
The Blockchain Bubble Will Pop, What Next? - baxtr
http://approximatelycorrect.com/2018/06/22/the-blockchain-bubble-will-pop-what-next/
======
skewart
Here's the big reason I've gotten skeptical about blockchain: it seems like
very few people are excited about actually using it. Almost everyone talking
about it is excited about getting rich from trading currencies or starting a
blockchain-based company. And plenty of people are excited about a grand
vision for how it might transform society one day, or how it might solve
problems they think other people might have. But it seems like almost nobody
is genuinely excited to use any blockchain product themselves purely because
it does something useful or fun or cool, and with no monetary interest in the
tech taking off.

This is all in stark contrast to the 90s internet boom when, sure, there were
lots of speculators and lots of get-rich-quick dreamers, but there were also
tons of random people genuinely excited about using the internet who never
stood to make a dime from it.

A lot of the grand visions behind blockchain mania are indeed compelling, and
I suspect something blockchain-ish will take off at some point in the future.
But it will probably be a distant descendant of anything that exists today.

Am I wrong about this? Are there blockchain-based products that have lots of
users who are using them because they like using the product and not just
because they're hoping to get rich off the hype?

~~~
healsjnr1
I am constantly surprised by this point of view. Blockchain is a solution to a
number of problems that were previously unsolvable, yet so much of the
discourse is around the idea that decentralised trust doesn't really solve any
useful problems. True many of the applications are hype, but we need to
recognise these for what they are and move on to more interesting things.

To me the best example is the travel industry. Decades ago a small number of
companies managed to get manual back office systems moved to centralised
booking and reservation systems. This had a huge impact on the ability to sell
inventory and open up the world of online travel agencies.

These centralised platforms are still around and they are now a huge problem.
The software is bloated, complicated and slow, integrating with any GDS is
painful and only ever allowed on their terms. It is amazing to me the amount
of time and effort and startups that have gone into just trying to find the
cheapest flight available.

This is fertile ground for decentralised trust. Having a local copy of the
live flight inventory or a large aggregate set of hotel inventory would
revolutionise the travel industry. Sure there are also applications around
settlement and financing, but to me the most exciting thing is the ability to
build customer applications on large sets of provably correct, trusted data.
And to do this freely in the manner you chose with the technology you chose.

~~~
JustFinishedBSG
> Blockchain is a solution to a number of problems that were previously
> unsolvable,

Name one.

~~~
nannal
Byzantine Generals Problem?

~~~
spamizbad
Is there a formal proof of that yet? (Not being sarcastic, genuinely curious)

------
m-i-l
I used to think that the blockchain bubble was like the dotcom bubble, in that
the core technology was actually genuinely transformative, so that even after
the bubble burst and all the over-valued companies went bust, the technology
would remain and continue change our lives. However, I must admit I'm starting
to have my doubts now.

It was 10 years in to the dotcom era that the dotcom bubble burst, and by that
time we'd had massive maturation of the technology and the start of mass
adoption.

However, we're approaching 10 years since the start of the blockchain era, and
there are signs that the bubble is bursting already, but in terms of progress
it is nowhere near where the dotcom era had got to by this stage, and there's
not much indication of anything that appears that it will be particularly long
lasting or widely adopted. Sure there's niches like settlement systems and
security tokens, but not something that a member of the public is going to use
on a daily basis like they do with many of the internet based companies.

~~~
malloryerik
Maybe we should consider that the blockchain's killer app is the truth.

This is the case with bitcoin, since the purpose of the blockchain is to be,
for example, trustless, protecting you from someone whom you don't trust lying
about your bitcoin transactions. Bitcoin will show you the truth about those
transactions. The blockchain also tries to protect against fraudulent double
spends and do on, and this like all fraud is also lying, untruth.

Likewise, the economist Hernando de Soto Polar's work on property rights and
"dead capital" has led to his creation of a blockchain app to allow people in
unstable political environments to prove their property claims. If the old
data is destroyed in the flames of the next revolution or hacked by your
neighbor bribing an official, it doesn't matter as much because you have your
claims on a global registry, and that global registry contains the truth.

And maybe when machine learning can allow bad actors to create false media,
change what a politician has said in a video, perfectly alter or even create
fictional recordings of conversations in order to deceive, the blockchain may
provide some shelter for the truth.

Edit: Of course there is a caveat: bad data in, bad data out.

~~~
hn_throwaway_99
Your comment is exactly why I believe many blockchain (and even
cryptocurrency) technologies are useless.

There seems to be this underlying pull for many crypto/blockchain enthusiasts
that this technology frees us from the constraints of governments and society.
"The truth is in the blockchain" and "There is no government in charge" are
common refrains.

The thing is, unless you want to be a true hermit, _you can 't escape the
bounds of society_. Nobody really cares about the "truth", they care what
society says is acceptable (and what governments will enforce). I'm pretty
sure there were a lot of contracts between Native American tribes and American
settlers that were basically ignored, and everyone knows this, but there
aren't any title companies that are worried about this fact.

~~~
malloryerik
I don't wish for myself or others to escape the bounds of society and
government (ok, maybe some of the bounds but that's another talk). Indeed my
premise is that individuals, society and government must all be bound to each
other in order to have a desirable society, and the _sin qua non_ of this is
respect for the truth.

As for government, I happen to prefer democracies, and they are especially
beholden to truth. When saying that the blockchain's killer app might be the
truth, I'm thinking about how it could help save our democracies.

As for The Truth, as in the ultimate truth, for when you'd use quotation marks
-- the "truth" \-- I'm not going there. We need only concern ourselves with
the notion of truth as opposed to lies.

To clarify the distinction, see how this doesn't work:

"Is it true that you were in Symphony Hall at the time of the murder?"

"Is it 'true'?... What do you mean by that slippery word, 'true'? This notion
of 'truth' is simply whatever we agree on and therefore irrelevant."

Edit:

And if the truth is simply what is agreed upon, then are lies simply what is
not agreed upon?

If so, perhaps we can agree together that the year is 1984.

