
“In 2018 the blockchain/decentralization story fell apart” - randomwalker
https://twitter.com/random_walker/status/1079759096272818178
======
randomwalker
OP here. A small clarification: there are some legitimate criticisms of the
Register piece that I cited in the first tweet, but I merely cited it as an
example of why I think the hype is calming down. The arguments I make are
independent of that piece; the limitations I point out have always been there,
rather than something new that happened in 2018.

I also wanted to add a couple of points that I didn't get to in the Twitter
thread.

 _Economics._ Blockchain technologists seem to overestimate the extent to
which new insights in economics are needed to understand cryptocurrencies and
blockchains, as opposed to applying basic principles from economics and game
theory. For example, a recent paper shows that thinking about miners and
attackers in terms of stock and flow exposes important limitations of the
security of Proof of Work. [1] I learnt of many other such examples at a
recent conference on the economics of blockchains. [2] So I think a lot of the
"cryptoeconomics" hype is misplaced.

 _Privacy._ It's often taken for granted that decentralized architectures will
improve privacy. This seems obvious given everything we've learnt about
Facebook, but a better way to think about it is that decentralized systems
exchange one set of privacy problems with another. I coauthored a paper a few
years ago skeptical of the "decentralization ==> privacy" story in the context
of social networks [3], but I think many of the arguments in that paper apply
to blockchain/dApps that are being built today.

[1]
[http://faculty.chicagobooth.edu/eric.budish/research/Economi...](http://faculty.chicagobooth.edu/eric.budish/research/Economic-
Limits-Bitcoin-Blockchain.pdf)

[2] [https://bfi.uchicago.edu/events/cryptocurrencies-and-
blockch...](https://bfi.uchicago.edu/events/cryptocurrencies-and-blockchains)

[3] [http://randomwalker.info/publications/critical-look-at-
decen...](http://randomwalker.info/publications/critical-look-at-
decentralization-v1.pdf)

~~~
AndrewKemendo
As I mentioned in the Twitter thread, my chief criticism of cryptocurrency
since the beginning is it's naivete of the history and politics of money.

The discussions about economics applied here focus too much on microeconomic
rather than macroeconomic arguments. So they end up missing the point entirely
which is this:

Money isn't a neutral instrument and it's not something that can be decoupled
from societal/political concepts and structures.

You can evaluate it as though it is neutral, but it has not ever been and will
never be a neutral instrument because of the historical tendency for resources
to pool and therefore become power centers, among other things.

Therefore if you view cryptocurrency as having the primary intention to de-
couple commerce from coercive power structures [1], then you'll see
immediately the historical problem. Namely, history doesn't favor distributed
power, especially not when it can easily be co-opted by the powerful systems
in which they rely.

In the best case scenario for crypto-utopians, millions of people transact and
do commerce on a decentralized currency. In that case, whatever sovereign is
most impacted, will then either outlaw commerce by crypto by force or require
parity with the sovereign currency and control of the crypto currency through
tax payments. This has happened multiple times over the centuries with alt-
currencies and they are killed off by the most powerful (see: Most powerful
economy/military) organization.

Politically, there is nothing different about Bitcoin than there was with the
confederate states dollar for example.

[1] From the original whitepaper: "What is needed is an electronic payment
system based on cryptographic proof instead of trust, allowing any two willing
parties to transact directly with each other without the need for a trusted
third party."
[https://bitcoin.org/bitcoin.pdf](https://bitcoin.org/bitcoin.pdf)

~~~
mathnmusic
> history doesn't favor distributed power

In that case, why do we have ~200 nations instead of a single world
government? Clearly, sovereignty matters to groups of people.

"Sovereignty of _money_ does not matter to LARGE groups of people" \- might be
a more defensible argument.

~~~
AndrewKemendo
_~200 nations instead of a single world government_

The long run trend is very obviously toward a single government. Consider that
until the Sumerians established cities less than 7000 years ago, humanity was
just thousands small traveling groups of nomads with no defined borders.

Sovereignty gets a lot of lip service, but in practice most people don't
really want it. It's a lot of work.

~~~
riffraff
> The long run trend is very obviously toward a single government

Is it? I believe there are far more countries now than 30 years ago.

