[HN Gopher] Why blockchain is not yet working (2018)
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Why blockchain is not yet working (2018)
Author : max_
Score : 93 points
Date : 2021-02-14 09:45 UTC (13 hours ago)
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| ffggvv wrote:
| ironically the biggest issue with crypto as an actual currency is
| stability, which could easily be solved via a stable coin or
| something tethered. but there's zero excitement about that and
| all the excitement is around bitcoin, because all people really
| care about is that it goes up up in price
| lima wrote:
| Here's how things are looking in 2021:
|
| _(1) Scalability Issues_
|
| Solved - there's a plethora of high-throughput chains in
| development, either based on sharding or
| pipelining/MVCC/optimistic concurrency. Some projects like Solana
| use GPUs and JIT compilation to achieve well beyond 50k tps in a
| distributed network.
|
| _(2) Lack Of Intuitive Private Key Management_
|
| Little progress. Ledger and other hardware wallets make things
| easier, but it's still far from intuitive. Non-technical holders
| typically use centralized custody providers.
|
| _(3) Contract Security_
|
| Some progress. Smart contract exploits still happen almost every
| week, but there's a robust set of best practices, safe-by-default
| standard libraries, and specialized auditing companies which make
| it much easier to write bug-free contracts, if you're willing to
| invest the time and effort.
|
| _(4) Consensus Algorithms Are Wack_
|
| Solved very thoroughly. There has been significant progress in
| byzantine fault-tolerant consensus, like Tendermint consensus[1]
| used in the Cosmos ecosystem, providing strong consistency and
| instant finality.
|
| _(5) Privacy_
|
| Many developments around zero-knowledge proofs and similar
| methods, but I don't know how viable those are.
|
| _(6) Price Volatility_
|
| There's a number of trustworthy stablecoins like USDC pegged to
| fiat currencies. Other than that, tokens are still highly
| volatile and only useful as a high-risk investment.
|
| [1]: https://atrium.lib.uoguelph.ca/xmlui/handle/10214/9769
| subaquamille wrote:
| > 1) Solved: [... it's] in development
|
| Wait what ?! Imagine saying this on a daily meeting !
| ausbah wrote:
| is there a good resource that you recommend that goes more in
| depth over advances like these? I think my opinion on
| cryptocurrencies and blockchain in general is severely out of
| date
| meowkit wrote:
| Start with a non-Bitcoin crypto and understand its components
| and how its supposed to work. Most of the core principles
| carry over to other cryptos.
|
| Ethereum.org and the the Ethereum blog would be my
| suggestions as a primer.
| ignoramous wrote:
| I genuinely think HN is subject to what Clay Christensen put as
| "disruptive innovation" when it comes to _Blockchain_ and friends
| (strange to say that for a community as opposed to a company).
|
| I understand that many on HN think of the many ICOs as Ponzi
| schemes, and other tech (like identity, DBs, VPNs, apps, or even
| alternate WWW) built on top as smokes and mirrors; but the
| industry being built around it is very real even if niche.
| There's a lot going on (including research) and it seems to me
| like, one fine day, like how ARM sneaked up on x86, Blockchain is
| going to take HN by surprise. And then, the disruption would have
| truly arrived.
|
| It isn't like the best sounding tech wins anyways.
| space_rock wrote:
| An ICO is a framework for a criminal conspiracy to defraud. As
| outlined in the evidence gathered by the SEC on Ripple.
|
| Make some outrageous sales pitch that experts in technology
| would describe as vaporware
|
| Sell your utility tokens. A worthless type of token
|
| Buy some fake articles and pump the price. Dump on the suckers
| that bought your tokens
|
| Pay for a exchange listing on a junk exchange. Pump the token
| and dump on the suckers that bought it
|
| Exits, rinse and repeat
| hanniabu wrote:
| By your logic the stock market a scam because of penny
| stocks.
| space_rock wrote:
| Penny stock is a utility token redeemable for an unproduced
| good?
| selestify wrote:
| Penny stock is a utility token representing governance in
| a company as well as the privilege of taking its profits
| -- much like crypto governance tokens are.
| space_rock wrote:
| Penny stocks are companies building perpetual motion
| machines and magic derivative technology with no trade-
| offs?
| space_rock wrote:
| I accept all downvotes as validation of my observation on
| ICOs
| cblconfederate wrote:
| Would be nice to have a decentralized HN . I m sure it exists
| canoebuilder wrote:
| > _but the industry being built around it is very real even if
| niche. There 's a lot going on (including research)_
|
| What are some concrete examples?
|
| I think most of us who are critical are still interested,
| because we _do_ see things that are going on, and we ask
| ourselves, are we missing something?
|
| But we seem to run into the same road blocks again and again.
|
| "Solutions" seem to come from people subtly or transparently
| "talking their book," that is, they have an undisclosed vested
| interest in you not thinking too much about those roadblocks.
|
| What is some fruitful research being done in the areas of well
| known roadblocks? What are some application areas with a
| genuine pathway to viability and no better non-blockchain
| alternative?
| spopejoy wrote:
| I think smart contracts are actually extremely novel in the
| form they take in Ethereum EVM, Tezos, Cardano, DAML and Pact
| (I'm author of the latter). TBH I'm a little frustrated with
| the evolution of smart contract langs post-2017, as I think
| Ethereum's dominance has made most engs/projects uninterested
| in innovating.
|
| If you look around, it's actually very hard to find a
| genuinely small language you can embed in your runtime, and
| offer to users. Lua is a common suggestion, but Lua doesn't
| let you lock down IO, or code loading (that is, without
| writing your own interpreter and changing semantics -- what's
| the point?). A truly pure smart contract language gives the
| containing app full control over the entire runtime.
|
| Smart contracts to me are a modern stored-procedure language
| that you embed directly into your app, and give you a 100%
| deterministic way to store long-term state, including code.
| "Application DBs" like sqlite don't scratch this itch (for
| instance sqlite doesn't have SPs). Plus, smart contracts are
| metered (usually), which allows for a cost-model and prevents
| against DOS. This plus the turing-incomplete angle makes them
| reasonable to open up to the world.
|
| Erlang and lambdas come to mind, and I can argue why they're
| different too. But this is already too long :)
| canoebuilder wrote:
| >But this is already too long :)
|
| Not at all, I appreciate the info.
|
| Cardano I believe uses PoS of some sort.
|
| What is the thinking about what keeps these distributed
| application servers running? Is it still mainly the mining
| reward model?
|
| What sort of applications most excite you? Are there places
| the distributed model works better than the traditional?
| Are there applications the distributed model enables that
| the traditional does not?
|
| And vice versa, what are the limitations of the distributed
| model? What things just aren't feasible? Could you build
| Twitter or YouTube like systems?
| [deleted]
| loceng wrote:
| That is speculation at the moment, a lovely fantasy to imagine
| to come to fruition for any technology; a market cap that has
| reached $1 trillion including price manipulation, I'm unsure it
| warrants that valuation - and arguably it's not simply that
| high due to price manipulation.
|
| I do believe blockchain could help us solve some fundamental
| problems - but only if it's tied to real trust and democratic
| processes.
|
| Bitcoin is a blockchain that's been structured to inherently be
| an MLM, and if you think through to the conclusion - say once
| 50% of the population has bought into Bitcoin, and now a
| growing majority require the remaining society to adopt Bitcoin
| to realize their gains - to unnecessarily, unreasonably
| transfer wealth from later adopters weighted towards earlier
| adopters - then you can how conflict will occur when the
| remaining 50% of society don't want to be left holding the bag,
| with no one else to then buy more Bitcoin for the last adopters
| to get wealth transferred to them; and this is why it also
| mimics a Ponzi scheme - it's just that there isn't a single
| controller liker Madoff, but instead it's controlled via a
| global, decentralized system that anyone can participate in.
| selestify wrote:
| It's not a Ponzi scheme any more than any other investment is
| a Ponzi scheme. Once 50% of society buys gold, who's going to
| realize their gains? Except for gold speculators, the point
| isn't necessarily to just realize gains, the point is to own
| an asset whose value is guaranteed not to disappear, even if
| it fluctuates.
|
| Granted, gold has a stronger guarantee than Bitcoin as of
| now. But that doesn't make Bitcoin a Ponzi scheme.
| jokethrowaway wrote:
| Bitcoin is the mongodb of finance: You like its features but in
| reality most people don't need them.
|
| Mongo's scalability sounds great until you find yourself
| reimplementing a relational database for your 1000 users app.
|
| Bitcoin decentralisation sounds great but must people don't need
| it. You just need a less evil and less corrupt government and
| better fintech.
|
| You're curing the symptoms, not the cause.
| slim wrote:
| Bitcoin decentralisation sounds great but must people don't
| need it. You just need a less evil and less corrupt government
| and better fintech.
|
| your second sentence inadvertently convinced me I need bitcoin
| imtringued wrote:
| That less corrupt government will provide 1000% gains for
| everyone. Bitcoin will give that only to those who buy it aka
| rich people.
| meowkit wrote:
| I can't tell if this comment is disingenuous or just naive.
|
| We've been trying to create less corrupt governments for
| hundreds of years.
| shaolinspirit wrote:
| oh wow, are you straight from Disneyland?
| bondarchuk wrote:
| Is this what Gell-Mann amnesia feels like? I happen to be a bit
| into cryptocurrency, and day after day I see these super basic
| surface-level takes on blockchain get posted here and even
| upvoted to the top spot. Are the other popular submissions here,
| on programming languages, the internet, entrepeneurship and what
| have you of similar low quality, but I just don't have the
| experience in those fields to realize it? This is a serious
| question.
| freddie_mercury wrote:
| Yes, absolutely. Outside of extremely narrow programming
| niches, discussions on HN are generally very bad.
|
| I don't think that's anything particularly unique to HN but is
| simply a fundamental weakness of the "one forum for all
| subjects" approach that HN takes contra Reddit.
| ravanave wrote:
| Technical content is generally of much higher standard.
| Although HackerNews sometimes feels a bit like an echo chamber
| with the type of content that gets popular.
|
| I think there's just too many crypto-sceptics here, and that's
| a shame because crypto solved a lot of challenges they're
| talking about, and is on the rally to democratise everything
| financial related. Something big that many people still miss
| on, but with about 0.5% adoption rate we're at the early stage
| of the innovators stage.
| https://en.m.wikipedia.org/wiki/Technology_adoption_life_cyc...
|
| Give it a few years until we get to the early adopters and for
| sure the quality of content will improve. It just needs more
| people reading about it and adopting it.
| andreaorru wrote:
| I'm having your same exact doubts. The quality of the
| conversation about cryptocurrencies here on HN is abysmal.
| Misinformation, or outdated information, is rampant.
|
| Maybe that's the case for everything else that is discussed
| here, but I just don't have enough domain knowledge to be able
| to tell...
| dschuler wrote:
| This is ironic, because your posts are part of the problem.
| andreaorru wrote:
| Very possible. In that case, joke is on me. :)
| [deleted]
| [deleted]
| gjulianm wrote:
| This happens a lot in topics that the HN community is
| interested in but not very knowledgeable in general. You can
| usually trust the top voted articles in programming and
| entrepeneurship because a lot of people here know about that.
| But, for example, in maths and music (I happen to know
| something about those) I see a lot of really bad articles and
| takes being upvoted.
| lima wrote:
| I think it happens even for topics of programming and
| entrepreneurship. HN is not a representative sample of the
| software industry.
| lima wrote:
| > _Are the other popular submissions here, on programming
| languages, the internet, entrepeneurship and what have you of
| similar low quality, but I just don 't have the experience in
| those fields to realize it?_
|
| Yes, absolutely. There's some niche topics that I happen to
| know a lot about, and the top stories and comments tend to be
| very superficial and/or plain wrong.
|
| On the other hand, there's usually someone around to call out
| the inaccuracies :)
| RurouniK wrote:
| Bitcoin has been running non-stop for the past 12 years, used by
| tens of millions of people,has a market cap of 1 Trillion and all
| that while protecting the human rights around the world:
| https://www.reddit.com/r/Bitcoin/comments/ldyy7s/bitcoin_is_...
|
| But even if you are clueless enough to think that Bitcoin and
| blockchain isn't working at least you should appreciate all the
| breakthroughs in cryptography like Zero Knowledge proofs,
| networking like libp2p, distributed storage like ipfs etc. that
| emerged from the evolution of cryptocurrency tech.
| [deleted]
| floo wrote:
| Bitcoin has all of the problems listed in the article and is,
| arguably, not yet providing the social value that blockchain
| could.
|
| Not sure how a high market cap is a counter argument to that.
| genericacct wrote:
| Especially considering market cap is a totally made up number
| and if everybody tried to get out at once they would get a
| fraction of a fraction of it. (1) But it's pointless to tell
| this to a cryptofreak because they're so heavily invested in
| it they make zealots look reasonable.
|
| (1) not to mention the fact that as soon as there is
| volatility exchange sites go down, even the bigger ones.
| RurouniK wrote:
| Wait until you find out what happens when people try to
| take out their money all at once from banks... I remember
| back in the day when people used to call early internet
| users internetfreaks and zealots. Now it's the same with
| Bitcoin. Whatever...
| janoc wrote:
| Yes, we all remember well what happened e.g. with Mt Gox.
|
| Not sure what your point here is - as if panic and runs
| on the banks were somehow magically prevented by crypto.
| AngrySkillzz wrote:
| And the hilarious part is, we actually have regulations
| like capital requirements and FDIC insurance and central
| bank lenders-of-last-resort to prevent bank runs? Whereas
| crypto has... none of that? And unaudited Tether pumping
| >$1B into the crypto ecosystem every week
| seibelj wrote:
| If everyone tried to get out of any asset at once the price
| would tank. That's how markets work.
| RurouniK wrote:
| The market cap is a counter argument because it shows the
| trust people, and lately corporations put into Bitcoin as a
| store of wealth and a hedge against inflation. The market cap
| proves that bitcoin/blockchain/cryptocurrency enthusiasts put
| their money where their mouth is.
| bildung wrote:
| I hardly doubt you'll find _any_ enconomist working in
| those corporations fearing inflation. Inflation has been a
| non-issue since the 1980s. https://en.wikipedia.org/wiki/Un
| ited_States_Consumer_Price_I...
| andreaorru wrote:
| And yet...
|
| https://wtfhappenedin1971.com
| bildung wrote:
| That page reminds me a bit of time cube :)
|
| Here is a good introductory article about the topic:
|
| https://slatestarcodex.com/2019/02/25/wage-stagnation-
| much-m...
|
| TL;DR: Inflation plays at most a secondary role, the
| majority of the effect is a result of stagnant real
| wages, i.e. the capital owners kept a larger share of the
| productivity gains.
| andreaorru wrote:
| Thanks, that looks amazing. It's gonna take me a while to
| digest it though. :)
|
| Does the article conclude that the correlation with the
| US going off the gold standard, and consequent change in
| monetary policy, is completely spurious?
| bildung wrote:
| It is mentioned in passing, but not discussed in depth. I
| don't think it plays a large role (mostly because it was
| a _consequence_ of the economic development - they didn
| 't just went off gold because they felt like it), most
| importantly because the same curve can be seen in other
| industrial economies in the same period - which didn't
| use gold before. I guess the computer revolution plays a
| large role, significantly altering many industries and
| the character of many occupations. Collective bargaining
| couldn't keep up fast enough, and thus wages and profits
| decoupled.