~~~
hn_throwaway_99
Nothing of what you are saying is something blockchain technology addresses.

~~~
malloryerik
Hi, excuse the delay.

I was saying that blockchain might help address fraud, against untruth or
deceit. For example I believe that yes, the American Indians would have been
better off with unalterable titles to their lands. Would it have changed
history? I don't know, but in other situations it might, and for that I point
you to Hernando de Soto Polar's site. [https://desoto.com](https://desoto.com)

I was also saying that the claim that "nobody cares about the 'truth'" (and so
blockchain is not useful) is misplaced, and that in this case there's no good
point for using the word truth in quotes as if it were something illusory.
There are times when quotes around the word truth make sense, like in
philosophy, but this is not one of them. An exception is if you are talking
about the potential to use the blockchain to make lies permanent.

And third I was responding to your statement that people who support the
blockchain are often hoping to be freed "from the constraints of governments
and society", and that my comment was a good example of this. Your comment
might be correct about others, but I'm not a libertarian or anarchist. Rather,
I'm a bit worried that technology like machine learning and even just social
media have the potential to weaken and even destroy our democracies by using
lies (doctored video, for example) as political tools.

But you don't even need machine learning and social media. In Russia, lies
have undermined what began as democracy under Yeltsin to such a degree that it
is now for all intents and purposes a dictatorship. In Russia the playbook is
basically as follows: an event occurs that makes the Kremlin look bad. The
Kremlin uses its media outlets to make up alternative truths (lies), several
versions, some more implausible than others. The person seeking the truth,
what actually happened, is now looking into a hall of mirrors. Not being able
to see anything clearly and having to spend their energy disproving several
false versions, no meaningful discourse happens. The event, in this way, has
been neutralized by lies. If a blockchain can help with this kind of problem,
then I'm interested.

Edit: Btw, I'm not like a cryptocurrency enthusiast, don't program Ethereum
contracts, own no BTC or any other crypto, and believe and have argued here at
HN that BTC is a bad currency because of volatility with makes credit and debt
impossible. Additionally BTC is used for crime and as a way to cash in on
fraud, malware, threats and so on, and I'm not interested in any of that.

~~~
tekknik
So specifically on addressing fraud, this only helps the merchant. You could
make an argument that decreased fraud decreases costs but human greed
overtakes that assumption. So then what’s left from the consumer side? What if
the merchant send you a bad product? They have no incentive to make it right.
You could argue that eventually it will put them out of business from bad
reviews however this doesn’t always work in practice and you’re still out of
your money for the original bad product. With a centralized system we can just
reach in their account and take it, refunding you your money and costing the
merchant more in the long run, further making them want to do legit business.
This permanent contract you speak of is a double edged sword that cuts the
consumer more than the merchant.

------
divan
I receive a salary in cryptocurrency for quite a long time, and I always try
to be as objective and unbiased about articles on the future of blockchain and
cryptocurrencies as much as I can. But articles like this truly disappoint me
because there is no actual reasoning for such a strong and confident statement
in the title.

The whole article just says that a single encounter with a not-the-cool-tech-
guy confirmed author's suspicions that there is no underground value in
blockchain technology. Which is strange to hear from a professor in ML – the
last person you would suspect to make such a generalization from the single
data point.

And that's not to mention that observable "blockchain boom" is, in fact, just
trading on the crypto-exchanges boom, which has nothing to do with actual
potential and benefits of blockchain and cryptoeconomy, which is itself a
field of research even more complicated than ML world.

~~~
albertgoeswoof
getting your salary paid in crypto currency is nuts. But fair play to you.

How do you pay bills? What cryptocurrency do you get? How do you / your
employer handle currency fluctuations?

~~~
fastball
Maybe he's getting paid in DAI[0], a decentralized stablecoin?

0: [https://makerdao.com/](https://makerdao.com/)

------
bepotts
In all seriousness, what are the advantages Blockchain has over a public SQL
database with limited reads and writes that also maintains a public
transaction history? Cause when I hear people talk about the problems
Blockchains solves (outside of cryptocurrency which is a whole other topic), I
don't see what advantages Blockchain has over that. A public SQL database
isn't the most "clean" solution, but it'll save everyone a bunch of time and
money over the resource intensive blockchain verification process.

This idea that centralization is always evil, or that public actors are
inherently untrustworthy and we need some mathematical algorithm to verify all
interactions between them strikes me as one of those Silicon Valley
idiosyncrasies that Silicon Valley haters laugh at.

~~~
celticninja
The SQL database has to be maintained by someone and with enough political or
legal pressure the maintainer can be forced to change it, not so with a
blockchain.

~~~
purerandomness
With enough political or legal pressure, you easily deploy a "51% attack" on
the chain, and fork it as you like.

Just as the NSA runs almost all the Tor exit nodes nowadays, what would stop a
government from running the majority of blockchain nodes and gain consensus
majority?

~~~
sparkie
> With enough political or legal pressure, you easily deploy a "51% attack" on
> the chain, and fork it as you like.

A 51% attack can do two things: Enable "double-spend" attacks - where the hash
rate majority will ignore a block which was previoulsy mined and had a
"confirmed" transaction, and instead mine from an older block which didn't
have that transaction - but instead place a transaction paying themselves the
money back. Anyone accepting payments over Bitcoin should use their common
sense as to how many confirmations they should wait depending on the amount of
money being transmitted. A 51% attack might _eventually_ be able to write a
chain longer than the current one, but it will take some time - and there is
the chance that if it fails, the miner will have wasted his electricity costs.

The other attack a 51% hash power can perform is denial-of-service. They can
ignore blocks containing transactions they do not want to include in the
chain, and as long as they continue to mine the longer chain, those
transactions will not succeed.

51% attacks can not change the rules of Bitcoin (although there are many
people who wrongly believe this to be the case). If you try to change the
rules, the rest of the network will reject your blocks and ignore you.

> what would stop a government from running the majority of blockchain nodes
> and gain consensus majority?

The costs, primarily. In the case that one party did accumulate a majority of
hashing power, the network participants can agree to change the hashing
algorithm to one which runs on commodity hardware. That would be many billions
of dollars of specialized hardware equipment going down the drain, and will
only make the system stronger by encouraging individual participation. Monero
did this successfully, and plans to do it each 6 months to deter attempts to
game their proof-of-work.

------
tCfD
The problem with blockchain is actually rooted in hazy, unexamined assumptions
about the viability of 'decentralization' that are are used as if they are
conclusions rather than premises for justifying the technology's utility.

I think ultimately the conversation will turn to discuss the cost premium
entailed by a decentralized coordination problem solving system of any kind,
and whether it centralization is really a problem that needs such an
redundantly-expensive solution in the first place. Also whether
decentralization is really sustainable indefinitely or merely a transitional
phase from one centralized regime to another one.

~~~
pembrook
People have an abstract distaste for "trusted intermediaries" because they
think the intermediary just sits in between you and somebody else while
collecting fees for adding no value. In many cases the fees absolutely need to
be reduced through market competition.

However the root of this thinking is wrong. Intermediaries _do_ add value.
Humans are inherently _un-trustworthy_ animals, and you pay your fees to buy
the valuable peace of mind the intermediary provides.