We seem to have some more powerful international organisations now than a
century ago, but earlier than that we had world spanning empires, and Europe
was less than 10 countries before WW1.

I want to believe that we're heading towards a star trek like unified post
scarcity planet, but I'm unsure we're not just seeing a local trend.

~~~
AndrewKemendo
It's misleading actually because unincorporated territories or completely
unmanaged or ungoverned groups could be counted in a "sultinate" and it would
effectively mean nothing.

Much how King Arthur, Lord of the Britains was not known to the members of the
anarcho-syndicalist commune.

------
sgentle
Joel "Nostradamus" Spolsky in 2001:

> Your typical architecture astronaut will take a fact like “Napster is a
> peer-to-peer service for downloading music” and ignore everything but the
> architecture, thinking it’s interesting because it’s peer to peer,
> completely missing the point that it’s interesting because you can type the
> name of a song and listen to it right away.

> All they’ll talk about is peer-to-peer this, that, and the other thing.
> Suddenly you have peer-to-peer conferences, peer-to-peer venture capital
> funds, and even peer-to-peer backlash with the imbecile business journalists
> dripping with glee as they copy each other’s stories: “Peer To Peer: Dead!”

> The Architecture Astronauts will say things like: “Can you imagine a program
> like Napster where you can download anything, not just songs?” Then they’ll
> build applications like Groove that they think are more general than
> Napster, but which seem to have neglected that wee little feature that lets
> you type the name of a song and then listen to it — the feature we wanted in
> the first place. Talk about missing the point. If Napster wasn’t peer-to-
> peer but it did let you type the name of a song and then listen to it, it
> would have been just as popular.

I've thought about that essay a lot in the past couple of years. For all of
the merits of ＢＬＯＣＫＣＨＡＩＮ I never found it very useful for conducting
transactions. Sure, that's the machinations of the federal deep state lizard
illuminati, but also it always felt like architecture and ideology were the
point, and serving an actual need was an afterthought.

~~~
leppr
Today's most popular blockchain application is centralized exchanges. The main
use case is to send fiat, play with the markets and then hopefully withdraw
more fiat than you put in. The improvement over traditional online gambling is
minimal.

The Silk Road, which kickstarted Bitcoin adoption, brought a much more
interesting improvement over the status-quo. Suddenly, acquiring illegal drugs
was easy and safe(r). That was the Napster of blockchain.

We will talk about blockchain again when a similarly disruptive use case is
found/created. We're missing a couple of crucial pieces of infrastructure
before the "people's money" use case can even be put to the test
(decentralized fiat on ramps, convenient wallets, scalable price stability,
fast confirmations).

------
boramalper
His points about blockchain are compelling but I disagree with
“blockchain/decentralisation” part. Blockchain is _a_ decentralised ideal, but
so is BitTorrent, so is Tor, and so on, to some significant extent. To say
that decentralisation failed because blockchain failed ignores all the other
technologies which are serving people well.

I think the distinction between “decentralised” ( _i.e._ federated) and
“distributed” is important (as decentralised is often used as an umbrella term
to cover both).[0] There are tons of federated projects out there from Matrix
to Mastodon, and there are initiatives to make federated networks more
decentralised (such as the integration of Kademlia DHT in BitTorrent).

No need for pessimism I think. :)

[0]:
[https://www.researchgate.net/profile/Jason_Hoelscher/publica...](https://www.researchgate.net/profile/Jason_Hoelscher/publication/260480880/figure/download/fig1/AS:297257619476480@1447883147178/Centralized-
decentralized-and-distributed-network-models-by-Paul-Baran-1964-part-of-a.png)

~~~
oelmekki
Also, the blockchain has introduced (AFAIK) the idea of using append-only
databases to build decentralized applications, and this is currently used in
very interesting new techs which have nothing to do with currencies or
economics (like secure-scuttlebutt). The "dweb" is becoming a thing, IMO.

~~~
Nasrudith
That is very not new - even transaction based decentralized databases
technically date back to the 1980s - even if they received less practical use.
The theory of databases are pretty old and practically ancient in computing
terms.

