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Turning Down a Blockchain Job Offer (hookrace.net)
285 points by def- on Jan 22, 2018 | hide | past | favorite | 225 comments

The danger in a space like this is throwing the baby out with the bath water.

- 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.

> Get angry at banks?

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.

Wells Fargo - multiple systematic fraudulent issues in the past few years


Sales issues, which any organization can and will have if they don’t very closely monitor what their sales people are promising and doing. Being a bank is not the red flag characteristic here.

As a general note the suggestion to go work for a company or sector you dislike is interesting, just like getting to know someone you dislike is, or trying to do something you really dislike. At best, it broadens your horizon, you learn a lot about how not to do X, and perhaps you can change something from within. At worst, its a confirmation, you can't change anything, it remains a bad fit, and you move on. As an example, this is why people who are into open source and Linux and who went working at Microsoft around late '00/early '10 were making a brilliant move. Not only for themselves, but for Microsoft as well. But we should not forget it is a suggestion which has a price: it costs time/effort switching job, or learning to know someone. I'd say a positive mindset (curiosity, open-mindedness) is going to help, or may even be a necessity.

You Sir have precisely understood the essence of what I was trying to say. Working for the "enemy", if you will, definitely comes at a price – but that up front cost could save you lots down the line both in time and capital, simply by virtue of having learned more about the domain you're trying to reform.

I worked for a few financial institutions, and interacted with banks, and frankly, you CAN do better, and you can both find malice and stupidity, and they can do that because they're protected by regulation.

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.

I have a better solution for those that are angry at banks and wish to innovate around them. Don't use them. Build communities around you that are also happy to not use them. There are plenty of working solutions available now to be free of banks - the main thing that is tethering you is lack of faith in crypto/ each other and debt that is still required to be serviced. Once you can unshackle yourself of the debt, you can say goodbye to the traditional banking system. Maybe not completely, but in the most important and significant ways.

That's one new can of worms. See, I don't have a lack of faith in cryptography; I have a lack of faith in humans ie. PEBKAC. I believe cryptocurrencies are being and are continuing to be abused by human beings with immense repercussions --some of which we're already seeing, some of which is hidden in plain sight, some of which we're yet to see. From programming errors to deliberate scams to losses of hardware wallets the cryptocurrency world isn't for the faint of heart. Meanwhile, there are more ethical banks. They might not be as popular as the big names heck they might not meet your ethical standards in one way or another but... they are out there. I'd say, check out that solution first.

I hear what you are saying, but it isn’t actually that complicated. Granted, it does get more complicated with larger sums as risk and security requirements increase. That said, if you are an adult, maybe it is time to not rely on a third party to be between you and other economic actors. We don’t do this with information, why do we do it with financial information (who holds what wealth and owes whom how much).

> That said, if you are an adult, maybe it is time to not rely on a third party to be between you and other economic actors. We don’t do this with information, why do we do it with financial information (who holds what wealth and owes whom how much).

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.

If you want to spend your time on earth helping to destroy the lives of poor people, work at a bank like Bank of America or Wells Fargo. They've got evil corruption down to a science.

> 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 [1]

  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. [2]

Even taking a conservative skewed estimate [3] of wealth distribution in Bitcoin, it's about twice as worse than normal capital oligarchy. This is because PoW* style cryptocoins allow anyone with capital to proportionally extract the limited supply of Bitcoins/Cryptocoins/Altcoins/Tokens/Etc - but often significantly worse due to how Satoshi style PoW algorithms produce the majority of the supply in a short time frame. Worse yet are the premined networks, like Ripple, NEM, ERC20 Tokens, NEO, Ethereum, and so on.

[1] http://www.businessinsider.com/bitcoin-inequality-2014-1

[2] http://hackingdistributed.com/2018/01/15/decentralization-bi...

[3] https://medium.com/@BambouClub/are-you-in-the-bitcoin-1-a-ne...

* 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.

That's why I love Raiblocks, decentralized, distributed to third world countries initially, no marketing, feeless, fast. It most likely has the lowest gini coefficient of any coin in the top 100.

The first result of a search reveals a bot to automate Raiblock captcha style PoW.

https://www.youtube.com/watch?v=3YR8eebMTF0 8,254 views

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 would take a look at the distribution in the top 10k wallets for Raiblocks versus other crypto to get this data. Mine is anecdotal, but I always take a look at this distribution when investing in a new coin and was surprised to find my small investment was on the list.

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.

One person can control many addresses.

