
You Do Not Need Blockchain: Popular Use Cases and Why They Do Not Work - discovan
https://blog.smartdec.net/you-do-not-need-blockchain-eight-popular-use-cases-and-why-they-do-not-work-f2ecc6cc2129
======
gregschlom
I've said this several times before on this site but will keep repeating it:
there's exactly one use case where the blockchain is a superior (and, in fact,
the only) solution: when you can't use contracts and the legal system to
ensure trust between the parties. In other words, anything illegal. For any
other conceivable use case, a database and a contract between parties are a
superior solution.

Edit: To clarify what I mean by "a database and a contract": I mean the way
the world does business, and as been for as long as society exists. There's
trust between parties, and there's a multi-layered system in place to resolve
disputes, starting from the customer support call center, reviews, bad
publicity, and going all the way to the courts.

Guys, this works. It's literally how the world works.

~~~
AnthonyMouse
> In other words, anything illegal.

Not exactly. It's anything for which the legal system is not effective.

For example, you can have a perfectly legal contract, but the other party is
in a corrupt foreign jurisdiction that would never find in your favor in the
event of a breach. Then you can't contract with them because they have no
incentive not to breach, without an alternative method of ensuring compliance
that doesn't rely on their corrupt government.

You may also have jurisdictions (like the US) where the process may be more
fair, but it's unreasonably expensive, so if you're transacting with parties
with a high probability of getting into disputes, something that can resolve
them programmatically without litigation is an advantage.

Then there are the false positives. You're not a criminal, but you have bad
credit or are from a disreputable country etc., so you're treated as one by
the government or the rules targeting actual criminals cause companies to not
want to do business with you, and you thereby need some alternative way to
engage in your legitimate activities.

What you're arguing is that a perfect system of government removes the need
for any alternative. But we haven't got a perfect system of government.

~~~
turtlesdown
> For example, you can have a perfectly legal contract, but the other party is
> in a corrupt foreign jurisdiction that would never find in your favor in the
> event of a breach. Then you can't contract with them because they have no
> incentive not to breach, without an alternative method of ensuring
> compliance that doesn't rely on their corrupt government.

International trade has perfectly good mechanisms for dealing with this at
present. See: Letters of Credit.

> You may also have jurisdictions (like the US) where the process may be more
> fair, but it's unreasonably expensive, so if you're transacting with parties
> with a high probability of getting into disputes, something that can resolve
> them programmatically without litigation is an advantage.

The easy workaround to this is just to factor in additional costs for doing
business...

> You're not a criminal, but you have bad credit or are from a disreputable
> country etc., so you're treated as one by the government or the rules
> targeting actual criminals cause companies to not want to do business with
> you, and you thereby need some alternative way to engage in your legitimate
> activities.

Probably still illegal to do business with you if the government has outlawed
work with specific sanctioned countries, etc. Also, letters of credit.

~~~
AnthonyMouse
Your workarounds have potentially higher overhead. "Just factor in additional
costs" is equivalent to destroying otherwise-productive low margin
transactions. Even for higher margin transactions, higher overhead is no
advantage.

> Probably still illegal to do business with you if the government has
> outlawed work with specific sanctioned countries, etc.

The whole point is the cases where it's not.

Many banks and payment processors won't do business with you when your
business isn't worth the effort of verifying you. That doesn't mean it's
necessarily illegal for the bank, much less the seller of whatever you're
buying, to do business with you. But you can't do the perfectly legal
transaction if the customer has no way of paying.

~~~
turtlesdown
> The whole point is the cases where it's not.

So your argument is that blockchain is only useful for international trade
with tiny businesses?

> Even for higher margin transactions, higher overhead is no advantage.

