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Rhetoric around the blockchain hints at problems with techno-utopian ideologies (longreads.com)
126 points by walterbell 8 months ago | hide | past | web | favorite | 111 comments



The biggest issue I see right now is with organizations trying to jump on the blockchain bandwagon but controlling all nodes. If control of your blockchain is centralized, it's no better than an ordinary database. The benefits come when control is decentralized because you can still trust the data hasn't been tampered with.


I keep talking to people who don't seem to understand this, and I am having a hard time giving polite responses. It's not only no better than an ordinary database, it's worse in a number of ways, including not being boring enough. [1]

Even if one needs trust that there's lack of tampering, publishing a real-time transaction log is in many cases sufficient, just as long as you're willing to trust that the central point is ordering transactions fairly. Which is fine in the case where there's a legal relationship between the entities involved.

[1] http://mcfunley.com/choose-boring-technology


Yeah I've basically stopped talking about bitcoin for this reason. The conversation is just too unsophisticated and there's really no point or interest in educating random people on this.

For example I still often hear people say the blockchain is cool but the value token isn't. When I tell them blockchain without a value token doesn't incentivise decentralised mining and it's just a regular old database, there's just no real response because their point was a talking point they read somewhere.

I stopped talking about it around 2015, I just got bored of having the same conversations.


I stopped around the time that 'Smart Contracts' were entering the mainstream as a buzzword (Late 2016? Early 2017?).

The moment that was, in retrospect, pivotal was being summoned to a meeting with some of our sales guys and an industry analyst as an 'authority' on blockchain (when really I'm just someone who had an interest in it). The analyst went on a long rant about how 'Smart Contracts' were going to revolutionise the insurance industry by being able to execute payouts automatically and how agreements were all going to be automated etc. etc. I tried to explain that 'Smart Contracts' weren't really 'smart' or 'contracts' and that what she was thinking about would probably be better described as 'Ricardian Contracts' (which don't require a blockchain to exist), but I could tell by the glazed over expression in her eyes that she was so sold on her notion of Smart Contracts that there was little to no chance that I was going to be able to dissuade her in a 15 minute discussion.


Yes, that's exactly it. It feels like a discussion about religion, astrology, alien probing, or homeopathic medicine. They have a shiny idea, and they are just not interested in hearing that it's not going to work.


I think it's interesting to consider whether a value token is the only possible incentive. There might well be other workable alternatives, possibly better from certain points of view if you can avoid or limit the mining arms race problem.


How do you check that this real-time transaction log was not altered? I think that blockchain concept is a neat way to implement that check. Client need to store a single hash and move on to the latest transaction verifying each block. If something is altered in the past, client will notice that immediately.


You can easily provide a log of most databases and clients can hash that. So, block chain adds nothing there.

Really, you can keep adding hashes to your log, but a client needs to save old hashes and have some access to old logs before they can verify anything.

IMO, a large reason everything went blockchain is you can tack it in without changing anything. Just setup a process to modify your logs and boom another buzzword.


At the point where we are talking about a distributed log with cryptographic hashes, it is hard not to introduce the buzzword "blockchain" back in, as that is the original design.

Having global consensus (PoW) is a different matter, but that doesn't mean what you are saying isn't a blockchain.

There is a good conversation me and @geofft had the other day, would love your thoughts on it: https://news.ycombinator.com/item?id=17000401


With the important exception that there are no blocks. If you're doing transactions one at a time, it's just a long ledger with checksums. Which are just a timesaving techinque so you don't have to replay log segments and compare with snapshots.

In practice, many of these organizations talking about using in-house blockchains have legal trust relationships and systems of laws in common, and they won't only be relying on a transaction log to make sure the record isn't getting fiddled.

And often the threat model isn't related to changing the historical ledger anyhow; there is a lot of fraud, embezzlement, and other financial crime that attacks other points in the system. That requires a significant system of financial controls, which will be sufficient to catch ledger tampering as well. Meaning that the checksums become a modest nice-to-have, not a significant anti-fraud technique.


Okay, that is an interesting and fair point.

You are saying because these types of verified logs can't control for other variables, they do not represent a "complete" set of the system, and therefore aren't as useful for fraud analysis? Hmm.

But this is where I feel like calling a cryptocurrency economic model a "blockchain" is just a silly misappropriation of a word. To me, clearly "blockchain" is not like "capital" or "communes", a blockchain is a cryptographically verified data structure. However, I do hear a lot of people throwing around the word "blockchain" just to reference an economic model, which seems excessive.

