For example, digital property rights might be best preserved via decentralized tech. But perhaps you might take your digital property and use it to interact with centralized services. Imagine a video game where the player truly owns the in-game items they use as crypto tokens, but the game itself runs on centralized servers.
The same might be said of Facebook-like applications. Rather than imagining a future where a decentralized Facebook exists, perhaps it becomes more of a hybrid decentralized-centralized platform.
This is a neat thought experiment, but beyond the novelty what value does it give you to own an item in a decentralized way if a centralized entity can take it away from you if they want to (even if it means patching the game instead of knowing your private key?)
Truly decentralized, Sybil-resistant networks are necessarily expensive to maintain, so it has to provide more than just novelty value.
If the centralized entity ever had a history of patching the game to block tokens, then the value of that token would go down a lot.
For example, if WOW currency were to become decentralized overnight -- what would practically change? Either way Blizzard can take them away. Either way value of token will drop if Blizzard does this a lot.
But verification of rare digital assets could produce some interesting scenarios. One could make a virtual trophy room showcasing their in-game achievements. Imagine there's some game tournament for StarCraft for example. Winners get paid in cash and also get one-time issued virtual medals as proof of their achievement. Like Super Bowl rings, these medals would have sentimental and tangible value.
How would items appear on the blockchain in this case? If every minecraft server can record created items on the blockchain, I can just run my own server that's modified to give me whatever I want. At that point a simply federation of servers seems to provide the same utility of transferring items between servers (but for free).
> Winners get paid in cash and also get one-time issued virtual medals as proof of their achievement. Like Super Bowl rings, these medals would have sentimental and tangible value.
They have to be issued by the organizer of the tournament to provide any value. What does decentralization buy me there? The organizer might as well just put on the website "X won Y".
A lot of these pie in the sky ideas seem poorly thought out once one asks what new value would a blockchain solution add.
As for organizers of tournaments issuing an ERC721 token in recognition of some achievement, well, as noted...the asset is non-fungible. It will last on the blockchain for as long as Ethereum as a network stays functional. A note on a webpage isn't tradeable. It isn't referenceable by other games. It can be duplicated infinitely.
Provably rare digital assets now exist. And the implications of that are just beginning to be explored. I think it's exciting times.
E.g., if I wanted to, say, give out blockchain-diamonds to Minecraft players when they mine diamond ore in Minecraft, I need to somehow be able to trust that when a server reports "player X mined a diamond on my server", that this is actually correct. Whenever you you have an interface to the outside world you get these kind of trust issues. And then you might as well go with a centralized or federated solution, since the trust issues are the same but a federated system is much more efficient.
Same for the indies: To make the economy worth anything, it can't be trustless in the sense of blockchain. Indie company A must somehow be sure that indie company B (or anyone else) isn't giving out rewards for cheap. At this point you might as well build a federated system built on public/private-key cryptography and save yourself the overhead of a blockchain.
As for the tournament prize: I don't see what the blockchain accomplishes over an email/piece of paper/whatever saying "Player X won tournament Y" that is PGP signed by the organizer of the tournament. It is even more resilient than the blockchain (the receiver can keep and show it as long as he wants), you can send it to whomever you care to, and you can copy it as often as you like.
Would it be worthwhile for a game developer to spend time on an economic system, or the game? Unless the game is an economic system...
People spend their lives struggling under capitalism and use games to escape - and then you want to create a capitalist class system there too?
If there's going to be a social element, it will be exploited to the game's level of popularity.
That isn't to say a game can't remain closed and private with a simplistic model, just that popularity will generally weaken whatever community aspects made it great early on.
Looks like an complete failure of imagination. Is it really that hard to assume there could be solutions to problems like that?
Handling private keys has also become much simpler in the past years due to hardware wallets and hierarchical deterministic keys. But I can see why someone could not want to be responsible for the safekeeping of their savings.
I think that is why Coinbase has been so successful. If my mom wants to hold some bitcoin, I'm sending her to coinbase. She can't be trusted with her own private keys.
I'm interested to read more on the multi-sig escrow services you mentioned though. Do you have any recommended reading material on the matter? Thanks.
The idea is, if the majority of people understands private keys like they understand door keys, then perhaps managing cryptocurrency private keys will be possible for everybody? Perhaps with some prevention measures against physical loss or theft like Dapp-based insurance or arbitrage?
The difference is, key management services are much cheaper to provide than full-on banking solutions.
As for the irrevocable nature of crypto transactions...this can be alleviated with smart contracts on ETH network, or likely some 3rd party will develop some kind of purchasing/account insurance that provides this service for those willing to pay for it.
The nice thing is, you will have the choice as a user. That is wildly superior to the current system.
A crypto-currency equivalent of a bank that could replace
traditional banking for the majority of users would have all those costs as well.
The primary business of a bank is extending credit. Of course it's easier to build a wallet app then run a bank - the former's scope is orders of magnitude smaller.
It (and also the role they play in wealth management and fraud prevention) is why banking devours such a large percentage of our gdp. It's not going to be replaced by another Bitcoin fork.
"Cell phones suffered a similar skepticism"
The people that invented them could tell you what you might be able to do with them and you'd find that way better than your current situation. Whereas, the design of these cryptocurrencies are worse than our current situation in a lot of ways. The problems they allegedly solve appear to be fixable with better forms of existing technology, law, etc that's used in centralized systems. The people pushing cryptocurrencies never even try to do that. They're ideologically against it rather than looking for whatever solutions are most practical.
