- Yes, there are an insane amount of scams, and lots of dumb money flowing in
- Yes, many use cases of blockchains should really be databases
- Yes, many blockchain job posts are just PR initiatives for companies who want to differentiate themselves
That said, it's an early time to have a tremendous amount of impact.
Don't like "proof of work"? Go hack on various other implementations. Get angry at banks? Go figure out ways to remove custodial risk, so that we may not need as onerous financial regulations that stifle innovation. Angry about security in this space? Go find security holes and disclose them.
Even for fun side hacks, there's a huge app layer that could be built on your smart contract blockchain of choice.
I say this having worked at the World Bank, Gates Foundation, and a mobile payments startup in India: financial services could truly use innovation, and providing safe, secure, broad access can have huge impact, especially in countries with weak legal systems. Blockchains are a "shot on goal" of trying this, though they may also never live up to the hype.
I'm all for calling bullshit on hyped trends ( https://www.nemil.com/musings/shinyandnew.html ), but just because a space attracts snake oil salesmen, "get rich quick" schemers, and cargo culting programmers doesn't mean that there might not still be great opportunities to do good engineering and have huge impact.
My response to anyone serious about competing with banks: go work for one.
Banks are often portrayed as these evil faceless entities that act completely in their self interest. In reality, most banks that matter are simply too large to act as one – and not in the sense that they are too big to fail (although, that's probably true as well) but that they are huge organizations with thousands upon thousands of employees and teams of varying autonomy. They may be all under one brand (and likely also under many sub-brands) but they don't act as one, pretty much ever.
Banks are very interesting organizations to work for, for a great many reasons. I think anyone with a serious grudge against banks thinking they can do better should spend at least a few years working for one. If nothing else, they'll learn first hand what to try and avoid, and possibly also why things are so ass-backwards a lot of the time.
There are some startups here in Uruguay that have gone against banks and were winning (one started by a classmate that used to work for a financial institution), and they of course are getting hammered with regulatory oversight (some needed, some not). I'm frankly surprised they let them go as far as they did, they were true entrepreneurs, I wouldn't have started them, not because I didn't think they were needed or succeeded, but because of the risk.
We are outsourcing (in the literal and figural sense) all the time, including with information. Google, Facebook, and arguably Amazon are examples of us outsourcing information. Even there, self hosting (e.g. Mastodon allows a Facebook/Twitter alternative) has its advantages and disadvantages. People do not take disadvantages seriously until it confronts them.
> A 2014 CFPB study showed that about 8 percent of bank customers pay about 75 percent of all overdraft fees. And much of the time, the purchases that trigger overdraft fees are minor. The median debit card transaction that ends in an overdraft fee is $24, according to the bureau.
> Overdraft fees began piling up in Davis Clark’s Wells Fargo account after he lost his job in February. The 26-year-old fell behind on bills, including about $9,000 in short-term loans he had taken out to help cover his living expenses. Each time the lenders tried to automatically withdraw payment from his checking account — his monthly payments added up to about $550 — he was hit with a $35 charge from his bank for not having sufficient funds.
By the time Clark started a new job as a data analyst less than two months later, his checking account was negative by more than $1,400. The debt that ate up more than half of his first paycheck and made it more difficult for him to catch up on the rent and other bills. Last week, Clark opened up a second checking account with another bank so that he could avoid having his earnings eaten by overdraft fees. But with the charges continuing to pile up on his first account, he worries he will have little choice but to file for bankruptcy to clear the loans and overdraft fees.
If you want to help people, empower your fellow humans with new technology that renders these truly evil megacorps obsolete.
Best estimates are that there are about one million
holders of Bitcoin; 47 individuals hold about 30 percent,
another 900 hold a further 20 percent, the next 10,000
about 25% and another million about 20%, with 5% being
lost. So 1/10th of one percent represent about half the
holdings of Bitcoin and 1 percent close to 80 percent
of-the-bitcoins-2013-12). The concentration of Litecoin
ownership is similar
Most of the big wallets have been in place from early on,
so sitting back and watching your capital grow has been a
very successful strategy.
The distribution of Bitcoin holdings looks much like the
distribution of wealth in North Korea and makes the
China’s and even the US’ wealth distribution look like
that of a workers’ paradise 
Both Bitcoin and Ethereum mining are very centralized,
with the top four miners in Bitcoin and the top three
miners in Ethereum controlling more than 50% of the hash rate. 
* Proof of Stake will exacerbate wealth centralization, due to statistical probability of block rewards going to the wealthiest, perpetually increasing their odds of further newly minted coins.