I like your point though, and well described.


People used DB logs with hashes for verification at least as far back as the 70's. Blockchain on it's own is just a slightly different form of the same thing.

So, while Blockchain has nothing directly to do with being distributed, that's just a useful feature but requires proof of work of some kind, or someone can quickly manufacture several blocks.


Right, the only "new" thing is using PoW as an /economic incentive/ because PoW was previously used for plenty of things during the cipherpunk movement as well.

Fair point about it being distributed

The Proof of Work solves a separate problem, that of Double-Spending. The Proof of Work here isn't arbitrarily to slow the system itself down, just to slow non-canonical histories.

But that itself is not the "blockchain" (thus the "how do you define it?" question, I'm curious to hear your take), I'm just playing devil's advocate: A lot of people who weren't around in the 70s are now calling verified logs a "blockchain", now it is a stupid buzzword, but at what point do we consolidate the word for an idea, versus argue there are semantic differences?


Your proposed system would not be censorship resistant: The central control point could decide (or be forced to) to block MrControversialGuy's from sending and receiving money. This point is not just theorethical, e.g. wikileaks got booted of the normal bank system when they dropped their big leaks, but they could still take bitcoin.


The same is true for a blockchain where the same organisation controls all the nodes, which is the scenario at hand.


If they know which addresses belong to Wikileaks


That's a feature of anonymity, not the blockchain.


But that's not a bad thing from the perspective of most of these "OMG blockchain" uses that are internal or with a controlled set of partners. In practice, very few people want to be forced to do business with somebody they later decide they don't want to do business with.

Even if they did want that for some reason, most countries have anti money-laundering laws where you have to be able to stop doing business with certain parties.


Wikileaks was never "booted off the normal bank system", only a few US banks (BoA, VISA, MasterCard, PayPal, Western Union) refused to send money to them. Bank transfers from anywhere else always worked fine.


When 90%+ of your income is routed through VISA, MasterCard and PayPal, getting booted off those is a sufficiently fatal blow. I don't know (or care) if this was the case with Wikileaks, but if it happens to your retail business you are toast.

These private institutions have way too much arbitrary power to decide the fates of others with opaque & inconsistent reasoning-- I see nearly anything providing a check against that power as useful. I'm no longer convinced blockchain tech is a viable answer, but I do think having a variety of non-consolidated payment processors to choose from is a good thing.


The bottom line is that this isn't a real problem for legitimate businesses. If you're a business owner who's been shut out of the western banking system then your business is DOA whether or not the business accepts bitcoin. Yes, bitcoin is great if you're a rogue political organization like wikileaks, but this is a very uncommon scenario.


There have been numerous, widely varied reports of legitimate businesses having their funds completely frozen for an unspecified amount of time - often long enough to sink a fledgling startup - simply because they were new and "made too much money too fast".

Payment processors have also been known to discriminate against perfectly legal businesses for a long list of random things some old jackass in a suit decided were too 'unsavory'.

I think these organizations are wrong to meddle so much rather than being passive facilitators as originally envisioned. They have a right to exclude things which put their assets at risk, as well as a legal obligation to assist law enforcement where appropriate, but beyond that neutrality and privacy should be the rule.


> Payment processors have also been known to discriminate against perfectly legal businesses for a long list of random things some old jackass in a suit decided were too 'unsavory'.

Typically, it's because of fraud, not unsavory-ness. Fraud on the customer's side, not the business'.

The solution to that is not making every transaction put the weight of fraud solely on the customer.


Definitely fine where legal relationships exist, but the whole concept of law as trust is being challenged right now, as our own countries break the very laws they exist to enforce.

Edit: help me understand why you disagree


Then the discussion revolves back to how insane it is that the central authorities in these schemes control the nodes. Either you can trust them (in which case they should use a normal database) or you can't (in which case you can use a coin that they don't control).


I agree, that is insane, and defeats the purpose of using block chain at all.


I think the issue people are taking is that they think you are overestimating exactly how much society has declined. The ABCs have special authorizations to essentially break the law, but that practice has not yet trickled down to the local politburo. It is not quite the time to call the stability of US-style contract law in to question. (Even though the attitude behind the special authorizations, namely "I don't care what happens just do something," will be what undermines it if ever anything does.)


Exactly. Blockchain is genuinely radical - but its primary benefit is trustless decentralisation. When a single entity controls all the nodes then you don't have decentralisation any more and you might as well just use a conventional database.

The real problem here is organisations jumping on the bandwagon without really understanding what they're doing.