So we know trust costs money. The question is whether the cost of
decentralized cryptographic trust will ever be lower than centralized trust.
The Rube Goldberg machine that is bitcoin has proved the answer at least for
the foreseeable future (the next few decades) is...no.

~~~
fbonetti
Centralized intermediaries are only trustworthy as long as they’re
incentivized to be truthful. If another party comes along and offers them a
bag of cash, the intermediary might choose to betray its clients’ trust.

Decentralized miners, on the other hand, are highly incentived to tell the
truth, because it’s the only way they can collect fees.

You’re right that you have to pay for the truth either way; the difference is
that the decentralized approach gives you stronger guarantees.

------
craigc
The biggest problem is that blockchains are inherently not scalable. That is
more or less by design, but it limits the types of applications that can run
on top of them.

I think a more likely outcome is that most types of payment infrastructure and
settlement/transaction layers move to blockchains and not actual applications.
For example, it’s not too difficult to imagine the stock market switch to
tokenized stocks to buy and trade shares of companies. Or perhaps deeds to
property in the real estate world could be issued on top of a blockchain.

I think the real value is removing intermediaries and allowing people to
control their own finances, shares, land, etc where you can cryptographically
prove that you own it. Building a decentralized Uber that is slower and more
difficult to use does not make much sense to me.

I think we will see these things develop. Remember TCP/IP was developed in the
1970s so it took almost twenty years before HTTP came out, and another 5-10
years before people really started using it.

~~~
EthanHeilman
>The biggest problem is that blockchains are inherently not scalable.

Blockchains can be made extremely scalable. You can break the problem into
transaction volume (how many transactions can be processed on average per sec)
and transaction velocity (how fast a particular transaction can be approved).

Transaction volume scalability results almost entirely from checking that the
rules of the system have been followed i.e. that each block in the chain is
valid. We now have very fast systems for recursively proving the validity of
blockchains. For instance coda [0] requires very little space or computation
(constant in the number of transactions) for a party to be convinced the
blockchain is valid. Under such a system you could increase transaction volume
by orders of magnitude.

Layer two protocols, such as the lightning network [1], offer near instant
transaction velocity.

We can solve the scalability problems of blockchain. The thing that keeps me
up at night is not scalability, it is user adoption beyond the use cases which
Bitcoin already successfully fulfills.

[0]: [https://codaprotocol.com/](https://codaprotocol.com/) [1]:
[https://lightning.network/](https://lightning.network/)

~~~
sp527
> The thing that keeps me up at night is not scalability, it is user adoption
> beyond the use cases which Bitcoin already successfully fulfills.

This felt like the canary in the coal mine that the anarchist crowd has
wholesale ignored for years. Joe and Jane LIKE that the dollar is backed by
the full faith and credit of USG. From the POV of the average person, crypto
is fairy dust next to a currency endorsed by what is perceived to be the most
economically stable nation on the planet.

Joe and Jane don't understand nearly enough about economics or technology to
really care about crypto or to ever be capable of using it securely
independent of a third-party facilitator like Coinbase. They want cheap, fast
transactions with guarantees, insured bank accounts, and a human being they
can call for support when something goes wrong. Visa and JPM already give them
that. Coinbase is a total reinvention of a system with no marginal benefit.
Bitcoin doesn't solve a problem Joe and Jane will ever care about. About the
only thing is does solve, at least in the short-term, is their FOMO about
living analog in a world beset by runaway digital progress.

~~~
craigc
I totally agree with your sentiment, but I will say one thing. If there is
some shock in the world economy crypto could be a way out.

Imagine

\- A bank run where every bank goes under and it is not possible to easily
bail them out

\- The government has to increase inflation and we far exceed the 2% target

\- The existing financial system gets hacked and records get destroyed

Not saying any of this is likely, but it could happen.

The US dollar has only been backed by nothing since 1971. That is a very short
amount of time in the history of the world. You can see that in that same
period of time debt has skyrocketed and production output vs. wages have
diverged significantly. It would be somewhat presumptuous to assume that the
existing system is going to last forever.

That said, it doesn’t mean that crypto currencies are THE answer, but they are
a possible answer.

Finally “the most economically stable nation on the planet” is $21 trillion in
debt.

I think if something like Bitcoin does end up reaching mass adoption it won’t
be because people CHOOSE to use it, it will be because they are FORCED to use
it because no one wants to accept dollars anymore.

~~~
nradov
That's not how economics or the banking system actually work. The Federal
Reserve can issue effectively unlimited credit to solvent banks in case of
runs. The government has no way to directly "increase inflation". Generally
when bank runs occur it's because the bank has a lot of bad loans; when loans
go bad it effectively removes money from circulation thus _decreasing_
monetary inflation.

There is no single central "financial system". Individual financial
institutions get hacked all the time. It's not a major problem.

Ultimately the US dollar (and other fiat currencies) are backed by something:
a government with an effective monopoly on violence over a particular
territory including all the people and assets therein. In the real world
that's a lot more powerful than any cryptocurrency fantasies.

~~~
craigc
Those were three separate ideas. A bank run would most likely be a result of
deflation, yes, but it is not guaranteed that if that were to occur that the
bank would be able to stay solvent.

The inflation example can already be seen in Venezuela, where the people there
have been using cryptocurrencies as a way to _survive_.

> Ultimately the US dollar (and other fiat currencies) are backed by
> something: a government with an effective monopoly on violence over a
> particular territory including all the people and assets therein.

Are you suggesting that the US military will use force to ensure that people
use the dollar and that is its backing? I am not saying you are wrong, but
that is not exactly a friendly thought. Sounds more like a dictatorship than a
free market economy.

~~~
drewmol
>Are you suggesting that the US military will use force to ensure that people
use the dollar and that is its backing?

Not the OP, but the governments' 'monopoly on violence' usually refers to the
fact that they hold position as the sole enforcement authority. Dollar is
'backed' by a reputation/record of US government fulfilling it's debt
obligations. As the enforcement authority, they can/will use force to secure
an operating revenue via tax collection. The specifics of what people use to
transact, is more flexible. So the dollar is backed by US Government's ability
to fulfill it's future debts. The method it uses to extract (something of
value, payment is currently required in $ format) from it's citizenry to pay
them is less important, but a 'monopoly on violence' sure helps with
collection efforts ;-)

------
DennisP
I was about to make a snarky comment about sitting next to one idiot on an
airplane and coming to a conclusion about a whole field. But then he sort of
covered it in the last paragraph:

> although the dot-com crash walked back valuations and chastened investors, a
> mature climate of internet businesses emerged in its wake. Today, technology
> firms account for 7 of the 10 largest companies in the world. The market
> didn’t overestimate the Internet, only the current crop of entrepreneurs.

~~~
aaron695
Yes, it's like the mostly urban legend about tulips, currently the tulip
industry is worth billions.