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 was once hit with a $35 overdraft fee three days in a row for buying a cup of coffee at Starbucks. I was really pissed off... at myself, for not staying on top of my bank balance.

I don't consider the bank evil for enforcing terms I agreed to.

I don't think your punishment for buying an expensive luxury coffee is the main complaint people have with overdraft fees. There are plenty of people who do monitor their balances. Obsessively. Because they have to, because they live just above the poverty line. Overdraft fees punish those people, often for things out of their control (having to take a sick day when you don't get sick pay, for example. Or just not getting enough hours given to you in the first place!), punishing their loss of money by... taking away even more of their money.

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'm all for personal accountability, but these banks have also intentionally "mis-ordered" transactions to make it that you hit multiple overdraft fees.


It's also often possible to set up low balance alerts including text and email. It's one of the first things I look for when setting up a new bank account (at any bank) - right after turning on 2FA of course.

I got a overdraft about 6 years ago and when I went into the bank to sort it out they said if I want they can just turn off overdrafts so the card will be simply declined. I use a credit union.

There are upcoming Distributed Ledgers that don't use blockchains or mining - like Hashgraph which uses a form of gossip protocol to handle more than 300k transactions/second. These distributed ledgers may soon handle traffic that currently requires centralized servers (MMORPG games, etc).


is there an actual product or implemention of any of these? I can't seem to find any examples actually in the wild. Has any of that even been mathematically proven? It's easy to prove hashing and the block chain.

>Get angry at banks?

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.

I've found this to be the case in most things, even not as complex as financial services, if you look close enough. Sometimes what you're seeing is a local maxima, where there's a rough period required to get to a better state that nobody is ready to take quite yet, and other times it's just that complexity is much more common that we like to think.

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).

This is true of a lot of Silicon Valley startups I've seen lately as well. They make a big show of how they can do things better, faster, more efficiently, and cheaper than existing incumbents, until the government comes in and says "Did you buy your insurance? Are you paying your employees (or treating them as employees in the first place)? Are you providing benefits? Are you certified?"

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[0]:

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.

[0] https://www.joelonsoftware.com/2000/04/06/things-you-should-...

Airbnb and Uber going into hotels and public transportation respectively are examples of successful companies diversifying their income. The point is that their core innovation has provided the capital and human resources to tackle higher level challenges. It had to be a substantial improvement on the original problem to get that kind of traction in the first place.

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.

It seems like you're responding to a different argument u/danudey isn't making.

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.

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.

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. :-)

I wasinformed recently that there's something similar behind most of the speed cameras in the UK - if you see one (other than on a motorway) it means that somebody died there, probably more than one somebody.

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.

Sounds plausible, given that it's speeding that's one of the biggest cause of traffic deaths.

Speeding, or unexpected stops?

Unexpected stops are, by definition, leading cause of all traffic accidents. The question is, what leads to those unexpected stops.

> 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.

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.

The funny thing is that I have literally only ever been "robbed" in my life twice. (As in money that was rightfully mine blatantly stolen from me). Once was from Mt Gox who I largely suspected to be insolvent, and the other was from my bank, the largest banking institution in my country. Both clearly knew they were committing a crime, but I was really only shocked by one of these institutions.

> Go figure out ways to remove custodial risk, so that we may not need as onerous financial regulations that stifle innovation.

FWIW, this is the best video I've seen on this: https://www.youtube.com/watch?v=dla42bY7k90

There's a surprising amount of information out there in regards to how blockchains work and how to build them, especially compared to 2013-2014 ish. They are not dark arts, there's lots of low-hanging fruit which doesn't require working for a company that you disagree with in principle (and to be fair, there's not many blockchain companies that seem to have many principles other than cha-ching).

> Don't like "proof of work"? Go hack on various other implementations.

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.

I'm genuinely curious about why you say that. Isn't proof of work proving itself to be a bad way to guarantee trust? Aren't the alternatives worth working on? Does that statement belie a fundamental misunderstanding of blockchain somehow (if so, I'd really like to understand why)?

AFAIK it has not been formally proven yet, but the general consensus I see among crypto fans is that you can't achieve the goals of decentralized, trustless currency without involving some kind of huge energy waste somewhere.

(It's saddening me that people think this is a feature.)

There is one alternative: https://youtu.be/l2bU_tOREos?t=2m13s

This sounds a bit like... if there’s no baby in the bathwater, don’t just throw it away - go ahead and put a baby in!

>Go figure out ways to remove custodial risk, so that we may not need as onerous financial regulations that stifle innovation.

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.

