments; This is one of those times.

The central problem in this entire debate is two groups talking past each other. The skeptics say "what is it for?" expecting a detailed answer, and the response from crypto enthusiasts is vague and high level; most of what I hear is heavy on words like "revolutionize" and "decentralize" but very, very short on specifics. Or I get argument by analogy to other technologies.

If I heard a single use case where blockchain technology actually created real value in the world, and was better than other alternatives, I'd listen. But it has to create real value, based on the real world and not some fantastical notion of what money is or governments are for.

I think we skeptics want a grounded narrative, and we're stuck hearing a thesis statement and nothing to back it up.

Here's a recent article from the NYTimes on buying things with Bitcoin. None of the examples seem impressive, a doctor accepting payments for covid tests, sex worker getting paid: https://www.nytimes.com/2021/02/03/style/what-can-you-actual...

I also find funny how all the fighters for the bright future, peace and rainbows are planning to become filthy rich in the process of making the world a better place. People like Vitalik and Charlie Lee (Litecoin) happily cashed out their coins into dirty filthy USD in 2018 and became millionaires. You remove the chance to become crazy rich and who really gonna stay there?

A single use-case?

How about uncensorable donations? For example Wikileaks got blocked by banks and payment processors when they wrote about the war crimes the US committed.

The US could block the banks, but they could never block crypto donations.

Crypto was good for blackmarket transactions.

Still probably is!

Of course there are awesome use-cases, but the real problem of the skeptics is that they can't let go of their fiat.

Take Nano for example: sub-second, 0-fee transactions, of any amount, to any (unbanked) person in the world. Of course, there is no way that any other (fiat) system can achieve this (due to operation costs, regulation, etc)

But the response of skeptics will always be "but I have to convert my fiat money". And at that point, it's not free and instant anymore.

But just because the new system loses its benefits because of backwards compatibility with the old system, doesn't mean that it is inferior. Maybe for some things, you don't need to pass through the old system anymore. One example is mining pool payouts, which can do payments through Nano to get the 0 fee transactions. (see https://2miners.com/blog/how-to-get-payouts-for-ethereum-min...).

You can argue that this mining is all a scam etc, but in the end real value is transferred using the most optimal network. More optimal than any central system that you can think of (remember 0-fee, instant trancations).

> ... but the real problem of the skeptics is that they can't let go of their fiat.

>But the response of skeptics will always be "but I have to convert my fiat money".

Here's a thought experiment for you. Your mother/father/neighbour's entire wealth is converted, at no cost to them, into BTC/ETH/whatever. What is their reaction?

Is it, 'thank god we didn't have to pay those conversion fees!'

I think not.

The crux of what makes it popular is decentralization which is a fantastic feature and I'd argue the single feature that it has that regular currencies can't ever have. However, everyone doesn't have a wallet and about 60% of all bitcoin is in the hands of only about 10,000 wallets. It's one of those things, if everyone had it then it would work great but because no one has it, it doesn't work at all. In order to get it you need someone you trust to trade you it, which means a centralized exchange, high fees, and slow transactions. However, if you only ever live in a bitcoin or other decentralized coin economy, meaning you never have to trade out of it into another currency, then it can work for you. Say Tesla accepts bitcoin, and everyonjhe pays in bitcoin, it still has to pay it's suppliers who don't accept bitcoin, this means it has to make a conversion to regular currency, adding an additional step, making things slower and less liquid. It's one of those things that just won't work, until it does.

I don't buy this framing for a second. Crypto is popular, I mean actually popular amongst most people on the ground, only because the price keeps going up; with the implicit promise that it will keep going up. Everything else is creative story telling. On-paper benefits are trotted out only to post-hoc explain the growth (which is mostly there from pumping and people seeing past growth) and to pump the coin further. "Decentralized" is only as important as it keeps the "this is still crypto right?" identity in lay-peoples minds that is tied to magic money out of nowhere. Otherwise it can be weakened arbitrarily.

Donations for dev's OSS didn't work.

Blockchain Climate Risk Crop Insurance: https://www.climatefinancelab.org/project/climate-risk-crop-...

Centralize it and implement something like M-Pesa, or build it on top of the existing mobile networks. The solution is selling standardized contracts to small hold farmers that pay out automatically; the problem has nothing to do with decentralization or trustless transactions.

The blockchain adds nothing here, and creates a layer of complexity that makes it more brittle.

I'm still very opposed to the idea of taking a technology and then searching a problem for it. Why? Back in 2017 during the first hype cycle, blockchain companies raised hundreds of millions with ICOs. I became very interested in the technology too, and some friends still work in this space. 4 years later in the web3 era, there is not a single product aside from trading/finance that got traction. Use cases like storing the history of a car on-chain, transparent supply chains, public voting... this all sounds interesting but never made it to product-market fit.

I always assume that I'm wrong, so I'll keep looking for successful applications and I'm sure you can prove me wrong :)

I've been documenting this with specific companies. A recent one that I worked with was Omnichains:

https://www.omnichains.com

"Omnichain CEO Pratik Soni speaks to Inbound Logistics about the growing number of blockchain use cases in the supply chain, including in reverse logistics, product authentication and sustainability."

Apparently this company started with the idea that they would use the blockchain to make supply chains more transparent. And they raised money from investors with that goal in mind. But they have since retreated from that goal.

I worked with a retailer that worked with Omnichains. None of Omnichains tools had anything to do with the blockchain. Certainly, we were never given access to a blockchain, nor was it mentioned after we had signed the contract. Instead, we were granted limited access to an API that I believe was run with Ruby on Rails and MySQL. So at a certain point this company retreated to traditional technologies, rather than trying to use the blockchain.

This is one example. At some point I hope to write up some of the other examples that I've seen.

I do not believe anyone will ever find a legal use for blockchains that cannot be more easily served with traditional technologies.

> Use cases like storing the history of a car on-chain, transparent supply chains, public voting... this all sounds interesting but never made it to product-market fit.

Anything that does not exist natively on the blockchain doesn't need a blockchain at all.

If a token on the blockchain would represent you as the owner of a car and one day someone steals your private key which represents your car ownership, that person is now the owner of your car. Still, the car keys are located in your house, the license plate is registered on your name and address, the insurance is on your name.

I guess I don't need to explain further how ridiculous that idea is that a token would officially represent you as the car owner.

Blockchain is proving a more than capable solution in the ransomware payments space, enabling a whole new class of malware.

I had the same experience. The thing that gets me as well is that normally with the rise of new technology you get an excitement that is tangible. Like when the internet first xame around there were emails, multiplayer games via modem, websites. A whole plethora of new wonderful experiences. So far all I've really gotten after doing a lot of research is some good projects and a long tail of terrible projects/websites and a lot of scammers.

It really feels like with the NFT backlash in the gaming world right now that crypto hasn't found its landing and it really hasn't taken off - its kind of in this weird purgatory. Im hopeful but very suspicious at this point. I wasn't suspicious of “the internet” until it was around for a long time. Crypto is past its wave of this is cool and lets build stuff phase afaik and now everyone is trying to make money off it.

In Dubai, buying real estate with bitcoin is a real thing, and by the looks of it also a big thing.

If nothing else, it shows that crypto has succeed in one of its goals: moving money between countries, without being detected/hindered by governments.

I mean, I don't know who buys real estate with crypto, but I am assuming that people who live in dubai and have large crypto values are bullish on crypto, and won't waste it for a low roi investment like realestate. So that leaves rich foreigners who wants realestate away from their own government and I can see them purchasing bitcoins as a way to siphon money out of their country.

Other than that, I am also out of ideas for useful uses of crypto currencies

That is what financialization does. Finance is a parasite that will destroy all potential if given room. To force finance to be symbiotic you must never allow them to control anything.

These ideas are best left in the academy, and then later financialized. The exception to this is internal R&D (like Bell Labs and countless other extremely productive corporate divisions.)

'Public voting' is not a technological problem but political one. There's a lot of opposition to making voting more accessible to everyone. Voting should be easy, and you don't need blockchain for that but maybe it could help. The question is who wants "voting rights".

Bitcoin had a problem to solve, it had a use case, from day dot... Satoshi set out to replace central banks that can inflate the money supply.

It was supposed to be relatively boring tech solving a niche problem (from the guy on the streets point of view)

Decentralized, anonymized identity is one application. It sounds amazing in theory - and can work for the general use cases of sharing information with corporations. But, I believe it won't really be anonymized, as "data exhaust", "identity touch points revealing identity in aggregate" can help identify.

An example I use, is people expect bitcoin is anonymous. Yes, it is anonymous to the general layperson and corporation - but not to say NSA/FBI for "people of interest". And once bitcoin to USDollar transactions or financial institutions are more common - banks will sell your wallet information to credit bureaus, and eventually corporations will be able to de-anonymize chains for profiling just as today.