All industries will pop (I predict there will be another recession!), the only
thing of value is knowing when and by how much.

~~~
skgoa
Thing is, there was not a single speculative mania in the history of humanity
that didn't crash and burn. Some of those new industries eventually outgrew
expectations, but universally they achieved this long after the original
speculators lost most of their investments.

------
nostrademons
My thinking about the blockchain/cryptocurrency space shifted significantly
when I changed my perspective from thinking about _technology_ to thinking
about _problems_.

The web caught on because in the late 80s, the biggest problem in the world
was that we were starved for information. We didn't know it yet, because we'd
never lived in any other world, but once we could fire up Netscape and view
homepages from people who lived across the world, or talk in real-time on AIM
with people half a world away, or ask any question of Google and get answers,
or find whole communities of people who were interested in that incredibly
niche interest that we'd despaired of ever meeting someone else to share it
with, or view the satellite & street view images of any address on earth, or
order any product off Amazon and have it delivered tomorrow to our front door,
it was apparent what we were missing out on. And that has spawned multiple
trillion-$ companies.

The biggest problem in the world today is lack of trust and the failure of
institutions. (Which, ironically, may have been been caused by the web and the
huge amount of information it made available.) And blockchains address this.
They don't _solve_ it - actually, my biggest resistance to Bitcoin &
blockchain hype earlier, and my biggest risk factor now, is that Bitcoin
doesn't actually solve the problem it's purporting to solve. People still get
screwed when transacting in Bitcoin, they just get screwed by scammers &
hackers rather than the government & big corporations.

But the problem still exists, and people are aware of it now. Satoshi's
greatest contribution was to create something that could semi-plausibly fix it
and then release it into the world, which generates all sorts of attention
from other entrepreneurs. Just like Tim Berners-Lee's original WWW browser was
pretty clunky by modern standards, Bitcoin is pretty clunky by modern
standards. But it's attracted a lot of minds into refining & replacing it, and
as long as there's a problem, there's a market, and there's a good chance that
eventually _somebody_ will figure it out.

(Or not. Who knows, in the 60s everyone was sure there was a market for flying
cars and robot vacuum cleaners. We did eventually get both flying cars and
robot vacuum cleaners, but so far the market for them is much smaller than
anticipated.)

~~~
castlecrasher2
>The biggest problem in the world today is lack of trust and the failure of
institutions.

That's a pretty strong statement, one that I would disagree with, mostly
because it's so vague. How did you come to that conclusion?

~~~
nostrademons
Because of what's happening in [government, media, science, public spaces,
labor markets]. I view all of them as examples of the same underlying
phenomena.

In government, you have the UK voting to remove itself from the EU, and then
when the referendum passed, the prime minister resigning, all of the major
_proponents_ of the referendum resigning, and Scotland threatening to secede
from the UK (again). You have a U.S. president who _starts his term_ with
under 50% approval rates, the lowest since WW2 [1], to cries of "not my
president", and Congressional approval ratings below 20%. You've got continued
polarization - instead of converging on compromise candidates in the center,
the Republicans has moved rightwards toward nominating actual Nazis (5 running
in 2018) [2], and the Democrats have moved leftwards toward nominating actual
socialists [3].

In the media, you've got an Overton Window that doesn't overlap - no matter
where you are on the spectrum, there are publications _with a large
readership_ who are publishing what you perceive to be blatant falsehoods.
Take a look at the comment sections of the same story on Breitbart [4] and
News & Guts [5]. Could you imagine a reader of one reading the other with any
sort of any open mind? Would you consider anything you read there an example
of trust?

In science, you have movements such as anti-vaxxers who would reject one of
the most important health advances of the last century because they don't
trust it. You have continued rejection of climate science, largely because
it's inconvenient. You have a replication crisis in many social scientists.

In public spaces - go to an airport and listen to the loudspeaker say "Please
report any unattended baggage or suspicious persons to the nearest TSA agent"
and think about what that's saying about the level of trust in society and the
constant messages of fear. There was another recent story on HN about air
marshals secretly tailing random civilians [6]; that's not exactly something
that happens in a society that trusts its citizens. There's also continuing
helicopter parenting [7] and the assumption that everything around you is
dangerous, which tends to become a self-fulfilling prophecy.

And in labor markets - I did a bunch of market research on a startup to fix
unemployment a couple years ago. My hypothesis was that with all the startups
desperate for workers, and workers desperate for jobs, it was a simple
information problem to match up supply to demand and make everything
efficient. What I found was that hiring isn't really an _information_ problem,
it's a _trust_ problem - employers are terrified of getting a bad hire and so
reject a lot of candidates that with a little training could be great
employees, and similarly employees are terrified of ending up in a career
dead-end and so are unwilling to invest in significant self-study or commit to
a career path or potential employer. End result - unemployment and
underemployment even though there are both workers and jobs available.

All of these are pretty far afield from cryptocurrencies, but you asked why I
believe the #1 problem in the world is lack of trust, and that's why. A world
where people trust each other is one where they're willing to take risks on
the assumption that they won't be taken advantage of, and that is...very far
from the state of the world right now.

[1] [https://projects.fivethirtyeight.com/trump-approval-
ratings/](https://projects.fivethirtyeight.com/trump-approval-ratings/)

[2] [https://www.vox.com/2018/7/9/17525860/nazis-russell-
walker-a...](https://www.vox.com/2018/7/9/17525860/nazis-russell-walker-
arthur-jones-republicans-illinois-north-carolina-virginia)

[3] [http://www.cc.com/video-clips/jzbxb9/the-daily-show-with-
tre...](http://www.cc.com/video-clips/jzbxb9/the-daily-show-with-trevor-noah-
alexandria-ocasio-cortez---bringing-moral-courage-to-american-politics---
extended-interview)

[4] [https://www.breitbart.com/big-government/2018/07/29/trump-
wa...](https://www.breitbart.com/big-government/2018/07/29/trump-wall-shut-
down/)

[5] [https://www.newsandguts.com/trump-will-shut-government-
doesn...](https://www.newsandguts.com/trump-will-shut-government-doesnt-get-
wall/)

[6]
[https://news.ycombinator.com/item?id=17635761](https://news.ycombinator.com/item?id=17635761)

[7] [http://www.dailymail.co.uk/news/article-462091/How-
children-...](http://www.dailymail.co.uk/news/article-462091/How-children-
lost-right-roam-generations.html)

~~~
zaphar
Trust has always been a problem. A trustless currency doesn't solve the
problem any more than anything else has. Blockchains can't and won't solve the
UK brexit problem. It won't solve the US politics problem. It won't solve the
businesses too big to fail problem or the politics, power, and money
corrupting people problem.

I agree that trust in institutions is a problem but blockchain won't solve it.
It will just displace it. In return if you aren't careful you'll lose the
benefits of third party arbitrators. The very thing that in the current system
gives you any hope of righting the wrongs that the systems you don't trust
have inflicted on you.