It sounds like Raiblock production/minting/distribution is finalized? How could you measure the Gini coefficient of Raiblocks, how do we know it's not worse especially considering even smaller window of time where people were allowed to participate in the minting and distribution of the supply?
I believe they changed the captcha as well during this phase to prevent automation. It was a big source of annoyance for people without time lol.
If the supply is produced in a limited time frame, then the limited amount of people who had accesses to production will control the supply.
I don't consider the bank evil for enforcing terms I agreed to.
This is more of a debate about society than the specific products a bank offers, but you being daft enough to pay $35 for a Starbucks coffee isn't really comparable to the lives these people live, and the vicious cycle things like overdraft fees can land them in.
I've found in many fields that are as complex as finance, that when I think something in that field is stupid, unnecessary, or onerous, it is I that am wrong because I simply didn't understand the why of how that thing came about.
So I find it fascinating how many people/groups in history have gotten mad at banks/finance, tried to make a "better" product, gotten stung or robbed others, only to eventually re-invent many of the things safe, efficient banking requires.
>I'm all for calling bullshit on hyped trends ... doesn't mean that there might not still be great opportunities to do good engineering and have huge impact
The problem is that as a field gets flooded with bullshit and scams, smart money (and people) turn their talents to other areas the world can be improved, avoiding the crap.
The obvious example is dumb laws. Almost every dumb law has at least some good effect it imparts, which is why it was put in place. Unfortunately the problems it causes are what is usually trotted out to explain why it's dumb and should be changed or removed, giving little or no credit to the problems it actually prevents (or disincentivizes at least).
Then suddenly, the SV companies say "hey, this is BS, we can't be competitive like this! If we have to do all these things then we can't be cheaper than the incumbents!"
Joel Spolsky said it pretty well:
There’s a subtle reason that programmers always want to throw away the code and start over. The reason is that they think the old code is a mess. And here is the interesting observation: they are probably wrong. The reason that they think the old code is a mess is because of a cardinal, fundamental law of programming: it’s harder to read code than to write it.
Now we've gotten to the point where people are taking entire buildings and making them short-term rentals (they're called Hotels), ride-sharing services are talking about multi-person trips to and from designated locations (it's called a bus or shuttle), and so on.
Everyone wants to be Stripe or Square and reinvent and simplify things that people hate, but no one stops to think if this is an area that's complicated on purpose or if people just think they're smarter than everyone else who came before them.
The hotel experience needed improvement. So did the taxi experience. Incumbents were preventing competition through monopoly and regulatory capture. They won, and in doing so they lost their edge.
Some of the regulations Airbnb and Uber skirted have good reasons. Others had good reasons, but new ideas and technologies made these reasons less important. And some were just bad and anti-competitive. The same is true in financial services.
'You shouldn't do that because it is illegal' argument is actually not an argument, it's an appeal to authority. Opening the Overton window to consider why we have the regulations we do, how we got there, and what makes sense moving forward is key to progress. And it often takes unreasonable people (eg: Kalanick) to make that happen.
Their point seems more about people getting too caught up in "disruption for disruption's sake".
To a certain degree, watching the evolution of cryptocurrency is like watching techies reinvent banking, one scam or lost transaction at a time.
Don't get me wrong, I absolutely see value of many blockchain-related innovations. Distributed ledgers. Decentralized transactions. Smart contracts for IoT.
But, I've also met many folks who are more enamored with the concept of "disrupting banking" without spending much time understanding the what and why of the disruption.
Someone else has already brought up Chesterton's Fence, but long before I heard about the fence of Mr. Chesterton, I learned that every warning sticker on your ladder, every regulation you despise, every "Don't Do $ACTION on the $THING" sign you see has a story behind it. Because few people enjoy researching and purchasing signs and stickers so much that they'll do it unprompted.
So, yeah, as you've discovered, when you hear talk about getting rid of Frank-Dodd or other dual-name regulations, ask yourself who benefits from that and why we had to write down some rules in the first place. IOW, Chesterton's Fence. :-)
There's a debate to be had about whether they are the most effective means of slowing down traffic, but it changed my view a little.
Hehe, this reminds me of a thing X that I'm implementing because my manager doesn't like thing Y. X will have the same exact same limitations as Y and won't be as battle tested nor will a new hire be familiar with X (although they'd be familiar with Y). But hey, at least it isn't Y.