The tech-first approach also distracts from real problems that remain unsolved while cash circles the blockdrain.

I can think of small problems that use blockchain as a solution, but they're relatively niche and only make the game-space straddle the real world, so they tend to be a bit on the vaporware side. Handy, sure, but I'm not sure they are A) 100% necessarily or B) as revolutionary as everyone seems to think blockchain is meant to be =[

EDIT: forgot to say, this could be a complete lack of imagination on my part past what's been done with blockchain already or just my horrible indoctrination into the game-space like some kind of cult =)

> web3 era

There is no web3, nor web3 era. It is a marketing buzzword.

It seems you are looking for a product blockchain enables you, but there are activities the blockchain enables which are not products, and are very difficult up to impossible without.

One example is sustainable (financially) open-source project is one I use now. Before that it was always impossible. You get a bunch of people all over the world, many of them are identified only by Internet handles. There's no investment to handle all the legalities of establishing a business, and anyway there's no legal framework for international businesses with psuedo-anonymous people.

But with blockchain we've been using DAOs and online voting tools etc. since 3-4 years now, and it works great. It handles the governance and the finance in a way the traditional system cannot offer.

Buying drugs on the Internet. The penetration might be low now, but the TAM is sizeable.

I think PartChain of BMW is the only one i know of: https://www.press.bmwgroup.com/global/article/detail/T030716...

I like the idea that the chain can be used as the source of truth when other sources of truth have failed us. first 15 minutes of this https://www.youtube.com/watch?v=Cwbbxb987vE

Issuing tokens is still probably illegal in both countries I live/work in. Regulatory and tax compliance immaturity are holding back a lot of people besides at the wild frontier or offshore operations with the resources to navigate that

> Back in 2017 during the first hype cycle, blockchain companies raised hundreds of millions with ICOs.

Yes. Those scams have been put an end to by regulations by the SEC, as unregistered ICOs are now illegal since 2017. [0]

> there is not a single product aside from trading/finance that got traction.

So what is wrong with using blockchain domain names like ENS for identity, or sign in use cases? Are we going to look back at this in 10 years time and we will see this sort of adoption? [1]

[0] https://www.investor.gov/introduction-investing/general-reso...

[1] https://www.skiff.org/updates/skiff-ens

It's muddy waters. I just heard some guy from a public office saying they used DOT for some specific need (related to managing bonds somehow). And it was before last year boom. It's all very fuzzy

I'm glad someone remembers the (2-year) history. NFTs=ICOs, just another scam to keep "crypto" afloat. Neither ICO nor NFT resulted in anything useful, wait, maybe Bored Ape??

Helium network is an example of a successful blockchain project/application in my opinion. They created the biggest decentralized lorawan network in the world that is used by more internet of things companies everyday. Also they are trying the same thing for creating a decentralized 5G network. It’s still early days for them because I think they started in the end of 2020 or the start of 2021, but they have grown to 490000 lorawan hotspots already. The network usage could be better, but is increasing (saw increased sensor data activity for my hotspot in 2021).

Biggest logistics companies in the world use it: https://www.tradelens.com/

Brave has micropayments for creators. It achieved 50M MAU last year. In a few years it will surpass Firefox.

Online shopping hadn't hit product market fit in the late 80s even though the Internet had already been around for a few years.

> I'm still very opposed to the idea of taking a technology and then searching a problem for it.

So, you're opposed to the internet, then?

This is literally how research in the Universities makes it to the world. Spin-offs like Boston Dynamics are essential to building things that may not have immediate use but payoff can potentially be huge. We need to do more of this.

Don’t throw the baby with the bathwater. I really don’t think generalizations of certain jaded experience and then seeing the entire world with the same broken lens does any good. Probably the opposite. We ought to try new tech and keep an open mind.

Before people go off on Boston Dynamics - there are thousands of spin-offs, pick some other charitable example. The point isn’t about BD.

People are doing research and deploying cool stuff that others are actively using. You can criticize that as much as you want but it won’t do much.

Then you should be opposed to most basic (theoretical computer) science and mathematics research too that doesn't have any immediately apparent application.

The scientific research to engineering pipeline is the backbone of our rapid technological progress. Basic research can target unexplored areas in a more organized fashion, allocating resources properly instead of industry's ad-hoc approach. Sort of like breath first instead of depth first. Industry will waste resources solving just their own individual instances of a mini-problem one by one resulting in a total resource consumption that is greater than what academia would have used in solving the overarching problem.

The idea that blockchain tech is somehow invented out of nothing and then we search for a problem to match couldn't be further from the truth. Talk to anyone who works in the industry and they're trying to solve a problem.

I used to work in blockchain tech and the main problem I was focused on was "How do we prevent internet monopolies like Facebook and Google?".

If you don't see those monopolies as a problem, then you're disagreeing with the problem space, that doesn't make it "trying to find a problem".

the final paragraph seems to summarize the article :

"The more you think about it, the more “it’s early days!” begins to sound like the desperate protestations of people with too much money sunk into a pyramid scheme, hoping they can bag a few more suckers and get out with their cash before the whole thing comes crashing down."

Future will tell. But the author is either acting on bad faith or they are not informed on the innovations that happened since then and are currently happening in the crypto space. And I am not even focusing on NFTs but on hardcore crypto stuff such as multisig and zero-knowledge proof protocols.

Well, 10y ago is not ages ago. Email existed for 30 years before it was ready for consumers. Same is with the internet. Certain types of technologies require decades research and development. I would argue that in 20 years it will still be "early days" of blockchain. And only in mid 40 we will figure out apps and who nows what to fully utilize underlining technology. Right now we are just coping what we have outside of blockchain and put it on the blockchain. Same as people couldn't imagine how internet could possibly transform their business and life, we now can't imagine how Bitcoin and blockchain will transform our business and life in the future. It's too early.

I'd say with email the application was always crystal clear: It's like sending a letter, but electronically and therefore instantly. This must have been obvious to everyone in that space even 40 years ago. Maybe it wasn't obvious how big email would be one day, but there were definitely no doubts about what it would be used for. As someone who is trying to understand the applications of "crypto", it is very frustrating to hear stuff like "we now can't imagine how Bitcoin and blockchain will transform our business and life in the future". Please give me something! If we can't imagine it, maybe there is nothing there.

The application of Bitcoin is also crystal clear: distributed, digital money. It’s like gold, but electronic, and therefore much faster/cheaper in certain scenarios (and slower/more expensive in others).

Reasonable people disagree on whether this application is actually something we need, or will need in the future. But the application is clear as day.

Email is also used for authentication, all those 6 digit codes that come in for 2fa are doing so. Definitely not something that was imagined 40 years go.

we now can't imagine how Bitcoin and blockchain will transform our business and life in the future

40 years ago people on the cutting edge of tech had VHS video recorders to record broadcast TV. The tech grew slowly, became the dominant standard, and after 15 years in the mid-90s they were everywhere. 25 years later no one has one, or wants one, or even has an equivalent.

Don't assume too much about the future based on the present. Things can change in strange and unexpected ways.

I'm not saying Bitcoin and blockchain won't be around in 2040. They may well be. I'm saying current trends aren't a particularly good predictor of the future. They're wrong more often than they're right.

It might be that the idea is too complex to be viable or useful. The graveyard of technologies created in the past decades stretches to the horizon, so if something doesn't work after 10 years doesn't mean it will work in the future. This is kind of obvious.

Specifically with blockchain my intuition is that, if its main selling points - immutability and decentralization - are already invalidated in the early days (10 years that is), the chances that it will recover are slim.

Complex tech tends to centralize to become cheaper. Also immutability is very problematic in terms of the right-to-forget and also in terms of illegal content and illegal operations.

Email's purpose and utility was super-obvious from day one, we just had to figure out how to make it more secure. Notice how email too became centralized, however.

Email required everyone to have a computer, plus infrastructure to connect them.

Blockchain has been waiting on a useful implementation since inception.

No. Email didn't have useful implementation (UI) until 30y after it was invented. Only geeks and tech savy people were able to use it because it was not so easy to use. Sending messages was really hard, sending would often fail. So you would say, 25y after email inception there was no useful implementation and no usage by consumers, so technology is worthless. And there were people who were saying that, I'm sure. Same was with the internet.

I never understand critiques like these.

> "somehow no one appears to have managed to find a positive use for blockchains that wouldn’t be better served by blockchainless technologies"

There is now a sovereign nation state that accepted Bitcoin as a currency, and, mark my words, no doubt more will follow this 2022.