It's quite probable that rather than making things better cryptocoins will
make them worse. It's also quite probably that they will devolve into the very
thing they were trying to avoid becoming. As a case in point: Ethereum forked
because of a bug in a smart contract. A central authority had to step in to
right a wrong. (You can't trust people to write correct software). And that
was early on in the cryptocurrency history. There will be more such occasions
and each one will prove that not only can you not trust your bank to always
get it right. You also can't trust the cryptocurrency developers or the smart
contract developers.

~~~
ghthor
The difference here is that the source code for the EVM is open source and
auditable. And I wouldn't use a smart contract that isn't the same, open
source and auditable. This is my realm of expertise, this is how I think about
systems and interactions, it's my turf so I have far higher levels of trust
executing a smart contract then walking through the TSA scanners.

~~~
zaphar
Yes, but our demographic is a very small part of the wider target audience so
what makes sense for us does not at all make sense for them. Any solution that
requires the market as a whole to level up to our level of expertise has the
same problem for them that we have when walking through TSA scanners. The only
difference is that now _you_ are the TSA which again only shifted the problem.
It didn't solve it.

~~~
ghthor
Thats where web of trust comes in and empowers us, the engineers, compared to
the past. Let's say my relative is having an issue with her mortgage,
something that should be fairly straightforward to codeify in a smart
contract. In the past, I'd have to shrug my shoulders and help her with a
human communication problem. In the future I might be able to actually inspect
the code of her mortgage. This allows me to assert my understanding about how
it works. I can say, I know it's correct or I know it's incorrect. This is in
contrast to modern day where it's much harder for me to understand, therefore
I would likely shrug my shoulders and say, I don't know, you'll have to
contact an expert.

It's similar to another example. I moved my mom over to use Linux as her
operating system. I now know, for a fact, that her system is secure and
updated. I trust the distribution to audit and package software safely,
therefore my stress levels are much much lower and I barely get technical
support questions from my mother, compared to before.

Smart contracts enable this same level of trust to develop for complex
protocols between people & computers, like mortgages, insurance, DNS, software
package building and distibution systems. It allows for advances levels of
trust to develop in the system itself, and as an engineer I can now transmit
that trust through my web of relationships which is how it reach and benefit
non technical users. In a way, it allows for engineers to take more
responsibility for the systems we live within, versus today where you have to
pay me to give a shit and I try to take as little responsibility for the
systems I support because I know they are fucked up and broken and I don't
want to be the one on the hook when someone gets hurt by the system I and
responsible for.

------
apo
_Chatting between sips of stale coffee, I collected enough data points to
discover he too had no great expertise in cryptography or fintech more
broadly._

I've run into way too many people like this to count. Fortunately, they're
easy to spot and I'm sure someone has even created a taxonomy.

All of them, without exception, have already launched or plan to launch a
token on Ethereum. That's red flag #1.

Ask them why their product/service needs a token. 9/10 can't even answer the
question. Red flag #2.

The few who can mutter something about decoupling the value of their utility
token from ether. You may be able to have an interesting conversation from
there, but it's more likely the answer is nothing more than a highbrow version
of "because money is flowing through the rivers and we aim to grab some of
it." Red flag #3.

------
rpedela
I think blockchain will end up like PageRank. Both are amazing algorithms with
very narrow use cases. And maybe a few companies can generate enormous value
with blockchain like Google did with PageRank, but that will be it. That's my
prediction.

~~~
BenoitP
While I agree with you, I would not have chosen PageRank as a comparison. I
cannot think of another domain where it made billions, but to me it is a
pretty neat way of extracting information inside a graph.

It just needs a concept that has transitive properties in order to shine. For
web pages, the transitive part is that a high quality page is more likely to
mention another high quality page. It uses the indifference one might have
about a lower quality page, it uses the author's implicit contract with the
reader that he should be showing (and linking to) high quality content. It
builds on top of man.millionYears of painstaking content filtering.

In a graph, you can run it about any property that has that transitivity.
There is a paper running it on citations in physics papers [1], and it can
identify some Nobel Prize winners, even if the paper has a low number of
citations; the paper just has the important ones.

I deeply believe that corporations could greatly benefit from continually
asking their employees "who in your coworkers had a positive impact on your
work this week?", and running PageRank on top of it. You could have natural
leaders emerge out of that.

[1]
[https://arxiv.org/pdf/physics/0604130.pdf](https://arxiv.org/pdf/physics/0604130.pdf)

~~~
rpedela
That is precisely why I chose PageRank as a comparison. I think it is one of
the most beautiful equations invented in computer science on par with some
physics equations. Yes, if you can turn your problem into a graph then you can
use PageRank to determine which nodes are more important relative to the
others. You can answer questions like which academic paper or website is the
best? Who are the influencers in a social network? What is the summary of this
article (sentences are nodes)? But the domains and use cases where it is
useful is still limited and so far no one has been able to use it to generate
billions other than Google.

In other words, an algorithm, no matter how amazing, is not a platform.

------
reilly3000
Anonymous blockchain sounds like fertile soil for the emergence of simple,
autonomous AI. Howard Bloom's cosmology centers around Replication Strategy
and Iteration. The medium of blockchain provides convenient and abundant
opportunity for both. Imagine a smart contract that could sort of recursively
fuel itself with prediction market earnings, and clone itself
programmatically. A relatively simple 'mother' script could run generate
contracts that have the ability to make predictions and bet a small sum
towards that prediction. Outcomes and learnings get shared back a sidechain
that is used to help generate more effective offspring. Like a live
evolutionary/genetic algorithm playing with real money. Then, if you give
those contracts a sort of failover mechanism to spawn a new mother script if
communication with the original is lost, you could have a petri dish for a
form of digital life beyond simulation.

I realize I probably may have just made an ass of myself as the article
suggested is happening. That said, it seems within reason to be able to
implement something along those lines given enough time and resources. The
article seems to suggest that blockchain has had minimal impact, and its
inevitable financial crash and inability to scale to facilitate mass adoption
of digital currency makes it worthy of ridicule. I posit that general
immutability and autonomous financial entities will come to define our times-
and that any assumption that blockchain isn't significant because it doesn't
replace your debit card in 2018 misses the bigger picture entirely.

~~~
rspeer
If you had these amazing sci-fi genetic algorithms that constantly make money,
why would you run them on the world's most inefficient form of computation?
Why wouldn't you pay for normal, efficient computers, and keep much more of
the money they make?

