
Ask HN: Why is the community so negative towards blockchain technology? - merrickread
I&#x27;m hoping to have a technical discussion, emotions aside.
======
patio11
Well since you asked.

Blockchain is the world's worst database, created entirely to maintain the
reputations of venture capital firms who injected hundreds of millions of
dollars into a technology whose core defining insight was "You can improve on
a Ponzi scam by making it self-organizing and distributed; that gets vastly
more distribution, reduces the single point of failure, and makes it
censorship-resistant."

That's more robust than I usually phrase things on HN, but you did ask. In
slightly more detail:

Databases are wonderful things. We have a number which are actually employed
in production, at a variety of institutions. They run the world. Meaningful
applications run on top of Postgres, MySQL, Oracle, etc etc.

No meaningful applications run on top of "blockchain", because it is a
marketing term. You cannot install blockchain just like you cannot install
database. (Database sounds much cooler without the definitive article, too.)
If you pick a particular instantiation of a blockchain-style database, it is a
horrible, horrible database.

Can I pick on Bitcoin? Let me pick on Bitcoin. Bitcoin is claimed to be a
global financial network and ready for production right now. Bitcoin cannot
sustain 5 transactions per second, worldwide.

You might be sensibly interested in Bitcoin governance if, for some reason,
you wanted to use Bitcoin. Bitcoin is a software artifact; it matters to users
who makes changes to it and by what process. (Bitcoin is a software artifact,
not a protocol, even though the Bitcoin community will tell you differently.
There is a single C++ codebase which matters. It is essentially impossible to
interoperate with Bitcoin without bugs-and-all replicating that codebase.)
Bitcoin governance is captured by approximately ~5 people. This is a robust
claim and requires extraordinary evidence.

Ordinary evidence would be pointing you, in a handwavy fashion, about the
depth of acrimony with regards to raising the block size, which would let
Bitcoin scale to the commanding heights of 10 or, nay, 100 transactions per
second worldwide.

Extraordinary evidence might be pointing you to the time where the entire
Bitcoin network was de-facto shut down based on the consensus of N people in
an IRC channel. c.f.
[https://news.ycombinator.com/item?id=9320989](https://news.ycombinator.com/item?id=9320989)
This was back in 2013. Long story short: a software update went awry so they
rolled back global state by a few hours by getting the right two people to
agree to it on a Skype call.

But let's get back to discussing that sole technical artifact. Bitcoin has a
higher cost-to-value ratio than almost any technology conceivable; the cost to
date is the market capitalization of Bitcoin. Because Bitcoin enters through a
seigniorage mechanism, every Bitcoin existing was minted as compensation for
"security the integrity of the blockchain" (by doing computationally expensive
makework).

This cost is high. Today, routine maintenance of the Bitcoin network will cost
the network approximately $1.5 million. That's on the order of $3 per write on
a maximum committed capacity basis. It will cost another $1.5 million
tomorrow, exchange rate depending.

(Bitcoin has successfully shifted much of the cost of operating its database
to speculators rather than people who actually use Bitcoin for transaction
processing. That game of musical chairs has gone on for a while.)

Bitcoin has some properties which one does not associate with many databases.
One is that write acknowledgments average 5 minutes. Another is that they can
stop, non-deterministically, for more than an hour at a time, worldwide, for
all users simultaneously. This behavior is by design.

I can go on, and probably will some other day. This is a bit of a hobby for
me.

~~~
kneel
Bitcoin allows you to buy all sorts of exotic drugs from strangers, safely and
securely from your couch.

~~~
this_user
Plus operating ransomware.

The problem with Bitcoin is the costs associated with using it. Due to its
decentralised nature it will always be more costly than centralised solutions.
Therefore, Bitcoin simply cannot compete unless illegal activities are
involved. The economics simply do not work out.

~~~
kneel
>Due to its decentralised nature it will always be more costly than
centralised solutions.

That's a really sweeping claim and I'd argue that it's too soon to really
claim one way or another.

The security of bitcoin is inherited from it's decentralization. The massive
proof of work operations in Bitcoin (and the resulting costs) are part of
bitcoin's security.

Centralized solutions will always be vulnerable as long as security bugs exist
(have you ever heard of a completely secure database?) And fraud will always
be part of the equation.

So what's better? Currently no one knows. But interestingly enough the
direction of bitcoin right now is to build centralized networks on top of a
decentralized network.

~~~
davidgerard
This follows from basic computer science. (Something I increasingly find
Bitcoin advocates handwaving away.) If decentralisation were more efficient
than centralisation, systems aiming for efficiency would naturally centralise;
this is not what we observe.