Replacing central banks, and by extension, their grasp on the limitless money printing, is the whole reason why bitcoin and it's blockchain exist. And it is working wonderfully well.

People in countries where the central bankers and politicians are letting them down are flocking to bitcoin and other later inventions (such as stable coins).

Just check these countries:

- Lebanon: https://www.aljazeera.com/economy/2020/2/25/distrust-in-leba...

- Turkey: https://etfdb.com/crypto-channel/as-turkey-lira-falls-bitcoi...

> "Rampant inflation is once again plaguing Turkey’s local currency, the lira, but one saving grace could be its citizens using bitcoin to supplant the plunging fiat currency."

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

- El Salvador: https://www.theguardian.com/world/2021/jun/09/el-salvador-bi...

- And El Salvador again: https://bitcoinmagazine.com/culture/bitcoin-el-salvador-geop...

By all accounts the adoption of that tech in El Salvador has been a disaster, the app is slow, buggy, not everyone has access and it’s easily exploitable for crime. Protests against it. Etc. I anticipate a reversal of this by the next government. Current governments cannot admit mistakes, so it’ll take a new term for it to be dismantled.

> has been a disaster, the app is slow, buggy, not everyone has access and it’s easily exploitable for crime

Sounds like early 2000s online shopping to me.

There may not be a next govt in El Salvador for a while. Their populist president seems intent on staying in power by any means necessary.

Uhm it might be hard to use but I completely reject the "exploitable for crime" part. Actually Bitcoin payments are a blessing for all those people that had to physically travel to Western Union branches to receive cash from abroad. Gangs frequently targeted such poor individuals and stole their cash. Bitcoin fixed this.

https://en.wikipedia.org/wiki/Nayib_Bukele#Presidential_appr... I keep hearing this line, and yet Bukele's approval rating is over 80%

Yes, I agree, and this is all very cool, however regarding this point:

> There is now a sovereign nation state that accepted Bitcoin as a currency, and, mark my words, no doubt more will follow this 2022.

Sure. That's true, but doesn't actually matter, imo., because the point of crypto is to:

> Replac[e] central banks, and by extension, their grasp on the limitless money printing

So approval from the government in the case of crypto is worth about as much as it is for making love. It's the losing side of a game saying "You know what, we'll be so gracious as to allow you to win". Never needed your permission to begin with.

You’re referencing the point of Bitcoin, not the point of crypto. Other platforms aren’t interested in destroying the existing financial system and would much rather digitize it and make it open to everyone.

I mean a significant portion of the world's money is created by fractional reserve banking.

Not just a significant portion, the vast majority of money in circulation is money created by commercial banks, not central banks. For example, in 2007, Euros issued by the ECB accounted for less than 15% of the supply of Euros (M1): https://en.wikipedia.org/wiki/Fractional-reserve_banking#/me...

Kelsey Hightower said it best: https://twitter.com/kelseyhightower/status/14778718907230781...

"If something is too early to criticize it's also too early to evangelize."

Not if you have a heavy investment and depend upon other investors (or greater fools) to buy your shares.

But it’s not too early to be a cult

Any sane web3 proponent would agree with this statement. Only the scammers wouldn't.

Sane people interested in web3 don't evangelize and are totally aware of and agree with most of the criticisms. If you criticized Ethereum as being expensive and inefficient, you'd get head nods from people that understand the space and pointed to projects that are trying to fix those issues.

The problem is that when a space becomes dominated by the insane people, it's the insane people who drive its future. Any hope for a sane web3 depended on the hype starting after there was an actual use case. As it stands, web3's Eternal September began before the foundations were even laid, and it's going to be very difficult to retrofit them.

IMO L1 (Ethereum, Solana, Fantom, etc.) development is closer to building out a communications or telco network.

From that “hard” technology perspective, it’s very early days. And the apps that run on top of these L1s are fully limited by L1 bandwidth, latency, and blockspace.

So, I think we’re in the pre-dial-up days for blockchains and will need a couple more orders of magnitude improvement to be (universally) on par with today’s app performance.

The information bandwidth on block based cryptocurrencies is far too low to support these deeper levels of complexity, and I doubt will ever get much better. Blockchains, despite being a distributed phenomenon, still centralize the flow of information into one stream, the chain. Ethereum, by my estimation, operates at around 7 kB/s, and Bitcoin at 2kB/s. These are clearly glacial speeds - think of how limited an internet connection at those speeds is. How will more informationally needy systems be constructed on top of so paltry a base? The problem is a blockchain's protocol must somehow coordinate the distributed actions of its participants, which are generally spread out across the world. By centralizing information in the chain, they are exhibiting the same intractable slowdown that we would see trying to emulate a brain on a CPU.

I think we’ll see if bandwidth and latency improvements bring more application development. Solana and Avalanche are orders of magnitude faster than Ethereum and their ecosystems are rapidly evolving.

Btw Solana founder is ex-Qualcomm and worked on embedded distributed (multi-core) systems and Avalanche founder implemented a faster more elegant consensus algorithm. Can hear them discussing technical aspects of development: https://open.spotify.com/episode/632rPGnMZlHag7DJ1SCDUV?si=F...

read up on L2 chains - both optimistic roll-up and zk-rollups. this problem you are breaking down has been the subject of study and development for years now and is nearing implementation - https://www.gemini.com/cryptopedia/layer-2-scaling-zk-rollup...

Good stuff, so you would suggest to the author that their examples are too narrow. Perhaps that smartphones, Uber, and Facebook all represented somewhat minor "time has come" type innovations, whereas you see Bitcoin as a development more like the internet itself, and that instead we are in the Arpanet days.

(Disclosure I own Bitcoin and Ethereum)

Yeah narrow or just on a different layer/level of abstraction.

Yup my mental model is we’re either in Arpanet days or multiple-competing-DOS days.

Yup. Of course everything that has "blockchain in it is "the next internet".

Now this ridiculous claim is taken further: it's not even the internet, but "the fundamental infrastructure of the internet".

Whereas all signs point to it being a Juicero, an Enron and an AT&T ISIS Mobile Wallet rolled into one.

My purely anecdotal experience so far has been that crypto bulls have tended to be more business-y/finance type people and, even among technical people, the technical people who don’t actually know how a blockchain works. Not a good sign for the technology and its applications but I don’t think all crypto is useless… but a lot of the hype is definitely by people trying to get rich quick with a hand-wavy understanding of the technology.

A lot of people missed out on Bitcoin early days… best way to cash in is to fork it and voila, the crypto Cambrian explosion where most of the forks will eventually die off.

Exposure bias. Who are you going to see more? The thoughtful coder and innovator who spends their time working on problems, or the excited businessman telling everyone about that work? Even the more outgoing founders are overshadowed by influencer types, and that’s not surprising at all.

One dichotomy I have noticed in crypto is that non-involved “tech” people seem to understand crypto and the big picture much more slowly than economically minded people (no, not just speculators). People don’t usually understand that crypto currencies are an economic innovation using cryptographic primitives, though more recently the space has started driving cryptographic innovation as well.

Well the excited businessman telling everyone about the work is the one hyping it to everyone. My point exactly is if it was just the hard working coder in a dark room everybody and their grandma wouldn't be buying into crypto right now. I'm also bullish on the utility of Bitcoin, as it allows for an almost cash-equivalent that's digital. Silk road took it as currency, and cybercriminals. These may be illegitimate businesses but they are businesses nonetheless.

"Crypto" shat itself in the area of payments (noone really needs or wants it and it provides 0 value), so now they are trying other angles - NFT, DeFi. The problem is the crypto influencers are losing touch with reality. You could at least bullshit someone clueless about cryptocurrency and payments, but it's really hard to sell the idea of collecting JPEGs or investing into DeFi (which aggressively described in the terms of a classic ponzi scheme for some reason) to the general public.

Ahh yes the “they” in crypto. The same “they” that people like you used to say would ‘turn it off whenever they wanted’ a few years ago.

So the people buying houses with crypto have dirty pants? Or in El Salvador, where BTC is on par with USD, they all have dirty pants? Please re-read your comment before publicly posting, as this is not advancing conversation, nor adding anything, but only exposes your narrowly held (wrong) beliefs.

El Salvador doesn't have its own national currency at all. And yes, imaginary people paying for houses in bitcoin is another example of a crazy meaningless argument. Maybe there is one or two, who knows. I think more people pay for properties in camels or Vodka bottles if we really search.

That’s not how it happened. Crypto is seeing a lot of technical advances. At the same time, people find different ways to build on top of it.

One man's advance is another man's dead end.

In the same time, India & China got mobile payment revolution. 4b+ transcations per month are done in India.

Well which means 3B people dont ever need crypto.

Ah they can send money abroad easily?

I send money abroad using Wise though I'd be happier with a publicish API.

