
I Don’t Believe in Blockchain - samastur
https://www.tbray.org/ongoing/When/201x/2017/05/13/Not-Believing-in-Blockchain
======
latenightcoding
The blockchain hype is amazing and entertaining, I love going to blockchain
events where 95% of the speakers have no idea what the hell they are talking
about, I love when banks and fortune 500s send their chief innovation officers
to blockchain meetups to find out how they can use the blockchain (hint: they
don't need it), I love going to hackathons where all the projects are fun and
cute but provide no real world value. The coolest thing is that I live in
Toronto, Vitalik Buterin is from toronto, I met him for 5 seconds, a lot of my
friends have met him, therefore they can call themselves blockchain experts.
The thing I love the most is when entrepreneurs with past exits tell me about
their "private blockchain" projects which got a verbal endorsement from
Vitalik's dad.

~~~
surak
Engineers don't like being told by mgmt what to do, that I agree with. To
continue generalizing, engineers also hate to re-evaluate the level of their
skills when having to learn a new stack.. It took msft 10-15y to get uptake
for the .net stack on the back-end side, and the reason they did that was
because of infighting in the Java community.

Having studied the BC stack, I would say that the biggest obstacle will be to
get engineers to dare try something new. To many SW-engineers on the web-side
today, don't really have sufficient skills to understand BC-technology. I
don't mean to offend, just state what I see. We saw the same thing with
p2p-tech before that.

Solidity as a programming language is an interesting abstraction and perhaps
lowers the barrier somewhat, but it will take many years before the skills
available match that for what is required to gain momentum on a broad scale.

If you're an engineer and wonder why mgmt keeps bringing it up, its because
this will potentially help them build a platform (two-sided) market. If that
occurs and you constructed it correctly, your company may well be able to skip
on taxes as well, as a side-effect.

~~~
acdha
> Having studied the BC stack, I would say that the biggest obstacle will be
> to get engineers to dare try something new. To many SW-engineers on the web-
> side today, don't really have sufficient skills to understand BC-technology.

I find those sentences make an interesting pair: they're both huge assertions
at odds with the general consensus and you didn't support either of them. The
usual complaint of web developers is that they're endlessly drawn to new
things, so it seems like some evidence would be in order to claim they're
suddenly extremely conservative in this one area. Similarly, since Bitcoin
proponents like to talk about about simple and easy to use it is, it seems
implausible to blame everything on a lack of skill.

The comparison to P2P is interesting: the technology was rapidly adopted in a
few areas where it offered a clear win but, similarly, had various people
pitching it as the solution to all problems and claiming that skeptics were
ignorant luddites. Since those products all failed, perhaps it would be better
to work on answering those questions rather than dismissing them?

> If that occurs and you constructed it correctly, your company may well be
> able to skip on taxes as well, as a side-effect.

This kind of argument is not going to change the reputation Bitcoin has for
being most of interest to crooks.

~~~
surak
> The usual complaint of web developers is that they're endlessly drawn to new
> things

I'm referring to a new way of constructing software, using a transactional
database at the core and defining every event as a transaction between two
parties. Today engineers usually think of the platform as a distribution
medium for data, aka. client-server. In the BC world refining this so that any
party can take on any role, aka. decentralized/distributed is challenging. I'm
trying to explain that this go far beyond a new JS framework or (no-)sql
database, in the BC environment the engineer must be able to define and code
business rules.

> Since those [p2p] products all failed

I don't think p2p failed because of technology, but rather because
mgmt/industry wanted to keep control. See e.g Spotify or Skype as examples,
there are many other interests at play than pure technological.

> tax evasion (value added tax and in some case corp. tax)

I agree with your view, but if you examine today's platform economies this is
exactly what they have done to a large extent. They give away "free" services
only to cash in on your personal data from a near tax free country setup.
Examples are FB, Google, Apple, Amazon..

------
austenallred
In summary: "I don't think the Blockchain will be a winner because there's too
much hype, it's not being developed by geeks, and it's not helping people do
their existing jobs."

1\. There is a lot of hype, sure, but there was around that whole Internet
thing too.

2\. The idea that geeks aren't working on it is patently absurd, and

3\. I'm not sure how OP missed the jobs-to-be-done of financial transactions,
proof of identity, proof of ownership, etc. Those are all pretty important
jobs in trillion dollar industries.