So, the potential usefulness of the desktop vs the terminals connecting to shared mainframes/minicomputers or mobile phones vs fixed-location phones is nothing like banks, cards, Venmo, and contracts vs Bitcoin or Ethereum. Actually, the current system works so well at what it does that most people are happy with it. The gripes they have are usually on policies, fees, etc that a non-profit, centralized, customer-focused organization can solve. A series of them cooperating via a standard protocol (i.e. better SWIFT) across jurisdictions and currencies can reduce those risks, too. There's nothing about the problems of current system that makes most people think: let's ditch existing currencies, databases, and accounting practices for decentralized, blockchain-based, crypto algorithms. A solution in search of a problem is an apt phrase.
Cell phones also provided something genuinely novel and useful for those who adopted them, in a package that was familiar and easy to use.
Bitcoin, by comparison, okay I can pay for some things, well I could already do that. I have to adopt hard to understand security measures and my every action with my 'money' is fraught with peril if I'm not exceedingly careful. Well, that's new, but it's not something that appeals to most people.
I don't know how you can look at distributed blockchain technology and not see something genuinely novel there. A set of algorithms and code are capable of replacing the functions of a bank (and then some). That is, you can store, transfer, and program the behavior of money around the world without any third party telling you can or can't.
Besides being open source money and all the awesome implications of that, crypto currencies are programmable. You can control the timing and flow of crypto according to scriptable logic. Please explain how you'd write a smart contract that escrows money and disburses according to preconfigured rules using USD.
What would you have to do to achieve that with code, today?
Crypto systems are incredibly powerful control and tracking systems - the ideal tool for banks and governments. That's where the use case is.
> Looks like an complete failure of imagination
Your response doesn't demonstrate a use for the technology, only that people are throwing money at it hoping to get rich. Communities built around useful technology don't spend so much time trying to convince everyone that the technology is useful.
Bitcoin whitepaper state goals rather clearly, and the problems outlined there aren't going anywhere far right now. So the question is, can cryptocurrencies provide a solution? I'd say it's too early to say.
Bitcoin looks like a much more serious idea than this article to me. On that level of analysis approaches like "come on people... etcetera etcetera" seem somewhat half-baked. The imagination jump which creators of cryptocurrencies made is much more significant and deserves a better review. The article is a good reminder that we need to think more here.
Well the stated goals of the bitcoin whitepaper are pretty narrow in scope, but setting that aside... Can cryptocurrency tokens provide a solution? I think the question is undeniably yes, the question then becomes, is the solution practical and do its tradeoffs represent a net benefit compared to the status quo? In this case the answer is clearly no. "Too early to say" is always true in technology so it's essentially meaningless. It's like if I said it's too early to tell if Diaspora will transform the social media landscape... sure, something unforeseeable could make that a real possibility but just like with cryptocurrency all the hype and fanfare has amounted to technically interesting novelty without much substance.
That's kind of venturing into a recursive loop of pointlessness.
The "problems like that" you mention, are actually the ostensible "solutions" that cryptocurrency was designed to provide.
So the solution to those "problem solutions," is to acknowledge that 10 years of cryptocurrencies with little more to show than Willybots and hot potato hype-machines, says something about their essential value to most of society.
> and if you don’t maintain your own private keys, cryptocurrencies are essentially no different from fiat money held in banks
A mere six months ago everyone and his dog was advising me to get into one coin or another as if they were trying to get me into their pyramid scheme. This chat is now absent from the watercooler.
So I pressed my bitcoin mad neighbour on 'how are the coins going?' earlier today. I got an answer that they weren't doing it at the moment which sounded like the answer you would get if you asked a drug addict if they are still on crack knowing that their dealer had been busted.
I asked some more and the response I got was that bitcoin was seasonal and that right now is just not the season for it. I asked some more but there was no more other than 'seasonal'.
I also no longer get notifications of bitcoin things on YouTube and Twitter. For instance the guy 'bitfinex'd' was writing daily about the scam that was going on with that coin that was pegged to the dollar, he has not written in weeks.
So my analysis is that the coin thing has gone the way of 'cold fusion'. It sounded like the next big thing but it is not.
There is a lot of momentum with these things, I am sure that bitcoin is worth many thousands of dollars and I am sure that there are people putting together new coin scams, however, the word on the street and by the watercooler is that bitcoin is passe. People have moved on.
You sound like an Internet hater after it failed to find a killer app besides email for most of the mid-90s.
Then, in 2000, as Pets.com was imploding, no doubt you would've dusted off this consistent criticism: "I am sure that internet stocks are worth many thousands of dollars and I am sure that there are people putting together new scams, however, the word on the street and by the watercooler is that internet stocks are passe. People have moved on."
Ten years later, the stock market is dominated by tech stocks.
If your criticism was based on actual knowledge, I'd give you credit, but it sounds like you have no idea what you're talking about, and you're using derision as an excuse not to educate yourself.
Indeed, I think $8500 per Bitcoin is a bargain. Come check with me in a year.
Actual knowledge would probably say that institutions are positioning rapidly.
Look to the crypto systems that are currently being integrated into the financial system, the primary of which is Bitcoin due to it being battle-hardened and consistent. Follow that with Ethereum, Litecoin and Ripple.
Others have their markets but none as mature as the majors, and most of the rest will simply fade away.
Even without that consideration policy changes can be enforced by Software updates. In the case of bitcoin gridlock has stalled this process but other coins have managed fine. The government has a strong compelling argument to force upgrades - you can't pay your taxes if you don't and then you will go to jail.
I'm afraid my suspension of disbelief has its limits.