Why would I in my right mind use crypto? Im not doing anything illegal and I'm not ideologically opposed to paying my taxes.

How often they need to? How often average person actual does that? Maybe there just isn't that big of an market there outside things like web payments. Or a market that doesn't involve complexities of dealing with money...

As os now it supports upto 10 countries. work on progresss

So there is no progress in non Proof-of-Work coins today? Perhaps the author is saying that there are no blockchains that are being used as the basis of regulated stable-coins and CBDC projects that are being tested by central banks today?

I mean, the author is arguing as if Bitcoin, and Ethereum are the only blockchains that exist today. Hence why this is another blog-post that associates all cryptocurrencies having the same characteristics as Bitcoin, and Ethereum, which that isn't true and the author knows it.

This is all given that they 'claim' to have done 'research' even though they feel 'annoyed' by all of this. [0] If you are going to argue about cryptocurrencies and blockchains technologies in general, at least attack the current alleged 'state of the art' rather than using the same old arguments on the same old cryptocurrencies (Bitcoin, Ethereum) that everyone knows its faults already.

[0] https://blog.mollywhite.net/blockchain/

I spent some time looking into Proof-of-Stake coins. Specifically, the Proof-of-Stake system advocated by Tezos. Give it a lookover, it's actually a fairly quick read.

https://tezos.gitlab.io/active/proof_of_stake.html

Unfortunately, it's also very flawed, and nulls most of the security properties we thought we would get by switching to "Blockchain Technology": if someone captures 50% of this chain, it is quite easy and trivial to turn that into a full chain attack, since all future seed data comes from past chain data. The RNG is seeded deterministically, meaning a motivated attacker can maintain influence forever by maintaining control over the seed.

When you usually bring this up, people usually say "yeah, but it would be against the economics interests of the miners to crash their own coins". Aka, the technology isn't providing the security, we're back to the same "no banker would ever be evil enough to crash the economy for small economic gains" security that most cryptocurrency enthusiasts usually claim is evidence of corruption at work. So, no, I don't see what the blockchain is adding over a typical database.

I've tried multiple times to read through the Ethereum Proof-of-Stake FAQ [1], but I have a sneaking suspicion it's intentionally obfuscated, just so people like me bounce off of it.

[1] https://eth.wiki/concepts/proof-of-stake-faqs

You should read into BFT protocols. Hotstuff is probably the reference today.

Proof-of-Stake is just Plutocracy-on-Steroids.

PoW is the fundamental breakthrough. Yet, everyone is oblivious to that fact, a decade later.

It's amazing that people on a technology forum talk about proof of stake as something new. That's what basically DNS runs on, and it's been around since 1983.

Maybe it is still early indeed.

I don't think the complaint is about the lack of new ideas for coins. No shortage there.

There have been a lot of prototypes, trials, testing, and scams, but not a lot of hits.

The only major exceptions are the same old cryptocurrencies (Bitcoin and Ethereum) where the same old arguments still apply.

Part of the problem here is that, with no centralized authority, it takes much, much longer to make changes. Perhaps that's what the author is missing and that's why we're many years in without the kind of success you might expect for a web technology that's not destined for failure.

Not related to blockchain but just an interesting difference in perspective. Using 2010 to refer to "ages ago" is almost comical. The internet was created in the 60s and I'd say 2000-2010 was still early days for the internet. So saying something is old because it was created 10 years ago is just ridiculous.

2000-2010 internet companies had to actually have revenue, or have users or some value.

Before the dot-com bubble there was hype about anything involving the internet.

Just like today, any business plan involve blockchain is awesome.

The hype around the blockchain reminds me of the hype around XML around 2000. People were blown away by the potential... but no one could quite demonstrate it with a product. Now the blockchain can point to cryptocurrencies as a success story, and XML can kind of point to HTML, but it is a reminder that real change in tech happens when someone comes out with a product where the rubber meets the road. When everyone is talking potential potential potential, I am very skeptical.

It's truly incredible that people still confidently proclaim that there is "no use case" today.

Because of the technical nature of the underlying tech, it's hard for the average individual to recognise how and why it's different. However, it's not possible to explain away the particular applications and their properties.

Here are 2 use cases which are live and working today:

-Taking a collaterised USD loan without permission or interference from a third party.

- Creating a public digital object which lives forever and can be exchangeable and extendable without a third party involved.

The immediate response from critics then is to question the validity of the use case. But that requires to admit that the use case is there.

Presumably you’re talking about a loan against an NFT or other crypto asset. But taking a loan against a financial asset is already really easy. Does loaning against a house, car or stock portfolio get any easier with crypto? I don’t see how.

The digital object in your second example is just a hyperlink or a hash, because the digital object itself won’t fit on the blockchain. And there is no link between digital and meat space identity, which means it’s exchangeable but not between people.

This is the perfect example of a critic response and exactly the phenomenon I'm describing.

On 1, you're somehow conveniently ignoring the "without permission or interference from a third party.". I never mentioned against a car, stock, or house. Nonetheless the functionality still exists. Using ETH or other crypto assets. It gets so much easier. Have you tried it? No talking to advisors, no documents, no discriminatory requirements. Pretty much 1 click and 30 seconds. Fully expect the next question of validity "aha! Well that's against a useless asset!".

2nd example. Yes it can be a hyper link or a hash, is there something particularly wrong with that? The use case I described has still been achieved, it's a digital object. Are you really questioning that people exchange assets using a digital identity? I'm not sure how that invalidates the use case.

By the way you're incorrect that digital objects don't fit on the Blockchain. First it depends which Blockchain. Second, there are some objects that do fit. Look at ENS. A domain name, address mapping fits on the chain. That is an NFT. That exists today.

>>The immediate response from critics then is to question the validity of the use case. But that requires to admit that the use case is there.

This comment assumes that the world == the developed world. Crypto offers borderless access that does not exist in today's world for many millions of people. In my country, getting a loan is near impossible, but no one can stop people from taking a loan against their ETH or stablecoins

I could already easily get uncollaterised loan, just a text message away...

And if I have a collateral in form of fungible crypto why do I need to loan against it? Specially when I could just sell it and use the money...

Because you're taking a loan against it, duh. Therefore you want to keep it. Just like taking a line of credit against your house. You don't sell your house immediately.

Thirst one…link? And still less efficient then Cryptofree technologie. Second thats how crypto works … thats not a use case cryptobro ;)

The author's description of 2015 doesn't sound like some ancient era to me.. Have things moved on and changed so dramatically from ML hype, Microsoft Edge, Apple Watch, and ES6?

I'm not really here to argue about blockchains being good or not, I just don't feel great about how the article tosses out a body of technology for not keeping pace with Uber. It's a bit like saying it can't possibly be early days for reusable rocketry, mm-wave communications, or quantum tech, because all those things were being developed decades before some guy named Satoshi wrote a very popular blog post.

Regarding ES6: Definitely. It used to be that there’d be a new JS framework every week, and the language was rapidly evolving to catch up with over 10 years of programming language innovation. No change to the language as big as ES6 has happened since, and the Cambrian Explosion of frameworks has largely subsided.

Nowadays things are way more stable. I’m sure someone will pop in and mention how their workplace just changed from Webpack to Vite, or how hard it is to keep track of Angular, React and Vue. To which I’d chuckle and note that when I got started in 2014 we had AngularJS, Ember, React, Backbone, Knockout, Google FOAM, Polymer, OJ.js and Aurelia (which emerged as Google announced that AngularJS 1.x would be deep-sixed and Angular 2 would essentially be a totally different framework). To build/bundle your app you would use one or more of Grunt, Gulp, Brunch, Webpack, Browserify, 6to5, Traceur Google Closure Compiler and/or RequireJS (so far we’re assuming you’re not using CoffeeScript, ClojureScript, or one of their downstream variants like IcedCoffeeScript).

How's this any different than the typical technology hype and adoption cycle? Perhaps we are just at the "peak of inflated expectations" right now, and are about to dive into the "trough of disillusionment".

https://setandbma.files.wordpress.com/2012/05/technology-ado...

This certainly happened with AI at least twice... remember the AI summers of 1970 and 2010 and the AI winters in between...before certain applications of machine learning became industrial tools.

I'm personally in agreement with the author that crypto is probably a waste of energy and a way to scam people, but I can look at the 30,000 foot view and admit there might be some applications in the future as we climb the "slope of enlightenment".

My wife recently suggested a possible one: NFTs minted by your university as proof of your diploma. Or perhaps your academic transcript. No way to forge a fake diploma again.

> My wife recently suggested one: NFTs minted by your university as proof of your diploma. Or perhaps your academic transcript. No way to forge a fake diploma again.