~~~
retube
Re 3., tell me one problem that blockchain solves that a regular db and
authentication can't?

~~~
honestlyreally
Show me one db with auth that can't be maliciously altered.

Agree that many usecases would be better served by a centralised system, but
many don't seem to grasp how useful an immutable database is.

Even with the advent of quantum computing and the havoc that Shor's algorithm
will cause, there still won't be enough computing power to undo the Bitcoin
blockchain.

~~~
maxerickson
Publication gives similar durability though.

(there's no need to do proof of work to track and publish a hash tree)

------
anon4this1
When I got into bitcoin in 2011, it had a market cap of $20 million, and
already had several killer apps:

\- Making darknet drug markets possible

\- Allowed permissionless, highly convenient storage of wealth

\- Allowed large, rapid, low friction money transfers anywhere in the world

Now, in 2017, Ethereum has a market cap of 8 billion, yet I can't find a
single use case for this technology other than enabling other scammy ponzi-
like coin offerings.

~~~
honestlyreally
Transparent voting mechanisms, prediction markets, p2p betting, gaming
micropayments, distributed computing rewards, replacing entire national
currencies because of irresponsible governments,etc

~~~
anon4this1
Vague gambling stuff - is this really going to be a 10x improvement over
betfair who already offers solid p2p gambling markets with <5% house take?

Distributed computing rewards - maybe for a subgroup off applications (eg.
illegal stuff eg. piracy), but in general terms a centralised system is
easier, cheaper and quicker to develop

Replacing national currencies - this is already bitcoin's killer app. Ethereum
adds almost no utility to this space.

------
antonios
I love the concept of a decentralized currency. Blockchains, not so much. They
are inefficient, unscalable and resource-hungry. But they're the best we've
got to get there now.

Looking forward to Mimblewimble.

------
clarkevans
While perhaps not worded particularly well, I think there's a point to what
Tim is saying. In many conferences targeted at non-technical people and
investors, block-chain is often touted as some sort of magic wand. Financial
transactions, record of provenance, and other problems were solved before
block chain with centralized databases, and then digital signatures, etc. When
these problems come up in a more traditional domain, centralized approach
often works just fine and there's no need to make it more complex.

~~~
sneak
> In many conferences targeted at non-technical people, block-chain is often
> touted as some sort of magic wand that will solve problems without
> discussing how.

cf. "the web", "ecommerce", "p2p", "social media", et c.

it's a tool, and a damn useful one, that enables some things no tools did
before. that's it, and that's all of it.

~~~
acdha
All of those had immediate real world uses. What activity which normal people
do has seen a blockchain offer significant improvements over previous
practice?

~~~
davidgerard
Buying illegal drugs. That's literally it.

I'm writing a book on this. (Nearly finished! Probably!) I have read thousands
of pages of the worst PDF whitepapers you can imagine. I have looked all over
to see if there's a "there" there.

As far as I can tell:

1\. The only thing blockchain does _in practice_ that anything else can't is
decentralised cryptocurrencies.

2\. The only thing decentralised cryptocurrencies do _in practice_ that
ActualMoney doesn't is markets for illicit goods and services.

note the "in practice" \- it's had eight years of "possibilities", by now I
think we can look at what it's done.

also, 3. the decentralisation isn't permanent - Proof of Work benefits from
economies of scale, meaning mining recentralises, and this is exactly what
happened from the FPGA era on.

The usual business proposition for Blockchain(tm) is supply chain management.
Blockchain doesn't solve any of the actual problems (bad data - it turns out
that crooks don't put careful documentation of violations into the data, and
bribe local inspectors and adjudicators) but _does_ offer a monopoly position
to the company defining the blockchain in question.

------
dpc_pw
This article is just a spin of "I don't see how music on the computer is
easier than in the radio" or "buying a newspaper will always be easier than
reading your news on some weird website".

Bitcoin and cryptotech are loaded with geeks, just not the same ones as the
author associate with. And cryptotech do a lot of stuff way better than
existing tech. You have to be totally blind not to see it, IMO. :D

It was the same with "noone will need a personal computer" laughed by older-
school engineers, or "The Internet is a funny toy with its funny packet
switching, but real business-critical communication needs a reliable
networking like a connection-based phone system".

Cryptotech (not only blockchain-based) is disruptive, groundbreaking and as
transformative as personal computers were. But it took like 30 years to get
personal computing to the point where it was obvious. And it won't be much
faster this time. There will be blockchains, technologies, standards,
businesses going up and down, people getting rich and/or broke, with winners
shaping a new world.