| andreaorru wrote:
| Thanks for sharing your perspective. I've read the entire
| article but it seems to discount the thesis that the
| technological revolution played a primary role.
|
| It seems to me that like most macroeconomics issues, it's
| a multivariate phenomenon, so correlational studies can
| only get you so far.
|
| Do you have books you would recommend on the subject?
| bildung wrote:
| The technology angle in the article is not quite what I
| meant. Alexander looked at how low-skill jobs and high-
| skill jobs developed, i.e. the new demand for high-skill
| jobs was not enough to get a higher share of the profits,
| but what I meant is that this also changed the landscape
| and structure of companies itself. The introduction of
| computers changed how companies organized themselves,
| enabled outsourcing etc. Companies before often were very
| vertically integrated, and the digitalization enabled
| organizations to spin off subdivisions into suppliers
| etc., which made it harder for unions to achieve higher
| wages. (A bit amusing that that went so far that vertical
| integration nowadays is all the rage again, with Tesla as
| the most vocal. We went full cycle after Ford started it
| 100 years ago :)
|
| Sadly I can't seem to find the article anymore, but there
| was a publication by Robert Brenner that showed that the
| fundamental changes of the early 70s also affected Soviet
| Russia in quite similar ways.
|
| Edit, sorry, forgot your literature question. I think the
| two important keywords are Fordism and Post-Fordism, as
| economic literature usually seems to use these terms to
| describe what changed before and after the early 70s. The
| Wikipedia article on Post-Fordism lists a few theory
| lines and their authors:
| https://en.wikipedia.org/wiki/Post-Fordism
| smartties wrote:
| Market cap means nothing. I can create 10^32 coins out of
| thin air, sell one coin at 1$ to one customer. And the next
| thing I have is a coin with higher marketcap than bitcoin.
| selestify wrote:
| To get recognition as the coin with the highest market
| cap, you'd need to have it actually traded on an
| exchange. How many people on the open market are going to
| buy your coin for $1 on an exchange? There you go, your
| coin is worthless and has a market cap of roughly zero as
| determine by the open market exchange.
| tromp wrote:
| That's what makes PoW (with no premine) coins more
| honest. No coins out of thin air, and the price derives
| from actual demand for the coins that anyone can mine.
| throw0101a wrote:
| > _The market cap is a counter argument because it shows
| the trust people_
|
| See also Enron, WorldCom, Nortel, Bre-X (for the Canadians
| out there).
|
| > [...] _and lately corporations put into Bitcoin as a
| store of wealth and a hedge against inflation._
|
| Given its volatility, I'm not sure how useful it is as a
| store of wealth. Less than a year ago it lost half its
| value in two days (before the recent run-up):
|
| * https://www.cnbc.com/2020/03/13/bitcoin-loses-half-of-
| its-va...
|
| If you think inflation is coming, then you need to stop
| working in economics and/or finance, as you're burning up
| returns hedging against it, at least in the
| US/industrialized world. The last time it was a problem was
| >40 years ago (mostly due to OPEC):
|
| * https://fred.stlouisfed.org/series/FPCPITOTLZGUSA
|
| Outside of specific circumstance, _de_ flation is the
| predominant force:
|
| > _But_ In _flation is not inevitable. There are numerous
| countervailing forces that have been at work for much of
| the past 50 years. The three big_ De _flation drivers: 1)_
| Technology, _which creates massive economies of scale,
| especially in digital products (e.g., Software); 2_ )
| Robotics/Automation, _which efficiently create more
| physical goods at lower prices; and 3)_ Globalization and
| Labor Arbitrage, _which sends work to lower cost regions,
| making goods and services less expensive._
|
| > _Put into this context, Inflation is periodic, driven by
| specific events;_ Deflation _is consistent, the background
| state of the modern economy. To fully understand this
| requires grasping how scarcity and abundance act as the
| drivers of the price of labor and goods. My suspicion is
| many economists who came of age during earlier eras of
| inflation fail to discern how the world has changed since._
|
| * https://ritholtz.com/2021/02/stop-stressing-about-
| inflation/
| playingchanges wrote:
| Funny I actually viewed the 2020 BTC drawdown (and
| subsequent rapid recovery) as my number one buy signal
| for the current crypto bull market. In a time period when
| the Dow loses almost 13% in a single day and the fed has
| to use every move in the playbook to maintain liquidity,
| crypto holds its own with no fed assistance at all.
|
| As for inflation, I'm guessing the exact opposite
| argument to yours was being made in the 80s.
| imtringued wrote:
| >As for inflation, I'm guessing the exact opposite
| argument to yours was being made in the 80s.
|
| By definition, inflation is what happens when demand
| exceeds supply. If the fed keeps flooding the market with
| cheap credit the expectation is that the money is
| invested into more production, either by machines or by
| foreign labor (i.e. in China). Prices stop growing
| because supply outstrips demand. That's why the fed is
| failing to create sufficient inflation. Supply side
| stimulus is causing the opposite effect and at the same
| time it is leading to an asset bubble.
| AngrySkillzz wrote:
| Or you could say that cryptocurrencies are incredibly
| correlated with the stock market and thus don't actually
| serve as a hedge for risk at all
| rullelito wrote:
| Maybe you should try to read the linked page.
| gjulianm wrote:
| How much of that usage and market cap is actual usage and how
| much is financial speculation?
| loceng wrote:
| There's been research done to show that multiple times just a
| few people manipulated the price of Bitcoin to its heights -
| https://www.bloomberg.com/news/articles/2021-01-14/research-.
| .. - and the Bitcoin community main mantra is "HODL" and they
| call themselves the "army of the HODLers" for a reason:
| they're waiting for enough of society to be manipulated/trick
| people into thinking the history of the "steady" increase to
| "$100,000+" is because people many people are actually
| valuing it (which they're arguably not) - using that as a
| proof point to decide to buy; which has been done by 1)
| misappropriating Bitcoin as being akin to a stock in the
| stock market, especially the term ICO - "Initial Coin
| Offering" vs. Public Offering, and 2) misappropriating the
| term currency calling them "cryptocurrencies" - in an attempt
| to additionally legitimize it.
|
| I believe Bitcoin likely started to exponentially take off
| when the online marketing forums started rallying to put
| their efforts behind promoting it. Eventually then the VC-
| finance industrial complex joined in - and mainstream media
| then has been promoting it as if Bitcoin et al are stocks and
| a new currency. All the while the army of HODLers is growing
| - all incentivized to promote Bitcoin et al, and those who
| speak of a counter-narrative aren't financially incentivize
| to do so, and actually should fear doing so due to the mob; a
| partner at a top, international investment firm, Ray Dalio at
| Blackwater recently said as much - "while those who are
| against it (which are a few scared souls cowering in a
| corner)" - in his article "What I Think Of Bitcoin" -
| https://www.bridgewater.com/research-and-insights/ray-
| dalio-...
|
| The VC-financially industrial complex with billions have
| started to jump into the speculation game, the MLM, and with
| their billions I believe have stared to attempt to invest
| just enough to offset crashes in price - along with the "army
| of HODLers" learning to be more obedient and listening to
| their war mantra of HODL, along with Coinbase likely
| purposefully engaging in price manipulation by multiple times
| making their platform unaccessible to users - so those who
| would impulse sell when the price starts to skyrocket are
| blocked long enough for them to instead hold; I'm guessing
| Coinbase also have a certain amount of large buy orders from
| large institutional investors that they manage, and they use
| these funds in part to counter a crash from happening.
|
| This same price manipulation happens in the stock market - ht
| tps://www.reddit.com/r/videos/comments/lg0ial/jim_cramer_e...
|
| I also believe Tesla's recent acquisition of Bitcoin was to
| seem aligned with the growing mob of HODLers - who you don't
| want to be maligned with if you want them to speak positively
| about your product and buy your product, or in reality be
| less critical of you and your company because you're then
| financially aligned; Elon Musk recently tweeted "Bitcoin is
| almost as bs as fiat money" -
| https://twitter.com/elonmusk/status/1340588909974200321
|
| Unfortunately the world may go mad, greed taking over,
| regulatory capture occurring where a generally small amount
| of people could lead to trying to engage most of society in
| helping realize whatever value Bitcoin et al reaches -
| unreasonably and unnecessarily transferring wealth from later
| adopters to earlier adopters. It could be the next war to be
| fought after tyranny is solved - Bitcoin in fact making
| tyranny easier as you can't implement policy like the
| Magnitsky Act; it's always a non-response when asking a pro-
| Bitcoiner to address this question/problem.
|
| I believe an organization needs to be started and funded
| somehow to put a concerted effort to organize and educate
| people by creating, compiling, everything necessary - and
| making whatever easy to understand educational material to go
| along with it - and to be promoted, along with as a resource
| for people to reference when they're in discussion with
| others.
| scsilver wrote:
| The money transfered from late adopters to early adopters
| is the massive amounts of old money mad from the wealth of
| kingdoms and colonialization. Personally I think having an
| infinitely divisible, fixed asset, protected by
| cryptography and not statutes, is a democratic upheaval of
| captured financial systems. You dont need blood, legacy,
| heritage to capture these assets, just information.
|
| Maybe having physical wealth ripped from my family multiple
| times in the past 150 years makes me feel this, this asset
| is a bit more useful than gold or jewelry when dealing with
| an uncertain future.
| loceng wrote:
| I like that you brought up money of old - and find it
| disturbing that people are happy to repeat the same
| pattern - "they did it, so why can't we;" two wrongs
| don't make a right.
|
| So great, we have regulatory capture of financial systems
| - and you want to replace it with a system that can't
| protect against bad actors via financial punishment for
| known bad behaviour e.g. via the Magnitsky Act? Don't you
| think that's a problem?
|
| You like Bitcoin because it allows you revenge - but the
| problem is it's not taking out revenge on the people who
| may deserve it, it's taking it out on all of society.
| That's disturbing that you, and I imagine others, aren't
| thinking critically of those consequences - or if you are
| that you don't care; in fact this is a fundamental
| element of Bitcoin and how the mob/"army of HODLers"
| grows - the price drops and the buy people who bought
| later, at or below the current price, have now lost money
| and haven't realized any - so they are now entrenched in
| the MLM scheme.
| scsilver wrote:
| Do me a favor and watch some of this class by the future
| SEC head https://ocw.mit.edu/courses/sloan-school-of-
| management/15-s1...
|
| I dont think the current thresd we are on is useful and
| you are misunderstanding my point of view. The class
| above gives some background to my points of view on
| Bitcoin and Blockchain.
|
| Ultimately, I think blockchain is an interesting
| technology that necessarily has value, hopefully our
| regulators can understand its nuances and find ways to
| channel it to provide more security to every human around
| the world, (like vaccines or education) than the
| currently impeded(for whatever reason, its gotta deal
| with alot of red tape and hundreds of noncoordinated
| jurisdictions) financial systems.
|
| There is value in having centralized and decentralized
| finance. The world rewards/will reward recognizing that.
| AngrySkillzz wrote:
| citation needed, most of the increases in global wealth
| and output are due to technological innovation and
| increased trade and improved governance. If you are going
| to claim that all the worlds wealth is just extractive
| you are going to need a big source for that. Most
| economic historians disagree with you.
| Tomte wrote:
| > all the breakthroughs in cryptography like Zero Knowledge
| proofs, [...] that emerged from the evolution of cryptocurrency
| tech.
|
| Zero knowledge proofs date back to the mid-eighties.
| hahahahe wrote:
| Yeah they sure have. Running GPUs endlessly to execute
| thousands of transactions per day. Do you realize how
| ridiculous that sounds? You can literally run a pub-sub
| equivalent of BTC for 1/1,000,000,000 of the cost involved in
| crypto and a million times more performant while preserving all
| the benefits touted in cryptos. The reason why we don't have
| this isn't because we can't. It's because the financial
| institutions are too entrenched. And the same institutions have
| taken over the cryptocurrency space. Do you not see what's
| happening?
| selestify wrote:
| > You can literally run a pub-sub equivalent of BTC for
| 1/1,000,000,000 of the cost involved in crypto and a million
| times more performant while preserving all the benefits
| touted in cryptos
|
| Explain how pubsub is impervious to the operator of the
| pubsub shutting down, due to governmental pressure or
| otherwise.
| ianai wrote:
| Has there ever been a good break down applying Greshams law to
| Bitcoin? It seems like an obvious example of it at work-and
| that's if we take the premise of Bitcoin at full face value.
|
| Link https://en.wikipedia.org/wiki/Gresham%27s_law
|
| Edit-it also leads me to wonder what the mature characteristics
| of Bitcoin will be? What happens when all possible bitcoins have
| been mined? No more transactions?
| lawn wrote:
| > The popular blockchains only don't offer transaction finality
| i.e you will never be 100% sure that you have gotten funds.
|
| > You can only be probabilistically to a high degree (but with
| zero guarantee) that you have received your funds.
|
| All cryptography depends on it being probabilistically difficult
| to guess the secret. This is an exceptionally weak criticism of
| blockchains.
| me_again wrote:
| I think the concern here is some group rewriting transaction
| history via controlling > 50% of the hash rate, not guessing
| crypto keys.
| Layke1123 wrote:
| A big part of why crypto doesn't work in my opinion is that it's
| hard to trust software and hardware with your money when you
| don't own the hardware or software or can't modify it freely.
| Nation-states take great care to ensure that you don't have
| exclusive rights to the things and therefore your entire life
| savings could vanish in the blink of an eye without so much as
| any guarantee of getting your value back. State backed fiat
| currency is by far still more valuable than crypto and the proof
| is self evident at this point.
| DennisP wrote:
| The article mentions Ethereum several times, so here are some
| Ethereum-specific updates for 2021. It's still a work in progress
| but some progress has been made.
|
| 1) Scalability
|
| For now, the big advance is a layer-2 approach called "rollups,"
| several of which are in production already and able to handle
| several thousand transactions per second. Zkrollups do that
| without compromising security assumptions at all, but aren't
| quite to the point of handling arbitrary smart contracts.
| Optimistic rollups can handle arbitrary contracts but require a
| delay for funds withdrawal since they rely on fraud proofs.
|
| About a year from now, data sharding will multiply rollup
| capacity by 23X. [1]
|
| 2) Key management
|
| Vitalik agrees on this point and advocates social recovery
| wallets, where your friends and/or service providers give you
| some backup. Two popular wallets already implement this. [2]
|
| 3) Contract security
|
| This one is near and dear to my heart since I've worked as a
| contract auditor. It's still a problem but less so if best
| practices are followed, and projects which did so are holding
| vast sums without issues.
|
| Of the two examples they mentioned, TheDAO happened when Ethereum
| was less than a year old and nobody had realized the reentrance
| issue; also it was nasty, convoluted code, and didn't have a
| thorough public audit. Parity actually had two problems: they
| changed their wallet, made a simple mistake, and it slipped
| through because they didn't bother getting a new audit. That
| enabled several large thefts. Then they made _another_ change to
| fix that, _still_ didn 't get a new audit, made another simple
| mistake, and that resulted in frozen funds. Both mistakes would
| probably have been caught by any decent auditor.
|
| As usual, keeping the code simple and straightforward helps a
| lot.
|
| 4) Probabilistic consensus
|
| The new proof-of-stake chain is probabilistic initially but every
| six minutes it actually finalizes. At that point transactions
| cannot be reversed without destroying 2/3 of staked ETH.