This is once again better served by a database. Diplomas are inherently centralized and issued by a trusted authority.

Guess we gotta keep brainstorming for use cases -- that's how technology development works, right?

The university can shut down, suffer data loss or get hacked. Decentralized storage is an improvement.

No sense in diplomas being transferable though.

What makes you think you can’t sign as a trusted authority a decentralized object? Maybe before you condescend you should learn the utter basics of what you are talking about.

> Guess we gotta keep brainstorming for use cases -- that's how technology development works, right?

Unironically, yes.

> NFTs minted by your university as proof of your diploma. Or perhaps your academic transcript. No way to forge a fake diploma again.

The problem with this an many similar examples is that there already exists a solution for this sort of authenticity problem: digital signatures. Basically, the university creates a public and secret key pair, makes the public key available on its website, and signs all diplomas with its secret key. This is a much more efficient solution than the one based on blockchain.

Or is that a problem in first place. If someone really wanted to check your diploma. They could ask a proof of permission from you and then contact the issuer...

A cryptographically signed diploma could be sufficient for this use case, no specific need to commit it to a ledger. Certainly the transferability property of NFTs is not desired in this case.

Yes, a machine readable section on the diploma, like a QR code, would suffice here.

Covid vaccination certificates in the EU use this method. No blockchain required, just some good old public/private key cryptography.

"My wife recently suggested a possible one: NFTs minted by your university as proof of your diploma. Or perhaps your academic transcript. No way to forge a fake diploma again."

This is already happening: https://www.5gnewsroom.com/2022/01/12/iit-kanpur-awards-bloc...

> My wife recently suggested a possible one: NFTs minted by your university as proof of your diploma. Or perhaps your academic transcript. No way to forge a fake diploma again.

You could already do this using x509 certificates signed by a university owned CA. No need to use blockchain here.

Why would people want to be able to sell unique receipts of having acquired their diplomas to each other?

Did Moore ever talk about the time length of such cycles? I imagine it differs from industry to industry. Is blockchain on a 10 year cycle like Uber/Facebook, or a longer cycle?

(Disclosure I own Bitcoin and Ethereum)

The hype cycle isn't Moore, it's Gartner -- the research firm.

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

Memorable moments from interacting with the Internet -- and web3

It's 1993. We are given a tour of the university I just got admitted to. I peel off the group at the physics building where the university VAX is. Something, something Internet. What is that. I get an account. I begin to use Usenet and IRC where I can talk to people so far away. Usability of these are on par with any other application (say, WordPerfect 5.1 for DOS) at the time. My mind is immediately blown. No one needs to give a pitch how useful or how fundamentally different this is to anything we had prior.

It's 2006. I began travelling the world, settling in Canada in 2008. I can chat with family for free. Later, even do video calls. I remember the weekends when we wrote a letter to my uncle who moved to the United States in the 80s. It took months to get a reply. Phone calls were rare and short. By the time my grandfather passed in 2011, my uncle was talking to him daily for a long time for free -- thanks to the 'Net.

It's 2007. I am wintering out in Israel. Moving around is very challenging, as I don't read Hebrew and I don't drive.

It's 2015. I am again in Israel. For a week, every night I sleep in a different apartment, booked online. Moving around is trivial, my phone tells me where and when to get on and off buses.

It's 2022. This a quote from someone touting the advances in the so called crypto"currency" space:

> Today, you have sharded blockchains, triple entry bookkeeping, proof of stake, blockchains that handle incentivized file storage, alternate name lookup systems, purchasing compute power on an automated order book, liquidity pools (a major, major fintech advancement if you're not familiar with then), arbitrary code execution with a canonical record of it.

Excuse me for being skeptical about web3.

The article suggests that using the phrase "it's early days" is incorrect in blockchain technology because Bitcoin and Ethereum have been around for 13 and 6 years respectively.

The author goes on to give examples like smartphones, Uber, and Tesla, all of which have had serious developments in terms of impact and usability in around the same time period. Then given that Bitcoin and Ethereum have not made similar progress in that time period suggests it is not "early days".

Users continue to get scammed and lose funds. So what is it instead? Middle days? End of life? Pre-early days?

Open to ideas here. The author seems to suggest that what we're seeing in blockchains is the best we're going to get out of it. If Bitcoin were middle aged, would users put up with all the warts knowing they won't go away?

(Disclosure I own Bitcoin and Ethereum)

It will always be "early days". Crypto requires a constant influx of marks who genuinely believe that they are early, as a ponzi scheme only ever benefits early entrants. No crypto enthusiast is ever going to tell that you are late.

For a pyramid scheme that certainly holds up. Whoever joins last seems most incentivized to bring others in. Has anyone modeled pyramid scheme dynamics to Bitcoin perhaps at an academic level?

(Disclosure I own Bitcoin and Ethereum)

Crypto does not require any such action. Likewise no dogmatic crypto skeptic like yourself will ever tell you you are early. Stay poor.

The author exemplifies people in the digital field who are making it their life mission to criticize blockchain/crypto all day.

I invested a significant amount in bitcoin very early and am now retired thanks to that decision. My hunch was that it was the combination of interesting innovative tech and a vector for greed that would be unstoppable. I never talked about this publicly, very few people know. Crypto is not my identity. I honestly don’t care about whether it gets banned, disappears, or ends up replacing parts of our digital experience. I recognized from the beginning that it would be unstoppable, whether it was to be a net negative or positive contributor to humanity being completely irrelevant. You can’t stop an idea.

But since I’ve been watching this space from day 1, literally installing the bitcoin client the day Satoshi posted it here, I’ve noticed that people who criticize blockchain tech tend to be folks who could have made the same bet I did and didn’t. At the time I invested I worked in a tech company and some people were already going on and on all day about how bitcoin is a scam, etc.

These folks were aware of the tech very early, considered it a scam. And now they’re making this crypto bashing their identity. I think a lot of that drive comes from the frustration that despite the space having so many negative aspects, they missed out on a once-in-a-lifetime opportunity. They personally know people like me. And now the only way to make peace with that decision is to publicly bash it constantly, to revolt against it. This becomes who they are, as much as crypto bros make it their identity too.

I don’t see people from the general public criticizing blockchain/crypto with as much passion as them. It’s only people from the tech field who go on personal vendettas against that space. People who had the tools and the information to transform their lives and even leave that space since… and didn’t.

As much as people who promote blockchain constantly probably have a vested interest in it due to the money they’ve put in it, making their opinion less interesting, the same is true for people who bash blockchain constantly because their vested interest is to make peace with the fact that they didn’t put money in it when it was really early.

The problem is that we’re still in the phase of “it’s good because it’s blockchain” so people are trying to get in early to make some free bucks. It will only work when someone comes up with a decentralized product backed by blockchain that simply works, and users don’t even need to know it’s a blockchain. It needs to be a blockchain use case instead of attempts to retrofit the blockchain into current problems.

I guess I'm old bacause all the he things listed as exapmle how far away was 2009 and especially 2015 feel new or at least newish to me.

Depends on how you define early.

When comparing the situation of crypto to the internet, I would say we are at around 1997 now. 1996 was the year when Yahoo went public and 2021 was the year when Coinbase went public.

The usability of crypto solutions also reminds me of 1997. It is still so bad that it makes them almost unusable. Reminds me of acoustic couplers where you had to manually plug your cable bound phone into some device and dial a number to connect to a bulletin box. Just that today the bad usablity looks very different. It has to do with complicated, privacy violating KYC processes, no standardized secure way to make a socially recoverable secret key, lightning network only used in very few places etc.

TCP/IP and DNS were both developed in the early 70s (1972 I think). So over 20 years before the first internet company went public.

So the adoption of the internet evolved more slowly than the adoption of crypto it seems. As the Coinbase IPO came already 13 years after the Bitcoin whitepaper.

>1996 was the year when Yahoo went public and 2021 was the year when Coinbase went public.

>TCP/IP and DNS were both developed in the early 70s (1972 I think). That is more than 40 years before the first internet company went public.

1996 - 1972 = 24.

Yay, fixing that!

TCP/IP and DNS were both developed in the early 70s (1972 I think). That is more than 40 years before the first internet company went public.

Is that really your belief about how to define when a technology became useful?

The IPO of a company makes a nice reference point for several reasons:

- It is a specific point in time which is easy to look up

- To go public, a company needs a big amount of traction already

- A lot of data is published for the IPO

"Useful" is in the eye of the beholder. But how much the company is "used" can be approximated by its revenue.

Yahoo had $1.4 million in yearly revenue the year before it IPOed. Coinbase had $1.14 billion. So about a thousand times more. Even when adjusted for inflation, this should be one or two orders of magnitude more.