Before blockchain was a thing much less a hyped one cloud computing used it
and before that some databases practiced 'tombstones' for databases. The
easiest way to maintain absolute consistency has been known to be not really
deleting things but marking them as 'deleted' and leaving them to be ignored
by default until consistency can be achieved. That was the approach when cloud
computing dawned to make things scaleable and avoid the bottlenecks and load-
balancing server overhead.

Transaction based databases are logically equivalent to an append only
database. If you have a list of transactions that add up to the same resulting
database state - with the option of more versatility if you don't constrain
things to be operational order insensitive.

~~~
oelmekki
I see, thanks to you and @weego for historical context.

It makes me realize that git is probably some kind of append-only database too
(and used for decentralization too).

I guess I can still thank blockchain for having introduced the idea to me.

~~~
jrumbut
The similarity goes deeper than that, given that git uses Merkle trees as does
Bitcoin. There's hashing and in the typical use case there is even some
distributed consensus process involved although often in git human decision
making takes the place of an algorithm.

Some good discussion here: [https://stackoverflow.com/questions/46192377/why-
is-git-not-...](https://stackoverflow.com/questions/46192377/why-is-git-not-
considered-a-block-chain)

I think the water gets muddied by people who know very little and yet have an
opinion as well as by people who know so much they can't see the forest for
the trees (if you'll allow the pun).

------
wpietri
The part I found especially compelling: "Blockchain proponents have a vision
of _society_ in which centralized entities are weakened/eliminated. But
blockchain tech is a way to build _software_ without centralized servers. Why
would the latter enable the former? It’s a leap of logic that’s left
unexplained."

~~~
lawn
How so?

Cryptocurrencies is about divorcing money and state. Seems pretty clear to me.

~~~
hkt
> Cryptocurrencies is about divorcing money and state. Seems pretty clear to
> me.

No, they don't. There is no technological or cryptographic answer to the
state's monopoly on legitimate force, its duty to execute the law, or any of
its other functions that create and maintain the business environment.

It occurs to me that much of what crypto-lovers want is actually radically
undemocratic. Vestigial states that can't do the bidding of the electorate
because they're unable to hold companies to account and so on. People of this
inclination are the death throes of the globalist dream: it is a fine thing
indeed that the nation state looks to be reasserting itself in the face of one
of California's more embarrassing wet dreams.

~~~
WalterSear
>It occurs to me that much of what crypto-lovers want is actually radically
undemocratic.

It's just the latest iteration of the libertarian fallacy, embodied in code -
that a market can exist without a governing body to make sure it doesn't get
sold.

~~~
bduerst
Basically whenever you create a vacuum of power, it gets filled eventually by
a few individual actors - i.e. Bitcoin miners being predominantly Chinese at
this point.

~~~
ric2b
And what exactly are they able to do?

People love to talk about how many miners are in China without mentioning that
they really can't do much, even if they get over 51%.

------
CM30
The blockchain hype fell apart. Which is good, given that it bears no
resemblance to reality, and came less from practical applications of the idea
and more the one that blockchain tech was 'magic' and was going to magically
fix every industry in existence. Companies sprung up based on blockchains and
crypotcurrencies and what not that didn't need them in the slightest, and
where their only reason for existence was 'get VCs to invest/hype up gulliable
people on Reddit'.

But blockchains have their uses, and those where they do work well will
hopefully be done better without the lunacy. Decentralisation isn't
dead/falling apart either, and in that sense... well I think its time is still
coming.

After all, privacy is a hot topic now. Facebook and Google are getting lots of
bad press. Mastodon is (somewhat slowly) taking off. The ingredients are there
for change, and at the end of the day, it's really just UI + network effect
holding it back now. If someone made a good decentralised
Facebook/Reddit/YouTube alternative, I definitely feel it could capture the
market. Anger is building up with these sites, and the more they force
ideologies/censor/shut down people and groups for corporations the more
popular an alternative will be. Heck, I feel the time may be right for a
decentralised Patreon competitor right now. Imagine a way to support creators
which VISA/Mastercard have no easy way to stop, which makes PayPal and co
irrelevant and cannot be shut down by angry Twitter posts. That may come up in
a few years or so.

But yeah, blockchain hype fell apart, some decentralisation hype fell apart,
but blockchain as a concept still has its uses and decentralisation could
still have its time to shine.

------
staltz
OP used an argument I see too often: that the (current) market success of
centralization is evidence of centralization's superiority with consumers. For
instance:

> Open platforms can’t win by directly appealing to users on philosophical
> grounds, or even cost (see Linux on the desktop). Mainstream users have no
> good reason to directly interact with blockchain technology—or any piece of
> code—without intermediaries involved. Openness and decentralization matter
> to _developers_.

I think _both_ centralization and decentralization can appealing to consumers,
depending on the case and on zeitgeist.

For instance, personal computers were decentralization of computing power,
back in the days when the Mainframe (centralization) was dominating. Apple is
a decentralized computing company. Often decentralization can become
businesses through products, read more [https://staltz.com/layers-of-the-
internet-economy.html](https://staltz.com/layers-of-the-internet-economy.html)

There are also other "stealth" success examples of decentralized software and
protocols that are directly appealing to consumers, such as the Camera and
Gallery apps on smartphones and the use of JPEG (open standard) and Bluetooth
(open protocol) to create (offline-first) and socially share pictures.

The problem with "decentralization" in 2018 is that it was a buzzword related
mostly to blockchain technologies, and software built with those were often
shadowing and imitating the recent success that tech giants have accumulated.
But decentralization goes way back and its success cases are so ubiquitous
that we take them for granted and leave them out of the discussion.