> Demonstrating the value of, and rationale for, those "onerous financial regulations" has been the one actual good result of this blockchain nonsense.

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.

Libertarian idiot here: no, it hasn't.

But, but ... "the children", "the poor". Someone has to protect us from all these blockchains, stealing our money!


Not everyone who buys drugs or launders money are libertarians.

> That said, it's an early time to have a tremendous amount of impact.

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?

Or, just don't work in this space, and do something else. It's fine to reject job offers. It's OK to work on what you want.

I really dislike how decentralized cryptocurrencies are. I'd be ok with how it is currently implemented as long as there was some level of central governance to guarantee the currency could continue forever. What's the point of mining bitcoin once all coins are allocated? Just for transaction fees? Or would people push to generate more coins? A central governing authority would be great in a situation like this. Right now it is all open and built on consensus which is open to attack.

Being decentralized doesn't mean that Bitcoin can't evolve, though. The process is just

- 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.)

And all of those points is why it is a poor currency. Great we can fork at any time and from any single transaction. So, we can essentially make infinite currencies. That's hugely wasteful and causes mass inflation. It makes it hard to invest, or even take seriously, a currency that may become worthless tomorrow. If you add some centralized backing, like with USD for example, you get way more clout. What would bitcoin be worth if it had government backing and insurance? I think it would be hugely more valuable and attract a lot more interest. As it is now, it is too speculative, and prone to wild swings in pricing. Also you get people who want it even more decentralized by making it ASIC resistant vs people (China) who want to keep it ASIC based to restrict access. It's just a mess right now.

> Great we can fork at any time and from any single transaction. So, we can essentially make infinite currencies. That's hugely wasteful and causes mass inflation. … If you add some centralized backing, like with USD for example, you get way more clout.

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.

The whole point of cryptocurrencies is that they're decentralized, and can't be controlled by governments. That would defeat the whole point of blockchain surely?

Not necessarily. Lack of centralized trust is just one feature. They have other features like public (but anonymous) ledgers, irreversible transactions, smart contracts, the ability to hold them without a bank account. Features like those could definitely come from a private or central bank.

If they were centralized they would most definitely have reversible transactions, and probably NOT be anonymous.

Not necessarily. Right now cash is anonymous. It changes hands without any record. It has no provenance. And is a centralized currency. There was a joke at the top of the crypto reddit a few days ago about how cash is just more convenient than bitcoin for ordering a pizza. It doesn't have to be government but I would like to see a trusted owner actually own the governance of a crypto currency. Right now it is way too wild west to instill a lot of confidence. Which is great way to make a lot of money quickly. But over the long term I can see a lot of issues coming up.

>Right now cash is anonymous.

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.

A non-crypto solution wouldn't have to have all of these features. These are just some of the possible desirable ones.

> It seems like people already know that they want to use a blockchain even before they understand what the problem is, basically a solution in search of problems.

This is the story with basically any startup in a hot space. This could be just as easily about AI / Machine Learning.

I hear you, but I have to point out that ML at least have already shown that can solve problems that need to be solved which had no solution before.

So did the blockchain

Edit: not trying to defend bitcoin here, just pointing that the blockchain brought a new solution to a trust issue

No, it didn't. Blockchain technology is perhaps the biggest recent example of a solution in search of a problem. It's interesting but still not clear at all what it would be useful for over what already exists:

>"Ten years in, nobody has come up with a use for blockchain"


I agree that it is a solution in search of a problem, but it was able to find a problem, namely, facilitating darkmarket transactions; that's a real use-case that wasn't practical before blockchain tokens. Unfortunately, that use-case does not satisfy the enthusiasts and they have been determined to find some other use-case that has yet to materialize. The closest they've come up with are smart-contracts but those are generally useless as well because a smart-contract is only capable of enforcing rules on a blockchain and nowhere else.

> [Facilitating darkmarket transactions] that wasn't practical before blockchain tokens.

Which is why, as we all remember, the darkmarket suddenly sprung into existence out of nowhere once Bitcoin was invented.

The blockchain has solved one real-world problem—making ransomware practical.

Huh? It's a trustless timestamping service. That's a thing that some protocols benefit from. Digital notaries, for instance.

That surely justifies a valuation around a few cents per bitcoin.

Before assigning a valuation you’d have to ask whether this was better than alternatives. In the case of digital notaries, PKI does the same job except for anonymity and it seems like many people – especially in legal contexts – would value the notaries not being anonymous.

Lets say we agree that this timestampting service is trustless (I don't, but for the sake of the argument lets say I do).