FWIW, this is the best video I've seen on this: https://www.youtube.com/watch?v=dla42bY7k90
If this strikes you as reasonable advice or as a reasonable way to think about cryptosystems, it is probably best if you don’t attempt to work on blockchain tech.
(It's saddening me that people think this is a feature.)
Demonstrating the value of, and rationale for, those "onerous financial regulations" has been the one actual good result of this blockchain nonsense. The endless tsunami of scams and fraud that has been the blockchain space has been useful in wiping away the original idiot libertarian impulses that drove the scene.
It's also helped demonstrate that plenty of financial regulations have nothing to do with preventing scams and fraud and everything to do with deputising the financial system to act as a law-enforcement body that goes after violations of awful laws such as drug prohibition.
It seems easy to forget that early actors of Bitcoin are either in jail or hiding. Why do you think this generation of actors will have a different fate?
- Someone proposes a change to the rules, effective as of some future block number
- Each miner decides whether to adopt the proposed rules
- The network is forked at that block number; some miners work on the original chain with the old rules while others work on a fork with the new rules
- The network converges as most miners, exchanges, etc. will end up honoring whichever fork has more traction. (Sometimes the fork with less traction remains somewhat viable; see Ethereum Classic.)
Okay. One of the appeals of cryptocurrencies to anti-government types is that there is predictability and transparency over new currency creation, since it's hard-coded in an algorithm. We can find out exactly how many Bitcoins there will be in five years. Granted, forks can change those algorithms, but they're still transparent. Also, forks of the Etherium Classic or Bitcoin Cash type don't really count as inflation, since you cannot send ETC when the receiver is expecting ETH, and likewise with BCH/BTC; they are not interoperable. In other words, the Bitcoin Cash fork did not cause inflation of core Bitcoin.
Now let's consider USD. Do you know how many USD there will be in five years? USD creation is at the whim of legislators and unelected bureaucrats who could collude tomorrow to crash the value of USD by just letting the printing presses run and there's not really anything that most of the users of USD, the normal people, can do about that. Now I'm not saying that such intentional currency crashing is likely to happen, but that lack of control and predictability is why libertarian types would find the idea of backing cryptocurrency with government fiat currency to be nonsense.
Maybe this is the reason why most governments would like to ban cash? Or at least restrict the amounts being processed by one entity. It's all about control.
This is the story with basically any startup in a hot space. This could be just as easily about AI / Machine Learning.
Edit: not trying to defend bitcoin here, just pointing that the blockchain brought a new solution to a trust issue
>"Ten years in, nobody has come up with a use for blockchain"
Which is why, as we all remember, the darkmarket suddenly sprung into existence out of nowhere once Bitcoin was invented.
That surely justifies a valuation around a few cents per bitcoin.
Care to explain how you go from that to "few cents per bitcoin"? I'm asking for an actual calculation.
Of course there isn't one. It's a Fermi estimate. The main points were that the value is greater than 0 but the use is exceptionally niche. Pick any other Fermi estimate you feel is appropriate for those conditions. It doesn't change my point.
It's mindblowing to me that anyone sees this is a good idea.
Also the energy requirements for PoW systems are cheap compared to its gains as pointed out by Nick Szabo:
"We need more socially scalable ways to securely count nodes, or to put it another way to with as much robustness against corruption as possible, assess contributions to securing the integrity of a blockchain. That is what proof-of-work and broadcast-replication are about: greatly sacrificing computational scalability in order to improve social scalability. That is Satoshi’s brilliant tradeoff. It is brilliant because humans are far more expensive than computers and that gap widens further each year. And it is brilliant because it allows one to seamlessly and securely work across human trust boundaries (e.g. national borders), in contrast to “call-the-cop” architectures like PayPal and Visa that continually depend on expensive, error-prone, and sometimes corruptible bureaucracies to function with a reasonable amount of integrity."
What makes me really wonder is this talk of corruption robustness when the blockchain world is basically a wild west without laws and regulation where the only reason to behave is financial incentives which obviously brings in more scams than anything else. This would maybe work if it would not be even better to slightly misbehave, you don't need to make a 51% attack, controlling 25% of the mining power already gives you an edge to steer the whole network. 
You don't trust Paypal and Visa where laws apply but you trust enormous Mining-Pools in China that were already caught forming carthels?
How robust is this thing really if the authoritarian government the pools run in decides to shut it down? Value would go way down and the network would be in a very weird unsecured state. It's entirely possible the network is at the whims of some bureaucrat deciding that should happen, which is one of the weird things about cryptos.