~~~
ajross
> But it took like 30 years to get personal computing to the point where it
> was obvious

Gotta quibble with this one. 30 years after the PET shipped we were solidly in
the middle of the Web 2.0 revolution.

Yes, ideas take time to mature. No, the PC in't a good reference. By 1981 it
was clear where we were going.

------
DennisP
So if his argument is that geeks in the corporate trenches aren't using it to
quietly get their jobs done without involving management, I'd say the reason
is that if you're just doing internal work, you're better off using a
database.

Blockchains are useful for reducing the overhead due to lack of trust when
you're working with other companies. You can't really make that happen without
management on both sides getting involved. There's no way a back office geek
working on his own can make complicated auditing and settlement procedures go
away, and that's the sort of thing where blockchains help.

(And of course not every new technology gets adopted first by corporate geeks;
iPhone apps are one example of consumers taking the lead.)

~~~
acdha
> Blockchains are useful for reducing the overhead due to lack of trust when
> you're working with other companies

Can you expand on what you're defining this problem as and how Bitcoin reduces
costs relative to the traditional approaches with trusted third parties, PKI,
etc. I've seen the marketing pitches but they're always conspicuously lacking
the kind of specific “we pay X to do Y but could pay Z” pitches which I've
seen used to justify bringing new tech inside.

~~~
DennisP
Not so much Bitcoin as smart contract platforms like Ethereum, or various
private offshoots. Most of what I know about this comes from watching the
Enterprise Ethereum Alliance conference, which had people from JP Morgan,
Santander, and several other large corporations.

Interbank settlement is one example. Right now it involves auditing process
that take days. A blockchain implementation could reduce it to seconds.
Insurance and supply chains are a couple other things they mentioned.

Pretty much any time you're either doing a lot of mutual auditing, or paying
someone a lot to maintain a trusted transactional database for a group of
companies, there's an opportunity to reduce costs and/or speed things up with
a blockchain.

For now, that probably doesn't mean a public blockchain, due to privacy and
scalability issues. The companies in the EEA are focusing on private versions
for now; if you have a known set of nodes and trust that no more than a third
of them will commit fraud, you can get away with much faster consensus
mechanisms. At the EEA conference they said if Ethereum succeeds in its
scaling and privacy efforts, they hope to move at least some applications to
the public chain, but that's a couple years off.

------
SirensOfTitan
This article is awful. Why are people upvoting it? I understand scepticism,
but this touches on a lot of things and comes across as a rant more than a
reasonable discussion.

1\. There are not only brilliant people leading these projects (Vitalik on
Ethereum in particular), but blockchain is a huge passionate discussion
amongst the SWE communities I find myself in.

> for ex­am­ple the laugh­ably slow transactions-per-second of most real-world
> blockchain im­ple­men­ta­tion­s.

2\. Is he/she just talking about Bitcoin? Apparently one means 'most'. There
are plenty of plans around scaling in various tech: Raiden for Ethereum is an
interesting example for smaller transactions.