Adoption of the Internet had serious pre-requisites in terms of the availability of computers in the general population so it’s not really surprising. One thing that was amazing about it was our ability to reuse existing networks to connect them all together.

I would say the pre-requisites are just as high this time. Just very different.

At least you could buy a computer in the 90s.

In my country, you cannot buy crypto anywhere. You have to go through some shady KYC process of a foreign company. Me and almost none of my friends are willing to do that.

And the very few who do are not willing to sell crypto to the others "Uuhhh no, go make your own Coinbase account."

The banks are all "Yeah, we are working on it. We don't know yet when we will offer it. It will take time to figure out the legal and technical aspects.".

I'm not long on anything blockchain related.

But I don't understand why people get so invested in it being a scam or failure.

Maybe it is, and it'll all die. That's fine. Why do people spend so much time insisting that it's the inevitable outcome. Let it do its thing, find something better to do.

> But I don't understand why people get so invested in it being a scam or failure.

Can't speak for everyone. But from my perspective, it's because certain "applications" are being marketed very heavily to non-technical people who aren't able to reasonably assess the viability of the technology. I'm thinking of NFTs in particular. The only other popularized non-NFT applications are cryptocurrencies, which are pure speculation (i.e., gambling).

In short, that's a moral issue. People were outraged by the Madoff scandal (and others), and this doesn't look a lot different to people who understand the underlying technology. Nobody wants their mom going broke because they bought some hyped-up blockchain thing on the advice of some super-hustler internet marketing influencer out looking to make a buck.

Many of us believe all this stuff is incredibly harmful right now. Just standing back and ignoring it, rather than attempting to direct people away from it, will likely cause more harm.

Imagine all your friends were really into MLM schemes and even quitting their job to join Amway and Herbalife. Sure you can just ignore it, but you can understand it’s tempting to ask them what the hell.

I was of the same mindset until this year when the pro-crypto crowd invaded the online art scene. Now I unfortunately can't avoid it, as much as I try, not matter how many keywords I mute.

I'd like to go back to ignoring it. But it looks like it's here to stay, and it's taken away one of the few things enjoyed about the internet. I guess I'm still moving through the anger and grief stages and am yet to reach acceptance.

Why couldn't they have just left art alone?

As this series of blog posts detailing why the crypto/bitcoin/ntf/web3 ecosystem is bad and wrong, I am continually reminded of two quotes from people worth listening to:

“Never argue with stupid people, they will drag you down to their level and then beat you with experience.”

― Mark Twain

"Don't believe the hype!"

-Flavor Flav

It's all about consensus and enforcement. The courts hold power because we all agree (actively or passively) that the decisions made by the courts are legitimate. We choose to keep our citizenships and pay taxes to enforce these decisions with coercive/violent means (police). If people lose faith in this arrangement and start disregarding the legal systems - e.g. if the police refuse to do their job - you could very well end up with blockchain officers taking their place and kicking down doors with the approval of the masses. For now, though, it doesn't really matter what you own on the blockchain because you have no shotgun to back it up (no legitimacy nor means of enforcement).

I wonder if this will be one of the “Show HN: Dropbox” type threads in a few years…

Comparing Bitcoin with companies and software products is not a good comparison.

Replacing software or products is not the same as exchanging government-issued fiat money to a new decentralized non-governmental form of money. The transition between different forms of money depends on trust which takes time[1]. E-mail and internet (web) took of faster but these inventions did not require people to exchange their money into an alternative system.

[1] https://en.wikipedia.org/wiki/History_of_money

I've been against the whole blockchain space for some time but I only just realised the one big positive to come from it - a new market.

I think that's why it's become so popular, you can actually invest in ideas just as they're being born now. The stock market is a marvel but the barrier to entry for companies is insane. It's also why there's so much money flowing through VC channels these days.

I'm just hoping the resolution to these issues that sticks, a proper market for investing in early stage startups, is created outside of the blockchain.

This article feels like it's just riding the crypto bandwagon for clicks.

The "early days" of something is relative to the lifespan of the thing. If crypto lasts for the next 1000 years then yes we are very much in the early days.

Moreover, a label like "early days" is entirely irrelevant, because really the question that needs to be asked is "Is it still changing, evolving, growing?" Based on what I've seen (I'm not a crypto enthusiast) the answer seems to be yes.

I don’t think the “early days” will be over until we can in fact see a few of the big projects crash and fail AND THEN some new projects survive and take over with killer products as we saw with the dot com bubble.

At the moment there are already some successful private blockchains, some of those the end user interacts without knowing about them.

> How long can it possibly be “early days”?

70-ish years. I'd say we just recently came out of the early days of computing around the 1990s or 2010s.

>How long do we need to wait before someone comes up with an actual application of blockchain technologies that isn’t a transparent attempt to retroactively justify a technology that is inefficient in every sense of the word?

Currency is inefficient? It's sure better than trading cows.

Smart contracts? Writing things using english and then every side involved hiring lawyers to be used as bad just-in-time compilers for what was written is way more inefficient.

"Bitcoin was the beginning of the end for the state" – geohot. And I can't imagine much more of an inefficient system than the state and central banking.

> How much pollution must we justify pumping into our atmosphere while we wait to get out of the “early days” of proof-of-work blockchains?

Energy production problem, not a blockchain problem.

> How many people must be scammed for all they’re worth while technologists talk about just beginning to think about building safeguards into their platforms?

God, devs, please don't put restrictions on your platforms under the guise of "safety". Same goes for governments. Stay out. If you have no clue how something works, it's partly on you if you gamble all your savings on it. But also, who is excusing scams? We all think scams are bad. Nobody is seeing someone who fell for BitConnect and saying "Well, it's the early days, so it's fine that you got scammed."

It seems to me that this lady really wants to dislike. In general. She enjoys disliking things.

> Currency is inefficient? It's sure better than trading cows.

Currency is a problem that's already solved much more efficiently in a lot of countries.

> Smart contracts? Writing things using english and then every side involved hiring lawyers to be used as bad just-in-time compilers for what was written is way more inefficient.

Writing a bulletproof smart contract is difficult, as demonstrated by endless exploits despite the contracts being written & reviewed by specialists paid lots of money.

The advantage of the legal system is that when shit hits the fan, humans (in court) can step in and determine what the intent of the contract was despite potential loopholes, whereas in code, there is no difference between "loophole" and "intended behavior". Now you can of course have an authority that has power over smart contracts and can step in and rollback exploits, but that's just the current legal system with extra steps, at which point you may as well not use a smart contract at all.

> And I can't imagine much more of an inefficient system than the state and central banking.

There are obviously edge-cases and cryptocurrency is valuable in those, but in the vast majority of the world banking is a solved problem and much more efficient than cryptocurrencies. Compare the total cost (fee + environmental impact due to energy use, etc) of a card transaction or bank transfer with a cryptocurrency transfer.

I'm not saying that cryptocurrencies are useless - there are use-cases for them including in countries where the established monetary system is broken. But outside of those edge-cases, cryptocurrency would be a very wasteful downgrade from the status-quo.

> Currency is inefficient? It's sure better than trading cows.

> Smart contracts? Writing things using english and then every side involved hiring lawyers to be used as bad just-in-time compilers for what was written is way more inefficient.

If crypto is doing these things really more efficiently than current solutions, then why neither use case has any significant adoption of blockchain solutions?

Every technological revolution is held back as long as possible by those making the most money using the current system.

London streets will be covered in 3 feet manure if industry progresses at this pace.

You’re crazy if you think this fool contraption you’ve been wasting your time on will ever displace the horse, there is no significant adoption.

Electricity is dangerous, there is no significant adoption, gas lamps and candles work fine.

Remove trollys since we can make more money selling tires, oil, and buses.

Internet is a fad, what use case is it solving, it burns a lump of coal every time a book is ordered, there is no significant adoption.

EV1 - we will take your electric cars and crush them, there is no significant adoption.

Proof of work guaranteeing that no one can alter history unless they spend more energy than the entire network has spent already to secure property rights has no use case and no significant adoption.

At this point either you see a pattern from history, or you remain perpetually on the wrong side of a Blub paradox.

Some of our current financial systems are deeply embedded and difficult to replace.

We're in a situation where we need bankers to finance lawyers to work on issues that would negate some of the need for bankers and lawyers.

> Energy production problem, not a blockchain problem

Yeah. But blockchain energy requirements are definitely a blockhain problem. That's the main problem.

Very precise criticisms. I wish she would have mention her thoughts on proof-of-stake blockchains.

PoS blorkchains do not solve the first problem completely (they still require an obscene amount of power to do something that can be done way more efficient) but implement an entirely new kind of problem: The more tokens someone already had, the higher his chances in the "stake-lottery".