That's not really true though. The "trust boundaries" still exist when you try to convert your tokens into spendable money. Also, blockchain enthusiasts seem to forget that blockchain tokens are built on an intricate house-of-cards that can easily collapse under disaster circumstances. There is an implied trust that is always taken for granted that the government will continue to maintain internet infrastructure and allow citizens the free-use thereof. How far will bitcoin take you as a resident of puerto-rico? It is also trivial for any government to prohibit or disrupt the use of blockchain tokens (either through the legal system or through draconian internet restrictions). At the end of the day you are trusting that the federated financial systems of the world tolerate blockchain tokens.
Blockchain tokens don't solve this problem; the power is defacto in their hands and you'll either need their consent or continued ignorance to participate in the wider economy using tokens.
I wish I grasped proof of stake better. I’m not yet convinced it can be made to work as well as PoW.
EDIT: I stand corrected as to the terminology, but if you replace [GPUs] with [POW hardware], the disincentive will remain.
Perhaps I misunderstood in the context of Bitcoin, but in the context of the investment in GPUs providing support to pricing, I think that is validated just from the news a few days ago that GPU pricing because of crypto demand was causing pricing issues in PC-gaming. And the same principle should apply to whatever "effort-based" mining technology is in use; any significant investment in hardware will be a disincentive to allowing improvements in the efficiency of said hardware.
Stupid example: I create 100bn coins. Then I sell one to myself for $1. Am I now running a $100bn experiment?
Yes, marketcap is flawed, and examples like yours do actually pop up because of the usage of this metric, but are quickly smacked down if they're traded on markets with any liquidity. Ethereum isn't in that category. We can do a Wall St. pissing contest about what consitutes "real liquidity" but I'll stick to that statement for Bitcoin and Ethereum at the least.
It's just a matter of perspective: let's say you're invested in Google. You put in $1000 and now it's worth $100,000 on paper. Google announces they are closing their data centers and pivoting to cat food delivery: are they risking $1000 of your money, or $100k?
Total emissions isn't the only important measurement.
It's a fair criticism of Bitcoin that it uses a lot of energy, but it's hard to predict whether it will ultimately use more or less than the existing system as a percentage of value created.
In general I agree, though. Turning energy into trust is definitely worth it, and we're in a price discovery phase to find out what "it" is.
Bitcoin is estimated to use about the same energy as the whole country of Denmark. Denmark has over 790 million cashless transactions with "Dankort", a local debit card, per year alone - excluding other payment methods. Bitcoin can handle about 2,000 transactions per block. 2,000 transactions times 6 blocks per hour times 24 hours in a day times 365 days in a year equals 105,120,000 transactions per year.
Congratulations, you just used the energy of the whole country of Denmark with _everything_ in it (housholds, heavy industry, etc.) to process less than a 1/7th of Denmark's cash-less transactions with a _specific_ (albeit widely used) debit card.
You see, your argument is simply invalid. "Traditional" banking is more energy efficient by multiple orders of magnitude.
2: https://www.nationalbanken.dk/en/publications/Documents/2011... (page 125)
- Someone else with similar capabilities as OP's probably took the job.
- This person will make significantly more money than what OP will be making (as OP points out)
- This person will have learned way more about the implication of the technology, whether it actually is as bad as what mainstream media says or if those are all coming from ignorance.
Even if this whole Bitcoin thing comes crashing, accepting a job that's much higher paying, and lets you explore a new edge technology, all while being able to work remotely, all sound like a game you can't lose.
All this narrative about how proof of work == global warming, and how bitcoin won't work because of such and such are mostly based on lack of deep knowledge.
Sure, they say "yeah i've read the whitepaper and I totally understand how it works", but that's not enough. I've been there and now that I know more about it I feel ashamed of blabbering my mouth to people about these things because to people who actually know things, these words immediately turn on red flag and they mentally mark you as "don't know what you're saying".
It's funny how most people who criticize bitcoin and blockchain for all these things actually haven't gone deep enough to have the expertise to say these things. They are basing their "opinions" on what someone else--who is most likely also less than enough informed--said.
If you really want to talk shit about Bitcoin, at least spend about a month, learning everything possible. Otherwise you'll be ashamed of yourself ever saying those things (just like I did) when maybe later on in your life you learn more about the technology.