Most people consider low corruption, high rule of law countries ideal places
for business, with the higher overhead...

~~~
AnthonyMouse
> So your argument is that blockchain is only useful for international trade
> with tiny businesses?

That is one use, not the only use. And don't discount the scope of
international transactions with _individuals_.

> Most people consider low corruption, high rule of law countries ideal places
> for business, with the higher overhead...

When the overhead comes with something worth more than it costs you. Sometimes
it doesn't.

------
melkiaur
I hate the blockchain hype. I think most uses can be solved by a simple
database hosted by a trusted authority. Yet, just reading the first two
samples, I already disagree with them.

Re the 1st one: it's true only if the transporter doesn't risk anything if the
sensor is tampered with. As soon as you introduce strong fines and/or
consequences if a validating authority randomly checks your goods and discover
some tampering, the system is a bit more likely to be trusted. But of course,
in such a case, you might as well just host the temperature log with the
validating authority (like it's done for Concrete, or in the Auto industry).

The second one is even more compelling: of course the trust chain stops when
the trust chains stops ! But if every luxury Louis Vuitton handbag is tracked
and you know precisely whether it's been sold or whether it's supposed to be
sitting on a shop shelf somewhere, you have zero risk of double sell (or at
least, within the same limits as a bitcoin double-spend).

~~~
treis
> I think most uses can be solved by a simple database hosted by a trusted
> authority

People say this in every blockchain related thing that pops up on HN but it
excludes literally the only legitimate use case for a blockchain. That being
the scenario where you don't have or don't want to rely on a trusted
authority.

~~~
AndrewKemendo
If you can't find or mutually organize a trusted authority you have much
bigger problems than what technology to choose.

~~~
woah
What?

------
czr
I'm reminded of the helpful "How to decide if blockchain is right for your
project" flowchart
([https://pbs.twimg.com/media/DPFvZuqU8AAeU0C?format=jpg](https://pbs.twimg.com/media/DPFvZuqU8AAeU0C?format=jpg))
from @MalwareTechBlog.

~~~
dmitriid
Also these two articles:

\- Ten years in, nobody has come up with a use for blockchain,
[https://hackernoon.com/ten-years-in-nobody-has-come-up-
with-...](https://hackernoon.com/ten-years-in-nobody-has-come-up-with-a-use-
case-for-blockchain-ee98c180100)

\- and the followup, Blockchain is not only crappy technology but a bad vision
for the future, [https://medium.com/@kaistinchcombe/decentralized-and-
trustle...](https://medium.com/@kaistinchcombe/decentralized-and-trustless-
crypto-paradise-is-actually-a-medieval-hellhole-c1ca122efdec)

~~~
vocatus_gate
Literally the only use is digital monetary instruments. Maybe "smart
contracts." Everything else? Nope.

------
nootropicat
The main argument is a logical fallacy: just because _some_ trust is still
required doesn't mean there's no value in minimizing it.

The land registry argument is the best example of this fallacy

>the regulatory authority can make its own record and thus rewrite yours,
which means that blockchain doesn’t work.

No, the value is precisely the fact that it's the regulatory authority that
forcibly changes ownership, and not you. Deed fraud [1] is a serious issue.
Blockchain would protect against it completely: forging a signature or a will
would be impossible. Rather than a document of dubious provenance, the will's
hash would be stored along with the property record. Very likely in many cases
of deed fraud the clerk changing the registry knows it's fraudulent and
changes it for financial gain. That would become impossible also.

The only way to forcibly take the property would be a provide a
cryptographically signed court order.

That's only for the security side of things. Tokenized real estate would make
things that are currently very hard to do trivial, like using 1% of your home
in country A as collateral for a rented car in country B. It's theoretically
possible right now, but arranging that would require so much effort nobody
does it. With a house record on the blockchain you would first tokenize it
(transfer the ownership to a smart contract with tokens) and then transfer 1%
of tokens to a car rental smart contract.

Same for every kind of possession. Own google stock and want to use it as
collateral for X? Why not. Want to sell 1% of your rental property to an
investor in another country? Easy, no paperwork needed.

Maybe it's never going to happen, but I think it's going to. The blockchain
revolution would do to finance what internet did to information. Everything
that's being done online was technically possible before it - theoretically, I
could have written this exact post and physically mailed it to everyone who's
ever going to read it.

[1] [https://www.lifelock.com/learn-fraud-deed-fraud-losing-
your-...](https://www.lifelock.com/learn-fraud-deed-fraud-losing-your-home-
with-the-stroke-of-a-pen.html)

~~~
simonw
The thing I don't understand about the land registry / stock ownership
scenarios is this:

If someone hits me with a rubber hose until I give them my private key, do
they get to then keep my house?