Care to explain how you go from that to "few cents per bitcoin"? I'm asking for an actual calculation.

You're asking for "an actual calculation" to back up a Fermi estimate of the true value of an irrationally-priced good?

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.

"Fermi estimate"? You know that Fermi was known for backing up his talk with numbers, right? How can you say that then "surely it's a few cents"?

So, you have no disagreement with my actual point?

Is your actual point that bitcoin should be worth at last a few cents just because the blockchain can be used for timestamping?

It really didn't. I much rather trust a big corp properly regulated by my country's government, than who knows who hoarding computers all around the world, plus who knows what devs deciding based who knows what criteria to determine what software is being run on this network.

It's mindblowing to me that anyone sees this is a good idea.

Actually ML started some decades earlier with some hype of it's own and there were not many problems it could solve back then.

Reminds me of that story with Microsoft and XML 20 years ago. The story goes that Bill Gates said in an interview that XML is an interesting technology, and that caused all kinds of people at Microsoft to go out of their way to use XML in their projects in some way, in a decentralized effort to please Bill.

I disagree, although the ecosystem is filled with scams, and evangelists have financial interests in promoting their believes, there are some promising advantages.

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."

If electricity and environment-pollution would not cost anything this would be maybe true and since mining is done mostly in large pools and the blockchain is already quite big (regarding having the whole bc on disk) the social scalability is not really there. And the computing power you need does not really sink because of the adaption of the network so that the hash-rate is kinda stable, so it does not get cheaper.

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. [0]

You don't trust Paypal and Visa where laws apply but you trust enormous Mining-Pools in China that were already caught forming carthels?


Not only is mining centralized, but the big holders are fairly centralized.

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.

>It allows one to seamlessly and securely work across human trust boundaries

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.

Maybe that's the idea of crypto: that such powers don't belong into the hands of bureaucrats? Btw: everything can collapse under disaster circumstances. Why creating a startup if government can forbid startups tomorrow?

> that such powers don't belong into the hands of bureaucrats

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.

Yeah but... the crypto algorithm chosen for Bitcoin is about as energy intensive as they come. Other algorithms which are more equipment intensive - scrypt etc - provide the same benefits but without the same disgusting externality of power consumption.

I wish I grasped proof of stake better. I’m not yet convinced it can be made to work as well as PoW.

The investment in energy-intensive GPUs will also serve as a disincentive for any change to Bitcoin that does not require energy-intensive GPUs, which will lock us into this paradigm until something drastic happens.

EDIT: I stand corrected as to the terminology, but if you replace [GPUs] with [POW hardware], the disincentive will remain.

No one has seriously mined Bitcoin using GPUs since like 2013. By 2014, everyone was using FPGAs or ASICs. Now, only ASICs are used.

I thought there was a change to the protocol that prevented ASICs from being as effective?

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.

A lot of altcoins have come up that are ASIC-resistant. A lot of these use memory as a bound, but GPUs sill have the memory bandwidth to make mining fast.

I must have mixed up some notes about ASIC-resistant altcoins with some older info about Bitcoin, its quite difficult to keep track.

Bitcoin is still using (and probably will always use) SHA-256 as the proof of work problem, which ASICs are great for since it takes negligible memory.


It seems like nobody really knows, yet. But Ethereum is about to run a $100bn experiment to find out :)

Market cap is very different from the actual money invested in the ecosystem. I don't know the exact number, but I bet it's a lot lower than $100bn.

Stupid example: I create 100bn coins. Then I sell one to myself for $1. Am I now running a $100bn experiment?

You don't need to explain the idea of paper wealth to me :)

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?

Right, and that's why Bitcoin has lost a huge amount of marketshare in the crypto space over the past couple months[1].

1. https://coinmarketcap.com/charts/#dominance-percentage

I wouldn't suggest this as an explanation at all. Another, equally-plausible explanation, is that retail investors are looking for the next BTC before its price pops.

Maybe the more energy we consume, the more motivated we'll be to move to more efficient methods. And the available fossil fuels are projected to run out at some point, aren't they? So if we're going to use them all anyway before switching fully to 100% renewable/alternative sources, then using it up faster doesn't result in more total emissions, just more now and less later. After that, we'll be "wasting" hydro and nuclear etc., which doesn't really matter.

If I take all the pollution or greenhouses gases that we would dump in a 100 year period and dump them all today, it's possible that the impact from that would be unrecoverable.

Total emissions isn't the only important measurement.