[Edit] To those who are saying: "if you know so much, why don't you just show us what you've got? Prove to us that proof of work can work" or things like that, if it was that simple to explain in a single comment, would I say learn for one month? (Actually one month is not even enough. It took me a full 3 months of doing nothing but teaching myself to get even closer to understanding the landscape) Even if I did my best to explain to you here, I would fail to convince you because it not only involves technology but everything around the ecosystem. I'm not trying to be condescending. I'm saying do yourself a favor and teach yourself wth is going on so that you can make informed decisions about whether you do want to jump in or not. Don't believe what uninformed people are saying.
I don't. And I don't think many people do (perhaps those buying put options might). That said, it's not hard to see the cost in power usage, and thus waste heat, that is/will be spent computing hashes that match ever-growing computational requirements.
You're right that I could spend a month of my time learning more about this tech that does obviously have solid implications in the form of distributed untrusted consensus.
That said, it took me maybe 30 minutes researching to understand the huge global power requirements, and in years of observing the tech, nobody has been able to quickly and easily dispel this concern. If it takes a month of in-depth research to make people feel better about bitcoin and dispel years of observing the currency and its ever-growing requirements, then maybe something is wrong. It could be that after a month of very hard work, you have an unconscious cognitive bias because nobody likes to waste a month of work learning something they decide to throw away.
I'd be glad to find an article that, in less than 30 minutes, can change my mind about the waste that bitcoin generates. It's happened plenty of times with other tech (not necessarily waste, but other misjudgments), and often in closer to 5-10 minutes. I don't expect Bitcoin would be any different, because I have no horse in this game. In fact, I'd be really excited to be proven wrong, because of the potential benefits that the tech has to offer.
I don't like this argument. It's garbage. Bitcoin does not replace the functions of the entire financial system. I can't take out a loan using the blockchain. Banks do far more then act as a ledger. Bitcoin's utility today is a little more than P2P value transfer. A centralized solution - something like Transferwise - does not use as much energy as Bitcoin.
Then your choice comes down to this: Use a centralized system for less energy consuming transaction but greater centralization of wealth -- or -- Use a distributed system that requires more energy but distributes wealth amongst network participants.
Personally, I would choose the system that distributes wealth at the expense of additional energy cost.
Ideally, I would choose the system that distribute wealth and has the least environmental impact.
I'm not in a position to estimate the waste energy of a financial institution either, but you're right that it probably is quite large, but it's hard to say which is more wasteful.
But let us assume that all those thousands of financial institutions and their associated infrastructure are just there to handle transactions.
Bitcoin is doing about 20 tx/s and Bitcoin mining uses as much energy as the nation of Denmark.
Visa is doing about 1700 tx/s.
> Renewables! Almost free, unlimited energy!
Oh man, I should have been reading your last sentence a bit better. With all those cryptomaniacs my sarcasm detector is a bit confused.
combine the tx/s of all the cryptocurrencies out there right now and I assure you it exceeds Visa's 1700 tx/s. NOT ALL TRANSACTIONS HAVE TO HAPPEN ON THE BITCOIN NETWORK! There are thousands of coins!
Also Visa is only just one company, there are also Master, American Express, Paypal, SEPA transactions and a lot more.
So I don't understand what you try to tell me and how screaming improves your argumentation.
The cognitive dissonance associated with having money at stake on Bitcoin.
Your comment sounds repeated from somewhere else. Do your own research, everyone is trying to manipulate everyone else in this space.
If you consider that and budget in the costs of looking for a new job, and account for the frankly non-trivial chance that the salary will end up being a lie, given the skeeviness of this space (I'd bet the first paycheck shows up, but my confidence in that goes down rapidly as the weeks wear on), it may not look like such a great offer.
Obviously, there are things that can be taken into account when you know more specifics (i.e., "it's VC backed by a reputable firm" would score some points on the "they at least have some money" front), but absent those I wouldn't start from a high degree of confidence.
Sure, if you're just looking at one job, then yeah someone else is going to come along and take it. But if enough people start feeling the same way as the author, there will be fewer qualified developers in the hiring pool for blockchain work. This will likely result in fewer companies and less work being done in the area, and more work being done on other technologies. (Other technologies that are more useful and beneficial to society, if you happen to agree with the author of this post.)
Or alternative to turn your proof of work into compute power for AI and other heavy computational yet beneficial tasks.
If that's what you want. But, the author didn't.
A little bit off-topic, I find very interesting how blockchain is regarded as a new technology. All the underlying technology has been available for ages: cryptographic hashes, Merkle trees (patented in 1979!!), peer to peer protocols. It's crazy how putting together some already established technologies/techniques/mathematical instruments can generate such a big movement. A lot of people refer to it as a cutting edge technology that will.. disrupt (I hate this buzzword) the current status quo. In my opinion it's just a very elegant solution to a problem (decentralised trust) that's been put together with already existing simple blocks.