------
smsm42
I just have been at OSCON, and they were talking about blockchain all the
time, blockchain this, blockchain that, private blockchain, enterprise
blockchain, blockchain plus this thing and blockchain on top of that thing.
But still I couldn't figure out or find any explanation how anything of it
would be useful for the member of the public, and indeed how it can work
sustainably without the hype that would drive the cost sky high and makes
people invest into mining hoping to cash out one day. And all hype ends
eventually...

~~~
mortdeus
blockchain is useful outside the context of cryptocurrencies because it
represents a verifiable chain of custody.

For example, imagine how blockchain could solve the problem of a patient who
has control of their health records. In the current system we have an issue
where anytime you move somewhere away from your doctor, the new doctor you see
has to retrieve records directly from your doctor because there is no way to
verify that the records you would present to the new doctor are the most up to
date records. If your doctor gave you your records from before your last
visit, and say during your last visit he wrote into your files that you no
longer needed opiates for pain management, but you are addicted and want the
pills still. Well if you have outdated records and take them to a new doctor
you might be able to still receive the drugs, despite the fact that the doctor
that initially diagnosed you took you off them. This is why most states
require by law that they obtain records directly from the source. To avoid
being able to scam the system.

Now imagine what happens if your doctor dies, his practice is shut down for
whatever reason, or for some other reason your records become virtually
unobtainable.

What do you do then? Go through the entire process of trying to get a doctor
to re-diagnose you for an ailment that has already seen years of therapy and
might no longer be as obviously in need of say pain therapy?

It's a problem. And something that blockchain could fix better than just
having some federally regulated centralized medical record repository that in
it's very nature allows the government or any bad actor a straightforward
method to hack into and invade your privacy.

Blockchain allows you to maintain personal and private control of your
records, while allowing a doctor to consult the blockchain network of doctors,
to verify that the chain of custody of your medical history is up to date.

~~~
greggman
How does block chain solve this problem any more than a plain old text file
with your medical history?

IIUC the only thing keeping bitcoin's blockchain trustworthy is millions of
people mining new coins and therefore distributively verifying the blockchain.
Who would be doing that for your medical records and what would their
incentive be to do it?

~~~
ghthor
You need that text file signed by your previous doctors, and your new doctor
needs to be able to verify the public keys of your previous doctors using some
type of PKI. You also need to locally manage your health records data, its
storage can't be easily automated and paid for. Blockchain solves all of those
problems in one nice bundle, it provides PKI, signed log of changes, and
distributed automated storage. That's one hell of a feature set.

~~~
greggman
As far as I understand the point is supposed to be the blockchain is
distributed trust. The longest chain = proof of most work = the truth. The
only reason someone can't basically change the entire history of the
blockchain is because no one has 51% control of the chain. The only reason no
one has 51% control of the chain in bitcoin is because so many people are
mining it to earn coins.

But, for medical records there is no such incentive. Therefore anyone can
easily change the records or add new ones and claim everyone else who has a
shorter chain has the wrong chain (which will be like no one since there is no
incentive to mine).

So I'm probably just informed how blockchain is supposed to help here. Without
the distributed trust there's no plus to blockchain. And without the incentive
to mine that generates millions of miners there is way to have the distributed
trust.

I'm happy to be wrong but I haven't see an explanation how this issue is
solved for all these non virtual currency uses cases.

~~~
ghthor
Using bitcoin(I know less about how to store data into bitcoin transactions)
you can execute a transaction and store a small piece of data that would be a
reference to a larger blob of data, say an IPFS hash to an encrypted MRI image
and the doctors notes. You use bitcoin to store the log of changes using
reference to some type of immutable data store. It's imperfect, but can be
built. The value add of the bitcoin here is it's extremely hard to create a
false history and tell that as the real story.

Ethereum would be easier to understand and see what's going on because we have
a reasonably readable contract language. You'd still likely need to store
larger blobs of data using an external immutable data store, and those blobs
wouldn't be automatically distributed and backed up. But you could pay for
distributed backups in an automated way using ether. Lots of people working on
this last part, which drastically reduces the potential size of the blockchain
because it will only be afordable to log blob references and numerical values.

------
hacknat
I don’t buy the hype of the blockchain as much as the average hacker news
user, but this article lacks anything but anecdotal data.

A bubble needs two things:

1\. Misallocated hype

2\. Real money

As far as I can tell no one has done much digging on how much money blockchain
ventures represent in terms of real world investment dollars. Can you call
something a bubble if there isn’t much “real” money in it?

If all the blockchain related companies died tomorrow how many people would be
out of a job, and how much money would be “lost”?

As far as I can tell most investors, even the ones bullish on the future of
blockchain, are suspicious of new blockchain ventures.

This isn’t how bubbles work, unless I am massively misinformed about the
amount of money in this area.

~~~
amarant
I mean, it's a billion-dollar industry, by any estimates I've seen at least. I
don't know about you but I would classify that as "a lot" of money.

this estimate for example says $1.3B was invested in 2018 alone!

[https://techcrunch.com/2018/05/20/with-at-
least-1-3-billion-...](https://techcrunch.com/2018/05/20/with-at-
least-1-3-billion-invested-globally-in-2018-vc-funding-for-blockchain-blows-
past-2017-totals/)

this one is on a similar track:
[https://www.idc.com/getdoc.jsp?containerId=prUS43526618](https://www.idc.com/getdoc.jsp?containerId=prUS43526618)

plenty of cash to be lost!

~~~
ericb
> this estimate for example says $1.3B was invested in 2018 alone!

That's like 1/50th of an Enron (which had a 70 Billion dollar value and went
to 0). Enron in itself wasn't a bubble.

------
albertgoeswoof
The bit I would like to know, is how the CEO of this company is making lots of
money?

I mean who is seriously paying for “AI on the blockchain”? Sure if it’s
possible to run some of the most computationally intensive processing we know
of on the one of the slowest platform architectures available, I would
certainly pay for that. Denying the laws of thermodynamics would be one hell
of a breakthrough though.

~~~
robjan
The usual way is to release a white paper about your hypothetical product and
then create a token and launch an ICO.

------
w1nt3rmu4e
I'm not sure why blockchain has become a perennial 'love to hate' favorite on
a forum dedicated to 'disruptive' startups. The cynic in me would say the
people complaining are the ones who sold their bitcoin for $100 back in the
day and _cannot stand_ the fact that they're out millions for not being
forward-looking enough.

If that describes you, go invest in a new blockchain tech. There aren't
actually that many -- most of the ICOs of the last year were for stuff built
on the Ethereum network. Sort through that a bit and you'll find companies
building entirely new blockchains, some of them incorporating very good,
forward looking ideas.

Blockchain is still _very_ young. You haven't missed out on anything. Do some
homework. Invest.

 _But nothing useful has been built on a blockchain!_

Go make something. You're smart. In the best traditions of the software
industry it's almost entirely FOSS. Absolutely nothing stopping you from
building something useful. And there's _lots_ of funding available for those
that do.

Saying blockchain is worthless is like saying public key cryptography is
worthless. Before e-commerce it was sort of a novelty (the need for security
was always there, sure). Now it's ubiquitous, as is e-commerce. The latter
would not be possible without the former.

Even if the development is / remains purely driven by greed, the introduction
of new financial markets and new investment vehicles means it's here to stay.
There is zero chance this genie is going back in the bottle. Every day there
are announcements about uptake by the finance industry and by governments.

But that's a shallow view of the possibilities. How about tamper-proof voting
for governments? Nearly fee-less remittances? Un-censorable communication?
Completely transparent non-profits? Trust-less provenance / chain of custody?

