
Ask HN: Why don't I believe blockchain will change the world? - yehosef
I&#x27;ve been watching all the buzz surrounding blockchain and cryptocurrencies over the last few months. I can&#x27;t say that I understand all the technical details of blockchain (why POW, how&#x2F;why miners, how a 51% attack works, etc).  But I think I&#x27;m a reasonably intelligent person and I have been reading about the merits and use cases.<p>The problem I have is that after reading and thinking about it, I&#x27;m mostly in agreement with this article: https:&#x2F;&#x2F;hackernoon.com&#x2F;ten-years-in-nobody-has-come-up-with-a-use-case-for-blockchain-ee98c180100.  I think it&#x27;s a neat idea and does have some use cases (especially for illicit transactions), but nothing like the hype that is surrounding it.<p>It seems that everywhere I&#x27;m looking, people are talking about how blockchain is going to change the world and people are starting ICO&#x27;s left and right.  The problem is that most of the applications I see don&#x27;t really seem like they need blockchain and have some built-in speculation component.  I feel like it&#x27;s the current solution to a lack of effective business model.<p>I also have technical doubts.  Example a 51% attack - While this maybe hard with Bitcoin because of the network size and age, I don&#x27;t know about the other currencies&#x2F;tokens.  I&#x27;m also not clear how the coming wave of quantum computers will affect this technology.<p>But I keep seeing the articles coming - how blockchain is going to change everything - and my doubts are eating at me.  How can I be so blind? It seems like everyone sees this truth except me (and the the guy that wrote that article and Warren Buffet).<p>Can the HN community point me to some articles or explain it to me so I can see the light?  Does anyone else here have this problem?
======
ebcode
I would suggest you take a step back and think about PayPal. Do you think
PayPal changed the world?

What PayPal did was reduce the "friction" of online transactions. Suddenly you
no longer needed a merchant account at a bank to accept credit cards online.
That was huge, right?

Similarly, a blockchain (Bitcoin's, as the premiere example) allows you to
sidestep the credit card companies and banks entirely. This reduces the
"friction" even more. Now, all you need is a string of alphanumeric
characters, no account, no verifiable identity.

PayPal was a first step in the direction of reducing online transaction
friction, blockchains are a second step.

~~~
nishantvyas
who will mange the per use-case blockchains (the distributed ledger for a
given use-case)? I like decentralization... more power-to-all...but the
reality is eventually there will be power-brokers (for example, miners in
bitcoins or exchanges like coinbase) who has deep pockets to manage and scale
these blockchains.... there will always be ripples and ethereums built
blockchains which mostly maintained by single player... but then how is it any
different than now... what am I missing?

~~~
ebcode
I think what you're missing is that the blockchains depend on network effects
to function. They scale naturally with adoption, being decentralized. Facebook
does not scale naturally with adoption, because it depends on its own private
funds to purchase more servers and bandwidth to handle the scaling, whereas
decentralized technologies do scale easily because each player pays for their
own equipment.