~~~
nootropicat
It would be treated just like a forced transfer would be treated today,
depending on the jurisdiction. Which at least in some countries means that you
would lose your house if the thief managed to sell it fast enough [1][2].

The control over the house, or majority of it, could be set to require
multiple signatures, or require each transfer to have a forced delay.

[1] [https://gradestack.com/CA-CPT/Transfer-of-
Property/Exception...](https://gradestack.com/CA-CPT/Transfer-of-
Property/Exceptions-to-the-rule-of/22690-4561-56092-study-wtw) Sale by a
person in possession of goods under a voidable contract

[2]
[https://en.wikipedia.org/wiki/Sale_of_Goods_Act_1979#Part_II...](https://en.wikipedia.org/wiki/Sale_of_Goods_Act_1979#Part_III,_effects_of_the_contract)

------
dangero
I've spent a lot of time doing consulting around blockchains for fortune 500
companies. Most technology choices are not a need. You can use MongoDB or
MySQL in most cases. There are places where MongoDB has benefits, just as
there are cases where a permissioned, immutable record has benefits. It's not
a silver bullet, but it can add trust. This article seems to miss that
creating immutable records of intermediary attestations can serve as an audit
trail later. If these audit logs are 100% immutable, that's nice. It's more
evolutionary than revolutionary, but it still has some value.

~~~
danielmg
The big problem with these kind of arguments is that is misses the interface
between the real world and the blockchain.

Say I have a blockchain that tracks births and deaths. Now if I see a record
on there I can be assured it hasn't been tampered with. But that tells me
nothing about how it was created - was the person entering the data acting
with malfeasance?

All blockchain does is audit the data after its creation. It doesn't solve the
issue of provenance of the original information. This seems to be where all
these schemes and ideas (beyond crypto-currencies[1]) fall down when compared
to current databases.

[1]slow and pointless. Money transfer is solved and current systems, while
lacking the assured fidelity of the transactional data, offer so much more -
fraud detction, chargebacks, etc etc

~~~
dangero
That's why I said "intermediary attestations".

I did not miss the interface between real world and blockchain. I did not
claim that the records would be 100% accurate. What I'm saying is, when
audited and we discover that someone provided bad data, we know who that was.

That's how fraud claims work in general. Having a nicely packaged up list of
who attested to what is nice. That's my point.

~~~
nucleardog
So we completely sidestep the difficult problem of ensuring truthful data in
the first place but it's okay because we've got a really complex solution for
replacing simple cryptographic signatures?

~~~
dangero
I'm not aware of any cryptographic system that provides immutable timestamps
as strong as public blockchain timestamps, but I'd love to hear if I'm wrong.

As a sidenote, burdening blockchain with solving the "truthful data" goal is
pretty unfair. In many cases this is an unsolvable problem.

------
nepthar
Based on reading a few articles like this, I think my understanding of
blockchain-related tech is different from other folks and I'm kinda confused.
Could some kind soul help clear things up?

When I think "blockchain", I basically think of a git branch: history is
verifiably immutable and using some external tools like a public rng, one can
prove that a block was not created before a certain time.

When I think "distributed ledger/distributed consensus" I think of the
practice of using basically properties of statistics to get a bunch of nodes
to agree on the state of something.

Neither of those things really seem to make sense as the author's definition
of "blockchain". What is he referring to?

~~~
jcranmer
Blockchain these days is mostly a hype train terminology. There are three
components that come together to make a blockchain, but people will often call
their technology blockchain if it meets only some of theses:

1\. Merkle tree or some other cryptographic append-only technology. (This is
really old, by the way).

2\. Proof-of-work. (This was, to my knowledge, first proposed as an anti-spam
measure, which incidentally went nowhere because most spammers "borrow" other
people's computers for free, and so it doesn't inconvenience them in the
slightest).

3\. Achieving consensus by saying that he who did the most work is right.
(This, again to my knowledge, was actually the main innovation that Bitcoin
brought to the table).

Many people pitch things only having the Merkle tree as being blockchain
technology, because blockchain is in and Merkle trees are so 20th century
technology.

