
The crypto alternative - tdurden
https://techcrunch.com/2018/05/13/the-crypto-alternative/
======
bobbygoodlatte
The author fails to mention a likely outcome: the co-mingling of centralized
solutions and decentralized ones. Decentralized solutions would be at global
scale (not at 2% usage) and they'd complement centralized solutions, not
replace.

For example, digital property rights might be best preserved via decentralized
tech. But perhaps you might take your digital property and use it to interact
with centralized services. Imagine a video game where the player truly owns
the in-game items they use as crypto tokens, but the game itself runs on
centralized servers.

The same might be said of Facebook-like applications. Rather than imagining a
future where a decentralized Facebook exists, perhaps it becomes more of a
hybrid decentralized-centralized platform.

~~~
paulgb
> Imagine a video game where the player truly owns the in-game items they use
> as crypto tokens, but the game itself runs on centralized servers.

This is a neat thought experiment, but beyond the novelty what value does it
give you to own an item in a decentralized way if a centralized entity can
take it away from you if they want to (even if it means patching the game
instead of knowing your private key?)

Truly decentralized, Sybil-resistant networks are necessarily expensive to
maintain, so it has to provide more than just novelty value.

~~~
Vadoff
The value of the decentralized token would be determined by the free market.

If the centralized entity ever had a history of patching the game to block
tokens, then the value of that token would go down a lot.

~~~
theamk
But if the value is determined by a single centralized entity, what is the
value that crypto tokens bring?

For example, if WOW currency were to become decentralized overnight -- what
would practically change? Either way Blizzard can take them away. Either way
value of token will drop if Blizzard does this a lot.

~~~
chrisco255
A better example might be Minecraft, where there are different servers hosting
the game and you can't necessarily port your items over.

But verification of rare digital assets could produce some interesting
scenarios. One could make a virtual trophy room showcasing their in-game
achievements. Imagine there's some game tournament for StarCraft for example.
Winners get paid in cash and also get one-time issued virtual medals as proof
of their achievement. Like Super Bowl rings, these medals would have
sentimental and tangible value.

~~~
anonymouz
> A better example might be Minecraft, where there are different servers
> hosting the game and you can't necessarily port your items over.

How would items appear on the blockchain in this case? If every minecraft
server can record created items on the blockchain, I can just run my own
server that's modified to give me whatever I want. At that point a simply
federation of servers seems to provide the same utility of transferring items
between servers (but for free).

EDIT, added: > Winners get paid in cash and also get one-time issued virtual
medals as proof of their achievement. Like Super Bowl rings, these medals
would have sentimental and tangible value.

They have to be issued by the organizer of the tournament to provide any
value. What does decentralization buy me there? The organizer might as well
just put on the website "X won Y".

A lot of these pie in the sky ideas seem poorly thought out once one asks what
_new value_ would a blockchain solution add.

~~~
chrisco255
[http://erc721.org/](http://erc721.org/) <= That gives you the spec for
Ethereum's ERC721 standard, which provides the ability to produce non-fungible
assets on the blockchain (which is what CryptoKitties is based on). The
creators of Minecraft (or insert future hit video game here) can issue limited
release assets using this standard. Whatever arbitrary criteria they want to
come up with for dispursing these tokens is ultimately up to them. It's not
hard to imagine scenarios where this plays out in in-game economies. We've
already seen multi-million dollar economies spring up in MMOs. It's also not
hard to conceive of cross-game assets that grant special in-game abilities,
special in-game decor, or what have you. If you think the big names like
Blizzard have no incentive to do so, well how about the indies? Someone could
easily come up with some reward scheme that several or more indies agree to
recognize within their games. This would produce an incentive for players to
play multiple games and succeed to a certain level in order to collect a
complete set of items.

As for organizers of tournaments issuing an ERC721 token in recognition of
some achievement, well, as noted...the asset is non-fungible. It will last on
the blockchain for as long as Ethereum as a network stays functional. A note
on a webpage isn't tradeable. It isn't referenceable by other games. It can be
duplicated infinitely.