~~~
zbentley
> personal computers were decentralization of computing power, back in the
> days when the Mainframe (centralization) was dominating

This "decentralized" computing power as an accidental side effect. Personal
computers (and open protocols) caught on because they were thought, by
consumers, to _fulfill a need_. The number of people for whom that need was
"decentralize $x" is a rounding error.

~~~
staltz
One very basic value proposition of decentralization for consumers in the
context of the internet is offline usage. When you're in an airplane, that's
when the need to have the capability at the end device becomes most obvious,
and decentralization directly fulfills that need.

~~~
landryraccoon
Blockchain isn't decentralized in that sense is it? What can you do offline
with BTC or other crypto?

------
Legogris
I wouldn't read too much into this. The authors don't want to release neither
the report or even which the 43 use cases are:
[http://merltech.org/blockchain-for-international-
development...](http://merltech.org/blockchain-for-international-development-
using-a-learning-agenda-to-address-knowledge-gaps/#comment-155)

> The purpose of this blog was NOT to address the use of blockchain, or any
> DLT, for digital crypto-currency or even financial applications, nor was it
> to disparage, debunk, or dispel ANYTHING. We were, and remain, technology
> neutral. If anything, we would say that more testing is warranted, but would
> advocate that the results of those tests be publicly and fully available.

> There is no report. The only product that resulted from our research process
> is this blog, as Linda Raftree correctly pointed out.

> A “use-case” is very different from a “case-study”, the former being more
> conceptual and the latter requiring significant data for research purposes.

> Regarding sharing the list of the 43 use cases, Linda was also correct that
> the purpose of the this blog was not to “name and shame” and doing so risks
> distracting from the work we felt has achieved its goal, to motivate
> conversation around these issues.

Two projects are linked from the blog post:

[https://exonum.com/napr](https://exonum.com/napr)

[http://www.amply.tech/](http://www.amply.tech/)

I have not heard of either before.

This tells us nothing. Basically they have randomly picked 43 out of thousands
of projects and won't even publicize which these projects are, or the
methodology they used.

------
chvid
Sure it is true - the "business cases" for blockchain are all rubbish.

But it is not for the reasons listed; there are no parallels to airlines or
gold mining and so on.

Decentralization for cryptocurrency is about making them resistant to
legislation: With properly decentralized cc you can pay your druglord,
terrorist, launder money, gamble, insider trade, hype pump and dump a scam ...
and the government can't shut it down or prove that you own any.

That is the killer use case. And the only one.

------
danra
I'm not at all convinced by the argument about centralization happening
because that's what people want. In Israel, for example, there is, in fact, a
conspiracy. Though not a hidden one at all - just one which is very hard to
defeat.