The decentralisation is _stupendously_ inefficient, Proof of Work is 47kg of
carbon _per transaction_ literally wasted, and it all centralises anyway - the
code is controlled by just a few people, the mining is controlled by four
miners (and there is no guarantee they are owned separately), most of the
mining is in one country and 75% is about to be in one building.

Bitcoin decentralises things that don't need to be decentralised, wastefully,
then naturally recentralises anyway.

~~~
kneel
>If decentralisation were more efficient than centralisation, systems aiming
for efficiency would naturally centralise; this is not what we observe.

I'm going to assume you mixed up your words there. I'd argue that we see lots
of decentralization on the web. I don't see why it has to be one or the other,
they seem to work fine in a hybrid state.

>the code is controlled by just a few people, the mining is controlled by four
miners

Code is available on github and you can fork it. Mining centralization was the
result of competition and some ambitious Chinese living next to dams. There is
nothing preventing this from changing in the future.

>Bitcoin decentralises things that don't need to be decentralised, wastefully,
then naturally recentralises anyway.

I'd say that money should definitely be decentralized.

~~~
ffwd
> I'd argue that we see lots of decentralization on the web.

Youtube, Paypal, Facebook, Steam, Reddit, Medium, Github, hell even hackernews
- I think the big success story of the internet in the past decade has been
the centralization. Decentralization is usually popular because of illegal
intents (like bittorrent). I agree with you though, they could exist in a
hybrid state and there will always be markets for decentralized systems. But a
global economic system run that way is on a totally different scale and stake.

> I'd say that money should definitely be decentralized.

Depending on how it's done, it very well should, but a lot of things come into
question like governance and consumer protection, and actually moving the
world forward and helping those who aren't computer savvy. Unless you're a
libertarian, the economy is really a means to an end and not and end in
itself, and another big success story over the past decades has been the huge
global economy that has been created and enabled everyone from the poor to the
old to people who aren't as savvy to work and live relatively safe lives. You
can't just dump the bitcoin software on everyone and say, "here it is! your
life savings, your paycheck, your everything, just make sure you don't fry the
hard drive that it's stored on and make backups!"

Decentralization is for the most part, an enthusiast endeavour. The
centralization aspect is powerful because it offloads all the technical
details so that 5 hours per day of brainpower on the whole globe isn't wasted
on just trying to do something as simple as recovering 5 bucks in an
emergency. And this applies to almost any decentralized service and applies
even more strongly to things that are of survival importance like money. I'm
not disregarding the idea or making a prediction, it's just there's a lot here
to think about I think

~~~
kneel
>Decentralization is usually popular because of illegal intents (like
bittorrent).

I guess we view de/centralization in a different way. All the sites you listed
are centralized under a brand/code but decentralized on cloud servers.
Inspecting a page and viewing sources you can see how many places a site loads
from (hackernews is pretty centralized)

>Decentralization is for the most part, an enthusiast endeavour.

I'd agree that Bitcoin is an enthusiast endeavour currently. There are several
elephants in the room though, the federal reserve, unaccountable corruption,
currency manipulation, SuperPACS, offshore tax havens. I'm not naive enough to
claim that Bitcoin could solve these problems or even any of them, but it
could be used as a tool if utilized properly.

------
chollida1
As someone in finance, where blockchain gets brought up alot, this one is
easy.

Blockchain is the proverbial solution looking for a problem. As has been
pointed out ad nauseam, the blockchain is often just a euphemism for database.

And that's where the backlash comes from, someone says Blockchain for
settlement, or blockchain for recording startup up option tracking, or
blockchain for tracking, well anything physical or digital.

The problem with these solutions is that almost always, there exists a
database doing exactly what the person is proposing we use blockchain for,
there aren't any trust issues with the counter parties so distributed
consensus doesn't buy you much, often it makes things worse due to its
immutability.

Couple that with the fact that many people like the current system, or make
money based on the current system and therefor can't see anything broken about
it.

Also, the current technology has inertia behind it, the new technology can't
be just a bit better, it needs to be much better to displace the incumbent
tech, and blockchain just isn't that much better yet for most of the soutions
its proposed for.

TL/DR Blockchain is the new NoSql. Awesome, useful in very strict cases, but
its currently supremely hyped up and over sold.

~~~
merrickread
I completely agree, it sounds like the forever present problem of wrong tool
for the right job.

However it offers the potential to approach problems in a fundamentally
different manner. I find myself incredibly curious and fascinated with how it
works - then immediately rejected once I see discussions on HN about the
blockchain.