Provably rare digital assets now exist. And the implications of that are just
beginning to be explored. I think it's exciting times.

~~~
anonymouz
CryptoKitties seems to work because all the game logic is on the blockchain.
But for a more involved game this is not feasible. Whenever you have to
interface with the outside world you have a trust issue there: You need to
somehow trust the correctness of the data put on the blockchain in the first
place. This is the same problem where smart contracts break down when they
concern stuff outside of the blockchain.

E.g., if I wanted to, say, give out blockchain-diamonds to Minecraft players
when they mine diamond ore in Minecraft, I need to somehow be able to trust
that when a server reports "player X mined a diamond on my server", that this
is actually correct. Whenever you you have an interface to the outside world
you get these kind of trust issues. And then you might as well go with a
centralized or federated solution, since the trust issues are the same but a
federated system is much more efficient.

Same for the indies: To make the economy worth anything, it can't be trustless
in the sense of blockchain. Indie company A must somehow be sure that indie
company B (or anyone else) isn't giving out rewards for cheap. At this point
you might as well build a federated system built on public/private-key
cryptography and save yourself the overhead of a blockchain.

As for the tournament prize: I don't see what the blockchain accomplishes over
an email/piece of paper/whatever saying "Player X won tournament Y" that is
PGP signed by the organizer of the tournament. It is even more resilient than
the blockchain (the receiver can keep and show it as long as he wants), you
can send it to whomever you care to, and you can copy it as often as you like.

------
avmich
> Likelihood: essentially nil, for many, many reasons, such as: The
> overwhelming majority of people don’t want to maintain their own private
> keys, and if you don’t maintain your own private keys, cryptocurrencies are
> essentially no different from fiat money held in banks, except for the many
> ways (such as the irrevocability of transactions) in which they are wildly
> inferior.

Looks like an complete failure of imagination. Is it really that hard to
assume there could be solutions to problems like that?

~~~
root_axis
Why should I have to comb through my imagination looking for a problem that
fits this solution? No other technology community has to use so much
exposition to convince others why their technology is useful.

~~~
chrisco255
There are a lot of problems blockchain technology solves. And I would
disagree. Personal computers were thought of as mostly useless hobbyist
technology until years later when spreadsheets were introduced. Even then,
home computers didn't exactly go mainstream until the 90s, when the internet
began to take off and OS technology matured (Win 95). Cell phones suffered a
similar skepticism up until the networks and pricing models matured in the
late 90s. And no one needed text messaging when that first came out. You also
couldn't convince most people that a data plan was worth it on the mostly
useless browsers of the time.

~~~
canoebuilder
Cell phones aren't the best example for you. As soon as economic and technical
hurdles were cleared, cell phones became one of, if the most, rapidly and
widely adopted technologies ever.

Cell phones also provided something genuinely novel and useful for those who
adopted them, in a package that was familiar and easy to use.

Bitcoin, by comparison, okay I can pay for some things, well I could already
do that. I have to adopt hard to understand security measures and my every
action with my 'money' is fraught with peril if I'm not exceedingly careful.
Well, that's new, but it's not something that appeals to most people.

~~~
chrisco255
Cell phones are a great example. They had absolutely dismal coverage in the
early days and your bill would be hundreds if not thousands of dollars if you
happened to roam in the wrong county. No one questions them today, but to many
folks, they were a hard sell in the early days. Most folks thought they'd use
a cell phone for emergencies only.

I don't know how you can look at distributed blockchain technology and not see
something genuinely novel there. A set of algorithms and code are capable of
replacing the functions of a bank (and then some). That is, you can store,
transfer, and program the behavior of money around the world without any third
party telling you can or can't.

Besides being open source money and all the awesome implications of that,
crypto currencies are programmable. You can control the timing and flow of
crypto according to scriptable logic. Please explain how you'd write a smart
contract that escrows money and disburses according to preconfigured rules
using USD.

What would you have to do to achieve that with code, today?

------
justinsaccount
Title should be "The cryptocurrency alternative"

------
Theodores
I am a keen watcher of crypto although I have zero skin in the game, just
friends that did get bitten by the bitcoin fever. I use bitcoin as a generic
term for all the alt coins and any business that talks of 'blockchain' or
'ICO' \- it is all the same snake-oil to me.

A mere six months ago everyone and his dog was advising me to get into one
coin or another as if they were trying to get me into their pyramid scheme.
This chat is now absent from the watercooler.

So I pressed my bitcoin mad neighbour on 'how are the coins going?' earlier
today. I got an answer that they weren't doing it at the moment which sounded
like the answer you would get if you asked a drug addict if they are still on
crack knowing that their dealer had been busted.

I asked some more and the response I got was that bitcoin was seasonal and
that right now is just not the season for it. I asked some more but there was
no more other than 'seasonal'.

I also no longer get notifications of bitcoin things on YouTube and Twitter.
For instance the guy 'bitfinex'd' was writing daily about the scam that was
going on with that coin that was pegged to the dollar, he has not written in
weeks.

So my analysis is that the coin thing has gone the way of 'cold fusion'. It
sounded like the next big thing but it is not.

There is a lot of momentum with these things, I am sure that bitcoin is worth
many thousands of dollars and I am sure that there are people putting together
new coin scams, however, the word on the street and by the watercooler is that
bitcoin is passe. People have moved on.