~~~
nosuchthing
Proof-of-Work in effect is giving control of PoW blockchains to anyone with
the most excess capital to spend on electricity and hardware, in return for
the lottery tickets the software generates.

------
MildlySerious
The anti-blockchain sentiment seems severely short-sighted when news like
Youtube coming up with new ways to push people off its platform are posted
within three hours of this submission.[1]

Where do we move the endless amount of unique content to, once that previously
trusted party breaks down? Be it greed, bad management, economics that just
won't work out or whatever. Are we just going to watch it disappear? Is that
the course of action you condone and suggest? Or are we moving to the next
monopoly that will ultimately fail and disappear, hoping that time won't be
the one where it's all lost?

The amount of data we generate only goes up, and just throwing a dart to pick
which megacorp is responsible for not losing or abusing that data is clearly
unsustainable.

In my eyes, Blockchain and other decentralized approaches are the way to move
forward in terms of owning your own data, and keeping things that are worth
preserving from disappearing at the whim of some third party that couldn't
care less.

[1] -
[https://news.ycombinator.com/item?id=19227294](https://news.ycombinator.com/item?id=19227294)

~~~
wmf
Most of that user-generated content only exists because the megacorps offered
to host it for free. Decentralized platforms aren't going to be free so 90% of
that stuff just can't be saved.

But speaking of decentralization there are plenty of proposals like personal
servers or federated co-ops that aren't blockchain related.

------
jMyles
The author concedes that smart contracts will likely find their niche one day.

...but I think that they have already found a good one: dramatically
increasing the difficulty of collusion in any m-of-n scheme. Technologies
which rely on m-of-n such as Shamir's Secret Sharing and Threshold Proxy Re-
encryption (disclaimer: I work at NuCypher) have never found widespread use
because the ease of collusion among unknown third parties is easy enough to
warrant using known third parties (and once you do that, the use cases for
such schemes tend to evaporate).

But look at the upcoming cohort of solid blockchain projects: many of them use
smart contracts for collusion resistance.

------
eeeeeeeeeeeee
Anyone have any good counter arguments to articles like this? That there is a
use case that makes sense?

I’ve been trying to find one and can’t, but it hasn’t stopped major
corporations like IBM, who I would expect to jump on the hype train, but even
AWS is embracing it to a degree with their latest announcements.

~~~
melkiaur
There's one I like: the farmer has a veal and introduces its date of birth on
the blockchain.

The veterinary that comes to check it posts a validation mark on the
blockchain. If you trust the veterinary, you should trust the birthdate.

The veal grows up to become a cow, and is sent for slaughter. The farmer
stores an event on the blockchain and sends it to be cut into meat.

The slaughterhouse stores an event (with the weight) on the blockchain and
sends it for distribution.

The butcher creates the packets of meat, with a QR-code which lets you check
the whole list of events, with their dates and places, and of course, you can
check that the same part of beef doesn't end up in two different shops. You
have complete traceability of your meat despite all the actors not knowing
each-others.

~~~
danielmg
That's already a solved problem in the UK after the BSE crisis. From what I
was told (by a friend who worked on it), it uses certificates to provide trust
and verification. Uses a central database hosted by DEFRA. No blockchain
needed.

[https://secure.services.defra.gov.uk/wps/portal/ctso/](https://secure.services.defra.gov.uk/wps/portal/ctso/)

Everything you describe can be solved, in a better and more efficient way, by
non-blockchain technologies.

~~~
melkiaur
It could be solved, but is it really ?

Shall I remind you of this:
[https://en.wikipedia.org/wiki/2013_horse_meat_scandal#UK_Inv...](https://en.wikipedia.org/wiki/2013_horse_meat_scandal#UK_Investigations)

The blockchain doesn't offer a technological solution that couldn't be done
with a centralized authority (I particularly like the way passports rfid
reading involves certificates signed by each country). But it offers means to
achieve that even if nobody safe enough wants to host the bloody service.

~~~
danielmg
That wasn't about the provenance of the meat but the production of the end
products - e.g. pies etc. They were just dumping in bad meat in place of good.

Blockchain isn't going to solve that - you could put the ingredients in the on
it and have them signed etc but at the end of the day humans are mixing the
food.

------
MusaTheRedGuard
Most people who are even a little bit serious about working/investing in
crypto, are well aware of this and have been saying this for the past few
years.

Inb4 "you're not investing, you're speculating/gambling". I'm aware.

Inb4 "blockchain is a slower database". Again, I'm aware.