According to your bio you've been programming for many years - is an
apprehension towards something new a common pattern you've observed?

~~~
wmf
To many people on HN, blockchain isn't new; many of us have gone through the
incredibly curious and fascinated stage around 2011-2013 and are now in the
cynical and grumpy stage. If you're curious about this stuff keep learning but
HN and Reddit probably just aren't good places to do so.

------
twinkletwinkle
To quote Matt Levine:

"If you announce that you are updating the database software used by a
consortium of banks to track derivatives trades, the New York Times will not
write an article about it. If you say that you are blockchaining the
blockchain software used by a blockchain of blockchains to blockchain
blockchain blockchains, the New York Times will blockchain a blockchain about
it"

The whole article is fairly insightful, as his often are:

[https://www.bloomberg.com/view/articles/2017-01-10/bank-
bloc...](https://www.bloomberg.com/view/articles/2017-01-10/bank-blockchains-
and-an-alibaba-box)

The article on the front page about Accenture today is a great example. People
are using it as a buzzword. Blockchain isn't snake oil, but it's sure being
peddled by a lot of snake oil salesmen.

~~~
m-i-l
And to quote Tracy Alloway, also Bloomberg: "you can replace the term
'distributed ledgers' with 'shared Excel sheets' in about 90 percent of talk
about blockchain and finance"[0]

[0] [http://www.tracy-alloway.com/?p=577](http://www.tracy-alloway.com/?p=577)

------
gue5t
It isn't negative towards the technology. Blockchains solve one problem:
distributed consensus among mutually distrustful peers. If there's any
existing trust structure, then a blockchain isn't what you need.

In situations where you already have trust but want immutability and
cryptographic assurances, you may want to look into Merkle DAGs or other
authenticated data structures, which are not blockchains at all.
[https://cs.umd.edu/~mwh/papers/gpads.pdf](https://cs.umd.edu/~mwh/papers/gpads.pdf)

~~~
zaphar
Exactly. The most valuable part of the blockchain technologies for most big
news announcements tend to be the Merkle DAG piece not the distributed
consensus.

Frankly the distributed consensus part of blockchains has always seemed more
than a tad bit wasteful of energy and computation.

------
codexon
Regarding bitcoin, the main problem is that a lot of people have large amounts
of bitcoin horded from early days and they tend to be biased and start
spamming forums about how great it is as it will make them very rich if the
adoption increases. This is despite there being very major flaws with the
system.

As someone that has actually tried to sell things with bitcoin, there are
major flaws with it, and they will never be fixed because these problems are
inherent to blockchains. And people trying to get rich quick keep spamming
forums and HN with blockchain technology X Y Z without acknowledging these
problems.

1\. It is really annoying to buy. You need to go out of your way to link your
bank account and passport/driver's license at any major exchange, and this
takes days or even weeks. You cannot buy it instantly with a credit card or
paypal unless you find a shady seller with bad rates. No one wants to sell
bitcoin for something that could be chargebacked.

2\. No chargebacks. Good for sellers but not for buyers. People might be able
to live with this if it weren't for the other 2 major problems.

3\. Payment takes forever. Waiting for the recommended amount of confirms will
take at least an hour?

These problems are deal-breaking and can never be fixed when using blockchain
technology.