| Currently the staked ETH totals $5 billion.
|
| However, so far this is running on the side, with real ETH but
| not actually running smart contracts or transferring ETH around.
| It will be about a year before rest of Ethereum migrates to it.
|
| 5) Privacy
|
| Zksnarks are able to help here and Ethereum is getting better at
| implementing them efficiently, but privacy is not in wide use
| yet, partly because of gas costs. EY has done a lot of work on
| implementing privacy in zkrollups for corporate transactions on
| the public chain.
|
| 6) Price volatility
|
| For people unwilling to deal with volatility, there are
| stablecoins on Ethereum, some implemented as derivatives over
| ETH.
|
| [1] https://vitalik.ca/general/2021/01/05/rollup.html
|
| [2] https://vitalik.ca/general/2021/01/11/recovery.html
| sillysaurusx wrote:
| _4. Consensus Algorithms Are Wack The popular blockchains only
| don't offer transaction finality i.e you will never be 100% sure
| that you have gotten funds.
|
| You can only be probabilistically to a high degree (but with zero
| guarantee) that you have received your funds. This is because in
| major consensus algorithm called Nakamoto Consensus, the miners
| elect the chain with the most computational work that are with in
| the same protocol i.e consensus rules.
|
| For instance imagine your bank tells you that you that, "there is
| a 95% chance that we might have your life savings, however you
| may also not poses it in 5 years in case we discovered that the
| chain with the most work does not have your transaction in it"
|
| Yes, I don't think anyone wants to keep their life savings in
| such a bank._
|
| Sure, and the probability that all of your atoms will teleport
| one foot forward is not zero. But it's sufficiently zero that we
| say it's zero, and we're rarely proven wrong.
|
| It took awhile to become comfortable with probabilistic
| algorithms, but some (small) familiarity with physics helped.
| Nature is probabilistic, and seems to work.
|
| This isn't a _great_ counterargument, but honestly none of these
| arguments seem very persuasive. I 'm not a blockchain fan, but
| it's like... "if someone steals your wallet, they'll get all of
| your money!" Well, duh. Everyone knows this and seems fine with
| it.
|
| _1. Scalability Issues The current bandwidth, i.e the data that
| can be transmitted through a blockchain with in a given time is
| simply too bounded for main stream adoption.
|
| Ethereum for instance does a maximum of 13 transactions per
| second. Visa on the other hand can do 24,000 Transaction per
| second and peak over 40,000 transactions per second._
|
| No mention of Lightning network to solve this. I've been out of
| the crypto game for years and even I know "Lightning is
| supposedly the solution." Did that ever pan out?
|
| _6. Price Volatility Very few people simply don't have the
| stomach to hold a financial instrument that drops by over 50%
| with in a few months._
|
| https://i.imgur.com/WWzTlGb.png
| davidgerard wrote:
| >WARNING
|
| >Before you proceed, please understand that the Lightning
| Network is still in the experimental stage. Do not put the
| money you can't afford to lose. There is a high risk of you
| losing the money.
|
| https://docs.btcpayserver.org/LightningNetwork/ and a pile of
| other places - and particularly when someone points out that LN
| doesn't work very well, and that money gets lost to bugs way
| too often to trust.
|
| The purpose of the Lightning Network is to serve as an excuse
| for Bitcoin's dismal performance. It is not a production-ready
| payment system, even to the degree that Bitcoin is.
| sillysaurusx wrote:
| Thanks! I've wondered how the lightning network fared over
| the years. Judging by the still-experimental state, the
| answer is "not well."
| cesaref wrote:
| > Nature is probabilistic, and seems to work.
|
| I think what you mean is that the currently most successful
| model of the physical world is probabilistic, but this doesn't
| mean that nature is.
| sillysaurusx wrote:
| Mm. That's an interesting way of looking at it. But the
| assumptions are laid out by Feynman: https://www.youtube.com/
| watch?v=QRE0GxT6Zbw&list=PLgRI7D_FXE...
|
| Although I'd love to urge everyone to sit through all six
| hours, I recognize this isn't too practical. So -- with
| apologies to Feynman -- I'll have to do a poor job of
| translating:
|
| - The scientific method means that we are never certain we're
| right; we're only certain we're wrong. But (as with Newton's
| laws) it's pretty incredible we can last so long before we're
| proven incorrect!
|
| - The world seems to obey mathematics. But math != physics.
| One _helps_ the other; discoveries in math have applied to
| physics, and vice-versa.
|
| - The heart of nature seems to be a purely mathematical
| construct, from which there is no escape. Many people have
| tried to model gravity as something other than the
| gravitational equation, e.g. suppose at every point in time
| there are particles shooting every direction simultaneously.
| Then gravity is merely us blocking these particles -- earth
| with respect to the sun blocks a certain fraction of
| particles towards the sun, and in fact inversely as the
| square of the distance. No math necessary! Unfortunately,
| doesn't quite work -- if it were true, the earth would have
| slowed in its orbit due to blocking the particles, and it
| wouldn't have lasted ~billions of years. So that's the end of
| that theory.
|
| - The double slit experiment seems to prove that the world
| has no other model _other than_ probabilistic (see lecture
| 6). There is some fundamental limitation preventing us from
| narrowing down nature further than this threshold.
|
| - Every test designed to break this assumption has failed.
|
| Therefore, I say that the physical world _is_ probabilistic,
| and I will wager any sum of money you 'd like to bet that it
| will still be true within, say, 200 years.
|
| There is one interesting alternative: if everything in the
| universe is pre-destined. The complete absence of any kind of
| free will whatsoever. Every atom, every electron, every
| single subatomic particle, all predestined from the moment of
| the big bang til now. That seems to be the only way that it
| _can 't_ be probabilistic.
| psychoslave wrote:
| Yes, I completely agree. I think however that the point was
| that whatever we build out of our best available physical
| theories ultimately relies on probabilistic grounds.
|
| Now on the other hand, we don't use quantum physics for every
| single human project out there, and for many human scale
| phenomena, we can act without concious probabilistic
| representations.
| bawolff wrote:
| Have the right cosmic ray hit the right set of memory chips,
| and you will be super rich. That can happen in an entirely
| deterministic world.
|
| I think its important to distinguish between realistic
| probabilities and unrealistic probabilities. If the chance is
| 2^-100 %, nobody cares. Bitcoin is a lot less secure than
| that, but its still not something i realistically would worry
| about.
| ketzu wrote:
| > Everyone knows this and seems fine with it.
|
| Are you sure? I believe a lot of people interact with
| blockchains through services like coinbase, without managing
| their own wallets.
| rini17 wrote:
| As the recent GameStop events have shown, it's uncertain who owns
| how many shares, settlement is slow and error/bezzle-prone, etc.
| etc. Plus I venture to guess that HFT algorithms do consume
| country-level amounts of energy as well. Unlike blockchain, it's
| not surplus electricity from renewables in faraway places. And
| all that energy does not even improve the whole ledger security.
|
| But hey, unlike the filthy blockchain, it works!/s
| AngrySkillzz wrote:
| Go read Money Stuff before you spread more misinformation about
| how the financial system works. There are no counterfeit
| shares, ownership is obvious except for cases like voting
| (because a short can pay a negative dividend but can't perform
| a negative vote), settlement is not error-prone and is slow on
| purpose (Russia tried real-time settlement and went back to
| T+2), HFT is literally just a service provider doing inter-
| temporal mediation between buyers and sellers rather than some
| evil money-stealing machine. Front-running is not real, naked
| shorting is super illegal with very few exceptions. If you
| can't tell me what part of Regulation SHO governs naked
| shorting, what the bona-fide market maker exception is and when
| they are required to fulfill a FTD, then you probably shouldn't
| be talking about this confidently in public.
| godelzilla wrote:
| Can someone post an even older, less relevant article?
| aylmao wrote:
| To the scalability issues section I'd add the environmental
| aspect. It has already been reported that by some estimates
| Bitcoin today consumes more energy than Argentina, and that's
| with an estimated 1 million active wallets per day. Argentina is
| home to about 50 million people.
|
| This means that in order to have Bitcoin serve as the daily
| currency for all of Argentina's 50 million people would at least
| 50-tuple its energy consumption. This is comically absurd. It's
| thankfully not achievable or economical with the energy resources
| we currently have available, because pursuing a 4,900% increase
| in energy consumption would be disastrous.
|
| If crypto sees any widespread usage I think it'll be as the
| backbone of financial systems, for big transactions between
| institutions. In that space I don't see much incentive for people
| to adopt it-- there's already a good level of trust amongst the
| parties, various levels of transaction verification, and it's
| mostly all digital already.
|
| [1]: https://www.bbc.com/news/technology-56012952
|
| [2]: https://www.bitcoinmarketjournal.com/how-many-people-use-
| bit...
|
| [3]: https://en.wikipedia.org/wiki/Argentina
| Erlich_Bachman wrote:
| > This means that in order to have Bitcoin serve as the daily
| currency for all of Argentina's 50 million people would at
| least 50-tuple its energy consumption.
|
| That's not how Bitcoin or any PoW works. The amount of energy
| used is not a direct function of number of wallets. It is not
| either a direct function of number of transactions.
| bildung wrote:
| The only intermediate step is the fact that the amount of
| currency in circulation needs to raise. As that isn't
| possible with bitcoin, the price has to rise. And that
| increases the incentive for throwing more recourses into
| mining.
| RurouniK wrote:
| "This means that in order to have Bitcoin serve as the daily
| currency for all of Argentina's 50 million people would at
| least 50-tuple its energy consumption."
|
| This comment is beyond dumb and just showcases that you have no
| clue whatsoever about how bitcoin works. Bitcoin's power
| consumption doesn't go up when more people use it. It goes up
| when more people COMPETE for the production of the next block,
| meaning when there are more miners.
|
| Also more than 50% of bitcoin's power consumption already comes
| from renewable sources.
|
| Also youtube and online gaming need many times more power and
| I'd argue that a global, open, permissionless financial network
| is far more important.
| bildung wrote:
| No, it isn't dumb. The monetary base currently provided by
| bitcoin is tiny. If an economy would switch to bitcoin as
| it's currency, the amount of BTC in circulation would need to
| gain multiple zeroes. As bitcoin has a fixed cap, that would
| mean the price would rise. And that, in consequence, would
| make mining way more profitable, with newcomers entering the
| field and established organizations to employ more resources.
| And that increases the power needed.
| smartties wrote:
| > Also more than 50% of bitcoin's power consumption already
| comes from renewable sources.
|
| You are tweaking numbers here. The only source I've found, It
| says 39% and it's from a shady crypto website that make a
| living promoting cryptocurrencies [0]. And if you look deeper
| in the source [1] they quoted it says "A total of 280
| entities from over 50 countries across various regions
| responded to the surveys.". So this study is based on surveys
| they sent to companies... Without anyway to verify their
| answer. This study has 0 value.
|
| Renewable energy is way more expensive and not reliable.
|
| https://cointelegraph.com/news/report-76-crypto-miners-
| use-r...
|
| https://www.jbs.cam.ac.uk/faculty-
| research/centres/alternati...
| WanderPanda wrote:
| > This means that in order to have Bitcoin serve as the daily
| currency for all of Argentina's 50 million people would at
| least 50-tuple its energy consumption.
|
| How do you justify this linear extrapolation?
| waheoo wrote:
| This is like saying we shouldn't build or invest in computers
| anymore because they cost so much and take up whole rooms full
| of space.
|
| Bitcoin is version 0.1 of a new way to record and share a
| common ledger. The cost and energy requirements are simple
| tradeoffs that are completely configurable to the applications
| needs.
|
| Go look at all the alt coins out there, blockchain tech does
| not require the same levels of decentralization as Bitcoin,
| many work off more centrally controlled systems, not all
| require huge amounts of energy to mine blocks, and many are
| extremely aware of the need to be an environmentally friendly
| solution.
|
| Like I get it's a very valid criticism to make about Bitcoin.
|
| But it's such a contrarian for the sake of being contrarian
| thing to say and completely ignores ten years of alt coin and
| defi evolution.
|
| Feel free to keep bag holding those "federal" reserve notes,
| they'll pay off one day I'm sure.
| bawolff wrote:
| Not really, most of the centralized ones could just be
| replaced with a mysql server and have the same properties.
| Notable exception being some of the proof-of-stake schemes,
| but its not like that's a scaling tradeoff but a totally
| different approach.
| waheoo wrote:
| And 64k memory should be enough for everybody but banks
| can't share a single MySQL database.
|
| They can try, but they would need an impartial
| intermediary.
|
| As someone that got shafted by the gme shutdown, I would
| have loved to be trading over a block chain unimpeded by
| "regulatory oversight".
| bawolff wrote:
| Well i agree that the energy cost is immense, it doesn't scale
| with number of users but mining power.
| [deleted]
| Ekaros wrote:
| Energy cost scales with value of coins produced. As the price
| of bitcoin goes up so does the cost of energy and equipment
| used for mining. Market searching optimum.
|
| This will be fixed at some point, but the point when rewards
| get low is very far away... So if Bitcoin were really come
| the one true currency with global market cap, the costs would
| be enormous...
| lima wrote:
| Everyone (except Bitcoin) agree that Proof of Stake is the way
| to move forward. Even Ethereum is migrating to pure PoS
| consensus.
|
| This solves the environmental aspect, thankfully.
| tromp wrote:
| Hundreds of PoW altcoins disagree. PoS is not a coin
| distribution method either.
| lima wrote:
| Hundreds of PoW altcoins are doomed:
| https://www.crypto51.app
| tromp wrote:
| Most PoW coins that have been 51% attacked go on merrily
| with little to no price suppression. The worst effect is
| much longer deposit confirmation times on exchanges.
| Ekaros wrote:
| How many of these hundreds of PoW altcoins are used for
| making payments for real products and services? Let's say
| single transaction a day over reasonable period?
| andreaorru wrote:
| The energy argument has been debunked over and over again.
|
| I recommend you read this thread by Yassine Elmanjdra (analyst
| at ARK Invest):
| https://twitter.com/yassineARK/status/1360343382556483587?s=...
| qayxc wrote:
| This "debunk" is bunk in at of itself - have you actually
| looked at the presented arguments? They are ridiculous and
| make no sense whatsoever (e.g. comparing PoW with literal
| gold mining - as if gold were a currency...).
| andreaorru wrote:
| Of course, I've read everything, including the article by
| Nic Carter [1] (which I highly recommend) and all his
| related articles on the subject.
|
| The comparison with gold mining is quite apt actually - one
| of the use cases for Bitcoin is to act as a store of value
| and hedge against inflation, precisely like gold.
|
| [1] https://www.coindesk.com/the-last-word-on-bitcoins-
| energy-co...
| qayxc wrote:
| > The comparison with gold mining is quite apt actually -
| one of the use cases for Bitcoin is to act as a store of
| value and hedge against inflation, precisely like gold.
|
| Ahem, the primary use of gold is _jewellery_ , not a
| hedge value against inflation. That's where the vast
| majority of all mined gold ends up (plus some in
| electronics and medical applications).
| lottin wrote:
| I don't think he understands the concept of efficiency. More
| efficient means doing the same thing at a lower cost. What
| same thing does bitcoin do at a lower cost compared to what?