Which is my biggest issue with most mainline coins, I believe they will ultimately incentivize centralization.


> If control of your blockchain is centralized, it's no better than an ordinary database

Sure, when Maersk uses a private blockchain to track shipments, it's hard to see how it improves on an ordinary database.

But let's say you want to build a prediction market for official corruption. The minute you start taking bets on which government officials are taking bribes, you'll have a powerful people trying to take you offline.

It's extremely difficult to build a completely anonymous and decentralized application to do this, but decentralized nodes with anonymous validators that you control is a potential hybrid that's resistant to censorship.


I'd be much more afraid of powerful people trying to frame non-corrupt government officials for the betting money.


Agreed, the problem with any anonymized system which attracts lots of users is, it creates incentives for bad actors to game the system.

Feel free to think up all the rules you want to prevent this, but a motivated entity can always simply pay large numbers of people to act on their behalf. If they're good at it, you won't know until it's too late.

Past a certain point, involving people's actual identities in the nitty gritty real world becomes increasingly necessary to establish trust. There are exceptions, but AFAICT they mostly rely on being uninteresting to would-be attackers.


I think there are usecases where you control the whole chain and have nodes within your organisation. The blockchain becomes a specialised database that's optimised to be a ledger, something like https://chain.com and https://chain.com/sequence/.


There's no compelling argument on those pages that addresses benefits over a traditional DB. It's the same circular arguments that completely ignore the tremendous cost of implementation and added complexity.

Or did I miss something?


> Or did I miss something?

I've found myself asking that frequently with the blockchain/cryptocurrency mania. The answer has always been no.


One point I've heard is that some large organizations don't necessarily trust themselves (or all their employees). Then a bunch of nodes with a chain inside the organization might be harder to tamper with than a database.


In that case, the blockchain actually makes it easier to tamper with, since the nodes will trust whoever mines the longest chain.

If you just want to avoid tampering, you're better off with servers publishing (signed) messages and clients storing those in an append-only log; a good example are the CT logs: https://en.wikipedia.org/wiki/Certificate_Transparency


I agree that at first this appears to make no sense. But there are actually good reasons for it, when you dig in. I work on a DLT/blockchain platform that has customers going live like this, so I'm closer to it than most people are.

This is a little like how I used to not understand why banks or other large firms cared about blockchains at all - isn't the point to get rid of them? Then it became clear that the problem of individuals trying to sync views of balances over the internet without powerful middlemen is a scaled down (or up) instance of a more general problem that lots of firms have between themselves, trying to sync data between organisations. And that this is a legitimate problem to want to solve with peer to peer technologies.

The main reasons you see companies deploying "blockchain but we control all the nodes" - an apparently nonsensical setup - are twofold:

1. They do want the ability for other orgs to run nodes in their blockchain network, or rather, some of their customers want the ability to run their own nodes and rely on the centralised firm less. But many customers don't care. They prefer to trust a centralised authority, at least given the current state of technology. Therefore, firms want the ability to decentralise selectively in response to demand.

2. They're doing a tech refresh. The world is full of financial middlemen who have platforms decades old that have been incrementally patched and upgraded over time, often with lots of customers. They decide it's time to do a rebuild onto more modern tech, but they can't justify a from-scratch rewrite unless there is a significant difference that can't just be bolted on to the existing architecture. Decentralisation is an example of such a change. By betting on blockchain tech now, they open up the possibility of totally new business arrangements in future that would have been blocked by centralisation/lock-in fears today.

If you decide to make your existing business app selectively decentralisable - perhaps in order to unlock new features or products in an environment where customers are concerned about data sharing - then it makes sense that you'd maintain one platform, run all the nodes yourself and migrate users to it in bulk. You've opened up new options for yourself and if later the business winds change and you don't want to allow this anymore, OK, you have a slightly more complex architecture than a plain old SQL DB but modern DLT systems like Corda (the one I work on) map blockchain data through to relational databases anyway so you can still use a lot of the same tools and processes that you're used to. It's not quite such a huge leap as it'd have once have been.

Why might some customers not want to be decentralised? A situation we see a lot is where a business or industry group wants to allow people to run their own nodes, but isn't sure the usability of taking part in a P2P network is high enough for everyone (or are sure it isn't). Remember that many businesses have very small or sclerotic IT departments, or no IT department at all, and peer to peer networks are historically associated with piracy, viruses, spam etc. So that + the prevalence of the web means that setting up anything that isn't HTTP to port 80, like a business P2P node, is considered to be a bit novel and exotic.