~~~
wc23
The term confirmation is a bad one. It gives people the impression that they
have to wait 10 might.s to an hour to know if they have their money. The
moment you see a transaction in you wallet, you have it, you just have to wait
10 mins to an hour to spend it. So to compare this to legacy systems which
take 3-5 days and claim its too slow seems unfair.

~~~
NeutronBoy
> you have it, you just have to wait 10 mins to an hour to spend it

And then after 10 mins to an hour you find you can't spend it because it's
been marked invalid, and the guy you sold your iPhone to is long gone.

------
SnakePlissken
I think the negativity is more focused on the _" blockchain will revolutionize
x industry"_ hype than on the _blockchain technology_ itself. I've noticed a
similar (and justified) degree of skepticism and fatigue here in regard to all
of the AI hype in mainstream media, but nobody is discounting the technical
advances made in the field; just the kind of unbridled, naive optimism that
played a part in the _" AI Winter"_ of the 80s and could lead to a similar
disillusionment with the blockchain.

------
niftich
Bitcoin's primary innovation isn't the blockchain per se, but the combination
of the blockchain and proof-of-work timestamping to solve the double-spending
problem without requiring a central authority.

A "private" blockchain largely defeats the point, as you don't need trustless
distributed concensus when you implictly trust yourself or a central
authority. We just call these versioned databases.

------
kyleschiller
It's just backlash against the hype. It's sort of hard to have a technical
discussion since people aren't usually negative towards it for technical
reasons.

Blockchain is a relatively new technology with plenty of promises paired with
low understanding.

------
reitanqild
I'm not negative to blockchains like I'm not negative to linked lists.

I am however sceptical when large amounts of people suddenly decides that they
need to swap technology NOW.

Example: javascript. A language that IMO is worse than even php in a number of
ways but still manages to attract developer mindshare.

(Yes, I have some experience in classic Javascript / ECMAScript )

------
vectorpush
Blockchain evangelists promise the world and deliver nothing except hype and
political grandstanding in return.

When we discuss the cryptocurrency concept, specifically bitcoin, I think
reasonable people can agree that blockchain technology has yielded something
unique, interesting and worthy of technical merit, despite it not living up to
the insane prognostications of bitcoin fanatics . On the whole, I think it's
fair to call bitcoin a success because it continues to exist and has been self
sustaining more or less within the parameters of the original design for quite
a few years. Although it is small, there is some real commerce that occurs in
the bitcoin world, and even among some of the alt-coins that followed it. A
self-sustaining mini-economy based on computer code is fascinating, and
without all the breathless evangelists talking about how bitcoin will end all
wars and liberate the masses from the tyranny of taxation and government, I
think we'd see a lot more meaningful technical discussion of bitcoin and the
other potential uses for blockchain technology.

But that is not the world we live in. We live in a world where every
conceivable problem is met with an overwrought and unworkable blockchain
solution. We live in a world where startups can drain 100 million dollars on a
clearly stupid idea because "blockchains are the future", we live in a world
where bitcoin evangelists refuse to face the reality that the incumbent
financial system is not at all threatened by bitcoin and concepts like "smart
contracts" and that people with common sense aren't ignorant or
misunderstanding blockchains just because they're trying to tell you that
throwing millions of dollars into a "decentralized autonomous organization" (a
misnomer which exemplifies blockchain insanity) is a dangerous and terrible
idea.

Blockchain enthusiasts need to put up or shut up. Storing land deeds and
stocks on the blockchain is unworkable. Using the blockchain to power smart-
locks and self-driving cars and autonomous drones and autonmous AI VCs is
unworkable and unnecessary. Bitcoin, bitcoin copycats, and RNG roulette are
the only examples of blockchains working mostly as intended and providing at
least a marginal utility (in that cryptocurrency can be converted into
spendable money). All the rest of it is demonstrably pointless (see literally
every project created with etherum besides decentralized gambling software).

This is leaving aside all the political nonsense and all the bitcoin hesits,
thefts, scams, and buzzword swindling. The bottom line is that people are
tired of hearing about the amazing capabilities of blockchains when nobody can
seem to actually demonstrate their utility (besides bitcoin) in practice.

------
Perceptes
It may not be a direct answer to your question, but this article has a cynical
(yet technically detailed) perspective on "blockchain" that might give some
insight: [https://tonyarcieri.com/on-the-dangers-of-a-blockchain-
monoc...](https://tonyarcieri.com/on-the-dangers-of-a-blockchain-monoculture)

------
fauria
As I see it, Blockchain technology is based on some premises that are not
easily achievable. This are the two I find most relevant:

1\. A large user base (computational power) is needed to successfully run a
blockchain backed product. If the network is small, a malicious attacker with
enough resources could manipulate past transactions or prevent new ones (51%
attack).

2\. Blockchain was designed to be a trustless (no central authority)
distributed ledger. In the case of Bitcoin, it prevents double spending of a
virtual currency that only exists in the Internet. When applied to "real
world" assets, sooner or later you will find a step in the process that
involves trusting something or someone.

So far I haven't been able to identify a use case for anything but a digital
asset with great traction.

~~~
wmf
Bankchains solve #1 by not using mining; they use something like BFT (which is
basically Paxos for liars) so that only 51% of the companies in the consortium
need to be honest at any one time.

~~~
fauria
I guess that invalidates by definition #2.

~~~
wmf
Ah, I forgot to mention that. Bitcoin is totally trustless, while bankchains
require the participants to trust each other's identities but not their
behavior. Whether this trust model is applicable in any real-world situation
is debatable.

And yes, if you're using blockchain to track something like gold in a vault
you might as well just have a database that is run by the same entity that
runs the vault.

------
chx
Blockchain technology? Maybe there's something in the future but right now
Bitcoin is mostly used as an illegal vehicle to get money out of China. Some
90% of bitcoin trades originate in China. A lot of people who are peddling
Bitcoin are holding on to it and try to convince others to use it so their
holdings grow. The whole thing became a scam. The other "alt coins" are even
worse, Monero is pushed by drug dealers etc.

------
zackmiller84
Reading through the responses from here has made me question my investment in
Bitcoin, ShadowCash and Lisk.