The space really is getting pretty crazy. I feel like my biggest fear these days is getting kidnapped by a van full of venture capitalists and forced to develop cryptocurrencies.

it puts the block on the chain or else it gets the hose again!

You sir, just made my day.

In the US, the financial system is about 10% of GDP. (The number depends on your definitions of financial system, US, GDP, and "is"). It also consumes vast amounts of resources ranging from gasoline to drive mortgage brokers to and from work, to the cost of mailing out free low-introductory rate credit cards.

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.

mortgage & credit generally are bad comparisons, because cryptocurrency doesn't solve this. You still need a credit score or similar reputation metric associated with your real legal name/entity.

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 doesn't solve this, but there are plenty[1][2][3][4] of cryptos that realize this failing in Bitcoin and others and are trying to address it.

1. https://www.civic.com/

2. https://stratisplatform.com/identity/

3. https://whycardano.com/#social-elements-of-money

4. https://neo.org/

Is there some evidence that it would actually replace any of the existing financial system, rather than just adding yet another venue for speculation and manipulation?

I will repost a comment of mine from another Bitcoin thread about a month ago regarding this comparison because the comparison is just ridiculous:

Bitcoin is estimated to use about the same energy as the whole country of Denmark[1]. Denmark has over 790 million cashless transactions with "Dankort", a local debit card, per year alone[2] - excluding other payment methods. Bitcoin can handle about 2,000 transactions per block[3]. 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.

1: https://arstechnica.com/tech-policy/2017/12/bitcoins-insane-...

2: https://www.nationalbanken.dk/en/publications/Documents/2011... (page 125)

3: https://blockchain.info/en/charts/n-transactions-per-block

While turning down the job is just fine, here's what happened instead:

- 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.

> If you really want to talk shit about Bitcoin

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'm not sure I understand. Proof of Work is not the only game in town anymore. It shouldn't take you more than 30 minutes to find that out. Look at the state of bitcoin, it's dying and the alts are finally seeing the light of day (Over the past two months).

Please name one of the alternatives which is secure as the "Proof of work", needs less energy for mining and doesn't have high transaction costs.

Sure, take a look at Raiblocks, NEO, Lisk.

Have you factored in the energy costs of running the thousands of financial institutions and associated infrastructure required to maintain them? I personally don't have time to run an energy audit of the entire financial industry, but I can tell you theres a lot more infrastructure required. factor in the engery required to: - construct giant buildings for financial offices - maintain financial offices - commute to and from offices - construct, deploy, and maintain ATMs - construct and maintain physical bank locations - server infrastructure how much of the energy required to build and maintain all of this infrastructure is from a renewable source? Proof of Work miners are at least incentivized to find the cheapest possible source of energy. Renewables! Almost free, unlimited energy!

>Have you factored in the energy costs of running the thousands of financial institutions and associated infrastructure required to maintain them?

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.

> 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.

This feels like a false choice. Why should I buy that the "decentralized system" distributes wealth at all? After all the top 1000 wallets hold 35% of bitcoin, and the top miners are factories that keep the best mining hardware to themselves. All of which compounds the fact that the participants in bitcoin were already wealthy enough from the "centralized" solution to buy into it.

Bitcoin obviously has flaws, but Bitcoin is still doing a better job at distributing wealth than the banks are, thats for sure. Bitcoin may not be doing it efficiently or as well as it could be, but its doing it. Also... there are other cryptocurrecies with different intents and purposes. If you are unhappy with bitcoin, build an alternative. Ethereum proves that its possible. Our financial system, laws, and government are all malleable, and from the looks of it could use some serious change.

Everyone is pretty equally incentivized to migrate to the cheapest possible energy source, I would think. The problem is that the CapEx cost of migrating is nonzero, and usually prohibitive unless you have high confidence you can make it up in lower OpEx over a long period of time. I can say pretty confidently that banks and financial institutions are much more likely to stick around long enough to realize the full financial benefits of renewables than miners are. It's just too risky that you'll eat your renewable investment if bitcoin loses too much value, particularly given the recent huge swings in the market, and the added uncertainty of so many people forecasting doom.

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.

How easy is it for a financial institution, who probably doesn't even control their own datacenter or buildings, to opt into using renewable energy sources? Seems like a big decision for an institution to make and a lot of beurocracy and political obstacles. For an individual who wishes to mine, they have a simple choice to make based on electricity prices. Is it profitable or not based on their current rate. Most miners will naturally exist where energy is cheap, renewable, and abundant. I'm making a hell of a lot of assumptions, though.

You are comparing oranges and apples.

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.