| dschuler wrote:
| The tweets you linked to link to another source [0], and are
| mostly paraphrased from that source, which makes the
| following argument:
|
| "Does Bitcoin justify its energy usage? Does it add enough
| value? So far, the market says it does."
|
| That doesn't "debunk" any argument about energy use, it only
| tries to justify it.
|
| [0] https://www.lynalden.com/misconceptions-about-bitcoin/
| andreaorru wrote:
| Disingenuous. That's not the only argument that is being
| presented.
| dschuler wrote:
| There's some muddled thinking going on there. The source
| doesn't make the argument that Bitcoin isn't energy
| intensive. If that's an issue for you, you should re-
| evaluate your views on Bitcoin, but denying it doesn't
| change the fact.
|
| Otherwise we're just arguing that "water isn't wet" and
| what the definition of "is" is.
| andreaorru wrote:
| I'm perplexed. I don't think we're looking at the same
| content. Perhaps you haven't read the entire thread but
| just the first 6 tweets?
| prof-dr-ir wrote:
| The "lack of intuitive private key management" is worth expanding
| on.
|
| Would it not be nice if you could, maybe for a small fee, have
| some trusted entity _store_ your private key for you? One could
| perhaps imagine storing a printout of the private key in some
| kind of physical "safe deposit" box, to be maintained by such an
| entity? But maybe that is to cumbersome and we can do so entirely
| digitally? In that case I guess that said entity would need to
| demonstrate a proven track record of safely keeping a record of
| your net worth, as well as the various in- and out-going
| transactions between its different customers.
|
| With the obvious possibilities for abuse, it is clear that such
| an industry would see a fair amount of regulations, and one can
| foresee never-ending tension between government, the established
| corporations, and potentially disruptive newcomers....
| jnwatson wrote:
| Key escrow is already a thing. I recently helped a friend
| recover his wallet, and luckily he had his private key
| escrowed.
| UncleMeat wrote:
| Is it already a thing my grandmother can use? She has a
| working bank account but doesn't understand that minimizing
| gmail doesn't delete here emails.
| hanniabu wrote:
| The UX is getting better every year. It's like saying the
| internet was doomed to fail because your grandma couldn't
| use it in 1990
| UncleMeat wrote:
| I'm not saying that bitcoin is doomed to fail for this
| reason. I'm saying that "key escrow already exists" is a
| bad argument.
| thecupisblue wrote:
| No it's not. The adoption rate in 2021 is way faster than
| in 1990. Most people weren't required to adopt a tech in
| 1990 to live their normal life, while in 2021 it is a
| norm to constantly be adapting to new tech.
| RurouniK wrote:
| How is private key management a problem when there are so many
| battle tested hardware wallets used by millions of people?
| hanniabu wrote:
| They have no basis. They want to detest it without learning.
| Either that or they looked into it a few years ago and have
| no idea how much has changed since then.
| infofarmer wrote:
| Smart contracts were supposed to make that easier, but this got
| blocked by the scalability issues. The current hope is for MPC
| which might get consumer-usable products without a SPOF: you
| have private keys on personal hardware, but if you lose them,
| there's a recovery procedure with multiple independent
| authentication channels -- e.g. 3 out of 5 notaries from
| separate jurisdictions must recognize you and sign their parts.
| Plus a lot of friendly logic like time-outs etc.
| andreaorru wrote:
| Look up "social recovery wallets" (i.e. Argent).
|
| Here's an article by Vitalik Buterin himself making a case for
| it: https://vitalik.ca/general/2021/01/11/recovery.html
| kgin wrote:
| Too many people are missing the dry humor in this post
| prof-dr-ir wrote:
| Well the post does appear to hint at a more serious issue -
| but it might not be easy to make it precise.
| rorykoehler wrote:
| You just recreated consumer banking.
| Melting_Harps wrote:
| > I think that's their point. There's a lot of discussion
| that 'banks will become obsolete with crypto' that forgets
| that banks are not the currency, they just manage it. If
| crypto becomes widespread banks will keep on existing,
| they'll just move to manage cryptocurrencies.
|
| > You just recreated consumer banking.
|
| While I personally detest the notion of such a model, and
| things like GME show why that is: I realized that after 10
| years we really are going to have to simplify this tech to
| that level in a way that it's indistinguishable to the old
| model if we are onboard them at all. Which is why Kraken
| taking the lead in this is happening [0].
|
| We collectively opposed this system so much that once we on
| boarded all the nerds we had a massive blindspot and didn't
| take pause and realize that the immense complexity to work
| and use Bitcoin on an everyday basis would be near impossible
| for the average person who struggled with HS math. And that's
| often who needs this tech the most, as they often the first
| to fall victim to the pernicious and illegal actions of banks
| with things like compounding overdraft fees, mortgage scams
| etc...
|
| I was used to having to use run a full node on QT with no
| smart phone for the first 4-5 years so it's all simple to me
| now, but that is all relative to where you start and when I
| started I couldn't even code enough to do more than a simple
| 'Hello world' command but with time I became a founder of a
| fintech start up and then developer and consultant at a
| multi-national corporation because this tech evolved so fast
| and demanded I keep up, so it was a massive learning curve
| but more than anything I was ready and willing to learn;
| which I KNOW most people don't want to do.
|
| HN is also a very good cross section that makes me keep
| coming back at ATHs because even amongst tech workers many
| keep talking about how 'bad' the tech is without taking the
| time to even look into it beyond the sensationalist headlines
| the media makes up as fact and they repeat the same tired
| narrative, and they too are reluctant if not entirely
| incapable of undertaking what we think is 'simple' but also
| the best deterrent for the inherit corruption of the fiat
| World and also the basis of OPSEC and is best inculcated in a
| simple mantra: not your keys, not your Bitcoin. Out thinking
| your enemy and creating new way to route around their absurd
| system is exhausting, and spending time playing factorio and
| with legos is fun.
|
| You'd think for a place like HN that is so quick to pat
| itself on the back for learning a new programming language
| and boasting about it here in some perverse form of virtue
| signalling as an _autodidactic impresario_ they 'd be the
| first to see the immense novelty Bitcoin holds (and to an
| extension it's Blockchain and it's verification, and
| consensus model) and the fun challenge to understand it would
| be and ultimately why some of the world's best cryptographers
| (who at their core have to love to solve complex problems and
| learn new skills along the way) work in this space. This
| sentiment is a total contradiction to the philosophy the
| early days of Silicon Valley had, but has given way to this
| more petty and servile wave of infantile 'technologists' that
| are beholden to FAANG so this is clearly what happens when
| even 'smart people' get things wrong: they try to justify
| their errors with these campaign smears. Which is why I'm
| glad so many are leaving CA, hopefully it can go back to it's
| cypherpunk roots it had in the 80s and 90s.
|
| So, rather than commit to endless Pyrrhic victories trying to
| fight this with ideological fervor and an unfounded hope
| people will just eventually 'learn on their own' I realize
| that time is the most pressing issue, COVID was just a
| reminder how quickly things can change for the worse, and we
| should just offer these service as an inevitability for those
| whose mindsets are not apt to a paradigm shift.
|
| It's crazy to see just how many on HN are incredibly jealous
| and over all envious about Bitcoin's success, you'd think
| they would be elated that open source tech is what disrupted
| finance, but then you realize how many are only 'successful'
| in Life because of their monetary net worth measured in fiat
| and how they ignored or simply dismissed Bitcoin because it
| was too complicated. Their work is not their own, and they
| are beholden to their employers for identity and purpose, and
| Bitcoin is just a reminder of why it might have been a waste
| of time when M1 and M2 spikes happen.
|
| For those of us who worked in Bitcoin professionally we can
| point and extrapolate the value we derived from it, and some
| of us can even point to landmark legislation, thought to be
| impossible, that had to be changed in part because of our
| efforts and that gives us a form of satisfaction they will
| never have. So even if it wasn't the safe, or even profitable
| undertaking sometimes it was worth it because money may be
| important but it isn't everything.
|
| We got two of the biggest names in Fintech (Musk and Dorsey)
| on our side, one being the richest man on the planet stating
| crypto will be used on Mar's economy; but we really need the
| new wave of users so we should also just acquiesce and create
| the walled gardens and gaurd-railed sandboxes they so
| desperately pine for, in hope that one day they could remove
| the training wheels if they so choose.
|
| They thought they had it so good, for so long, so now when
| something comes along and shows them that their jails are
| opened they suffer from a sort of anxiety when they're not in
| one, so I say: lets just build it for them, but give them a
| key they can keep inside and use if and when they are ever
| ready, while the rest of us continue to operate as we always
| intended Bitcoin to be.
| jakupovic wrote:
| Been around this forum probably since it's inception and
| have noticed the same in regards to bitcoin. I mean the
| parent poster is saying there is no use for a technology
| that's been around for 12 years and underpins ~$1T of
| value. Reminds me of this quote copied from internet:
|
| First they ignore you,
|
| then they laugh at you,
|
| then they fight you,
|
| ... and then they buy bitcoin
|
| Also noticed the same in regards to kubernetes, only in the
| last six months has it become "acceptable", and yet it is
| everywhere and used for everything. Just plain ignorance.
| But, as the above quote tries to show, lightly, eventually
| Bitcoin wins.
| selestify wrote:
| Seriously, the skepticism here convinces me that there's
| still time to buy before everyone realizes what a good
| idea it is after all
| 1996 wrote:
| > servile wave of infantile 'technologists' that are
| beholden to FAANG so this is clearly what happens when even
| 'smart people' get things wrong: they try to justify their
| errors with these campaign smears. Which is why I'm glad so
| many are leaving CA, hopefully it can go back to it's
| cypherpunk roots it had in the 80s and 90s.
|
| So true. I wish I had had the opportunity to live in the
| golden age cypherpunk CA of the 1970-1990s.
|
| > Their work is not their own, and they are beholden to
| their employers for identity and purpose, and Bitcoin is
| just a reminder of why it might have been a waste of time
| when M1 and M2 spikes happen.
|
| So true. If only they could listen. But they are too
| emotionally invested in their mistakes. So they try to find
| meaning and happiness with the peanuts that are thrown at
| them.
|
| > They thought they had it so good, for so long, so now
| when something comes along and shows them that their jails
| are opened they suffer from a sort of anxiety when they're
| not in one
|
| Thanks a lot for taking the time to write that. It helps me
| understand them better.
|
| Like you, I have tried to understand the people who single
| hand reject crypto on HN.
|
| My conclusion is that it is due in part to the golden jail
| (good paying job in FANG tech) + not wanting to bite the
| hand that feeds (corporate overlords / governmnent) +
| intellectual laziness coming from a mix of a golden jail +
| old age (most people here seem to be over 40) - but the
| icing on the cake is this anxiety.
|
| I have talked with some people like arcticbull (a HN
| permabull on all things crypto) and he said he also has the
| irrational fear of being defrauded.
|
| I think it is a manifestation of the anxiety you describe:
| the fear their effort were meaningless.
|
| > lets just build it for them, but give them a key they can
| keep inside and use if and when they are ever ready
|
| The airdrops were like that. I have seen myself very
| intelligent people sell their airdrops for a handful of
| dollars. In a way, this free crypto was lost on them. They
| got a few burgers. More patient people got at least a car.
|
| If you have friends you want to help, don't give them
| crypto: they will immediately sell it, regardless of the
| price, because they are afraid of the variance and not very
| rational. They are the kind of people who would eat the
| seed gains instead of planting it. They are unable to think
| long term (maybe from growing up poor, or having to work a
| job to get money?)
|
| Instead, keep the crypto for them, and bestow a part of it
| when the time is right, in fiat, at an amount you think
| adequate to their immediate needs. You can always give them
| more later.
| throw9017000 wrote:
| Not everyone ignore Bitcoin because they love fiat or can't
| handle the disruption. Some do it because enabling a
| stronger uncontrolled brand of capitalism sounds like
| replacing a weaker poison with a stronger one.
| scsilver wrote:
| What are core competencies for moving into blockchain work?
| mightybyte wrote:
| Depends on what area. Depending on where you're focusing
| in the blockchain industry any of the following can be
| important: cryptography, large scale distributed systems,
| economics / game theory and designing incentive systems,
| programming language design, pure functional programming
| (because smart contracts can't have side effects),
| frontend development, UI/UX design, and on and on.
|
| Ultimately dapp (I hate that term but have long since
| grudgingly accepted that it's become ubiquitous in the
| industry) development is just normal web app development
| except that you might also be making AJAX requests to a
| blockachin and _possibly_ also writing your own smart
| contracts. Writing your own smart contracts is a somewhat
| distinct skillset, but the rest of it is just normal web
| app development.
| Melting_Harps wrote:
| > What are core competencies for moving into blockchain
| work?
|
| That's too broad a question, and really depends on the
| ecosystem, but I'll narrow it down for you if you want
| just want one obvious use case and I can expand as I go:
| verifiable proof of ownership.
|
| Something like Melvin Capital shorting 138% of GMS's
| stock would be impossible in a properly regulated Market,
| one that prohibits endless speculation and the wanton
| destruction of Capital for the sole purpose of making
| money gambling to take a business down as the outstanding
| shares cannot simply be willed into existence if they
| need to be cryptograhpically verified and exists solely
| on a blockchain, but most likely a sidechain/colored-coin
| system that still has the same properties.
|
| Naked Short selling maybe technically illegal, but that
| is in name only and in continues unabated to this day,
| hell the SEC refused to look into this obvious collusion
| between various hedge funds (citadel/melvin/Steve Cohen)
| but speculation about trying to go after Elon for taking
| to Social Media and talking about Bitcoin is enough to
| warrant a possible investigation?
|
| Also, deed ownership, be it land or property:
| government's entering hyperinflation and dissolving is a
| perfect time for asset forfeiture on a national level
| (nationalizing) by the vying faction and is responsible
| for so much unnecessary misery and wasted Human Capital:
| I wish I still had this interview that really touched me
| it was with Suboi, a now famous Vietnamese rapper, but
| relatively unknown at the time and her parent's issue
| with trying to convince the Vietnamese government that
| they owned the home before the War happened but they
| tried to make all kinds of excuses to repossess it as she
| was growing up: its the basis for her song 'Doi' talking
| about her father's attempted suicide and thier monetary
| troubles as a result of this dispute with the government.
|
| Same thing happened in Katrina with FEMA and settlement
| checks as ownership of the home had been on a legacy
| basis that had roots from sometimes from colonial times.
|
| Lastly, and most vivid to me is over coming censorship,
| but specifically financial censorship: I did it and I
| could write a book on the matter. But suffice it to say,
| I was really touched by Paxful's work recently as they
| just built their 4th school in Nigeria instead of
| 'moonboi'ing it' and buying 'lambos' with the wealth
| their startup created and have instead focused on help
| build the the Nigerian economy and it's entrepreneurs to
| create wealth all while their Government is actively
| trying to deem it as the source of all it's problems, not
| least of which ~12 inflation per annul that is a direct
| result of poor monetary policy coupled with even worse
| insular laws and ossified fintech solutions.
|
| My most ambitious and craziest goal/aspiration of all is
| something Elon just made possible with adoptiong Bitcoin
| and making it clear a crypto will be used on Mars:
| Bitcoin serving as the medium of exchange for inter-
| planetary trade and commerce, and a settlements network.
|
| Banking even in the West doesn't even work on weekends or
| past 5pm and people are just assuming we can keep
| carrying that corpse on our backs as we are slowly
| getting closer to becoming an multi-planteray species is
| beyond me and I cannot emphasize how critical that will
| be in just the next 2 decades.