It would be good if we could cut down on the uninformed hype and just appreciate the elegance in it.
With your logic, everything is an old technology.
And what is that? Most of what it’s credited with seems shakey at best. E.g. it’s not really decentralized is the vast majority of the mining is done by two or three large groups.
You have to trust the other peers aren’t secretly working together to use a 51% attack.
Bitcoin hasn’t been “deanonymized”. It’s never been anonymous. Some of its value actually comes from its extreme transparency.
That said, privacy is important when it comes to money and there are various ways people implement privacy. Both on top of bitcoin and outside of bitcoin.
I don’t know what 51% attack has to do with anonymity though.
Interestingly, r/crypto is the cryptography subreddit and has https://www.reddit.com/r/crypto/comments/7jrba2/crypto_is_no... stickied.
It's like turning down a job with government just because governments sometimes do bad things.
Cryptocurrency is like banking, venture capital, social networking and religion all rolled into one.
Before, startups used to get traction by joining popular accelerators like YCombinator, from now on, startups will get traction by affiliating themselves with popular cryptocurrency projects. It's funding by the people, for the people; nobody is locked out, everyone can participate.
If you don't like single central banks or intransparent financial institutions - cool, good thing there are Byzantine consensus algorithms that don't require proof-of-work but simply some known identities (in blockchain lingo this would probably be permissioned blockchains). You can get much of the benefits and build an ecosystem around known, trustworthy actors and don't have to use awkward mechanisms like proof-of-work.
I kind of agree with this notion, but it is not limited to blockchains or cryptocurrencies. I had discussions about using deep learning on a problem that was very ill suited for machine learning approaches (in the end it was solved by regular expressions and some simple statistics). Other overhyped technologies include: microservices, nosql-databases, rdf/sparql/semantic web and IoT-devices. Some items on this list were overhyped in the past, but have found a reasonable technological ecosystem in fields that are suited to it, like rdf. I think the same will happen with the blockchain.
I thought this was an interesting claim to use as a disqualifier. If you see the promise of blockchain, why wouldn't you invest in them?
That doesn’t need to be a conscious attempt to defraud, either: humans are notoriously bad at seeing things accurately when not doing so is highly profitable. A lot of people really believed their house doubled in value over a couple years in the 2000s, or that selling things online was a high margin business before that.
> If you see the promise of blockchain, why wouldn't you invest in them?
There’s a delicate difference between investing vs. investing and telling strangers how they could invest into the same thing.
The former indicates you believe something has merit. The latter indicates you want something to appreciate in price.
Perhaps those aren’t mutually exclusive, you might also believe it has merit, but others will take your words with a grain of salt because you maybe, just maybe, are trying to speculate in it short-term. (Otherwise wouldn’t you try to keep it quiet and invest more and more into it while the majority is unaware?)
There’s the third case, though, and it’s the worst: you invest, frequently praise the thing you’ve invested into, and consistently forget to mention the fact that you’ve invested into that thing.
This would read as: you believed into something enough to invest, you’re eager for it to go up, and you also don’t want your audience to discount your acclaim on the basis that you’re an investor. In other words, lack of investment disclosure (where it’s due) advertises a degree of insecurity about true merits of the thing someone’s endorsing, so those two cancel out, which leaves the speculation motive. The whole field seems to send this sort of a mixed signal, and it leaves an unpleasant residue. The hype is, perhaps paradoxically, discrediting the technology.
There are plenty of people in the world who live in countries where the legal system doesn't work, the do not have access to banks, their fiat currency gets manipulated by the corrupt government. And these people now have smartphones and Internet.
The internet democratized the sharing of information. Prior to this it was quite difficult and expensive to communicate with thousands of people all over the world. With the advent of the internet, it became cheap and accessible to anyone with a connection (I am obviously skewing my world view by considering only those with connections).
With cheap communication comes increased trade and we initially saw many companies trying to cash in on the new routes to market (Amazon, eBay, Pets.com, ...). However, these have more or less developed into monopolies over time. How many startup retailers could challenge Amazon?
Blockchain should result in the democratization of transactions as it reduces the barrier to entry for anyone with access to a shared global computer which utilises smart contracts. It's useful to highlight this with an example:
I have $1000 of gold and you have $1000. We need to exchange these items. We could just meet in the street and exchange the items but this would be considered risky as either one of us could attempt to mug the other and run off with $2000 worth of assets. Therefore, we employ the services of a mediator or escrow.