> Bitcoin is doing about 20 tx/s > Visa is doing about 1700 tx/s

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!

When I combine all tx/s of all the cryptocurrencies I need even more energy.

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.

Bitcoin mining uses as much energy as the nation of Denmark. Each transaction confirmation uses as much energy as nine American households do in an entire day. What “deep knowledge” am I lacking here?

Agreed. I see rejecting a job in Bitcoin for environmental reasons as quite similar to rejecting one working for an oil company. Most people don't care that much, but for some it makes sense.

> What “deep knowledge” am I lacking here?

The cognitive dissonance associated with having money at stake on Bitcoin.

Other newer cryptocurrencies don't have the same power requirements.

Your comment sounds repeated from somewhere else. Do your own research, everyone is trying to manipulate everyone else in this space.

Thats because the bitcoin network is over relied on and the cyptocurrency space is still infantile and not decentralized enough. Once people realize that bitcoin isn't the only cryptocurrency out there, they will switch to other, less expensive coins and the pressure on bitcoin will, hopefully, be relieved some. Thats the beauty of this space! There can be so many coins and all with unique and improved attributes!

Until we have functional decentralised exchanges, using a common protocol would be a nice thing for humanity. Most people don't care about the bigger picture, they just want to get rich quickly, rather than try and make the world a better place by working together.

I'd add a fourth bullet point, "This person probably won't have a job in 3-6 months".

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.

The author rejected the offer on principle, which is a very good reason to do so.

I see that the author has done significant open source work, so it's possible he just received an offer. But I'm thinking the more likely path was that the company reached out with a pitch and asked him to interview, and I wonder why his principles didn't stop him then.

Been in the same boat where people pitch me a cryptocurrency job or I see job listing match in experience in cryptocurrency and I decline to even interview - I already know how I feel about it and it would be a waste of my time and their time to subject both sides to an interview.

While turning down the job is just fine, here's what happened instead....

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.)

Instead of ranting how stupid everybody else is you could give us unenlightened souls a hint how the proof of work problem could be solved without wasting lots of energy.

To not use Proof of Work and use one of the many other ideas for achieving consensus in the blockchain world currently.

Or alternative to turn your proof of work into compute power for AI and other heavy computational yet beneficial tasks.

> 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

If that's what you want. But, the author didn't.

I spent most of last year working on a high-paying project for a huge company that was the dumbest shit imaginable and everyone on this thread would heap scorn if they saw it. I earn more than I know what to do with and would love to work on something actually useful for a change even if it meant less money and 10 year old tech.

What tech stack are you working on, so that I can replace you in the future when I get bored chasing unicorns?

The stack we used to build the expensive nonsense was all super modern and cutting edge. I'm still looking for emotional fulfillment in a Perl/CGI environment.

> lets you explore a new edge technology

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.

It's a new technology because it enables a new human behavior.

With your logic, everything is an old technology.

> It’s a new technology because it enables a new human behavior.

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.

Anonymous trustless peer to peer exchange of value.

Bitcoin (which as far as I know is the largest blockchain project) has been de-anonymized.

You have to trust the other peers aren’t secretly working together to use a 51% attack.

Take out the “anonymous” part and it’s pretty much correct. Trustless value transfer is very powerful.

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.

The 51% bit had to do with ‘not needing trust’, not the anonymity.

Please do not make arguments about how proof of work != global warming until you've spent at least a month studying global warming.

I'm pretty sure you can convince someone in less than a day with a reasonably simplified version.

Well said. I couldn't have said it any better.

The crypto community is the organized religion of tech https://twitter.com/jakefuentes/status/955151552984920064

I don't see what this has to do with cryptography.

Crypto = cryptocurrency. Cryptography = cryptography. We may not like it but the public has decided and there's nothing we can do to prevent it.

Crypto still just means hidden or secret though. Both sides here probably ought to increase their specificity by one level.

Interestingly, r/crypto is the cryptography subreddit and has https://www.reddit.com/r/crypto/comments/7jrba2/crypto_is_no... stickied.

I don't necessarily disagree with the author here, but I would be genuinely curious if the job offer was for one of the "scammy cryptocurrency ICOs" or for one of the industry use case that seem to be destined to survive after the current round of scamminess passes.

Seems to be a critical piece of info that the author detained. A job with, for example, Google versus a job with BitGold+Plus would make a big difference in this kind of decision.

His reasons seemed really strange to me. If I was considering such an offer, my decision would be based in large part on what exactly the company was doing in the space and whether I felt it was good or bad.