~~~
root_axis
> _Most people who are even a little bit serious about working /investing in
> crypto, are well aware of this_

Not really sure how you can back up this claim. After hundreds of interacts
with blockchain enthusiasts, I have observed that most of them subscribe to at
least one of false use cases listed in the article, especially #7 and very
often #1-3 and #6 as well.

~~~
MusaTheRedGuard
Anyone can call themselves a "blockchain enthusiast" that doesn't mean they're
smart or know what they're doing.

Examples of good thinkers are the guys over at multicoin capital, a crypto
focused hedge fund: [https://multicoin.capital](https://multicoin.capital)

I don't agree with everything they invest in, but they have clear, logical
theses

~~~
root_axis
Every enthusiast has their own ideas about what qualifies as "knowing what
you're doing". Nobody in the enthusiast community can agree on any of it.

------
anjc
Any arguments like this are immediately nullified because we have real-world
examples of blockchain doing astounding things which can't be done without it.
E.g. cryptocurrencies such as Bitcoin.

Can you transfer value across the world without Bitcoin? Yes, you can use
banks, you can use wire payments, you can stuff gold in your butt and hope it
doesn't show up in Airport scanners.

Can you verify that goods have been delivered without blockchain? Yes, you can
insert to write-only dbs, you can hope that everyone in the supply chain is
honest, etc.

There being an alternative to blockchain for a task doesn't mean blockchain
isn't highly suitable for that task.

These same anti-Cloud-hype arguments were spewed throughout the 2000s, yet
look how the world has changed because of it.

------
awrence
There has just been immense confusion about what blockchain technology is
meant to enable because unfortunately, amidst all the hype, a ton of people
who don't understand the point of it have started to peddle the absolute non
sense concept that is a private blockchain. These are actually better known as
databases, and are obviously not a miracle innovation, they’re just SQL
wrapped up in blockchain hype. And in most cases you’re just fine with SQL et
al between a few responsible counterparties that can go through the court
system if they need to but generally trust each other.

The only true innovation is the decentralized public ledger. A properly
decentralized public ledger is actually a horribly inefficient way to maintain
a ledger, but this is necessary and by construct, because the only way you can
have a secure immutabl'ish ledger (no human abstract creation is truly
immutable) is to make amending it or the rules it follows highly democratic
and expensive to change. The united states constution is a good analogy of a
properly decentralized blockchain.

From an economic impact perspective there is only one absolutely major
groundbreaking application for this: to create monetary digital vehicles
immune from centralized manipulation (read mostly, from inflationary
interventions). The market value for money in the world is between 100-300 tn
USD equivalent depending on what you count which is ballpark equivalent to the
amount of real wealth in the world (that's a coincidence). This is by orders
of magnitude the killer use case of cryptocurrencies, which incidentally was
Satoshi’s original vision.

After that, you can conceive of all sorts of other applications, but mostly
smart contracts which can theoretically provide immutablish programmable
transfers of wealth mechanisms, free of intermediaries or corrupt legal
frameworks. This has tons of downsides and risks and the max valuation down
the line is a fraction of the monetary use case, but it’s a thing that does
get plenty of people excited and i'm sure some of it is potentially legit,
especially in disfunctional countries.

In general though the second you read private and blockchain used together,
you can mostly roll your eyes and move on. EG JPM coin to name but the latest
example.

------
SI_Rob
Blockchainism doesn't work, in the long term, for one simple reason: people
want technology to _give_ them leverage over their environment (which includes
over their peers), not to undermine the leverage they already have. People pay
lip service to the doctrine of decentralization, until they find an advantage
to exploit that makes them the center of it.