Essentially, PoS makes sure that "he who has the gold makes the rules" becomes hardwired in the system, instead of only being a side effect of it.

No they don’t. They’re pretty green.

interest rate at 2-4 % will do the trick. not so long.

Apparently high levels of debt will really limit the amount rates can be increased. This is something I have heard from crypto investors, but also from people who dislike Bitcoin.

While i agree, ultimately i don't think it would matter if it was.

Either you have a product that does something interesting or you don't. I don't think it matters at what stage you have the interesting thing at.

(Fwiw, i don't find recent blockchain interesting)

I've started telling my tech-following friends and relatives: Whenever you hear somebody say "Web 3.0" you should think "YABS" (Yet Another Blockchain Scam).

History will not be kind to @pmarca for promoting this shite.

I just can't take the power and pollution argument seriously. There's just nothing salient about it. I might have otherwise agreed with the author on their other points but if you can't see the issue with this argument it disqualifies your opinion (which js just my opinion).

"Bitcoin requires lots of electricity". No, nowhere near the scale human activity sans blockchain does and to provide it we burn coal. Like we've done for a looong time before bitcoin. Removing bitcoin doesn't remove the coal we burn. Genuinely daft argument.

And that's before we get into looking at the numbers from areas like the mining sector. Aluminum smelting isn't cheap from a power perspective, yet I don't see this argument leveled against coke.

The answer is renewable energy. Obviously.

The difference is that from then perspective of the critics, cryptos burn the energy needs of multiple small country for Ponzi schemes.

Purely to represent the opinion of the critics now, aluminum smelting might be and, but at least aluminum out of it, so they don't criticize the base activity, just the energy type. From the perspective of the critics, we don't need to struggle and transition crypto to RE, we can just stop doing it.

I personally agree, but people with your perspective (presumably) don't and place Crypto in "expensive but inherently valuable activity" or at least in "entertainment" both of which also use a lot of coal power but aren't negotiable, hence people focus on the energy sources not so much the activity.

Hence talking past each other

> I just can't take the power and pollution argument seriously. There's just nothing salient about it.

https://news.ycombinator.com/item?id=26097332

https://news.ycombinator.com/item?id=26335888

https://news.ycombinator.com/item?id=20351959

TL;DR: Bullshit.

> The answer is renewable energy.

You're talking as if the crowding out effect didn't exist: Even if we had a lot more renewable energy than we do, every kWh used for crypto-"currencies" is a kWh that can't be used for something else

To me, the most promising use cases for a blockchain would be activities that are today carried out by government agencies, states or lawyers. Anyone who has ever bought a property in central Europe knows how much money has to be spent on trustees and notaries. If such transactions can be carried out in a secure way between buyer and seller without an intermediary, that would be a huge win. However, the lobby of lawyers and notaries is big, the connections to politicians are tight and they will not give up this business easily. Additionally the public sector is not known for its fast technology adoption.

Until the first person gets tricked into signing over his property for free...then suddenly, all these lawyers, agencies and notaries are back on the track again, because it turns out they were there for a good reason the entire time: To make sure its really really really hard to get someone to hand over his home via something like a typo or a misclick.

Code is law, until someone writs code to steal your monkey jpg or worse, a real house. Then you realize the law and lawyers were there for a reason.

> activities that are today carried out by government agencies, states or lawyers. Anyone who has ever bought a property in central Europe knows how much money has to be spent on trustees and notaries. If such transactions can be carried out in a secure way between buyer and seller without an intermediary

So if the system in those countries could be thoroughly reformed to work totally differently than it does today... Then why couldn't it just be thoroughly reformed to work more like it does in Western or Northern Europe today, where it works with a lot less hassle even without blockchain?

The author admitted in her opening that she doesn't understand the point of decentralization. Reading anything beyond that point is a waste of time.

I think it's still early days in terms of what's been built and what valuable applications have been created, i.e. nothing of note. But it's definitely not early days for investing in tokens - almost all of the top tokens seem completely overvalued. I think the token prices will crash and rise continually over the next 5-10 years as developers and entrepreneurs take the ridiculous amounts of VC money that has been raised to invest in crypto, and ultimately (perhaps) build a handful of useful and popular applications.

To be fair, it took decades for e-commerce on the web to become mainstream. Remember what a joke Webvan used to be in 2001?

Uh, 2001 happens to be the year that Amazon became the biggest bookseller in the world, having been founded five years earlier. That's literally about as mainstream as you can get, and it was half a decade.

Whether or not you agree with the arc of the linked article, the basic facts are correct: blockchains have been with us for a decade now and haven't done much or made anything that wasn't itself a speculation about blockchain.

You call it speculation and that’s convenient for your argument. Bitcoin as a store of value is not speculative. It has objective qualities that make it valuable and you dismissing those as speculation lets you be ignorant to the comparable short term success of Bitcoin.

Didn't pg write Viacom (shopping cart software) in 1995, and sell it to Yahoo in 1997?

http://www.paulgraham.com/avg.html

A rare article on the realities of blockchain

The blog post conflates several issues together:

(1) why is the blockchain still so inefficient?

(2) why is the blockchain still so lacking in practical use cases with widespread adoption?

I think she is totally fair in complaining about (1). Either it is impossible to have decentralization and efficiency or it's just a technical problem that will be solved given more time. I don't have the answer here - only time will tell.

For problem (2), I think it's mostly an over-exaggeration of the use case(s) where web3 that beats web2. As far as I can tell there is one and only one use case: web3 can do things while having a middle finger pointed at major governments. Web2 cannot. In that bitcoin and eth can offer people of Argentina a some reliable store of value (against their own currency which depreciates at 50% per year) it has generally achieved that. You can't even buy a Tesla in Argentina so the adoption of that wonderful technology there is zero.

To claim that it's the next web2 or mobile tech is both an exaggeration and an underestimate. Web3 will not be much of a challenge to web2 or mobile. Instead it will be a huge challenge to existing political, monetary and taxation systems. It will be the tool of the rich to evade taxes, for libertarians to evade control and for those living in high inflation countries to build wealth.

Those who complain that this is hardly revolutionary are both right and wrong.

this article misses the forest for the trees.

it's the early days for smart contracts and applications like defi

once the barrier of entry drops in contract creation i suspect there will be exponential growth in exotic securities/financial-arbitration

Reminds me of something Elon Musk said. A lot of the content on the internet is a "projection of our limbic system". (Elon saying this https://youtu.be/ycPr5-27vSI?t=1074)

I see the craze around crypto the same way. It is a representation of something in our limbic system. Perhaps greed?

Why limit your theory to blockchain? “Craze” in general seems to be limbic in nature, but that’s common knowledge, isn’t it?

If there would be a legal framework in place that can tie a DAO to basically be legally binding bylaws of an actual org. and the smart contract lang. is expressive enough for this to work this would be extremely valuable. Outside of this most of web3 looks like hype.

If there was a legal framework, it wouldn't be decentralised! ...and hence, it's pointless, since you could recreate it at much lower expense without the blockchain and associated speculative coins.

This has 0 to do with coins. Going through court systems can cost 10s of millions of dollars and someone actually has to actually bring the action to court.

The question is: does the legal framework override the results of the smart contracts and blockchain records? If so, you don't need the crypto. If the crypto cannot be overriden by the legal framework, you don't need the legal framework. Pure redundancy.

so if we are depending on a centralized legal framework, why would we need the blockchain (decentralized store)? Wasn't Code supposed to be Law?

so we do not have to go through legal process to resolve anything

Can you elaborate on what you mean by this ? Do you have any examples of what this could look like in practice ?

a very narrow example you are nonprofit in charge of .org TLD the DAO managing bylaws of that org have no provision for you to be able to sell .org TLD to a third party. You don't have to constantly worry that some ahole will take over the org and do this, because there is no way to do it.

I believe Wyoming actually passed some laws along these lines, to where a DAO can be a legal entity.

Well I am def not a legal expert to know if it is sufficient for the above purpose and if we can ever create a lang for smart contracts that is expressive enough, but it's cool to see things are happening.

Substitute “NASA” for “blockchain” in this article, and I agree:)

Blockchain denialism is the new remote work denialism

people have the tendency to quickly categorise things into "good" or "bad". as scammy as the crypto world is, there are a lot of potential uses for the blockchain. think fault-resistant backends, think open and transparent data flow and storage. "the early days" is subjective but in my opinion there are still so many things that'd run better if it were run on a blockchain instead of a traditional centralised server

Platforms develop quickly.

Protocols develop slowly.

Following the same logic, the late 90s were not the web “early days” because the web started in the early 90s

Only due to the internet existing in the first place, which by the author's own logic, 'that wasn't new either'.