> I could maybe get past the socio-political is­sues, the mis­guid­ed no­tion
> that in civ­i­lized coun­tries, you can route around the le­gal sys­tem with
> “smart contracts” > I still don’t think the world needs it.

3\. Doesn't go to support their arguments at all. A simple and obvious use
case here is: banks dragged down by capital obligations from Dodd-Frank
regulation are looking everywhere for cost savings.

Blockchain is interesting to everyone because there are fairly easy to get
involved in financial instruments associated that have been doing very well
lately. With that, there are plenty of nerds investing a lot of time into
technologies to make these networks truly useful.

~~~
mifeng
> Banks dragged down by capital obligations from Dodd-Frank regulation are
> looking everywhere for cost savings.

Name a single bank who is using blockchain in an essential component of their
operations (not just a proof of concept). Go on, I'll wait.

Sure, blockchain is "interesting" and the people involved are "brilliant" but
where is it delivering a 10x improvement over the status quo?

Blockchain is a classic example of a solution looking for a problem.

~~~
SirensOfTitan
> Name a single bank who is using blockchain in an essential component of
> their operations (not just a proof of concept). Go on, I'll wait.

What a ridiculous argument. With blockchain really just becoming interesting
over the last 2 years, you think banks, many of which use systems 20-30 years
old (bonds are still primarily traded over phone) are going to switch over to
it immediately. Give me a break.

> Sure, blockchain is "interesting" and the people involved are "brilliant"
> but where is it delivering a 10x improvement over the status quo?

International bank transfers can take days, have large transaction fees, and
have a non-trivial amount of book keeping error. Whenever those same
transactions could take 30 minutes with no human oversight I'd say the speedup
is much higher than 10x. With that, it seems like you're more interested in
making claims without being properly educated on what you're talking about.

~~~
mifeng
International money transfer is indeed a big problem, and TransferWise has
built a billion-dollar company over the past 6 years solving it, just not with
blockchain.

~~~
AstralStorm
Heck, even Paypal is a smaller scale solution to this problem. Not to mention
much more broken Western Union transfers.

It is not like the problem hasn't been attacked many times from different
angles.

------
jcfrei
> And with­out ex­cep­tion, I ob­served that they were ini­tial­ly load­ed in
> the back door by geek­s, with­out ask­ing per­mis­sion, be­cause they got
> shit done and helped peo­ple with their job­s.

This is precisely what I see happening with bitcoin. Bitcoin addresses keep
popping up more frequently every day (with WannaCrypt being one recent and
unfortunate example). Despite the scalability issues and regulatory
uncertainty there isn't an easier way to send value around the globe. And this
isn't simply because banks face a huge regulatory burden. The settlement
systems in place are very complex and archaic and blockchains promise a fresh
start for a global settlement layer.

------
safek
I wish people would drop the theatrics when writing these. Here's the same
article rewritten without loss of substance:

\---

I looked in­to blockchain tech­nolo­gies care­ful­ly and I’ve end­ed up
think­ing it’s an over­pro­mot­ed niche sideshow.

I’ve seen wave af­ter wave of landscape-shifting tech­nol­o­gy sweep through
the IT space: Per­son­al com­put­er­s, Unix, C, the In­ter­net and We­b, Java,
REST, mo­bile, pub­lic cloud. And with­out ex­cep­tion, I ob­served that they
were ini­tial­ly load­ed in the back door by geek­s, with­out ask­ing
per­mis­sion, be­cause they got shit done and helped peo­ple with their job­s.

That’s not hap­pen­ing with blockchain. Not in the slight­est. Which is why I
don’t be­lieve in it.

------
KirinDave
What's the Byzantine Generals solution he's talking about? I thought most BC
implementations can't recover from worst case BG problems?

That said, I know a lot of people using the tech and they're making money with
it, solving real technical problems. I suspect maybe Bray doesn't know about
it because it's easier to assume that it isn't than to verify it so.