|
| Voting is another one that should also be clear, given
| Trumps fomenting of violence in the capital reminding why
| its best to have open and free elections that can be
| verified by anyone in real time. Several countries have
| attempted this so I'm not going to into depth as the
| information exists, and that's just focusing on what
| we've created in the last decade, I think the next 2 are
| going to be an even more interesting ride as I cannot
| even what is next and this tech moves so fast.
|
| UBI would be another one, but to be honest Aurora failed
| and we didn't gain much useful info from it's failure, so
| this is one we have to wait for Nation states to fail
| (even more than the US has with unemployment apparently)
| at and we can quickly iterate from there as the
| technology is just way more robust and capable now.
| fractionalhare wrote:
| _> Something like Melvin Capital shorting 138% of GMS 's
| stock_
|
| It didn't short 138% of GME stock. GME short interest
| increased to 138% while Melvin and many other hedge funds
| were shorting it. Melvin didn't do that singlehandedly.
|
| _> Naked Short selling maybe technically illegal, but
| that is in name only and in continues unabated to this
| day, hell the SEC refused to look into this obvious
| collusion between various hedge funds (citadel
| /melvin/Steve Cohen)_
|
| There is no evidence these firms colluded or engaged in
| naked short selling. Naked short selling is when you sell
| short a security without first entering into a contract
| to borrow the security. Short interest is orthogonal to
| naked short selling.
| Melting_Harps wrote:
| > It didn't short 138% of GME stock. GME short interest
| increased to 138% while Melvin and many other hedge funds
| were shorting it.
|
| You corrected yourself to include that they weren't
| alone, but whatever... but that still doesn't change the
| fact that this would be impossible to do if it were a
| blockchain based system with these parameters built in,
| you cannot fictitiously create more of something that
| exists in order to benefit you or your industry and then
| suspend trading when things get out hand in that
| blockchain environment, as its completely out of your
| hand and the fraud in impossible to forge. And clearly
| with a trillion dollar market cap, and growing, we proved
| that it pays to play by the rules.
|
| > There is no evidence these firms colluded or engaged in
| naked short selling. Naked short selling is when you sell
| short a security without first entering into a contract
| to borrow the security. Short interest is orthogonal to
| naked short selling.
|
| Ok... we're done. This is going no where, keep downvoting
| as that seems to be your only recourse but you being
| blind to this obvious reality that SEC is selectively
| applying the Law (which also happens to apply to OTHER
| Naked short selling) isn't changing the fact of how
| obvious this collusion was and nothing I say will change
| that.
|
| You want to pretend these markets are fair, go ahead, and
| I'm not going to waste my time... But my points for
| Blockchain based tech solutions that exist are already
| there and your make believe arguments notwithstanding
| will not make them go away.
| [deleted]
| fractionalhare wrote:
| I'm not making normative statements about what's fair or
| not fair. There are legitimate and reasonable grounds for
| criticism of capital markets. I'm correcting your
| specific _positive_ statements, which I quoted, because
| they 're incorrect. I don't have anything to say about
| blockchain or the rest of your comment.
| UncleMeat wrote:
| > but that still doesn't change the fact that this would
| be impossible to do if it were a blockchain based system
| with these parameters built in
|
| Why? Shorting above 100% doesn't "create more of
| something". Why would a blockchain based trading system
| prevent me from short selling a stock based on what other
| people are doing? I've got the stock in my wallet. It was
| loaned to me by Bob. I can sell it to you right now. Why
| can't I sell it?
| gjulianm wrote:
| I think that's their point. There's a lot of discussion that
| 'banks will become obsolete with crypto' that forgets that
| banks are not the currency, they just manage it. If crypto
| becomes widespread banks will keep on existing, they'll just
| move to manage cryptocurrencies.
| rorykoehler wrote:
| Banks are not just managing money. They are distributors of
| newly minted money via loans. They are not distributors of
| crypto and the Fed are not involved (or at least necessary)
| for the creation of new crypto.
| logifail wrote:
| > Banks are not just managing money. They are
| distributors of newly minted money via loans. They are
| not distributors of crypto and the Fed are not involved
| (or at least necessary) for the creation of new crypto.
|
| So in the brave new post-Fiat world we're thinking of,
| how does getting a mortgage work, exactly?
|
| The house I'm in was financed by my wife and I purchasing
| a plot of land, for cash, then offering that land as
| security to a bank, who then created a loan for a fairly
| sizable chunk of cash with which we paid a builder to
| construct the house.
|
| In the all-cryptocurrency world, who creates the crypto
| in the getting-a-mortgage process?
| Melting_Harps wrote:
| > The house I'm in was financed by my wife and I
| purchasing a plot of land, for cash, then offering that
| land as security to a bank, who then created a loan for a
| fairly sizable chunk of cash with which we paid a builder
| to construct the house.
|
| This begs the obvious question: contract law is all about
| enforcement. Clearly no one would be right to dispute you
| own this land and home, you have the deeds and the tax
| history, which could all be hashed on to the blockchain
| right now for a nominal fee. But the fact is that the
| State is what upholds the court system and the need to
| prove this and they hold the threat of theft and violence
| if you don't comply and arbitration in their 'legal
| system' is expensive, slow, and arcane. People being
| thrown out of their own homes they paid for in full in
| 2008 was real because the banks created all these complex
| derivatives and no one knew who owned what in the those
| CDO and MBS. So when things got messy, and the banks
| claimed the home the sheriff's showed up and did what
| they always do: rendered unto Caeser. You may pay your
| taxes that directly pays their salaries but they work for
| the State, not you the resident and home owner.
|
| This is why we don't need technologists in Bitcoin as
| much as we need other professionals like legal people to
| help create an automated arbitration system, divorced
| entirely from the whims of Mankind: you can clearly prove
| you've owned this land and home and when you made the
| purchase(s) for it and the tax history in a timestamped
| and verified way on the the ONLY immutable ledger,
| amazing... but we cannot and do not have an enforcement
| system to ensure you are entitled to keep this land and
| home should an adversary come and take it other than
| violence.
|
| And this needs to be solved, which is why I would hope HN
| would be a good breeding ground for such thought instead
| of this endless non-sense about Bitcoin is just for
| speculation, as if hedgefunds and FOREX markets aren't a
| hotbed for illicit, corrupt and even more complex
| legalized forms of gambling in the fiat Word. And have
| caused the collapse of the economy countless times in
| just the 20th and 21st Century that always ends up in
| hotwars in the end, fought mainly by the people who
| ironically just wanted to protect their homes from
| 'foreign adversaries' when it's most often the domestic
| threat they should have been most vigilant about.
|
| Hell, most people don't even realize that the FOREX is
| the biggest Industry in the entire World, and yet people
| just forget about things like LIBOR interest rate rigging
| when it's convenient and time to bash Bitcoin on here.
|
| We get it, you missed out on making billions in fiat by
| ignoring it, get over you not going to be Chamath or Elon
| and help build the future we all want and maybe have a
| chance of creating a post-scarce World.
| tsimionescu wrote:
| > help create an automated arbitration system, divorced
| entirely from the whims of Mankind
|
| No. That is simply not possible with anything resembling
| today's technology. We'll have flying cars on a Mars city
| before automated arbitration on real world matters.
|
| > help build the future we all want and maybe have a
| chance of creating a post-scarce World.
|
| Except fixed supply currency is going back in the other
| direction. And the hard parts about eliminating scarcity
| have nothing to do with the monetary system.
|
| Besides, you still haven't explained how lending works
| with bitcoin but without banks making up extra bitcoin.
|
| Note: using bitcoin to refer to any fixed supply
| currency, whether it's bitcoin, Eth, gold or anything
| else.
| Melting_Harps wrote:
| > No. That is simply not possible with anything
| resembling today's technology. We'll have flying cars on
| a Mars city before automated arbitration on real world
| matters.
|
| I don't disagree about its current feasibility, but I
| think that's mainly so because of a distortion of
| incentives and that so many are invested in this model
| (the few) despite how horrible it is (to the detriment of
| the many) as so many people are incapable of doing
| anything else at this point.
|
| They would sooner die than consider opting for something
| that they know will end their way of life if successful
| and this terrifies them rather than excites them about
| starting something new in life; the sad reality is the
| legal system is already getting disrupted as we speak all
| over the World and it's innovating at the edges, but also
| manifests as distrust and disillusionment and lost of
| confidence in even basic things like anti-masker, vaccine
| conspiracy, and refusing to follow curfew and business
| closures and can lead to having the National Gaurd in
| Washington DC due to the storming of the Capital by
| imbeciles fomented by Trump.
|
| All of these are legal matters that are complicated and
| messy, without a doubt, but the current legal system is
| to blame for why so many loss confidence as it cannot
| solve them either, and we can easily be overrun with a
| 'burning of Alexandria' situation if we don't attempt to
| solve these problems. And I mean in the next decade given
| how fast things are escalating not just in the West but
| in Asia: Thailand, Hong Kong and Mynmar are all in revolt
| right now for obvious break down in trust with thier
| systems and legal systems. The CCP is the benefactor from
| these disolving in the region as they can expand their
| influence in the turmoil and they simply don't care how
| corrupt their legal systems are or how they appear to the
| outside World and will disappear you if you resist which
| is where I think this is all heading.
|
| > Except fixed supply currency is going back in the other
| direction. And the hard parts about eliminating scarcity
| have nothing to do with the monetary system.
|
| WHAT?!!!
|
| This smacks of outright detached privilege only HNers can
| conjure up from its ivory tower, go to countries that
| suffer from hyperinflation and still suffer from severe
| capital controls after that period all of which prevent
| wealth creation before you make such a claim.
|
| Otherwise I cannot take you seriously as your ignorance
| is almost palpably painful to me... I've lived and worked
| in Eastern Europe in the last decade and I went to baja
| before the revaluation of the peso in the 90s quite often
| as tourists, and the amount of poverty is incredibly
| sad... it was crazy to see how my single dollar bill
| bought 1000s worth of X in pesos down there. I honestly
| would buy absurd stuff like 10kg of packaged laundry
| detergent because it cost something absurd like 96 cents
| and I had a story to tell when I got back to school.
|
| Ill still remember to this day how upset I felt as a kid
| using quarters on the arcade machines outside the store
| instead of going to the counter and exchanging my USD to
| credits for 'free play' tokens, and then suddenly
| realizing how spoiled I was and how the $10 I spent in
| that store after a few hours probably helped feed the
| owners entire family for a week. It's funny how much
| those experiences make you grow up, and I fear you cannot
| relate.
|
| What you have just said is just beyond belief and I
| cannot seriously take what you say serious.
|
| I can address lending as that is already a thing, BTC is
| the collateral and fiat is the lent out. But the short is
| we just revert to a satoshi standard rather than whole
| Bitcoin (satoshi is 100 millionth of a Bitcoin)... But I
| seriously don't feel like I can muster the energy to go
| into depth as to how that would look like because of how
| struck I am by that statement.
|
| I'm not trying to be a SJW trigger queen, but that is
| just so painfully ignorant that my head literately hurts
| now and I have to get offline for a while.
| tsimionescu wrote:
| For the first part, I'll just say that you vastly
| overestimate our technical abilities if you think we
| could even specify the problem of arbitration in such a
| way that a computer could solve it, nevermind actually
| implement the solver. You've chosen a relatively simple
| case (proof of property) but arbitration in general is
| much more complex.
|
| For hyperinflation, I have been born and continue to live
| in Romania, a country that went exactly through that in
| the 90s, to the extent that a loaf of bread that was
| initially maybe 10-20 ROL would cost 10k ROL. I remember
| as a child not being able to afford popcorn when going to
| the park with my grandparents, or my grandfather selling
| his old car and buying the family's first color TV with
| the money. I remember living as a family of four in a 2
| bedroom apartment (my parents had their bedroom, while my
| brother and I shared the livingroom until we were in our
| twenties).
|
| But that wasn't the problem of our economy, it was just
| what kept it (barely) working! If we couldn't go to
| hyperinflation, we would have simply not payed salaries
| or other debts.
|
| The problem of the economy was that we had sold most of
| our communist-era industry for parts in a quest for
| 'privatization' and a 'free market', and were left not
| being able to produce locally or export almost anything.
| Even today, we are a temperate, extremely water-rich
| plains country that imports a good segment of its food -
| to the absurd degree that we are importing fruit from
| Holland and Israel among others.
|
| Of course, poor governance and corruption played a huge
| role as well. The government promising ever higher
| pensions and salaries for state employees, the works. But
| those problems would not have gone away if people were
| getting bitcoin instead of Lei.
|
| Scarcity is a problem of production, not of money. Money
| itself is almost immaterial. If we could produce enough
| food, water, energy, cars, fridges, computers, furniture
| etc. for every single person on Earth, and all of their
| children, to have all they need at the same time, we
| could renounce money entirely, Star Trek style.
|
| You have a terrible understanding of economics (and of
| the plight of people who lived through hyperinflation,
| like myself) if you think that people in a country
| experiencing hyperinflation would fare any better if they
| could trade in BTC instead of the de-valued fiat. The
| only ones who would be better off are the rich, whose
| reserves of cash would not suddenly lose their value. But
| people who live off wages would see pay cuts and
| eventually just stop getting payed if the currency were
| forced to a global standard instead of suffering
| inflation.
|
| Note: there may be cases where a country, often a
| dictatorship, simply prints money out of stupidity, and
| also forces the population not to trade in foreign money.
| This is not the most common cause of hyperinflation, and
| it is significantly better fixed by BTC, since that is
| more or less as easy or hard to outlaw as the ownership
| of dollars.
|
| Oh, and guess what - the country got richer and better
| without the currency having to go through deflation! In
| fact, bread still costs 10-20k ROL, and a PC still costs
| 40-50 million ROL, we just 're-branded' our currency to
| RON at a fixed 1:10k RON:ROL exchange rate to make the
| numbers more manageable. We started having productive
| industries with products that others wanted to buy, and
| governance got better (we still have huge problems and
| some of the poorest regions in the EU, but that is
| besides the point).
| oblio wrote:
| > I don't disagree about its current feasibility, but I
| think that's mainly so because of a distortion of
| incentives and that so many are invested in this model
| (the few) despite how horrible it is (to the detriment of
| the many) as so many people are incapable of doing
| anything else at this point.
|
| The problem is, at this point it's like arguing for
| communism. It's an utopia. It could happen but I wouldn't
| bet money I'd lose sleep over on it.
|
| It's probably more likely that an asteroid will hit the
| planet and we'll all go extinct before you're able to
| change the minds of most of humanity.
|
| Heck, communists even managed to get a hold of a global
| superpower which actually tried to take over the world
| and they still lost! Good luck with
| Bitcoin/cryptocurrencies :-)
| imtringued wrote:
| >>This smacks of outright detached privilege only HNers
| can conjure up from its ivory tower, go to countries that
| suffer from hyperinflation and still suffer from severe
| capital controls after that period all of which prevent
| wealth creation before you make such a claim.
|
| Hyperinflation is merely the symptom. If you think you
| can cure a failed state by treating it's symptoms you are
| just going to make things worse through ignorance.
|
| >What you have just said is just beyond belief and I
| cannot seriously take what you say serious.