Israel has a very centralized market controlled by just a handful of oligarch
families. The same guys control the insurance companies, pension, the fuel
supply, the banks, etc. The prices are too high and the service isn't great
not because that's what people want, but because competition is stifled, in
cooperation with the politicians, who need the oligarchs to keep funding them.

I don't think a decentralized currency would be a magic trick which would
instantly solve this larger problem of economic centralization, which people
most certainly do _not_ want - but it could certainly help break the existing
cycle by taking away power from the politicians.

~~~
Theodores
That is just capitalism, Marx wrote about this a long, long time ago. Lenin
came along with a solution to this a century ago however that revolution
resulted in a different type of centralisation with the 'workers of the world'
not uniting into the cooperatives that could have prevented the surpluses of
capitalism ending up in the hands of the few. Instead there was dubious
central planning with party officials calling the shots rather than these
mythical worker heroes. Socialism and communism was an existential threat to
international finance capital nonetheless, hence the Cold War.

The cryptocurrency boom was greed driven with the fig leaf of 'smash the Fed
and fiat currency'. The people that got into it were not that smart, a case of
'fools rush in'. Nowhere in the cryptocurrency discussion was there any
appreciation of the history of capitalism, which requires considerable study
to get any meaningful knowledge of. If you are studying graphs of alt-coin
fluctuations all day and gambling on these things then you aren't going to
take time to read all the required texts (or even the 'white papers' on how
these silly coins are supposed to work).

There are ways to address the evils of capitalism, for instance we haven't
heard of the 'Tobin Tax' in a long, long time and discussion of how much
capital banks should have in reserve hasn't happened even though the crash of
2008 revealed problems in that area.

Despite everyone working so hard for this money stuff we, as a society, are
remarkably unconcerned with figuring out how it all works and how we can build
a currency system that works for everyone with liquidity to make money work
for us instead of us working for money.

I would be very interested in further reading on how the economy of Israel
works, if you have any links then do share. I am detecting more antisemitism
going on in the world at the moment with the polarised views that have not
served us well historically. People muttering about international finance
being a Jewish conspiracy tend to have no idea about Jewish history or how we
got here. Hence I would quite like to know more about the story of the rich
getting richer in modern day Israel.

~~~
danra
> Nowhere in the cryptocurrency discussion was there any appreciation of the
> history of capitalism, which requires considerable study to get any
> meaningful knowledge of.

This is false. I recommend listening to Trace Mayer, for example.

> I would be very interested in further reading on how the economy of Israel
> works, if you have any links then do share.

I recommend Guy Rolnik[1] and Yaron Zelekha[2].

[1]
[https://www.haaretz.com/misc/writers/WRITER-1.4968179](https://www.haaretz.com/misc/writers/WRITER-1.4968179)
[2] [https://www.haaretz.com/.premium-yaron-zelekha-s-crusade-
to-...](https://www.haaretz.com/.premium-yaron-zelekha-s-crusade-to-save-
israel-from-itself-1.5234889)

~~~
Theodores
Thank you so much. I clearly over-generalised regarding the cryptocurrency
crowd and their knowledge of capitalism, glad I did as I now have Trace Mayer
to read properly.

I keep forgetting about Haaretz, again thanks for the quality reading
material.

------
drenvuk
It's a mistake to conflate "decentralization" with "blockchain". One is not
necessary for the other and decentralization has not fallen apart. I'm not
even talking talking about mastodon either. I don't use it. The many to many
relationship that torrenting is the epitome of decentralization, is very
effective and has been around for nearly two decades at this point.

I'm just a random guy on the internet but who is this guy to talk about these
subjects in such broad terms? Lay off the misused hyped up tech, please.

~~~
schoen
> I'm just a random guy on the internet but who is this guy to talk about
> these subjects in such broad terms? Lay off the misused hyped up tech,
> please.

He's a Princeton professor who's written a book about blockchain technology
and taught several university courses about it. And he's been studying
decentralization issues for a long time.

I don't think that Prof. Narayanan means to say here that decentralization
requires blockchains, but rather than the optimism that blockchains provide a
comprehensive solution to incentive, coordination, and scalability problems in
decentralized systems has run up against very serious problems and
counterexamples.