------
companyhen
This is an interesting project with the department of defense -
[https://www.engineering.com/AdvancedManufacturing/ArticleID/...](https://www.engineering.com/AdvancedManufacturing/ArticleID/18460/Analytics-
Powered-Blockchain-to-Help-the-DOD.aspx)

------
maratd
Not every engineering solution needs to make sense exclusively within the
engineering domain.

Some engineering solutions have purely business justifications.

For example, take a look at the Tesla Model X and its Falcon Wing Door. It is
very clearly a stupid design from an engineering perspective, but is
sufficiently unique to have its own name. It also very obviously draws
everyones attention when used and draws attention to the product which further
promotes it. So while everyone else has normal doors ... you have special
doors. On top of that, the owner can say that they have an SUV without those
pesky mini-van doors which obviously work better, but then you're driving a
mini-van.

Similarly, while everyone else is using a vanilla database that does its job
and warrants no special attention ... we're using blockchain! We're new, we're
special, etc.

It's marketing, not engineering.

~~~
SlowRobotAhead
Good points, as it were, in 10 years when your "Falcon Wing Door" breaks
because it's got a fraction the engineering time and lessons learned over 100
years of car door mechanisms you're going to be envious of people with those
boring old regular doors.

In 10 years when your blockchain is no longer supported by the developers and
your new team has no idea how to manage it, it's showing it's age, it's
breaking, you're going to be envious of people with those boring old
databases.

~~~
UncleEntity
> Good points, as it were, in 10 years when your "Falcon Wing Door" breaks
> because it's got a fraction the engineering time and lessons learned over
> 100 years of car door mechanisms you're going to be envious of people with
> those boring old regular doors.

Yep, which is why I've even given up on these newfangled door things and got
myself a motorcycle -- there's millenia of "technology" behind (dis)mounting
horses so I should be safe during the car door apocalypse.

And, honestly, Tesla doors are probably as technologically advanced as a
minivan hatchback.

------
karmakaze
This post is so bad. I generally agree that most attempted uses of blockchain
are flawed. The problem is that the reasons given in this post are even more
flawed.

Most of the examples given could be adapted to work with blockchain if it were
to solve it's core scalability issue. The repetition of "blockchain is not
IoT" is a parody of the post itself. Reminds me of "MongoDB is webscale".

We should instead be discussing how each case _could_ work with blockchain
given a few changes. For example the supply chain one would work if we put
tamperproof temp sensors in with the produce rather than the truck. The
desires of the produce supplier and receiver of it are aligned so trust
shouldn't be put in the truck. Even a little thought sheds light on the other
straw man examples.

------
Zaskoda
I've recently been thinking about a blockchain use case that I have not seen
mentioned: security.

It seems like log obfuscation is a common tactic used to cover tracks after a
break in. Thus it seems like a blockchain could be used in a logging system so
that a falsified log would trigger an alert.

~~~
twic
systemd's log subsystem has been doing exactly that since 2012:

[https://lwn.net/Articles/512895/](https://lwn.net/Articles/512895/)

Although here's a detail i didn't know:

 _The algorithm for FSS is based on "Forward Secure Pseudo Random Generators"
(FSPRG), which comes from some post-doctoral research by Poettering's brother
Bertram._

So that's just peachy.

~~~
Zaskoda
Hah, of course.