|
| The unfortunate reality is that the problems lie much
| deeper than in just something as irrelevant as the
| currency.
|
| Think about it. If you can buy 10kg of laundry detergent
| for $1 how come that country didn't simply export its
| ultra cheap products and grew its economy that way? You
| know, like China. Why is China different? It's easy.
| China had competition in Hong Kong and an easy model to
| copy and most importantly, the government did copy the
| working model and invested into a capitalist China.
|
| Here's the thing. Governments can make and break their
| countries. A crappy deflationary currency will never
| achieve anything.
| littlestymaar wrote:
| Coinbase and al. also do exactly this though: when you
| buy bitcoin on an exchange, Coinbase gives you an IOU for
| bitcoin, with zero transaction recorded in the blockchain
| it's only when you want to actually take these bitcoins
| out of your Coinbase wallet, to move them to your own
| bitcoin wallet, that a real bitcoin transaction exist. In
| the meantime, there can be more bitcoins owned on
| Coinbase than real bitcoin in existence, exactly like a
| bank. (And commercial banks have existed is the US long
| before the Fed, which was relatively late invention
| (1913) designed to avoid /limit the scope of financial
| crisis).
| uhhhhhhhhhhhhhh wrote:
| so what would happen in a "bitcoin bankrun", where, for
| whatever reason, 100% of coinbase customers say "i'll
| take my coins into my own physical wallet please"
| llaolleh wrote:
| It seems like most of these problems are technical in nature,
| which can be solved with better silicon and design schemes.
|
| I was very anti-blockchain for a while, but if you zoom out it
| makes a whole lot of sense.
|
| The revolution that happened in finance was double entry
| bookkeeping. To me, the logical next step is to have everyone
| keep a immutable tamper proof, copy of the ledger synced, in
| agreement, all the time.
| jonathanaird wrote:
| BSV has solved 1,2 and 5. 3 is on the way and 4 is a non-issue.
| EGreg wrote:
| No, blockchains are not the future, they are really the reason
| why one transaction can happen at a time in the whole world.
|
| Even Ethereum 2.0 will have shards which will do away with this
| anomaly. The only reason flash loans even work with no collateral
| is because you can be sure nothing else is running on the "world
| computer" while your transaction runs, so you can roll it back
| with no risk except gas fees. Vitalik himself acknowledges this,
| the guy is quite honest and straightforward about its
| limitations:
|
| Vitalik Buterin: _Using Ethereum is expensive, and its blockchain
| is 'almost full' He also said blockchain 's 'problem' is that
| every computer verifies every transaction_
|
| Actually blockchains are a first-generation technology that do
| global consensus for every block, which literally means all
| transactions in the world must go through one computer in the
| world (the miner) although it's a different one each time. And
| the situation is actually worse, since you don't know who would
| mine the next block in advance, every transaction must be sent to
| every potential miner! Imagine if BitTorrent had every computer
| store and seed every movie instead of using DHT.
|
| The ability to send or loan arbitrarily large amounts for a fixed
| fee is a symptom of centralization. In a fully distributed
| network, transaction fees would have to be proportional to
| transaction size!
|
| Almost every other protocol on the Internet does not have such
| bottlenecks in its design. No one asks how many emails or
| websites can be served per second. Blockchain is trying to secure
| every transaction using the entire network! That is why so much
| electricity is wasted just to do 7 transactions per second. The
| next generation of crypto will actually be able to power payments
| using embarrasingly parallel architecture. Until then, we have
| blockchain.
|
| Ethereum is nicknamed the "world computer" for a reason. Gas fees
| are super high for small transactions like paying for coffee or
| voting in a secure election. Just one app KryptoKitties can clog
| up the entire network.
|
| As one example, we built Intercoin apps on top of Ethereum
| (https://intercoin.org/applications) but we are not going to wait
| around for Ethereum 2.0 - which is blockchain also. Kik Messenger
| and others have long gotten off. Ripple, MaidSAFE and Solana use
| different technologies.
| ItsMonkk wrote:
| You touched on something that I have been trying to work out
| but don't nearly have the expertise to create.
|
| Bitcoin requires PoW because it's implemented as back-pointers,
| where the global software states that everyone coalesces behind
| the tallest chain.
|
| But why not just implement a linked list, where the next link
| is written into the current block, and whomever writes to that
| next block wins? You would end up with endless blocks, but we
| can use what we learned with ext2 fs, where we have a circular
| queue. Once the data has been consumed by the main datastore,
| it is consumed and is available to be written to again.
|
| You can still store the entire chain in some cheap s3, and
| anyone who wants to ensure that every command was executed
| could do so, but most would not.
|
| I would love to see this implemented with torrent technology,
| such that I could host a website database solely by paying a
| seedbox company.
| [deleted]
| andreaorru wrote:
| What's your opinion on Layer 2 technologies like ZK and
| Optimistic Rollups?
| EGreg wrote:
| I think they definitely have a chance, but sharding is the
| best idea.
|
| Unfortunately Bitcoin with Proof of Work will be around for a
| very long time as mining will be extremely lucrative for 100
| years. Wasting more and more electricity for a legacy system
| to do store of value.
| loceng wrote:
| "Almost every other protocol on the Internet does not have such
| bottlenecks in its design. No one asks how many emails or
| websites can be served per second."
|
| I think blockchain can be a good answer to problems that
| Bitcoin solves, however the blockchain used needs to not be
| designed as an MLM scheme with a financial incentive for its
| adoption, and designed to avoid other unavoidable pitfalls
| Bitcoin creates that we need to avoid. I think the current
| iteration of blockchain as Bitcoin only became the incumbent
| because of the MLM scheme, and that there is a non-MLM solution
| that can gain adoption - it just has to be understood by
| democratically elected decision makers first (save regulatory
| capture which will most certainly happen with the weight of the
| "army/mob of HODLers."
| controlweather wrote:
| Y'all just mad you're still poor!
| mtrycz2 wrote:
| Scalability: While it can't do 25k transactions per second, my
| Raspberry Pi can validate 600tps with still some headroom. (ie
| 150x current maximum of BTC; it could actually do 2,2k but I
| wasn't able to reliably generate blocks because of the stochastic
| nature of it)
|
| The barriers described in the article are very real, but there is
| also real work being done to remove them.
| nexthash wrote:
| I think the #1 reason blockchain doesn't work is very simple -
| the technology is broken beyond fixability. This article is two
| years old, but the same variations of these excuses always come
| up when the crypto ideologues are grilled on why their utopiaic
| vision hasn't come about, for all of blockchain's existence.
| Blockchain is awful for most things compared to a centralized or
| distributed database: it is inefficient, untrustworthy due to
| decentralization, a huge resource hog, and morbidly complex to
| implement.
|
| The only good use cases that come to mind is if there is some
| _particular reason_ for you to evade the conventional and easier
| systems of communication and storage. The lesson is: you should
| evaluate technology on its merits, not its politics. Three
| classic sources on the blockchain question immediately come to
| mind:
|
| http://doyouneedablockchain.com/
|
| https://imgur.com/a/RlUj9Ed
|
| My personal favorite:
|
| https://twitter.com/vgcerf/status/1019987651301081089
| mrharrison wrote:
| I have been in the blockchain space for about three years, and
| there is an explosion in tech and innovation in the last six
| months. Visa, Mastercard etc... are integrating, bank
| regulators now allow banks to connect to public networks. It
| just astounds me sometimes how people can be so confident in a
| review of a platform type and done so little research. I urge
| you to take a second look. Blockchain is primed to disrupt the
| financial industry.
| rrrazdan wrote:
| Disrupt but how? Can you point to a specific example or use
| case?
| mrharrison wrote:
| More transparent than the opaque financial industry. You as
| a user completely own your assets, with your public key.
| Yes blockchain wallets/public keys are bad UX, but at the
| same time they give you actual ownership of your
| securities/index funds. A person can have access to the
| same financial products that banks have access to, because
| they cost a fraction of a price to run then they normally
| do on CEX and instead of waiting for 3 days for a
| transaction to complete, it completes in 5 minutes. I could
| go on and on... Essentially blockchain makes financial
| products faster, cheaper and more accessible. No middlemen
| involved and a transparent audit trail.
| UncleMeat wrote:
| > You as a user completely own your assets, with your
| public key.
|
| Cool. Why is this a thing tons of people want?
|
| > A person can have access to the same financial products
| that banks have access to, because they cost a fraction
| of a price to run then they normally do on CEX and
| instead of waiting for 3 days for a transaction to
| complete, it completes in 5 minutes.
|
| Which financial products? How many people want those
| things?
|
| For BTC to disrupt the financial industry I'd expect
| there to be a huge number of people who want its features
| over the alternative. But where are they? Where are the
| billions of people who want to manage the storage of
| their own wealth or trade derivatives daily?
| mrharrison wrote:
| They don't know they want it, till they know what it
| means. It means independence from central exchanges, it
| means the money in your savings account of .01% interest
| account can now be directly leveraged by loans on Aave,
| which return 5-9% interest. No middleman managing your
| money. Your assets can be directly accessed by people who
| need it.
| AngrySkillzz wrote:
| Defi loans are not actually useful though. You
| overcollateralize 150% of your ETH or whatever, to get
| say 100% back in some stablecoin.
|
| But you could have just sold the ETH in the first
| place...? If it truly is a "currency" then why are you
| taking a currency loan on your currency? That's like
| putting up $150 of collateral to get a $100 loan, it
| makes no sense.
|
| Unless it's not a currency, in which case this is just a
| margin loan - I think my speculative asset is going to go
| up in price, so I will take out a loan against it instead
| of selling it. Which has only two use cases: I need the
| dollars and I'm avoiding paying capital gains, OR I want
| this margin loan to speculate on more cryptocurrency!
|
| That's a pretty small use case compared to like, "loans"
| in general. Plus if/when the ETH/USD price crashes, all
| of these loans will get liquidated and push the price
| down further. I fully expect a "portfolio
| insurance"-Black Monday type crash if ETH ever falls by
| more than 30%.
| mrharrison wrote:
| Web3 is definitely the new wild west of the internet. I
| agree there will be wild price swings, but it will
| stabilize as more people are onboarded.
| [deleted]
| nradov wrote:
| I don't think you understand the relationship between
| interest rates and risk. The reason that bank savings
| accounts have low interest rates is that they are zero
| risk (FDIC). Any asset class with a 5-9% expected return
| carries a substantial risk of losing you principal. In
| other words, sometimes borrowers default.
| BlackInkstoan wrote:
| DEXs and PLFs still lack integration into the traditional
| finance infrastructure. Outside of escrowed p2p sales of
| cryptocurrency, centralized exchanges are the only FIAT
| on and off ramps.
|
| If stablecoins, custodial or noncustodial gain widespread
| adoption, DeFi will remain as a niche for hardcore crypto
| fans.
| selestify wrote:
| > If stablecoins, custodial or noncustodial gain
| widespread adoption, DeFi will remain as a niche for
| hardcore crypto fans.
|
| Why? It seems the exact opposite to be -- if stablecoins
| gain widespread adoption, there will be a lot more
| exposure to DeFi because you have stablecoins already and
| can directly partake in DeFi.
|
| Right now the biggest hurdle is fiat -> crypto
| conversions and back, stablecoin or not. If you already
| have stablecoin because it's widely used, then that won't
| be a problem anymore.
| dmitriid wrote:
| > A person can have access to the same financial products
| that banks have access to
|
| Like reverting transactions? Handling of disputes? Fraud
| detection?
|
| > Essentially blockchain makes financial products faster,
| cheaper and more accessible.
|
| You literally mentioned bad UX just a few sentences ago?
| How that makes it more accessible than existing systems?
|
| Cheaper? What's the transaction cost at any given moment
| in time?
|
| Faster? Credit card transactions are instant these days,
| have no fluctuating costs, and carry an added benefit of,
| you know, customer and seller protections.
| kergonath wrote:
| Anytime now. We've been told the revolution was around the
| corner for years.
| mrharrison wrote:
| It turned into a 1 trillion dollar market three weeks
| ago. DeFi has been on an upward trend for the past 6
| months. It is happening. Banks were just allowed in
| January to start interacting with public blockchains, so
| give that a year. The regulatory walls are dropping and
| accessibility is increasing with the likes of Visa and
| Mastercard.
| ashtonkem wrote:
| I find it very entertaining how suddenly Visa is a good
| thing, the moment they wanted to offer a crypto card. All
| this after how many articles decrying Visa and other "legacy"
| financial institutions?
|
| Also, the idea that Visa is going to help the Blockchain
| finally scale is ... well, let's just say that you're not
| supposed to enthusiastically endorse what the detractors have
| been saying for years.
| hanniabu wrote:
| It's a stepping stone to create adoption.
| mrharrison wrote:
| Yes, I went from Coinbase to managing my own wallet.
| Coinbase was my stepping stone, but now with my own
| wallet I have access to so many other products without
| Coinbase taking a fee and products that Coinbase doesn't
| offer. Coinbase helped me understand what was possible,
| now I have graduated to liquidity pools, staking and
| DEX's.
| mrharrison wrote:
| Weird how I got so many minus points for an actual
| experience.
| AngrySkillzz wrote:
| Where "creating adoption" means "hopefully the price of
| the speculative assets I own goes up"
| payne92 wrote:
| > "The only good use cases that come to mind is if there is
| some particular reason for you to evade the conventional and
| easier systems of communication and storage."
|
| * Nailed it *
|
| I've long said the killer app for blockchain already exists:
| international money laundering and untraceable transfers.
|
| This also happens to be the precise use case where folks want
| to "evade conventional and easier systems".
| pjkundert wrote:
| Until you need international remittances or business
| payments.
|
| Then, Crypto at its worst is _far_ better than international
| Wire Transfers, etc.
| jeltz wrote:
| I do international business payments all the time and most
| of them cost 0.15 EUR and are easy to both accept and send.
| More expensive ones (those outside the EU) can cost 3 EUR
| and have a exchange fee of 0.5%. And as far as I can tell
| prices are going down. I had to pay 0.3 EUR in 2019. Most
| transactions take like 2 bank days, but that is no big deal
| since most invoices are for 14 or 30 days.
|
| To me it is unclear what issue there is to solve unless
| your country has messed up banks.
| pavlov wrote:
| This claim is often made and it just makes no sense to me.
|
| Let's say I'm invoicing someone abroad for $100k USD.
|
| Today they send me a wire transfer. It costs about 25 USD
| (fixed fee, but in this case 0.025% of the transaction,
| i.e. negligible) and normally completes the same day.
|
| The payment is made in the currency of my invoice, so I'm
| guaranteed to receive the right amount. (Any currency
| exchange is the sender's responsibility. But a lot of
| companies maintain accounts in various currencies, so they
| probably have USD at hand.)
|
| How does crypto payment improve anything here? Exchanges
| just add extra steps. The extreme volatility of Bitcoin
| means that, by the time an exchange is processing my $100k
| withdrawal, it might be worth $90k. It's not a useful
| currency if it goes up and down 10% in a day.
| hanniabu wrote:
| If it wasn't an issue then this wouldn't be happening:
|
| https://news.bitcoin.com/central-bank-of-nigeria-orders-
| bank...
| pavlov wrote:
| An African central bank is suspicious of cryptocurrency.
| How is that somehow evidence that wire transfers are
| difficult?