There are specific industries where block chain limitations don't matter, and
its guarantees do.

~~~
AstralStorm
Apparently those "real technical problems" have already been solved in another
way that is commonly implemented or are unimportant.

~~~
KirinDave
I mean, a great example is medical records. I know because the concept if
using hash blocks for history predates Bitcoin.

Personally I think both the hype and the anti-hype exist because we finally
gave this family of data structures a snappy name.

Also, I found the BG solution he was referring to and it's rather soft.

------
_nalply
Perhaps because Blockchain is about automating trust. However trust should go
deep. Everyone should be able to see how something works and Blockchains are
too complicated for most people to understand. These people are forced to
trust someone else, some sales guy or the like.

Bitcoin is growing because there are enough people on the world who are
willing to risk it. They don't trust Bitcoin, they are gambling.

------
campbelltown
This article is lazy. It sounds like the author took a cursory look at the
tech and wrote it off. This has no place at the top of hackernews.

------
lifty
While I agree that there is a lot of hype at the moment, once the dust settles
we will be left with the usescases that stuck. The geany is not going back in
the bottle. And some of the projects are run by the most geeky people I have
ever seen, people that are knowledgeable in multiple fields like cs,
cryptography, math and economics.

------
kibwen
_> (op­tion­al­ly) a Byzantine-generals so­lu­tion too!_

What is this referring to? In all of the ways that I've seen the Byzantine
generals problem phrased, it's presented as impossible to "solve".

~~~
wmf
[https://www.reddit.com/r/Bitcoin/comments/1wqj8z/will_someon...](https://www.reddit.com/r/Bitcoin/comments/1wqj8z/will_someone_explain_how_the_blockchain_solved/)

~~~
kibwen
Ah, thanks, I didn't realize that the Byzantine generals problem wasn't just a
synonym for the two generals problem.

------
RichardHeart
Darknet believes.

------
cocktailpeanuts
It's easy to just dismiss saying "that's not happening with blockchain", a
baby can say that too.

But I have no idea what he's talking about when he says "And with­out
ex­cep­tion, I ob­served that they were ini­tial­ly load­ed in the back door
by geek­s, with­out ask­ing per­mis­sion, be­cause they got shit done and
helped peo­ple with their job­s."

Is he saying Bitcoin is not being developed by geeks?

Is he saying Bitcoin is not "helping people get shit done and helping people
with their jobs"?

There are valid criticisms, and there are really baseless rants like this.
Just because you're "old" doesn't mean you know the future from your past
experience. Tons of talented old people (and younger people too) with tons of
experience never realized the potential of the Internet when it first came
out.

Oh, and when Internet first came out, it never was meant to "get shit done and
help people with their jobs", for a long time. It was a fringe culture. If
he's as experienced as he claims to be, he should know better.

~~~
rictic
Serious question: what is block chain being used for besides trading crypto
currency? Like, not building infrastructure that may be useful, for things in
the future, not speculative value but stuff that's identifyably useful in and
of itself today?

I don't follow coins closely anymore but the main one I saw was namecoin,
which hasn't yet seen much use.

~~~
atemerev
I rent cars, pay for groceries, and basically do everything else with Bitcoin.
I have to use card gateways like Bitwala for that, but it works for me
perfectly. My debit card can be usually loaded with Bitcoin within 10-15
minutes (it is especially helpful as I live in 2 countries and travel a lot;
bank transfers take much more time).

There are many companies now where you can get your salary paid in Bitcoin. In
fact, it is so infinitely more convenient, I think that only the forces of
mental inertia hold this approach from immediate universal adoption.

~~~
6nf
My credit card does all of that and they actually reward me for using them, so
given the choice when paying for something I will choose a credit card 100% of
the time.

~~~
honestlyreally
They reward you by charging the merchant more. You realise that right?

~~~
6nf
Of course, that's what's so great about it. I don't pay a thing!