If you want to see some of his broader concerns about the tradeoffs of
decentralization in other contexts, you should ask him, since he's reading
this HN thread. :-) (edit: and he posted it himself)

------
wrs
If blog posts published as Twitter threads make you as impotently outraged as
they do me, try this:
[https://threadreaderapp.com/thread/1079759096272818178.html](https://threadreaderapp.com/thread/1079759096272818178.html)

------
bitxbitxbitcoin
The irrational blockchain/decentralization hype story fell apart and good
riddance!

The technology trudges along, a lot slower than the hype beasts would like you
to believe.

~~~
wpietri
For me, when technology trudges along it's in response to some sort of use.
E.g. solid-state data storage started out being used in exotic situations like
flight recorders. Later came camera usage. It evolved over the decades to
become dominant in phone and laptop storage; perhaps eventually it will drive
spinning-rust storage out of existence.

What are the equivalent real-world use cases for blockchain tech that are a)
delivering economic value not achievable by other technologies, and b) are
paying for sustained innovation?

~~~
bitxbitxbitcoin
I’ll address the elephant in the room:

Primary use case currently: moving money/value to somewhere or someone that
some centralized entity doesn’t want you to move it to.

That covers real world uses from skirting high remittance fees to the infamous
dark net markets.

~~~
wpietri
Thanks! I appreciate the frankness.

Regarding remittances, I don't believe any blockchain technology has made a
significant dent in the market. If you have data otherwise, I'd be interested
to see it. But I live in a neighborhood where there are a lot of money
transfer places, and all of them seem to be conventional.

As to the rest, I think we're talking about light financial crime. (Light
because the heavier sort isn't big on having a permanent public record.) It's
hard to know, of course, but is this usage going up or down? I had the
impression that KYC/AML efforts were putting a big crimp in it. Either way, it
seems self-limiting to me, in that significant success invites more attention
from various authorities, which strongly discourages participation from people
who would like to remain on the right side of the law.

------
phoe-krk
The Fediverse is a successful case of decentralization.

You can't say that decentralization as a whole is a failure or, worse, that
blockchain is synonymous to decentralization; saying so would be an insult to
e.g. the original World Wide Web.

------
api
I think we are entering a cryptocurrency winter for much the same reason the
first AI winter happened: too much promised too fast, and hand waving away
really massive unsolved problems.

------
jchanimal
I still have trouble understanding how a system designed to facilitate global
consensus can be considered decentralized. Sure maybe the hardware is
decentralized but the resulting data structure is just like the centralized
systems it aims to replace. Call me when your cryptocurrency is offline first.

------
matchagaucho
There must be some law or corollary to the effect of "In any decentralized
network, 20% of the nodes will control 80% of the transaction value (Pareto
Principle)."

Critical mass adoption of blockchain will just trigger major capital
investments by existing centralized agencies.

------
geraldbauer
FYI: I've collected the best of tweets from two top crypto / blockchain
critics. See Best of Bitcoin Maximalist - Scammers, Morons, Clowns, Shills &
BagHODLers - Inside The New New Crypto Ponzi Economics [1] by Trolly
McTrollface and Crypto Facts - Decentralize Payments - Efficient, Low Cost,
Fair, Clean - True or False? [2] by Nouriel Roubini

[1]: [https://bitsblocks.github.io/bitcoin-
maximalist](https://bitsblocks.github.io/bitcoin-maximalist) [2]:
[https://bitsblocks.github.io/crypto-
facts](https://bitsblocks.github.io/crypto-facts)

------
sonnyblarney
The 'blockchain decentralization' story is hurting, but the 'decentralization'
itself, as a concept, is still gaining momentum, though it has few real
vectors of enablement, i.e. few vanguard products.

------
wslh
There is a very basic argument, not against decentralization per se but about
its real power: even imagining a future where you can decentralized social
networks like Facebook, at the end people interacts with the service through
an application and this application dictates what the user sees beyond the
protocol.

For example, OpenBazaar is a decentralized marketplace but if people search
for products in the GoogleBazaar site, GoogleBazaar can sort or hide the items
as they wish not matter how perfect the decentralization protocol is.

------
dexwiz
Would blockchain have evolved differently if it’s first major implementation
was not Bitcoin? BTC generated a huge amount of wealth from nowhere, and it
seems like most blockchain ideas where just trying to duplicate it’s success.
To the general public blockchain and BTC are synonymous.