Q - Is it better to pay the mediator $10 each or $100 each?
-------------------- Think carefully --------------------
A - $100
This is counterintuitive as we obviously would prefer to pay $10 each and receive $990 in assets at the end of the trade. However, the incentive for the escrow to simply run off with the assets is greatly reduced if we pay them more for the trade.
An escrow who takes $200 from a $2000 trade only needs to complete 10 trades before they have $2000 in assets. An escrow who takes $20 per trade would need to complete 100 trades before they have $2000 in assets.
You may be wondering why I'm telling you this so I'll cut to the point. The escrow in this example is a real person. The escrow in blockchain is a smart contract that literally cannot run away with the money. It can only send funds from one account A to account B or from account B to account A when it has received both sets of assets. The cost of this smart contract is therefore (in Ethereum's case) the cost of the computation on the network, which is exceptionally low in comparison to the human escrow. Even if someone was to create a contract that took %10 per trade, someone else could copy the contract and reduce the fee. This would happen until the cost of running and maintaining escrow contracts found it's market value.
In summary, the $200 fee becomes cents. These kind of operations are made available to the general public on a world computer. This approach can be applied to ANYTHING that can have it's value represented as a digital token. Take a minute to consider this - it's grand.
In the short term, Monopolies like Amazon and eBay begin to lose their competitive edge. This is the democratization of trade.
In the long term, we have a global interoperable platform capable of trading anything you can imagine. (For a science fiction extrapolation of this see "Whuffie" in Down and Out in the Magic Kingdom by Cory Doctorow).
How does your contract move gold from you to me? If it doesn't (which it obviously doesn't), how is it removing the utility of escrow? In fact, what is it achieving in this case that does something different to a traditional payment system?
And in what conceivable way has this anything to do with the utility of Amazon or eBay?
That's not to say that smart contracts cannot have any utility, they can. I could imagine, for example, that they could replace a lot of the functions of notaries. Or, in fact, any case where the primary problem is a common understanding of the state changes of a digital asset. But I can't see how they have any utility in any of the examples you cite beyond a mundane payment system.
They do not move the physical gold - they move the ownership of a digital token tied to gold, at a far lesser fee than current digital escrow. This is the same as ETF gold currently. Not many people receive actual, physical gold.
In the case that you needed to receive the physical gold, the cost of trusting a delivery person remains fairly constant (until we have autonomous delivery robots). However, the proof of ownership can no longer be tampered with, as it exists on a global ledger. This reduces the overall transaction fee.
The transaction is a transfer of value. Amazon and eBay are also facilitators of value transactions. The same economic rules apply albeit on a much smaller scale. Extrapolate this and any transaction of a digital asset can benefit from reduced mediator fees. The scale of this is quite large.
I think this is well summarised here: https://www.ibm.com/blogs/insights-on-business/retail/transa... Text between asterisks is added by me.
"Consensus: Thanks to the value that smart contracts and shared ledgers offer blockchain users, consensus can be more easily agreed upon and confidently understood. Using blockchain, users can make decisions based on factual data – helping to eliminate disputes, confusion and time (reduced mediator fees). Consensus is built at each step of the supply chain not just at the beginning, when the order is placed and the end, when the order is received. This process enables all parties to resolve issues as they occur and have visibility to take alternative actions if necessary. From a supply chain perspective, this adds tremendous value to merchants, logistic companies, vendors and all others working together to deliver timely, efficient inventory deliveries, re-orders and more. This is particularly important when you factor in that data – and data alone – is what leads supply chain leaders in their immediate and future decisions. Without concrete data to refer to and analyze, decisions cannot be as precisely made between both internal and external partners alike."
TLDR: reduced mediator fees reduce barriers to entry in any market where value transactions occur.
If you're not moving the gold, who needs escrow? You're just describing a cash settled spot market.
> the cost of trusting a delivery person remains fairly constant
Indeed, as you're having no effect on either escrow or post-settlement delivery. But that's my point, smart contracts don't make a blind bit of difference.
> Amazon and eBay are also facilitators of value transactions
The value is in the goods turning up. Smart contracts don't help at all outside digital assets. Or more specifically, the payment process is trivial compared to the logistics process. The value is almost all in the latter.
That's not generally true for digital assets. But today, the main challenges with those are to do with rights and marketing/discovery. Again, that's the value, today, of Amazon in that space. Disrupting transactions is irrelevant.