It's like turning down a job with government just because governments sometimes do bad things.

The last phrase about declining it because of the state of the ecosystem was what confused me. There are good parts and bad parts of every system, even when the system is majority bad parts. It seems dismissive to discard both to avoid one.

I accepted an offer to join a top cryptocurrency project recently. I worked for many companies in different industries as a software engineer in the past and this job feels more meaningful than all of them.

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.

I liked his comment about trust, it's something that always bothered me with the very radical trust model of Bitcoin and other cryptocurrencies. It is not entirely clear why you have to go all the way and do away with _all_ trust, except for niche applications such as transactions for people in repressive regimes (which are necessary but do not require us to replace conventional currencies with cryptocoins). In normally stable countries and economies, trust works great and makes everything so much more efficient.

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 just accepted a generous blockchain job offer with a fortune 500 company. But they are not interested in building a new blockchain implementation, but rather exploring smart contracts and their possible relevance to their business.

More likely, they want to be able to show their investors that they're exploring blockchains so that they aren't seen as dinosaurs missing out on the hottest new tech

For those of you doubting that this type of market signalling happens, look at Kodak: https://www.bloomberg.com/news/articles/2018-01-09/kodak-sto...

Any semi-valuable exchange that requires a level of trust may benefit from smart contracts.

You could have just said J.P. Morgan


Ethereum or another blockchain?

I told them it will have to be Ethereum for now

>> It seems like people already know that they want to use a blockchain even before they understand what the problem is.

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.

> Everyone who is talking positively about cryptocurrencies and making hyperbolic claims seems to have invested in them.

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?

Because investing in coins is non-productive, those coins don't generate anything besides demand. If one believes in the technology, one should be investing in companies working on expanding blockchain tech. Also blockchain != coins.

many of the teams working on expanding blockchain tech in the most interesting ways are only investable via coins/tokens. in this way, your statement contradicts itself.

It’s not an inherent negative but it’s a huge conflict of interest which every listener needs to factor in, especially since a booster has no long term commitment to stay past the point you buy in.

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.

> > Everyone who is talking positively about cryptocurrencies and making hyperbolic claims seems to have invested in them.

> 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.

The benefits of blockchain outweigh the initial costs involved in kickstarting the ecosystem. The same initial flurry of investment happened when the internet was created. Look how that turned out.

Which benefits exactly? I've yet to see a problem where Blockchain is the best solution except doing ICOs which is not a problem. Also comparing the internet (having utility form the start) to blockchain (since 10 years nothing but gambling) does not make any sense...

not trying to assume any position here, just want to point out that you're looking at the world through the gucci glasses of someone who lives in a 1st world country with functional financial and legal systems.

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.

Why do you think the comparison with the internet is fair? Why not compare it with the initial flurry of investment into dotcom no-hopers like pets.com and webvan.com ?

They are one and the same. There are of course plenty of "no hoper" ICOs that will cease to exist, much like the dotcom boom.

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).

OK, I'll bite.

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.

> They do not move the physical gold

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.

Supply chain mistakes are costly and can result in unsaleable stock. There are existing standards (see GS1) but they are full of errors due to disparate systems and varying interpretations of XML messages. Smart contracts have the potential to reduce the cost of goods delivery through shared supply chain management systems, placing less risk on a potential 'new to market' market place or 'direct to consumer' seller. These are both direct challenges to Amazon and eBay.

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.

If you have a big supply chain, like Amazon does, then managing the complexity of that chain is a tough problem. I happen to agree with IBM that a distributed ledger like technology can help with that. Not a public one, obviously as that would just be silly, but it would make sense for Amazon to run one. We're doing a variant of this in my field.

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.

I don't understand the high horse.

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.

> I don't understand the high horse.

> 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.

There's always a reward for becoming part of a problem.

Of course, if you go through the world without ethical concerns, then your plan sounds pretty good.

It is sound. Yes. Thanks!

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.

He's probably trying to not offend the company by not being more specific, but given the information offered -- why even apply/interview for a blockchain job if these are his objections (too much hype, PoW is bad)?

He didn't mention applying or interviewing; this could have been an offer more-or-less out of the blue. There usually isn't much harm in at least talking to someone who tries to pay you money for your work.

This is refreshing to read. I share similar opinions as the author and also do not have any investments in cryptocurrencies. However, the technology itself and the original intent is still very interesting to me.

It does suck because blockchain technology does seem intriguing and cool, but there's so much dirty money floating around the ecosystem right now I wouldn't touch it with a ten foot pole.