~~~
samastur
It didn't generate it. It moved it from elsewhere.

~~~
erikpukinskis
Can you explain what you mean?

If the blockchain issues 1000 BTC to various miners who sell them to 1000
people for USD$1 each, and then some time later 100 of those people are able
to sell their coins for USD$100, then the total amount of money that's been
moved out of other investments is USD$11,000, but the total market cap of
Bitcoin is USD$100,000 so can't I say that USD$89,000 was "generated"?

Although really none of that USD ever disappeared, it's ostensibly still going
into USD denominated assets, so... well I don't know what to say about any of
this.

~~~
ibeckermayer
It depends on what you mean by “generated”. Sure, in that scenario some people
made money off of bitcoin. But did it actually generate anything of value?

Properly conceived, currency is a proxy for genuine economic value. Bitcoin
mining generates nothing but bitcoins, which then are valuable because...
other people say they’re valuable? I fail to see how this differs from a
pyramid scheme.

~~~
erikpukinskis
So by the same token, would you say banks don’t generate any economic value?

------
pjc50
This is an extreme "we told you so" moment, isn't it? But then successful
completion of the project was never the goal, just selling blockchain tech to
enterprises to generate BTC price rises.

~~~
topmonk
Actually this happened 5 or 6 times already and crypto rebounded within a
couple years every single time.

So, there was no “told you so” moment for me at least. If you're apt to invest
in new technologies and don't invest in crypto soon, there will be a big “I
told you so” moment for yourself I think.

(imo people being forced to admit they were wrong and missed a golden
opportunity is part of the reason for the extreme hatred of cryptocurrencies.
As a counterexample, there isn't any hatred of Linux, for not conquering the
desktop, which is a technology which also failed to meet expectations. The
funny part of it is, is that the negative feelings towards themselves for not
investing get projected onto the technology itself, meaning they are blind to
the positive sides of it. This manifests as the boom/crash cycle as we see it,
since most people are blind to the progress of the technology until it is in
their face. Then everyone rushes in, and due to the rapid increase in price,
the “buy because it's going up, fast” mentality springs up, recreating the
same bubble for the 8th time, the same crash, the same outwardly projected
self hatred and the same cycle repeats, yet again. And people never see their
own role in it... It amazes me how this human trait manifests itself and
plainly laid out for everybody and yet no one is able to see it.)

------
paraschopra
One way to look at the decentralisation is to look at what happened to
Internet’s first decentralised platforms such as Youtube. It started as
anybody can have a channel but what ended up happening is organisations and
full time youtubers ended up garnering most attention on the platform.

Centralisation is an inevitable outcome of human groups. I wrote more on this
on my blog [https://invertedpassion.com/decentralization-
continuum/](https://invertedpassion.com/decentralization-continuum/)

------
wrycoder
Blockchain tech and decentralization are orthogonal.

~~~
CharlesW
A blockchain running on a single node is uninteresting.
Decentralized/distributed consensus is part and parcel of why one would use a
blockchain.

~~~
wrycoder
I am thinking of a non-public blockchain, say used to clear bank transactions.
It might or might not be externally visible, but only authorized entities
could add to it. So, not distributed like Bitcoin.

------
raverbashing
This is a very sane and down to earth rebuttal of crypto

ActualMoney sucks for a lot of reasons, crypto is addressing very few of them
and adding several problems on top of it

------
reilly3000
I've taken a step back from crypto-startup news in 2018. Are there any bright
spots? Interesting projects to follow?

~~~
zhoujianfu
Maybe mlbcryptobaseball.com? Baseball cards do seem like one of the few things
it would be cool to “tokenize”, and they’ve made a deal with the MLB to do it.

------
tCfD
Cryptocurrency is just alchemy for the internet age. Same failures, same
etiology, same promise of unexpected insights in another, future form

~~~
man-and-laptop
This looks like trolling.

Blockchain was the first serious attempt at solving the problem of distributed
concensus without centralisation. One application of this outside of
cryptocurrency is to DNS (see Namecoin).