The World Wide Web was the 'killer app' for the internet (which that has been there for years before) in the early 1990s; perhaps even fuelling the dot-com boom. A decade after that, the whole market crashed.

The critics were celebrating, did the utility of the web stop? Nope. Only the scams and useless, overvalued websites died.

The same thing applies to just blockchain technology even beyond 'Bitcoin or Ethereum' where when the concept of that is not new. The regulations will come and eliminate the coins that do not comply and the useless cryptocurrencies or meme coins will be extinguished - probably will cause another crash again and eliminating more useless unregulated cryptocurrencies.

That is even before the regulatory framework has been even properly implemented. A few of these cryptocurrencies will survive all of that.

Not really. The innovations in 90s web technologies solved more “real” problems and gained mass adoption. much different than the blockchain/crypto innovations of the past decade which are still used by a relatively small number of people.

First video call was made in the 60s. It took 50+ years before it was ubitiquous.

Yeah but the advantages of video calling are obvious to anyone immediately. Same with the internet.

Spot on.

Those crypto hate articles are so trite. By this point, either people get it, or they don't.

We could even agree it isn't for everyone. Some people suffer from or dislike centralization, others don't. Some even explicitly WANT centralization.

Automation has not delivered his full potential but only side effects which favored the few sociopath over the many. Internet has delivered as much as possible in the early days, not its full potential, and has been regulated so that the orwellian side effects will be prevalent. Bitcoin put a dent in the banking system, and it is being normalized. But the ideas behind blockchain and trustless consensus have a great potential. They will probably fail like the rest but why not give it a chance. I do NOT mean invest money. I mean invest time in understanding how those principles can be applied so technology can fight soulless technocracy.

Why is it that in 2021 if I accidentally transfer btc to an eth wallet I lose it all (into the actual ether)?

Because when the genius Satoshi Nakamoto thought up about digital funny money in the aftermath of 2008 financial crisis, he didn't think hard enough about all the possible scenarios.

Blockchains exist for a reason completely other than performance. Of course a centralized database would perform better. That’s not the point. I think engineers keep getting hung up on this and don’t zoom out and see the big picture.

I feel like even after zooming out and seeing the big picture, it's hard to imagine blockchain solving real world problems. Blockchains are good when there's a lack of trust and decentralization is absolutely necessary. There are very few problems that actually need a blockchain. Anything that has the government in the loop (like buying houses or property) is a non starter and anything that runs on centralized servers (like game NFTs) also doesn't make sense.

You're right. And bitcoiners have been saying this from the very beginning of the crypto madness.

A global, government agnostic money like bitcoin that no group of insiders and early adopters have unassailable control over, seems like the only likely candidate for something that needs a truly decentralized and trustless blockchain.

The rest is hype.

> Blockchains are good when there's a lack of trust and decentralization is absolutely necessary. There are very few problems that actually need a blockchain.

How about the current status quo of the Internet? Do you think being mined, sold, and endlessly tracked is OK?

What is the big picture then? I've never got anything concrete that doesn't sound like the usual buzz word snake oil.

Blockchains solve the wrong problem for a lot of the proposed applications I've seen, like handwaving about "supply chain". The biggest difficulty is not that you don't trust the database, it's that you don't trust the connection between the electronic data and reality. How do you trust a person to have packed the correct grade of meat into the box you are buying? If they've dutifully recorded something on the blockchain and you can verify that nobody has tampered with that record, it still does not help you.

And if you have regulation to ensure supply chain steps comply, then you trust the regulators, then you can have a central database.

Crypto coins are unique in that you can verify them mathematically. They have no connection to anything else out in the real world so they don't have that problem.

So aside from coins, where else is it that you would not trust a central database, but you can verify/trust the entries being added to that database?

I agree, no problems in the real world are solved. I guess that’s where all the meta verse nonsense comes into play.

>>So aside from coins, where else is it that you would not trust a central database, but you can verify/trust the entries being added to that database?

I would not trust a central database for any application, even those where I have to trust the verifiers of the entries to that database.

E.g. I would prefer stablecoins over credit in a bank.

With a decentralized database, immutability and permissionlessness are the default, until the trusted third party actively intervenes to strip you of these privileges.

With a centralized database, access is by default denied, and requires active intervention from the trusted third party, in the form of a grant of permission, to acquire.

Except that as Moxie pointed out just recently, the way it all is set up, everything is centralized anyway. So it's not actually being used in a different way.

NFTs are set up in a centralized way.

Every time there's a bull market in cryptocurrency, the charlatans jump out of the woodwork. They build a bunch of websites and scam a lot of naive people. When the market reverses, these project disappear one after another, usually with people's money, sometimes because they don't actually solve a problem. Almost every one of these NFT grift projects are going to disappear over the next year or two.

And he was right of his critique.

Of course, he's saying all that after pumping and dumping his personal centralized crypto crap MobileCoin into Signal.

Some blockchain technologies are highly centralized, but even then I think it's more like an "active/passive" configuration than a truly centralized system. If the system goes wrong, it's still easy to move to a different one.

The parent article doesn't say anything about performance. Therefore this comment seems like a red herring. A case of not reading the article?

The parent article's point is that most currently popular technologies found an application rather quickly, whereas blockchain technologies have been around for a long time (in tech terms) and still have not made ground.

From the article-

> How long do we need to wait before someone comes up with an actual application of blockchain technologies that isn’t a transparent attempt to retroactively justify a technology that is inefficient in every sense of the word?

Maybe you mean that they haven’t made useful ground, where useful is specific to you.

Remember that blockchain technologies have become legal tender, have over a trillion in market cap, have become financial instruments traded by people around the globe, is taught at Universities and part of the CFA accounting exam, is in the news daily, has resulted in large investments in research, etc…

It’s impact has hardly been non-trivial. Just the impact on finance is substantial even if people seem to gloss over a new financial asset as “just finance stuff”.

I don’t think we even need to “get” web3/blockchain/whatever rebrand.

No one understands what it will be (and people involved in the space barely understand what is, as in what all exists, today).

But here’s something that is concrete to anchor to: there’s somewhere north of $1T floating around in blockchains today.

That’s an incredible amount of money and people that have problems that need technology solutions.

Thank you for saying this, this point seems to be completely glossed over frequently, but it’s literally the point of blockchains.

To be explicit, the reason blockchains exist is to have a globally consistent database that doesn’t require trusting the operator.

>To be explicit, the reason blockchains exist is to have a globally consistent database that doesn’t require trusting the operator.

which I mean when I think of that I think - that would be really useful for crime because you don't want to trust the operator because either 1. they're a narc 2. they're a criminal.

it's also useful for currency because not trusting the operator allows you to keep them from turning into paypal.

but then I just draw a blank on what it is useful for after that.

'Zooming out and seeing the big picture' seems to mean buying into a libertarian vision of the world where the current money system is horribly broken and blockchain technologies are a viable and superior alternative. I profoundly disagree on all points of that analysis.

There are plenty of people on any part of the political spectrum for whom the current money system is horribly broken.

I’m not libertarian at all. I see cryptocurrency as a fair and transparent way out of the extreme wealth inequality we see in the world today. Decentralization gets me excited. New ways of using technology gets me excited.

Exactly, People on all extremes of this just cant seem to understand the simple reality that “the market can bear it.”

The market can bear smart contract platforms whether that platform writes to a proof of work system, a faster distributed set of nodes, or on localhost with port forwarding.

It doesnt matter! People like to deploy that kind of code on a platform that can be accessed that kind of way.

If there isn’t a token then people DDOS it instantly, with smart contracts that take up too much processing cycles or memory. Simple. People dont want to use limited fiat payment rails to attempt to preallocate resources, it doesnt work very well at arbitrary amounts, it ceases to be permissionless and the author is agreeable here: its been 13 years of this other solution and is an international hit!

Think about developers on Shopify’s app store that try to sell to ecommerce merchants. Its the same people with the same goals! Sell tools that theoretically make someone else’s life easier. Extract value because commerce exists. Thats really valuable. Thats exactly whats going on in blockchain. Just because you and your friends are taking linear bets with your capital and cant quantify why things go up way too often really has nothing to do with the people that built that tool for you who are taking little basis points here and there.

I think the author hasn’t heard about DeFi. It’s pretty mind blowing what people are building on top of blockchains these days. But of course users who are not directly affected are oblivious to the advances and are just upset that they are not being served as users. If you think blockchain is useless: you are not the target user. The day it becomes useful to you, then you can choose to use it or not, but that day you’ll probably use it without knowing you’re using it. After all, do you have a clue what backbone your bank is using to perform wire transfers?

I'm not aware of any serious financial application running at scale and relying on blockchain under the hood.

Are you? What is it? Specifically.

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