Let's be real. Humans are _terrible_ to each other. Being to able to fight
greed and corruption with a little math -- in a trust-less, incorruptible,
self-sustaining way -- is potentially history changing.

~~~
Nursie
Blockchain tech has yet to deliver on _any_ of these promises. Instead we have
a mass of people speculating that it might, someday, in future, do a load of
stuff that will make it more valuable than it is today.

It's only like saying "cryptography is worthless" if it turns out actually to
have worth in the long term. It could be a lot like saying the Sinclair C5 is
worthless.

I don't see that the introduction of new financial products based purely on
artificial scarcity does mean that it's here to stay. There are indeed
announcements quite frequently - most of them turn out to be pretty
meaningless, often overhyped by parties with a vested interest.

> How about tamper-proof voting for governments?

Any scheme that allows votes to be verified, allows people to subvert the
process by demanding verification.

> Nearly fee-less remittances?

We have those. Cryptocurrencies make these worse, irreversible, uninsured etc.

I'm not going to address everything point by point, but your post exemplifies
the hype perfectly - it's a big cry to imagine possibilities, but unable to
point to any real success

------
oysterfish
The blockchain & cryptocurrency industry is becoming too big to say the _whole
thing_ will pop. If you're telling me AI + Blockchain starts-ups with windbag
CEOs are a bubble that will pop, then that premise may have legs.

Will that drag the _whole thing_ down with it? Most likely not. It's like
saying Groupon were every to sink as a company, all coupons everywhere would
vanish & lose all their value, and people would lose their money.

A business managed poorly is not a reflection of the quality of the raw
materials they were intending to work with, or of the rest of the industry for
that matter.

------
lvs
Not pretending to favor one buzzword bubble over another, but the author seems
to think that it's particularly blockchain technology that's being
irrationally pursued, not AI. No doubt, blockchains are being completely
inappropriately sold to investors to perform all sorts of miracles that truly
require nothing more than a database, but the very same is true of AI. This is
an obvious case of the old adage, "When you have a hammer, everything looks
like a nail."

In particular, I fear a future where too many rational algorithms have been
supplanted with their irrational AI counterparts. The latter cannot be
debugged, and analyzing the mechanisms of trained networks will become
increasingly opaque with increasing complexity. Since we're comparing these
buzzwords, blockchain is, at the end of the day, just another algorithm that
can be debugged by reason and logic. It's behavior is definite and provable.
In terms of thinking of the brittleness of complex systems, I much prefer ones
where all the parts can be analyzed by reasoning.

------
raverbashing
Maybe the real money is coming up with some over the top idea that sounds good
on paper. Actually making it work is optional.

------
yc-kraln
I see a lot of comments concluding that the value of blockchains is trust, or
truth, or decentralization. Very few seem to realize that the trust is just
moved from the people running the systems, to the people programming them
(either the chain developers, or the dapps, or the contracts). There's still a
hefty amount of trust involved, and I still haven't seen any successful
project, or one with huge goalposts which isn't trying for a moonshot of
changing consumer behavior. Sure the technology is neat--SQL spawned Oracle
and SAP--but it's not trillions of dollars neat.

------
rargulati
I’m really surprised at the limited scope through which the hacker news crowd
is looking.

Good news: your centralized pie where you’ve put in tons of time, and built up
a huge amount of credibility is safe!

Cryptocurrencies/blockchain shouldn’t, and likely can’t, “disrupt” most of
those industries. A glance through some of the industry reports in the
comments shows an immense amount of work done in these respective industries.
The value is in the edges.

The important thing to think through, critically, is how we’ve organized
ourselves as a species, and how that orientation has changed over time. Do
cryptocurrencies / blockchain offer a superior way for individuals to organize
themselves around a specific network? There are some interesting questions
there, and I think if we can answer those questions, the interesting
applications will emerge. Right now we’re thinking of how to slap Web 2.0 onto
blockchains, which, though interesting, isn’t going to bode well for anyone.
Because the status-quo is superior (from performance and pricing perspective),
and works well for most.

Store of Value, currencies, and financial instruments are appealing; those are
applications in which humans have to orient themselves around a centralized
power structure and believe. Switching the focal point of trust from a large
institution (or government) to a decentralized network is an interesting
thought exercise. Also think DRM.

Folks are comparing things to the 90s, but that’s a tired dog. You’ve really
gotta look before that. We’re still in the installation phase, and I don’t
think we’ve quite gotten to the dot com phase of this journey. That level of
frenzy is yet to come.

------
fivedogit
News flash: it already popped. 70‰ from top. ICOs dried up.

Blockchain market cap is about $300 billion now. Should the next major tech
wave be worth half a Facebook? IMO, yes, and more.

Blockchain has already proven 2 major use cases (e-gold and ICOs) and several
minor ones (unstoppable casinos, prediction markets). Doubters are in for a
bunch of regret.

~~~
aidanlister
How many people do you know with savings in physical gold? How big do you
think the consumer market is for that?

The major holders of gold bullion are banks and governments – they are not
going to pile in to a pyramid scheme style system where by a small number of
early adopters become worth the GDP of a small country.

~~~
fastball
Nobody has savings in physical gold because it's a PITA to acquire and store.
Digital gold obviously doesn't suffer from these problems.

~~~
jcranmer
After all, it's not like people breaking into computers and stealing stuff
from them is anywhere near as common as people breaking into houses or bank
vaults.

~~~
fastball
I don't have the stats, but I actually would guess that robbery is way more
common than hacking personal computers which results in the retrieval of
useful information.

~~~
zaphar
I make it a habit not to bet. But if I were a betting man I'd take you up on
that. Hacking personal computers is a huge blackmarket industry and it costs
society a lot of money. The average person (i.e. not you or me) don't even
know they've been hacked and are just joined to some botnet without their
knowledge. But a hacked computer is a hacked computer and if the hacker want's
the bitcoin wallet they can get it.

Good luck getting the bitcoin back after that.

~~~
fastball
Hardware wallets?

------
jasonwen
There are two use cases at the moment that I can think off:

1\. Proving origin and authenticity of a product through the supply chain (car
parts, branded bags, wine). In China for example wine companies lose billions
because of counterfeit wines.

2\. Alternative currency for unstable countries - like Venezuela where
everyone lost confidence in Bolivars due to massive inflation.

Current valuations are hugely inflated and doens't make sense. However, most
people are there to earn a quick buck. They don't care about working products.
There are many coins that do nothing and are outright scams but are worth
billions just because everyone is willing to speculate.

I also feel a lot of people came from Forex trading where trading with
leverage is normal. With the volatility of crypto's, leverage is not necessary
anymore so that you can't get margin called.