Cryptocurrencies at the very least make black market trading more efficient.
See Silk Road.

Also, the analogy to alchemy needs a lot more explaining. I don't see any
connections.

~~~
Nasrudith
Well there are several from the 'get rich quick scheme' aspect vs lead into
gold aspects to the fact it is trying to get what they want by properties of
analogy. That they can turn processing power into the new gold. Then there is
the literal magical thinking like the sun and gold must be connected because
of the same color therefor if we create a scarce currency it will be a useful
commodity and gold shares properties of the sun, also the sun's rays created
gold. Alchemists pursue the same goal obsessively trying to get what they want
despite the mechanism for it just plain /not being there/. Similarly
Cryptocurrency even if it perfect in security and privacy would run into
interchange issues. You would need teleportation to bring commerce beyond
government control.

Gold is a very apt comparison given the gold-bug rhetoric they were in pushing
deflationary currency despite its history of failures resulting in fiat
currency. The gold standard resulted in /many/ wars for the sake of gold just
so that they wouldn't have their economy size capped by lack of currency -
leading to considerable loss of /real/ value and massive suffering. Ironically
having too much gold also created inflation issue. Having currency that can
inflate with the economy instead of something else arbitrary is what the
strength of fiat currency is.

------
amriksohata
Nothing fell apart, its all part of the process, just like the dot com bubble
and bust, crypto/decentralisation is not going away. Economics always wins.
Someone will make a better, regulated version, that works.

~~~
minimaxir
> Economics always wins.

Yep, supply and demand. Currently there's no demand for crypto/blockchain as
appropriate substitutes already exist.

~~~
wallacoloo
> no demand

“ _No_ demand”. Isn’t Bitcoin still trading for several _thousand_ dollars?
Maybe you, and maybe most people, don’t have any want for cryptocurrency, but
don’t let that make you think that _nobody_ has demand for it.

~~~
bduerst
Most of the increase in transactions you see now are from HFTs speculating,
who generate demand on any high-risk instruments if they think it has a return
somewhere. Demand for Bitcoin as an asset isn't that different from any other
commodity, but demand for Bitcoin as a currency is not there as many
competitive substitutes exist.

[https://www.bloomberg.com/news/articles/2017-01-16/high-
spee...](https://www.bloomberg.com/news/articles/2017-01-16/high-speed-
traders-are-taking-over-bitcoin-as-easy-money-beckons)

~~~
duskwuff
And that's when the transactions are even real. There's significant evidence
that >80% of volume is wash trades used to drive traffic to fraudulent
exchanges.

[https://www.blockchaintransparency.org/](https://www.blockchaintransparency.org/)

------
qwerty456127
Success rate of blockchain project is not 0%. Many people have became rich
this way. Many people use cryptocurrencies actively.

~~~
duskwuff
> Many people have became rich this way.

Some people have made money through speculating on cryptocurrencies or tokens.
A similar, if not larger, number of people have also lost money this way. More
importantly, the "success" of these traders has nothing to do with the
underlying technology -- they could have been similarly successful in trading
any other financial instrument.

> Many people use cryptocurrencies actively.

Like who? And for what? Mainstream merchants have generally been moving away
from accepting cryptocurrencies, often due to price volatility or long
transaction times. Some people still use cryptocurrencies to make illegal
transactions online, but certainly not "many people", and in any case I'm not
sure that's a success...

~~~
qwerty456127
> Some people still use cryptocurrencies to make illegal transactions

Illegal ≠ evil. Some countries introduce and enforce ridiculous laws that only
benefit the ruling regime and their oligarchy and not the people. AFAIK in
countries with crazy governments like Russia and Venezuela cryptocurrencies
are considered a relatively reliable (and accessible) investment instrument
letting people to save their money when the government does some bullshit to
ruin the national currency rate.

There also are legitimate things (e.g. porn sites subscriptions) that people
don't want to show up in their official credit card statements as that would
be a shame in the context of their society's dominant culture.

It also feels kind of hypocritical to consider whoever smokes weed in e.g.
Canada a normal person but whoever does this in Korea (where it's outlawed) a
wicked one.