------
tcrow
why is this comment rated so highly? it's completely niave with respect to the
use cases of blockchain technology. I realize that a lot of people like here
like to boohoo this stuff but there are several legitimate reasons to use a
blockchain. One of the most important reasons being the ability to resist
government censorship of information that would otherwise be subject to cease
and desist or outright take downs. Another is the ability to transact with any
other individual without relying on a system of banks and long waiting periods
and their fees. And what about reward systems that remove the middle man? What
about the recent scandal with Patreon? I could go on and on I hope you get the
point.

~~~
snissn
i agree with you, the article is rambling and mostly sets up and attacks straw
men

------
thekhatribharat
Shameless Plug: A quick read here - [https://medium.com/open-factory/to-
blockchain-or-not-to-bloc...](https://medium.com/open-factory/to-blockchain-
or-not-to-blockchain-3954223fc7b2)

A quote from the article

 _Blockchain, in basic terms, is a shared ledger and a consensus mechanism to
reconcile transactions on the shared ledger. This is the basic structure of
all blockchains.

In fact, the basic structure of blockchains can also be found in traditional
distributed databases. The software industry is blissfully aware of this and
some vendors have repackaged traditional distributed databases as blockchains
to attract new markets._

------
platz
NISTIR 8202 Blockchain Technology Overview

[https://nvlpubs.nist.gov/nistpubs/ir/2018/NIST.IR.8202.pdf](https://nvlpubs.nist.gov/nistpubs/ir/2018/NIST.IR.8202.pdf)

------
WisNorCan
Blockchain is an incredibly elegant solution to a problem that doesn't exist.

------
nathan_long
Main point: any statement about world outside of computers can be
cryptographically signed and stored in a decentralized immutable store yet
still be false.

Also, crypto guarantees cut both ways. Which is more likely, that your account
will be illegally taken from you, or that you'll lose your account password?
In normal banking systems, the former is very unlikely and the latter is
fixable. In crypto coins, the former is impossible (assuming nobody can steal
your password, which is untrue) and the latter is unfixable.

------
tempestn
Can someone explain this line to me?

"Is it a good idea to put a hash of student diploma digitally signed by
several professors on Bitcoin blockchain? Yes."

How exactly would one do that? Is the idea to send a tiny transaction to a
made-up wallet, with your hash embedded in the wallet id? Seems like it would
need to be pretty small, and would be somewhat of an abuse of the system. Or
if that's not it, what exactly is meant by "put a hash of __ on the bitcoin
blockchain"?

~~~
fortenforge
You probably want to read
[https://www.blockcerts.org/guide/](https://www.blockcerts.org/guide/)

~~~
tempestn
Thanks. After digging into the FAQ there, the answer is that the data is
stored in the 'OP_RETURN' code of an unspendable transaction. (Although some
bitcoin is still spent on processing the transaction.)

 _The OP_RETURN code was introduced by the Bitcoin core developers to address
(but not necessarily endorse) the increasing desire of people to store non-
financial data. The code signifies that an output is provably unspendable,
allowing transactions to be pruned from the UTXO database._

------
arisAlexis
Just read this from the people that built Silicon Valley
[https://a16zcrypto.com/](https://a16zcrypto.com/)

------
xlc0212
I am sad about all the hates of the blockchain technology. I do agree that
most of the blockchain products are hype and have no real use cases, but that
doesn't mean the blockchain technology is completely useless.

Disclaimer: I work for a company building a blockchain ecosystem.

It is not the silver bullet that magically solves all the problems, but it
does improves few areas compare to other technologies, which are
decentralization and distribution.

Distribution is a mostly solved problem as we have many distributed database
available so I won't go into details about it.

Decentralization, is the core attribute of any blockchain technologies. No
single entity needs to be trusted, instead the user have freedom to decide who
to trust. In terms of currency, user do no need to trust a bank. He get to
decide to choose which wallet app he trust (which itself is not an easy
decision), which node implementation he trust, which blockchain protocol he
trust. Or alternatively he may be able to create his own implementation if
there are no reputable implementations available. This is not the case of
banks. I am forced to use whatever mobile app the bank offers. I can't use an
alternative implementation (at least no banks in my country allows). It have
very limited (most of the time, zero) extensibility and customizability. I
can't simply create a bank because I don't trust other banks. As a user, I
don't have a choice.

Blockchain technology does not solve the trust issue (track operator can fool
the sensor to make it report false information), but it provides full
transparent and allow user to choose who he trusts.

No blockchain can't prevent dishonest seller make a copy of a real bottle with
a token and fill with low quality wine. But user can see who issues this token
and able to decide never buy wine from this sellers again. The problem is
still not solved, but you cannot say blockchain does not improve the situation
here. Yes centralized technology can help as well, but the user have to trust
the centralized technology provider and the wine seller. In this case the
centralized technology provider will have a large leverage on both the seller
and customer. And we know it can be bad if a single entity have too much power
(e.g. Facebook, Google).

Yes, there are too many hypes on blockchain technologies. No, blockchain
technologies are not useless. It gives the power back to consumer, instead of
controlled by a few large entity.

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miguelmota
With blockchain, like a database, if you put garbage in you get garbage out.
There's no good way to tie physical world assets to blockchain because you
can't fingerprint these things like you can with digital assets.

------
danablast2
The best use case for blockchain is smart contracts. Guaranteed continuous
liquidity without a counter-party (bancor/uniswap), self collateralize loans
(maker), stable coins without counter party risk (maker again), etc.

------
gwbas1c
I think this article can be summed up in one phrase:

Technology does not solve political problems

------
arisAlexis
can someone explain how Y Combinator and many other SV innovation leaders are
openly endorsing blockchain but every other day here there are haters posting
links about how useless it is?

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JohnFen
Indeed. While I understand how blockchain works from a technical perspective,
I have yet to hear an application of it that actually makes a lot of sense to
me.

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robryk
I'm confused about the terminology here. Is Certificate Transparency a
blockchain in the meaning in which the article uses the word?

------
berbec
9\. Currency.