|
| I guess if the use case is "I want to send $1M from Iran
| to an American who will distribute the money to Nigerian
| accounts"... Then yes, that is presumably easier to
| execute in crypto. But there are also pretty good reasons
| why countries want to keep an eye on that kind of flows.
| michaelscott wrote:
| I see you've never lived in an African country.
| Remittances of any kind, even between neighbouring
| countries, is slow, painful and depending on which
| country on the continent you're in may not arrive at all.
| I haven't lived in Asia, South America or even certain
| parts of Europe but I imagine you may find similar
| conditions there as well.
| selestify wrote:
| Why not just use a stablecoin for the transfer?
| centimeter wrote:
| As someone who has had to make international payments in
| the US$20-50k range semi-frequently, Bitcoin is _by far_
| the easiest way to do it.
|
| Your story about it being easy and cheap to do via
| remittances or whatever is pure fiction. Any traditional
| mechanism is at least two of slow, expensive, and
| onerous.
| jeltz wrote:
| It is not pure fiction. I also send transactions semi-
| frequently in those ranges and have never had an issue.
| Sure, I have not sent them to Africa and that might be
| where the differences in experiences lie.
| throw0101a wrote:
| Better than, say, Transferwise or XE.com? Can you explain
| how?
| bitxbitxbitcoin wrote:
| There isn't a list of allowed vs banned countries?
| UncleMeat wrote:
| Now you are back at the "evading" use case. BTC works
| better if you want to send six figures to somebody in
| Iran. That remains a pretty small use case.
| m3kw9 wrote:
| There was once I transferred money from Bitcoin to a
| Bitcoin cash address accidentally. The money was lost
| forever. It was a weird reason due to being syncing , but
| yeah you could lose money just like that while most people
| wouldn't be able to explain it or understand it.
| hanniabu wrote:
| That has been solved with more user friendly wallets. If
| you're using a Qt wallet you'd think you knew what you
| were doing. The Qt wallet actually even tells you not to
| do anything until it's done syncing so you must have
| closed that overlay and ignored that warning. User error,
| that's your fault.
| m3kw9 wrote:
| Actually i got no such warning. But your explanation re-
| enforces how easy things can go wrong.
| acdha wrote:
| This is a great example of why Bitcoin has failed: you do
| not build faith in a financial system by reportedly
| telling people that any mistake will have no way to
| correct it but they will be mocked for not being perfect.
| hobs wrote:
| The globally shared ledger is not a place for untraceable
| transfers.
| selestify wrote:
| Monero solves that problem.
| The_rationalist wrote:
| Immutable databases are much more interesting than Blockchain,
| it's time for the hype circle to move on
| https://adlrocha.substack.com/p/adlrocha-immutable-databases
| throw0101a wrote:
| > _a huge resource hog_
|
| One observation that I recently saw:
|
| > _Bitcoin is such an environmental disaster it really is a
| crime against humanity. So what does Tesla do with their $1.5B
| in revenue last year from clean car credits sold to other
| automakers? Put it into "Destroy the Planet Inc"_
|
| * https://twitter.com/ncweaver/status/1358780808144723968
| mlthoughts2018 wrote:
| > "The only good use cases that come to mind is if there is
| some particular reason for you to evade the conventional and
| easier systems of communication and storage."
|
| This is the number one model for valuation of Bitcoin-like
| cryptocurrencies. Say you live in Venezuela and dealing with
| custodial intermediaries in your local fiat currency is
| completely untenable. You can't store money in gold or other
| precious metals. You can't keep it in a bank account. You can't
| transfer it (with fees) in a foreign exchange market.
|
| All these things require dependency on the local fiat currency
| (plus more for custodial fees if dealing with anything like
| gold or stocks or bonds), not even factoring in issues of the
| fiat currency's own extreme volatility and transaction fees.
| Banks being trusted central parties or Visa being able to
| process 40k transactions per second sure won't mean shit to you
| at that point.
|
| But with Bitcoin you can drive across the border and actually
| buy milk or medicine, no fiat currency involved. You'll happily
| see the volatility and slow transaction process / high fees as
| a worthwhile overhead cost for independent purchasing power
| outside of your local fiat currency.
|
| Now, _of course_ this is a rare and small use case by volume
| and by market cap in comparison to normal functioning fiat
| currencies. At any given time only a small amount of the world
| demand for financial transactions would fall in some
| destabilized government zone where independence from local fiat
| currency is materially important and having a preemptive stock
| of cryptocurrency holdings really matters. And somewhat lesser
| there will be some small market for people with extreme risk
| aversion preferences or "prepper" outlook (eg, "What if the US
| dollar collapses?" - most of us don't care to hedge that
| extreme tail risk, but some people do care).
|
| The total demand for currency holdings like this will
| _obviously_ be much lower than any total market cap of a major
| fiat currency.
|
| But it may still be higher than the total market cap of
| cryptocurrency today - that completely depends on your personal
| take on forecasting and speculating.
|
| In other words, there are several straightforward and
| uncontroversial reasons why buying and holding cryptocurrency
| _rationally_ makes sense. You could happen to be wrong about
| the speculative future demand for this type of transaction
| capability. You could be wrong in the magnitude of the
| forecast. But being wrong doesn't make it irrational hype or
| conceptually broken from first principles, as you foolishly
| assert. There are many very uncontroversial, directly obvious
| and rational reasons to speculatively buy and hold crypto,
| depending on your personal appraisal of that market and future
| demand for that transaction capability.
| selestify wrote:
| > You'll happily see the volatility and slow transaction
| process / high fees as a worthwhile overhead cost for
| independent purchasing power outside of your local fiat
| currency.
|
| Don't stablecoins solve the volatility problem, and NANO
| solves the slowness/transaction speed aspect? Granted, these
| features can't be combined just yet. But they are available
| separately
| throw0101a wrote:
| > https://imgur.com/a/RlUj9Ed
|
| This decision flow chart is Figure 6 of NISTIR 8202,
| "Blockchain Technology Overview":
|
| * https://csrc.nist.gov/publications/detail/nistir/8202/final
|
| See page 53 of the PDF ("42" at the bottom of page,
| 'physically').
|
| If you need a handy guide to give to someone to explain
| blockchain (though not crypto currencies), it's hard to go
| wrong with send people this link.
|
| For a more finance-y, the CFA Institute has a useful white
| paper:
|
| *
| https://www.cfainstitute.org/en/research/foundation/2021/cry...
| lima wrote:
| > _the technology is broken beyond fixability_
|
| [citation needed]
|
| Crypto ideologues are a strawman. Anyone working on the actual
| tech agrees that blockchains are useful if, and only if, you
| can't rely on a single party and need a decentralized,
| trustless append-only database. Otherwise, why bother with the
| extra complexity? That's the whole point of blockchains, after
| all.
|
| Technology choices are complex set of trade-offs, even within
| the blockchain space.
| oblio wrote:
| Blockchain is like NoSQL.
|
| NoSQL was a nice buzzword to bunch up web caches and log
| processing tools for analytics, especially for the creepy-
| spying-ads corps.
|
| The blockchain niches seem to be much, much smaller than what
| it's sold for. Once the dust settles (~5 years from now) it's
| likely that not much will be left behind an all this money
| spent on it will have been wasted.
|
| Heck, NoSQL databases have wider applicability than
| blockchain and few people consider them a major technological
| revolution, let alone a social or economical one.
| packetlost wrote:
| Correct. The problem is there's virtually nothing that
| actually benefits from those things. A strong case case could
| be made for a truly decentralized global currency and maybe
| smart-contracts, but not "a store of value" or
| "revolutionizing supply chain bookkeeping".
| mikegreenberg wrote:
| Note that both use cases (decentralized global currency and
| smart contracts) rely on altruism which cannot be
| guaranteed by human actors but is entirely deterministic
| within the chaos of humanity (with a sufficient number of
| honest actors) using a blockchain. That is the value prop:
| distributed consensus with "quick" convergence toward an
| agreed upon truth.
| [deleted]
| ClumsyPilot wrote:
| Transactions between banks need clearing and settling. Many
| systems run on a periodict (like half an hour) net
| settlement, some are even slower. Blockchain is a perfect
| firt for those usecases.
|
| There is a reason JP morgan is developing quorum
| acdha wrote:
| There are two distinct classes of system pushed under the
| label "blockchain": the kind like Bitcoin are enormously
| complicated by trying to be used between untrusted
| parties. The systems which are potential viable are much
| less expensive because all of the parties in their system
| are known and trusted at least to be subject to contract
| law. All a bank needs is public key encryption and Merkle
| trees, and while that might be branded as a blockchain
| for marketing purposes that doesn't make it the same.
| jeltz wrote:
| Or they could just start doing real time settlement,
| something which the banks are working on.
| hobs wrote:
| Right, the problem is that almost no one needs those features
| and those are mostly anti-features for modern software.
| jamemuraca wrote:
| I think a great use case is for distributed storage and control
| of home automation products, with an open protocol on top of
| it. When I have lock in to one vendor and they go bankrupt,
| device has lost control but also my historical data. If this
| was all via a distributed model, I could grant access to a new
| app/company to take over control. Even if they don't close up,
| I could still give access to other integration partners to gain
| see my historical data for some kind of processing.
| UncleMeat wrote:
| Why do you need a blockchain for this? This just sounds like
| a shared data format.
| ashtonkem wrote:
| There is no <explicative deleted> way I'd put my home
| automation in a public ledger. We have enough problems as a
| society with cloud enabled security cameras being used as bot
| nets and to harass people. A permanent ledger of what
| happened in your home is a mind bogglingly awful idea.
| gregmac wrote:
| Buy home automation products with local control and no
| internet communications at all. Ideally with an open
| protocol, and open source control software.
|
| Same protection against vendor death/depreciation/etc, and on
| top of that your data is more secure, the system survives
| internet outages, and you don't have to mess with the immense
| complexity blockchain adds.
|
| Remote access, if you even need it, can be done through a
| thousand other methods (direct IP address, tunneling proxy,
| VPN, etc etc).
| ffggvv wrote:
| seems like you could just do this with some sort of open
| source or shared standard that different providers use
| smoll wrote:
| Yes, but this is where politics comes into play. If you're
| a Google/Amazon/Samsung/any big player, why would you stick
| to the open standard when you could just change to a
| proprietary standard for more lock-in and profit?
|
| With a blockchain-based standard, you could make vendor
| buy-in permanent and enforceable. The only way that one of
| the big players could win in this new normal is if the
| products on their proprietary standard are better (in
| merit) than the _entire marketplace_ that implements the
| blockchain standard.
| ffggvv wrote:
| but why would they agree to that blockchain standard in
| the first place? it's the same issue
| hakfoo wrote:
| You could do that with any widely-adopted standard. No
| blockchain required. Remember that even IBM at their
| late-1980s juggernaut status couldn't put the genie of
| the ISA bus back in the bottle.
|
| I think the trick to lasting open standards is to provide
| only a MVP ecosystem at launch. No one vendor is strong
| enough to close the platform behind them. Again, like the
| IBM PC, their product both needed and spawned a galaxy of
| add-on and compatible products, providing enough of a
| force to protect the open standard.
| jcfrei wrote:
| This is the typical argument on a very technical board such as
| HN where blockchain is synonymous with a specific
| implementation. But that's an outdated way to think about
| blockchains. Yes, Bitcoin's implementation is a huge resource
| hog and slow. But for most newer projects "blockchain" just
| means an auditable trail of state changes. Whether you
| implement this with the shiniest newest db paradigm or some
| simple SQL database is irrelevant for most people in the
| economy. However the fact that we now have a global consensus
| over the ownership of digital assets that's something new and
| valuable. And that consensus didn't exist in a meaningful way
| in the past; at least not in a way that was accessible to the
| public - there were always gate keepers involved. In that sense
| blockchain is not about some fundamental technological
| revolution, it's about the introduction of digital ownership
| that's accessible to anyone.
| xirbeosbwo1234 wrote:
| Then we, as engineers, have failed in explaining things.
|
| A blockchain is a linked list where each element of the list
| contains the hash of the previous element. It's basically a
| degenerate Merkle tree. That is _all_ that it is. It isn 't a
| metaphor. It isn't throwing off the shackles of an
| overreaching government, nor is it a takeover of our society
| by militant right-wing conspiracy theorists.
|
| It's a data structure.
| zeroxfe wrote:
| A Merkle tree is just one component of a blockchain. It
| also requires: a byzantine consensus mechanism, a p2p
| network stack, public key crypto, and a set of economic
| incentives to keep it going.
|
| You can't build a public database on a Merckle tree without
| being able to agree on what goes into it.
| xirbeosbwo1234 wrote:
| That is a cryptocurrency. The work coming from the people
| at Hyperledger, who are also using blockchains, is an
| ordinary database complete with access controls. It uses
| the same data structure but without any of the political
| goals and with many different design decisions.
|
| A blockchain is just a data structure. It isn't even a
| very interesting one.
|
| In common parlance "blockchain" isn't well-defined: it
| just refers to something that's, like _anarchy_ , dude,
| whoa....
| zaphar wrote:
| If you claim that a blockchain is just an auditable trail of
| state changes (i.e. a Merkle tree) Then the proponents of
| blockchain technology chime in on how it's more than just
| that. It's also a matter of consensus for that technology.
| And in point of fact the consensus mechanisms of most
| blockchains are terrible. Highly inefficient, vulnerable to
| majority attacks for different types. The "idea" of a
| globally consistent audit trail for digital assets that can
| survive in an adversarial environment is great. The most
| popular implementations all seem to be terrible.
| meowkit wrote:
| Of course its inefficient. Thats the tradeoff.
|
| I guess servers are terrible computers too because you
| can't carry them in your pocket?
|
| Or phones are terrible computers because they can only stay
| powered for a day or two?
|
| Blockchain is horribly inefficient in almost every regard.
| But thats the trade off.
| zaphar wrote:
| Neither of your examples are tradeoffs. Both my computer
| and my phone are excellent at their jobs with little in
| the way of downsides. Bitcoin is bad at it's job with
| lots of downsides.
|
| It only looks better than the alternatives if you live in
| a place where the economy is heavily mismanaged. If
| you're currency is only better than the absolute worst
| economies in the world don't expect all the people in
| better economies to look favorably on it. Except perhaps
| as a way to further exploit those in terrible economies
| by speculating in that currency and driving high
| volatility in it's value.
| StavrosK wrote:
| You keep moving the goalposts between "blockchain the
| technology" and "Bitcoin the currency". If you want a
| trustless auditable log, your best option is a
| blockchain. What's a better alternative?
| zaphar wrote:
| Actually Bitcoin keeps moving the goalposts. First it's a
| currency, next it's a trustless auditable log. All I need
| for trustless is auditability. All I need for
| auditability is a public Merkle Tree. I fail to see what
| actual real world value the PoW and associated approaches
| actually add.
| StavrosK wrote:
| > You keep moving the goalposts [...] What's a better
| alternative?
|
| > Actually Bitcoin keeps moving the goalposts.
|
| Okay.
| TomSwirly wrote:
| If you have a rebuttal, let's see it. Mockery is
| childish.
| StavrosK wrote:
| Still waiting for your rebuttal first.
| michaelscott wrote:
| I think you've misinterpreted what Bitcoin's "job" is.
| Although the initial impetus was definitely to set up a
| new type of currency (something I'd agree it fails at) it
| has long since moved to behaving as a store of value, or
| a commodity. At this it excels.