~~~
jeremyt
On the contrary, we are about to start the second wave of things. The next
wave will be an order of magnitude larger than the last, and this will
continue until Bitcoin and blockchain has disrupted the vast majority of
current industries.

You sound like an Internet hater after it failed to find a killer app besides
email for most of the mid-90s.

Then, in 2000, as Pets.com was imploding, no doubt you would've dusted off
this consistent criticism: "I am sure that internet stocks are worth many
thousands of dollars and I am sure that there are people putting together new
scams, however, the word on the street and by the watercooler is that internet
stocks are passe. People have moved on."

Ten years later, the stock market is dominated by tech stocks.

If your criticism was based on actual knowledge, I'd give you credit, but it
sounds like you have no idea what you're talking about, and you're using
derision as an excuse not to educate yourself.

Indeed, I think $8500 per Bitcoin is a bargain. Come check with me in a year.

~~~
tim333
Theodores seems to have some actual knowledge from the water cooler. Bitcoin
has no intrinsic value - the price is entirely driven by various people buying
and selling it so seeing what such people are thinking is relevant.

~~~
jeremyt
Don't listen to what people say...watch what they do.

[https://toshitimes.com/newly-appointed-goldman-sachs-vice-
pr...](https://toshitimes.com/newly-appointed-goldman-sachs-vice-president-
leaves-for-cryptocurrency/)

------
PopePompous
The article does not address what I think is the Achille's Heel of crypto
currencies: Controlling the money supply is one of the most powerful rights
that a government has. Why do you think the governments in the EU have not
unified their fiscal policies? Why do you think EU countries cheat on their
budget deficits? Governments want to be able to make money plentiful during
economic downturns, and tighten it up when the economy starts overheating.
They set nonzero target inflation rates to encourage people to consume and
invest. The idea that governments will allow some technology to remove that
power from them is silly. If a crypto currency ever becomes a significant
medium of exchange, it will be outlawed (following predictable reports about
Drug Kingpins, Terrorists and Child Pornography).

~~~
slededit
Most cryptocurrencies are spec'd to stop creating new coins after a period of
time. But that doesn't mean one couldn't design a coin where inflation is
controlled by an entity with the right key.

Even without that consideration policy changes can be enforced by Software
updates. In the case of bitcoin gridlock has stalled this process but other
coins have managed fine. The government has a strong compelling argument to
force upgrades - you can't pay your taxes if you don't and then you will go to
jail.

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spraak
The different scenarios don't seem to follow the same time line. The first
example seems to be far in the future while the others closer to now, making
the comparisons flawed

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ilaksh
How can he be so good at understanding the possibilities but so bad at judging
the likelihood of significant change?

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arisAlexis
some good points there but saying "uh, nah" as a valid argument for dismissing
probable outcomes doesn't awe me

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arisAlexis
the subsidization of real world real estate, art and other things that solve
numerous problems did not enter this article.

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blattimwind
"Suppose, just for a moment, just for argument’s sake, that (some)
cryptocurrencies are not a giant scam, and what’s more, they’re not just
another kind of financial asset. Come on. Don’t look at me like that. Work
with me here. Imagine, just for a moment, that there exist plausible futures
in which they matter."

I'm afraid my suspension of disbelief has its limits.