Now, I'm not saying the tricky bits can't be disintermediated. That's already started. But TBH if and when that does occur, why go to all that trouble and leave the transaction system as a fee taker? Disintermediate that too.
Expensive digital assets will always require a mediation fee. You could write your own contract to transfer the assets for free but you would probably want to pay to guarantee that it worked.
Of course, if the digital transaction is of a suitably small value, a direct transfer of assets may be preferred via a self-authored contract. The loser in this case is VISA or whichever payment provider scalps off the top of music/movie/book/... sales currently.
I wasn't trying to specifically cite transactions as being the main target of smart contracts (although they are the most obvious). The example was to show how existing processes of a transactional nature can be recreated with less complexity and therefore utilise less resources. There is an endless list of examples where this holds to some extent.
But it doesn't make any sense to use smart contracts to manage the supply chain complexity of a business that, by definition, doesn't have a complex supply chain i.e. a direct to customer seller. Especially a seller of digital assets.
> Expensive digital assets will always require a mediation fee
Why? Most mediating supplies an overt service for those fees as well as the mediation. For example, producers at studios, editors at publishers, rights management and marketing/discovery at Netflix etc. Remove the value add and you're left with a commodity.
In that scenario you might have very small margin services but, just as likely, would be ad led services for free. I mean, they have useful financial information. There'll be a group that doesn't want that but there's no clear evidence it'll ever be more than niche.
So yes, there's value there but I just can't see any reason, for any of the examples you cite, to believe that incumbents will be challenged. If anything it may help entrenchment.
Accept the offer, rake in the cash, move on.
Whether or not the company eventually becomes a success does not affect the money you have raked in.
Be greedy, the investors are. If you're an engineer, you're the needed fuel they need for their fire.
> Accept the offer, rake in the cash, move on.
The closing part of this video sums it up perhaps: https://youtu.be/u6XAPnuFjJc?t=524
It’s for a fairly old talk called “Drive: The surprising truth about what motivates us”. In short, for work requiring cognitive skills, best performers don’t really get motivated by financial incentives (unless they have money troubles). Watch from the beginning for all that background and references.
FWIW I share OP’s feelings. I get really easily demotivated, I can’t bring myself to work on something uninteresting, let alone something I have a bad feeling about.
I am advocating it [this strategy] in this instance. It's not like this is weapons/defence, private prisons, tracking or mining.
It's a blockchain startup.
2. Mention on your CV that you've integrated with blockchain-based payments APIs.
3. Recruiter searches for CVs with the word 'blockchain' and finds yours.
However my thinking has begun to change since reading over the technical specs of the Bitcoin Lightning Network.
The basic idea is that open payment channels of liquidity will be part of a payments routing scheme, directed from me to whatever address I want to deposit funds into. You can read about it here .
This system is still being developed but if it works it could reinvigorate Bitcoin.
I am going to be a little more suspicious and say that the OP never had a job offer for a "blockchain implementation", but instead posted the standard, rather empty cynical fare with the job offer justification. Lumping in all blockchain implementations and then trying to hang every possible downside is as absurd as decrying a hypothetical video handling job because pornography exploitation exists. It doesn't follow, and makes the argument asinine.
I get at least two blockchain related job messages a week on LinkedIn right now. Started around a month or two ago. Looks to me like a gold-rush, and I totally believe anyone with remotely relevant experience could have got an offer.
I'm not trying to be overly cynical, but when posts like this top HN I worry that it's less a "hacker" site, and more about a group trying to conjure a reality.
You can have a bird's eye view of most common platforms on this infographic:
My advice would be, take the job and enjoy it while it lasts.
He didn't say much about the company. But, just watch out for scams. If it's not a real company, they might just be trying to get your bank account information or something in which case you definately want to stear clear
Blockchain right now is a mix out of super hot and interesting and absolutely shady, so maybe it's not that bad to be cautious about being associated with it.
Every 10 minutes, a $200,000 bounty is given to the Bitcoin miner with the cheapest electricity + computing power. So once everyone has the same chips, what's the advantage miners can use? Cheap electricity.
Bitcoin miners will do more for renewable energy than many governments around the world.
Cutting and pasting solidity smartcontracts doesn't make you a blockchain developer :-)
I started a new thread for this https://news.ycombinator.com/item?id=16206218
The factors at play in such choices are extremely complex for every individual, but we can't just say "Hey you hypocrite you work for a major multinational so you can never ever take a moral position on anything ever again". That's not sensible.
Ad hominem is a fallacious argument.