|
| The tradeoff GP is referring to is efficiency for
| security. If you have a distributed, "trustless" network
| you unfortunately have to trade your efficiency for more
| security.
| hannob wrote:
| So Blockchain is a fancy word for something like a Git
| repository?
| oblio wrote:
| > Blockchain is a fancy word
|
| Blockchain is a funding key word.
|
| There, fixed that for you.
| ashtonkem wrote:
| We're now in the phase where the underlying technical term
| is being diluted down to meaninglessness in order to dodge
| around the well publicized failures of specific examples.
| jcfrei wrote:
| I'm absolutely aware of the shortcomings of the currently
| most popular blockchain technologies. But calling
| specific implementations (like Bitcoin or Ethereum) a
| failure when people are paying thousands of dollars each
| block to use it is pretty bold.
| wizzwizz4 wrote:
| I don't think something's success or failure hinges on
| whether rich people like it.
| thedudeabides5 wrote:
| Well, except for tradable financial assets...which are by
| their definition beauty contests for rich people's
| saving/investment dollars.
| Retric wrote:
| Success or failure of financial asset is independent of
| their current price, otherwise Bernie Madoff was
| providing a valuable financial product in 2007.
|
| It's individual trades that depend on the price because
| they have finite endpoints. However, assets are owner
| independent and therefore based on their long term value
| proposition.
| ashtonkem wrote:
| > But calling specific implementations (like Bitcoin or
| Ethereum) a failure when people are paying thousands of
| dollars each block to use it is pretty bold.
|
| And people were willing to pay hundreds of dollars for
| plush toys with the appropriate tags preserved in
| plastic. Bubbles are a thing, and the crowd can be wrong.
| To pretend otherwise is silly.
|
| More fundamentally, the original promise of Bitcoin was
| that it would act like a currency. It has failed at this.
| You can tell because all of the advocates have shifted
| over from "money of the future" to "it's a store of
| value"; a subtle admission that it's not actually
| functioning like a currency.
| meowkit wrote:
| And there are cryptos like Nano that fulfill this
| original promise.
|
| Technology evolves over time. Just because its not
| perfect at the first go, doesn't mean it should go in the
| trash.
| ashtonkem wrote:
| > Just because it's not perfect at the first go, doesn't
| mean it should go in the trash
|
| The converse is also true; just because it's an
| improvement over past failures doesn't mean that it'll
| actually work.
|
| My issue with crypto has always been fundamental; I don't
| think crypto fans really have a good grasp on what
| motivates the average person, because most crypto fans[0]
| are ideologues, and like many ideologues they struggle to
| recognize that not everyone shares their values.
| Decentralized and trust-less speaks to engineers, but
| your average person has no idea what that means and
| doesn't really care either. Plus a lot of the
| consequences of crypto currency design are absolute anti-
| features from a consumer perspective; nobody wants to
| find out that losing their password means that they're
| broke, or that they can't reverse a fraudulent charge.
| Your average consumer _wants_ those features, and is
| willing to give up decentralization, something they
| didn't value, to get it.
|
| 0 - At least those fans of crypto that want to see it
| used as currency. As compared to those crypto fans that
| want to do whatever it takes to make the number go up.
| jakupovic wrote:
| Is Elon Musk bitcoin fan? How about Mass Mutual? BNYM?
| Pretty funny the language used, fans, seriously 6th most
| valued currency in the world is relegated to plush babies
| status. At least people have stopped with the tulips and
| that talk. Same talk and yet bitcoin acceptance keeps
| growing day by day, how do you explain that? Is everyone
| else wrong?
| ashtonkem wrote:
| > Is Elon Musk a[sic] Bitcoin fan?
|
| Yes. He also is a Twitter shitposter who got in trouble
| with the SEC for promising to take Tesla private at $420
| a share, a number he picked because it was funny, and was
| also involved in the GME nonsense a few weeks back.
|
| If you're pointing to men like him as serious figures
| pushing for bitcoin's adoption, then it's time to stop
| and rethink a lot of things.
|
| > yet Bitcoin acceptance keeps growing say by day, how do
| you explain that?
|
| Bitcoin _speculation_ grows day by day. People want to
| get rich (in USD I'll point out) with it. Actual usage of
| Bitcoin as a currency is not growing.
|
| As always, gimme a call when I can buy a latte and
| groceries with it. I've seen literally one place with a
| "we take Bitcoin" sticker, and the receptionist had
| absolutely no idea why it was there or what it meant.
|
| > Is everyone else wrong?
|
| Why couldn't they be?
| StavrosK wrote:
| I wish cryptocurrency payment processors supported many
| more coins, but I understand how they can't support
| everyone's pet coin. I do wish I could pay for more
| things with Nano, though, it's amazing how you can pay
| for things instantly without any fee.
| throwaway9980 wrote:
| Yes. See the sibling comment about Merkle trees.
| GuB-42 wrote:
| That's a question I asked myself a few times.
|
| The fundamental part of a blockchain is that each block
| signs the previous block, making it very difficult to
| rewrite history. And it is exactly what git does.
|
| We could implement a cryptocurrency on a git repository.
| Just commit and push 'I am X, here is the proof, send Y
| gitcoins to Z' whenever you want to do that.
|
| The only thing git is lacking compared to say, bitcoin, is
| a builtin way to select the "origin" repository. In most
| git-based projects, there is a global consensus on a
| central location. In bitcoin, it is automatically selected
| based on who wasted to most computing power on a pointless
| cryptography problem.
| jcfrei wrote:
| No, I see blockchain as a social technology. The current,
| trusted system for tracking ownership is a state-governed
| system. The account balances we have, share registers of
| companies, residential property registries, etc.
|
| Blockchains offer an alternative system (outside of
| government run systems) to keep track of ownership. Now, in
| my opinion there's little to gain of replacing those
| existing systems - they are working just fine. But for a
| new asset class (notably digital assets) blockchains will
| work very well.
|
| Again, the important change is the change in social
| consensus. If you told someone 5 years ago that you hold a
| certain token on the Ethereum blockchain nobody would have
| cared. If you today ran a registry of tokens on your github
| repository nobody would care. But if you hold a token today
| on the Ethereum blockchain then people are willing to pay
| for it.
| canoebuilder wrote:
| > _However the fact that we now have a global consensus over
| the ownership of digital assets that 's something new and
| valuable._
|
| It's also completely contrived. Being digital means
| infinitely replicable, or thereabouts. Do we really need this
| game of artificial scarcity?
|
| People used to talk about things like property records, but
| if this realm of artificial scarcity is going to interface
| with the realm of actual scarcity in the real world, it's
| still going to need the systems of adjudication that already
| exist in the real world.
|
| Code is law. But law is not code, otherwise legal disputes
| would have long since been settled and we wouldn't need
| systems of courts and various legal avenues to surface new
| areas of contention and revisit old areas in new light.
|
| If the above wasn't an issue. How do you get past the
| resource hogginess? These things are currently handling a
| minuscule portion, if that, of what their proponents propose
| they take on, and they are already comically massive resource
| hogs. How can they scale?
| jcfrei wrote:
| For the record, I don't think code will be law, ie. that
| blockchains will replace our current system of
| adjudication. Rather smart contracts will be changed to
| allow for an interface with the current system, for example
| via a master key held by the originator of the smart
| contract.
|
| Regarding your second point: Look into newer projects like
| Solana, Polkadot or Cardano which are already live and have
| much better scalability.
| canoebuilder wrote:
| That's an interesting idea, but in what situations is it
| superior or preferable to just signing a traditional
| contract, and taking any disputes to a court?
|
| Cross border maybe, but then what court would you go to?
|
| > Look into newer projects like Solana, Polkadot or
| Cardano
|
| Are these newer projects more or less built with the same
| vision? What is their reason for being?
|
| Censorship resistance would be nice, so would laws
| against private censorship in certain areas. Distributed
| mechanisms of censorship resistance would be more
| trustworthy and transparent. But people find information
| in centralized locations, be it a library, or Twitter,
| etc.
|
| Is there legit headway towards combining beneficial
| aspects of distribution with the efficacy of centralized
| platforms? What are the mechanisms that keep it running
| and the incentives involved?
| gjvc wrote:
| > Code is law.
|
| What does this mean?
| canoebuilder wrote:
| It was something "smart contract" proponents used to say,
| maybe still do.
|
| When I say code is law, I mean "law" in the physics
| sense. We can code, print "hello world", and know exactly
| what the code will do. We can write code up to some
| threshold of complexity and know exactly what it will do
| in all cases. Like how given certain information about a
| physical system we can calculate trajectories or whatnot
| up to some threshold of complexity.
|
| I was making the point that civil law is a different kind
| of law from this physics sense of the word.
|
| With more clarity, code is physics law, but civil law is
| not physics law, i.e. civil law cannot be fully ported to
| computer code.
|
| Maybe I'm wrong and all civil law could be translated to
| computer code. Might that make for a better world? Even
| if possible, there's so much inertia in the system with
| lawyers and judges wanting to keep their job which is
| another human complexity that would have to be worked
| through.
| davidgerard wrote:
| > But for most newer projects "blockchain" just means an
| auditable trail of state changes.
|
| you mean, the 1979-model Merkle tree? I concur that in a lot
| of marketed "blockchains", the closest to a useful bit is the
| 1979-model Merkle tree.
| jnwatson wrote:
| Even more trivial, single-leaf Merkle trees is all that is
| needed.
| lottin wrote:
| > ownership of digital assets that's something new and
| valuable
|
| Doubtful, because ownership only makes sense in a context of
| scarcity whereas digital assets are in infinite supply.
| mikegreenberg wrote:
| How are blockchain assets, whose scarcity is defined by the
| protocol and agreed upon by all participating node
| operators, infinite in supply?
|
| Edit: Arguing in good faith... you could suggest changing
| the protocol, sure, however you would need follow that
| particular blockchain's rules for gaining consensus about
| changing the rules first.
| zaphar wrote:
| Bitcoin already forked once and magically duplicated the
| digital assets. I profited quite handsomly as a result.
| The scarcity is not enforced by the protocol it's
| enforced by community agreement.
| selestify wrote:
| How is that different from the USD, the scarcity of which
| is enforced by the USG?
| lottin wrote:
| Yes, but it's an artificial scarcity. Like you say, these
| assets are only scarce because all the participants agree
| that they're scarce. This is different from physical
| objects, which are scarce because of the laws of nature.
| mikegreenberg wrote:
| I'm not sure why that distinction is important. Value is
| realized in use of a complete product and are not
| represented by the sum of its parts. (Value is not zero
| sum. A log and a plank together can arguably provide more
| value as a slope than the log and the plank can provide
| value on their own.) Sure, you can decompose the system
| to remove artificial scarcity, but that's part of the
| product. The market has manifested it into existence
| because it is valuable and users trust the protocol
| sufficiently that it will not be changed from underneath
| them. And without evidence that the protocol is brittle
| enough to allow rules to break, that trust in the
| protocol is more valuable than any human's promise.
| hakfoo wrote:
| I think the question is less about "can it maintain a
| (premise of) scarcity" and more "are the scarce tokens
| worth having?"
|
| There's plenty of things that are scarce but essentially
| worthless. There's no robust secondary market in Penn
| Central Railroad timetables, the little plastic caps that
| SNES cartridges came with, or copies of the May 18, 1986
| edition of Arizona Republic.
|
| Having a built in utility factor is a very strong way to
| answer the "is it worth having?" question. It provides a
| stickiness to the asset, rather than just being a pump-
| and-dump vehicle.
|
| Gold says "I'm worth having! I can be made into jewelry
| and really good connectors for premium audio cables."
|
| The paper dollar says "I'm worth having! I can keep the
| IRS from sending you to jail."
|
| Hell, even MMORPG gold says "I'm worth having, because
| you can trade me for a Sparkly Unicorn Rainbow Dragon of
| Death mount."
|
| Different cryptocurrencies are making a wide range of
| cases, ranging from "I can let you transfer value cheaply
| and quickly across borders" to "I can let you buy
| contraband goods without an obvious paper trail." And a
| lot of these claims are still to be proven or fully
| realized.
|
| It's entirely possible we're barking up the wrong tree
| with blockchain. Maybe there's a killer app for it that's
| not currency, but the current trends seem to be
| predominantly about it. (It feels like a lot of the
| supply-chain-tracking and registry-of-ownership hype died
| down)
| lottin wrote:
| I have no idea what you're talking about :(
| ezoe wrote:
| I think price volatility is the only reason it's not working as a
| normal currency.
|
| Right now, these blockchain currencies are traded just like
| expensive wine, art or gold bar. It's a speculative money game.
| We can't use wine or art to buy some food for today. Most people
| don't even run the full node themselves. They relies on somebody
| else's node. In good term, they are investing, in other words,
| they are gambling.
|
| It's just sad seeing a lot of resources and some brains are
| wasted on these gamble.
|
| How could this be happened? When bitcoin was announced and it's
| first implementation was actively developed by someone or some
| group known as Satoshi Nakamoto, it was just a technically
| interesting non practical piece of attempt. But now... it's just
| a mess. Had I mined bitcoin in early days, I could be a
| billionaire. But the same thing can be said on buying the gold
| bar. It's not that technically interesting.
|
| The first P2P boom invented a lot of practical services. File
| sharing, web hosting, audio and video streaming, video chat and
| all. They are all pivoted to central system for efficiency, but
| some services gained a few years of early head start experience
| thanks to the P2P. What blockchain achieved so far? Nothing. It
| just invented another gold bar. Totally useless but some people
| believes value in it.
|
| I really wish people wake up and spend precious time and
| resources on something that introduce real value to the world.
| Blockchain? Wake me up if proof of storage space become
| practical.
| willbudd wrote:
| You have obviously no idea what you're talking about. Bitcoin's
| block mining algorithm is excessively deflationary: it
| encourages hoarding instead of spending while
| disproportionately rewarding early adopters. That however has
| absolutely nothing whatsoever todo with the blockchain
| algorithm, which was/is truly innovative as a decentralized
| ledger.
|
| There is nothing preventing cryptocurrencies from utilizing
| blockchain technology in combination with inflationary currency
| generating models, and in fact plenty of them do. They are less
| well known partially because they were later to the game, and
| partially because they lack the get-rich-quick pump and dump
| appeal of bitcoin and co.
| hanniabu wrote:
| It's a new asset class so it's in a huge growth phase. Over
| time it's volatility is beginning less and less and will
| continue to do so as the market matures.
| selestify wrote:
| > The first P2P boom invented a lot of practical services. File
| sharing, web hosting, audio and video streaming, video chat and
| all.
|
| Have you looked into all the new developments with Ethereum and
| defi?
| AngrySkillzz wrote:
| The other main reason it is not a currency is that it only
| processes 5 transactions per second and they cost a ridiculous
| amount of money ($60 at the peak in 2017). Which makes it only
| usable for large transfers of speculative value, not like,
| buying your daily coffee. It's not a currency.
| lawn wrote:
| This is only true for Bitcoin, there are many others without
| the transaction bottleneck and the ridiculous fees.
| tomglynch wrote:
| Unrelated to the content, but I found that blog so visually
| appealing.
| max_ wrote:
| Author here. Thanks
| hahahahe wrote:
| There's no accountability in blockchain. Proponents of crypto are
| unwilling to create a currency with specifications they preach
| without relinquishing the "wealth" they derived from early alpha
| versions.
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