Presumably you use cash occasionally? The worldwide criminal cash markets dwarf anything related to blockchain (although they do also utilise blockchain).

What I'm curious about is how someone without any blockchain experience gets offered a blockchain job out of the blue.

1. Integrate donations using a blockchain-based payments API

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.

You make it up as a sensational blog post

Like this author and many here I've been dismissive of the blockchain ecosystem as it stands. Especially Bitcoin, for while I appreciate the potential of Ethereum as a platform in itself, Bitcoin seems much less flexible.

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 [1].

This system is still being developed but if it works it could reinvigorate Bitcoin.

[1]: https://lightning.network

It is interesting how grievance posts have such an easy time on HN, and how willing the audience is to put aside basic cynicism (AMP is another easy target for these sorts of posts).

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.

> say that the OP never had a job offer for a "blockchain implementation"

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.

He has no relevant experience, and claims that everything about the job was dreamy ("significantly higher salary", remote, etc), but they rejected it for some absurdly vague, hand-wavy, message-board type rhetoric that sounds like the standard sort of from-the-sidelines, self-validating fiction. It is absolutely transparent, and if there weren't so many on HN looking to feel less threatened by the whole blockchain thing, or less jealous about this idea that a bunch of people are getting rich (and quick! This is facetious, obviously), this would be sitting in the basement of HN, but instead it's validated as if it has the slightest wiff of truth. It clearly doesn't.

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.

Bitcoin and proof of work consensus is just the tip of the iceberg. Since then, lots of advancement happened in the field. You can easily choose from different implementations of prof stake or DAG systems.

You can have a bird's eye view of most common platforms on this infographic:


The issue is people like him who is right won't be rewarded. Hype and luck sometimes matter more than being right.

Misleading title, blockchains and coins are closely related, but you can do blockchain without any coins and PoW.

Hi, I'm Max. I gave the talk that this article mentions, and have helped publish papers about BeyondCorp over the last few years. At Google I work in the Cloud CTO Office. I'm eager to get your feedback on what we can explain better, and answer your questions.

PoW is not the only algorithm option in blockchain technology.. you have PoS, PoC/PoA, ...

As "generous" is subjective, I'm curious what the specifics of the offer were.

I have a friend running a cryptocurrency company and wants me to come work for him. I'd be more attracted if it weren't so far away but either way it's still just so sketchy to me.

I thought there might be more depth into why this person decided to turn down the job offer. The reader can only try to infer the reason from the author's take on the space.

lol another job posting. I like these posts. HN is now LinkedIn.

Who is this guy, and why do we care about his life choices?

He turned down a much higher salary AND "REMOTE WORK!" just because he didn't want to be "associated" with the current state of bitcoin. Remote work possibilities are extremely rare, especially high paying ones.

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

Or maybe listen to your conscience and stay away if it does not feel right. Working in tech is not completely detached from the rest of the world, so when some people decide not to work for a company with connections to military, maybe you could also stay away from Blockchain jobs if you see more harm than benefit for the world in it.

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.

The author may not have valued working remotely as highly as you do. Personally I would much rather work in a company office, and selfishly would prefer to not pay the personal cost of working with remote colleagues.

Bitcoin mining will spur competition for the cheapest energy in the world once there is parity with mining chips (12-18 months away). We're hitting the upper limit on what is possible in the ASIC chips.

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.

Orrrrrrrrr they'll find power without externalities priced in.

99% it was just some marketing drone wanting to find any developers to cut a ECR20 for their scamtoken. You are right to avoid this. BTW if any engineers read this, treat 99% of unsolicited 'blockchain jobs' as the scam that they are.

Cutting and pasting solidity smartcontracts doesn't make you a blockchain developer :-)

I'm always curious how blockchain developers make money except for holding coins or doing the one-time ICO...

I started a new thread for this https://news.ycombinator.com/item?id=16206218

OK great. So can you link the offer?

what if i told you there are blockchain companies backed by y? e.g. qsp coin


If working for SAP helps with keeping your integrity, you should stick with them forever.

Everyone has the right to make their own determinations about the moral quality of different choices. Just because you believe that his decision to work with SAP represents some kind of moral failure (I'd be fascinated to hear your reasoning) it doesn't preclude him from both disagreeing with you and at the same time taking a moral stance on another issue.

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.

How does the fact that he works for SAP have any bearing on his moral stance regarding blockchain?

Ad hominem is a fallacious argument.

Sure you might not like SAP's business practices but there are very few large software companies in Europe.

Incredibly disrespectful for no reason

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