~~~
aiCeivi9
> Proving origin and authenticity of a product through the supply chain

How exactly is that supposed to work. For example I checked
[http://www.blockverify.io/](http://www.blockverify.io/) and it looks like it
relies more on impossible to copy tag than on blockchain.

------
jl2718
I just want all the investors to disappear so we can get to work.

------
corv
Yes, there are lots of charlatans in the blockchain space (and startups in
general).

Figuring this out now, half a year after market participants noted a bear
market isn’t worth much however.

~~~
tluyben2
Exactly; besides far more public visibility (well with notable exceptions like
Theranos lately), how is it different than vc backed startups?

Bubble already popped and will rise and pop again, yes there are scams like
there are everywhere; that is no news, nothing to see here.

------
1996
People who create and sell puff of smoke will make some money, but may not
last long. The others may be side victims when they go down.

But if you can not see the potential of trustless censorship resistant value
transfer and smart contract among other things, you will also be a victim.

There is money to be made, without any need for shenanigans.

------
bariswheel
If you want some good Sunday reading from people who actually know what they
are talking about, I would recommend reading essays and papers from people
like John Pfeffer, Bharath Ramsundar, and Vijay Boyapati. 'Bitcoin is worse is
better'is also a fun read.

~~~
sadgit
Some links?

------
jostmey
I don't think many people understand but the block chain has become. It is
gambling. That is it's allure. It will remain in existence so long as there
are people willing to gamble money

------
curyous
Generic blockchains may not have any use, but Bitcoin Cash (BCH) is money at
the speed of the internet: global, instant & free. It's like email vs snail
mail.

------
mar77i
Can we live with real things again and not clickbait each other into
conflating issues and harming third parties with oversimplified, inaccurate
models of reality?

------
HNNewer
The bubble is about to pop because we're seeing only examples which are still
far away from reality and that until now are useless.

------
sobani
How is this not an article about the AI bubble about to pop?

From what I read, the entrepreneur is trying to have machine learning
interpret a written contract into a digital form, which the author of the
article considers to be (close to) impossible. To me it seems AI is a
profitable buzzword for the entrepreneur, without it having any practical use
for their company.

If blockchain is a bubble, because the entrepreneur uses it as a buzzword,

then AI must be in bubble, because the entrepreneur uses it as a buzzword.

~~~
zzzcpan
Maybe because you can't profit speculating about AI bubble as it's not
actually tradeable and barely anyone invests in it.

~~~
sobani
But isn't the tradability of a technology orthogonal to whether it's a bubble?

Maybe I should've called it "signs the second AI winter" is coming?

------
cvaidya1986
Experts are right until they are wrong.

~~~
cycrutchfield
Tautologies are true until they are true.

~~~
cvaidya1986
The tautology shall set you free.

------
justinzollars
I hope not, we are getting some really great GPUs for AI. Its is the silver
lining of the crypto boom!

------
TheGrassyKnoll
"...the marriage of excitement and ignorance..."

    
    
        I guess I'm a polygamist.

------
dalf
Using smart contracts, who does "apt upgrade" ? Where does the data come from
?

------
b1daly
I feel like I'm missing something. The innovation of Bitcoin, which I grant is
interesting, was in solving the game theoretical aspects of maintaining a
trust-less distributed public ledger. It could be relied upon and used by
anyone, and was under the control of no individual or group of entities.

The core of the game theoretical solution was the creation of a digital token
which (miraculously) was purported to be useful as a general purpose currency.
(i.e. it could at least theoretically have value, and built in scarcity.)

To take control of the distributed ledger would require the expenditure of
significant resources, and the ultimate result would be the attacker would
gain some control over the ledger. If the attack was successful enough to do
this, the assumption is it would destroy the value of the currency, which the
attacker needs to stay high to realize any return on the attack.

Somehow Satoshi and early adopters bootstrapped this system early enough, and
did enough social engineering, for it to take off.

It's not clear that the value of the tokens needs to stay high to provide
incentives to the miners to continue mining. A catastrophic loss in the value
of bitcoin would cause the shakeout of many miners. But the system might
remain as secure as before. Meaning, I don't understand if the incentive
system works to maintain proof of work method for maintaining the integrity of
the ledger, if a token does not have significant value, in another realm.

The problem I see with other blockchain systems, is that the bizarre economic
speculation we see happening in the crypto currency space needs to happen to
boost the price enough to make it worth mining.

I could see a privately used blockchain being used between largish entities
that are "frenemies." For example financial institutions the don't fully trust
each other creating a pool of entities that incentivizes the members to act
collectively to prevent cheating. In that case, it's using the
cryptographically secured ledger as the "truth." Kind of like using a
permanent escrow service. I have no idea whether this is an efficient way to
solve this problem. Do banks really have disputes about the actual value of
accounts relative to each other that they currently have no simple way to
resolve?

This case would not need the tokens, and would not need miners. It would be a
way of distributing the trust aspects to a wider group, but not to the public.

In the wider world my intuition is that a successful, trust-less, distributed
ledger requires the kind of current fantastic waste of the who crypto-coin
proof of work system.

If a given crypto currency project can't get their public blockchain to be
secured in a pretty damn close to trust-less manner, the vexing problems of
trust, when it comes to keeping track of debts and assets on distributed
system, are not solved.

To see the problem with Bitcoin, think about the actual cost per transaction,
if you include mining costs. I remember seeing estimates of $30-$50 per
transaction. That is horrifying, because the majority of that cost is wasted
electricity. Currently, the majority of the cost of a bitcoin transaction is
being borne by either the miners, or the speculators who are required to keep
new money coming in to the system. (Otherwise, miners selling their block
rewards could crash the price.)

So, I think there is a great confusion in "marketplace of hype". The hype, the
"sizzle" comes from the dramatic climb in price of Bitcoin and cousins. Since
it became clear to the hypesters that Bitcoin had virtually no utility as a
currency, they decided to extract the "blockchain" element to carry the
expectations of investors. Bitcoin and the like do have real utility as an
almost perfect vehicle for pure speculation, for which there is perennial
human demand.

I would love to hear if someone can point out something I'm missing here!

------
arisAlexis
funny how cocky these articles are. Perfect material for posts like {title}
(2018) in a few years

------
enterx
I bet on the blockchain.

More and more people will eventually realise, as we can now witness by the
facebook's revenue drop, that the fraudulent behaviour of the ad networks
combined with the echo chamber does not bring them prosperity.

Which in the end would decrease trust of the consumer.

And bet who do we have there to trust? Well lets see... the blockchain? BINGO!

I would rather believe a friend of mine or a relative(related trust party)
than corrupted ad network.

Now lets explain the corrupted.

If i pay more for the ad, my product will be advertised more, without the
actual benefit for the consumer?

That is corruption.

So i would place my bet on the trust in the future.

~~~
enterx
Lol. a minus in a minute. <3

hey, ad selling trolls... when will the layoffs?

:D