So, no, they (blockchains) won't be "maintained by a single player". The code
may be centrally maintained, but not the network, and it is the network that
holds the value. The crowd is fickle, and bitcoin could turn to nothing
tomorrow based on the whim of the crowd. Still, the internet has this same
quality, and it's still going strong. It (the internet) is simply _too_ useful
to be discarded. It remains to be seen if bitcoin is that useful as well.

~~~
nishantvyas
When I buy/sell bitcoin on Coinbase, am I considered part of network? Yes the
transaction will be part of the blockchain but I am not participating directly
rather using proxy (in this case, coinbase for it). This is what I meant by
powerbroker.

Second, to my scaling point, In order to be a part of a network one has to
maintain a complete blockchain on local server/computer. This is something
just not scalable in practice for 99% of people or the use-case... so
regardless of the intent there will be an emergence of powerbrokers....

So using the internet analogy, yes internet is decentralized but who owns the
backbone (att and few major players) will be the case for blockchain.

------
jotjotzzz
I view BTC/cryptocurrencies made possible by blockchain as the modern
electronic alternative to gold and silver as a store of value. Free from (for
the most part) manipulations from the Central Banks. I think the excitement
(at least for me) was knowing that we now have a technology that can lead to
honest money. Satoshi Nakamoto's initial inspiration for blockchain sprang
from this idea after the banking crisis.

Also, I recommend Mike Maloney's series "The Hidden Secrets of Money" which I
think does an excellent job of explaining the fractional reserve banking and
possible currency crisis.

------
bsvalley
Don’t focus on the noise, %99 of the ICO’s are scams. Same goes for a bunch of
alt-coins. There is a difference between changing the world and improving the
world. Bitcoin is already changing the world, anything else is just about
enabling blockchain technology to decentralize responsibilities. Like enabling
AI to reduce human effort. In other words, it is just another buzz word that
attracts a lot of investors (at the moment).

Welcome to the tech world.

------
lookACamel
It's staring you right in the face: blockchain is the perfect tool for
speculation.

------
cookiecaper
I'm a blockchain skeptic, but I do think there are _some_ valid use cases. A
great example was the Greek banking crisis a few years back. Bitcoin
skyrocketed because with the banking system shut down, it became the most
practical way to transfer money.

There are only a few limited cases when banking would be shut down and
internet access would still be functioning and useful, so bitcoin may not be a
good alternative very often, but at least until the collapse is complete, it
will probably be a valuable asset. :)

Bitcoin is in fact among the worst of them when it comes to practicality.
Litecoin's fast blocks are much better.

For the most part, though, I think you're right that bitcoin/blockchain is
massively overhyped and not useful outside of a small niche, and that its
technical limitations and vulnerabilities are massively underplayed.

------
hkmurakami
I think there's a lot of noise in the ecosystem that masks a lot of the
exciting stuff going on.

I heard about a blockchaim based system that trades energy credits/power via
solar panels between neighbors. Maybe in most places a centralized system
takes care of this, but surely there are areas where no one bothered to cover
it. Imo that's pretty cool, and even in urban areas it's more efficient for
the neighbors.

------
auganov
A global currency is big. A global economy is big. For citizens of poor and
cut-off countries - it's huge. Which is why I think the SV has largely missed
it. ICOs are big with Eastern Europeans for the same reason hacking was (hint:
it's not the criminality).

The 51% attack is largely a boogeyman. Cryptos have no intrinsic value - if
the 51% attacker gets too blatant the underlying crypto is going to crash.

Sure, you can have an attacker that isn't super-greedy - it's okay. We put up
with insignificant manipulations in our current financial systems already.

As for quantum computers (or the romantic version thereof), well, they're
going to affect many many many many technologies. It'd be a nuclear event.

~~~
matt_s
"For citizens of poor and cut-off countries - it's huge"

Can you explain this? How is a citizen of a poor country that doesn't have a
personal computer, probably not even a smart phone, going to be able to do
anything with a global currency like a cryptocurrency?

~~~
auganov
Citizens of poor countries, not necessarily very very poor people
themselves[0]. Almost any country has a not-insignificant middle/upper-class
that would love to compete on a level playing field with the world.

Which is most obvious with Internet entrepreneurs living in countries without
good access to the US/West. Hence the Eastern European example.

[0] I do think you're underestimating smartphone ownership though

------
iagovar
I have an use case: Monero -> Currency for illegal activities where you can't
be tracked.

From the perspective of a criminal, the only problem lies in the exchange side
of the chain.

------
dglass
Ripple's cryptocurrency XRP solves a real world problem and they have real
world customers already using it. I'm not saying it's going to change the
world in some grand sense but it's quite possible Ripple's XRP will speed up
the time it takes for banks to settle balances. No more waiting 3-5 business
days for cash to hit your account. The money would show up almost instantly
(3-4 seconds) because XRP + bank adoption enables instant transfer of value.

------
TokyoKid
Cryptocurrencies are extremely slow, have high fees and are destructive to the
environment. They also eliminate many consumer protections in place for both
banking and investing, leading many to financial ruin and suicide.