~~~
danielmg
has worked for literally millennia without it.

~~~
lawn
Why did we ever move away from sea shells then?

~~~
seattle_spring
When I was young, taking the ferry would cost you a nickel, and in those days,
nickels had pictures of bumblebees on 'em. "Gimme five bees for a quarter,"
you'd say.

~~~
berbec
I'm cold and their are wolves after me.

------
momentmaker
This use case seems disruptive in the finance niche:

[https://www.lawsnap.com/smart-contracts-are-set-to-
transform...](https://www.lawsnap.com/smart-contracts-are-set-to-transform-
the-trillion-dollar-derivatives-industry/)

~~~
twic
Nowhere in that article does it explain why smart contracts actually save
costs. Yes, some derivatives contracts are simple enough to explain to a
computer, but still quite complicated. Why does putting them in a smart
contract on a blockchain save money over just putting them in the dealer's
computer?

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satoshisvision
Blockchain not needed

Bitcoin/metanet/blacknet is needed

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denart2203
"However, this system is vulnerable to a very simple threat: a dishonest
seller can make a copy of a real bottle with a token, fill it with wine of
lower quality, and either steal you..."

The argument around “someone that doesn’t care about tokens” is weak because
that applies to any authenticity solution.

The idea behind the authenticity guarantees would be that every step along the
way, you add a record that the object has passed through your step. Otherwise
I agree this won’t work.

If someone adds a record, but does fill the bottle with cheaper wine, the
first person that catches them will blacklist that actor.

~~~
azernik
At which point you're back to a centralized system - who maintains the
blacklist and has authority to add people to it?

~~~
SpicyLemonZest
I don't think that follows. Email and IP addresses both have decentralized yet
very effective blacklists against bad actors.

------
jondubois
Blockchain is a fractional reserve system which can be used as a payment
layer. That's it. The whole point of blockchain tech is to create hype and
incentivise collaboration towards a shared financially beneficial goal.

Saying that blockchain has no use cases is like saying that money has no use
cases. It incentivizes, it corrupts, it buys loyalties, it buys positive news
coverage - These are the most important use cases of all and blockchain is
great at that. Potential value is real value, even speculative value is real
value.

People should not diregard the benefits of Blockchain any more than they
should disregard the benefits of VC money. They're both mechanisms of mass
collaborative incentivization and corruption.

The only way to beat corruption is by democratizing it so that anyone can do
it.

~~~
UncleEntity
> Blockchain is a fractional reserve system...

I'd argue that it is the opposite since you can't receive 1 bitcoin and
produce 10 bitcoins through the magic of a fractional reserve system (unless,
of course, you run one of the exchanges and keep the transactions local).

If you have 1 bitcoin you can only spend/loan/destroy 1 bitcoin as the
blockchain prevents double spending.

~~~
jondubois
But it's a fractional reserve system with respect to fiat currency. The price
of Bitcoin is supported only by a fraction of its market cap in real fiat
money. If everyone decided to sell all Bitcoins in existence on the open
market, the total amount of fiat that they would get for it would not match
the total market cap of all Bitcoins before the selloff started.

~~~
UncleEntity
That's not really the way fractional reserve works but merely the result of
normal market pricing through supply and demand.