Again, because Corda is designed for large firms it has features that help with this, in particular for really large and paranoid firms like banks where the internal IT departments don't always trust each other :) But ultimately if you're trying to pull off a major platform migration, you don't want it to hit the rocks if some users reject the idea of running local infrastructure and just want an ordinary web app.

This exact problem is prevalent in the Bitcoin and Ethereum communities too. Many users don't run nodes or even SPV wallets. They just dump all their coins on an exchange and trust a centralised service completely. They could go full P2P but that involves small sacrifices like having to back up your private keys, so they choose centralised trust instead. The nice thing about cryptocurrencies is users can choose their own configuration.

As a consequence of all this, a popular feature request for Corda and something we're spending a lot of time thinking about is how to split a node up, so parts of a node run in some cloud somewhere, and other parts run locally on e.g. a mobile or desktop app. For instance private keys and transaction signing could be done locally, with everything else run remotely - this is "share the my data but not my authority". In more advanced setups you allow people to migrate from hosted nodes to local nodes and back again in smooth automated ways.


Hi, im about to hop into same ship. This text was perfect representation of my thinking. Would you happen to have any more great material with you?


You can read some stuff over at the Corda blog:

http://medium.com/corda

I don't think we've written much on the topic of deployment with centralised nodes before though.


thanks!


You'd probably implement something "blockchain-like" in the database to get the same benefits, such as not being able to go back and delete old transactions.


As someone presented with a startup that needs an "append-only" transaction database with consensus across 2-N servers (depending on scale), and an inherent incentive to exploit any potential "double-spend" issue, an internal blockchain with a single node acting as an authoritative "miner" (aka, controller) seems pretty cheap to roll out considering I can just modify existing bitcoin/blockchain software.

Is there any software out there that I could readily adapt to provide the same properties and guarantees without incurring hundreds of hours of development and testing?


This is the right way to look at it I think. I've been looking at a blockchain based solution recently, and there has been an awful lot of negativity, and people wondering if it would have been possible to implement the same solution with an oracle database.

Well, yes, it would have been possible. There are a couple of minor things the blockchain does better and a couple of things it does worse for this use case, but fundamentally, I believe the blockchain based solution was cheaper to build and will be cheaper to maintain.

People need to consider these solutions in the context of whether or not they solve business problems effectively, and put aside knee jerk reactions based on technological prejudices.


Why was the blockchain cheaper to build and maintain compared to a traditional RDBMS? I agree that avoiding knee-jerk reactions is good, but I frankly have yet to see a case where it was actually the best solution, except for the case of Bitcoin and other public cryptocurrencies.


Because we wanted transactions signed with the key of the transactor and a complete audit history (ideally one that couldn't be tampered with, even by an admin).

By using ethereum, we didn't need to write microservices to front the database, we didn't need to configure the database (not trivial if you want serializability https://blog.dbi-services.com/oracle-serializable-is-not-ser... ), we didn't need to write any cryptography code, we don't need to run any kind of infrastructure (let alone expensive, distributed infrastructure) to allow people to interact with and update the data. We get broadcasting of changes to clients so that the UIs can be kept up to date for free too.

We do have to carefully audit our smart contracts, but they are much smaller pieces of code than the microservices and triggers that we would otherwise have written.

Mainly, because our use case was similar to the crypto-asset tracking use case, there was a lot of code we could rely on already in ethereum that we would have had to write ourselves in the RDBMS world.


Thanks. I have to admit I don't agree with most of that as stated, but I wasn't involved in the actual project, so I admit I may still be missing specifics.

By the way, did you use any historical data from the tracking? Does ethereum provide good tools to analyze that?


If you have a single miner and an incentive to exploit double-spends, won't whoever controls the miner just do the double-spending themselves? They can mine a chain that spends one way, then mine another to replace that one that spends again.

If you can trust the miner, why not just use a regular RDBMS? The controller is the primary/master, you just need to disallow UPDATEs and DELETEs, and to have a constraint that prevents an account from spending more than they received. The other nodes are read-only replicas.

(To the complaint that a single master doesn't scale: it should scale as well as a single miner. They're both the only writer to the database.)


"select * from transactions" won't tell you that this has happened.

But your blockchain client will know immediately if the single miner has rewritten the block chain. It won't be able to download any new blocks based on the one it current thinks is head.

So while you can't stop the miner from doing what you said, no one will be fooled when it happens.


As I wrote in the reply to the sibling post, chain-signing the transactions is basic, just a few lines of code using a crypto library like NaCl. We did that for an invoicing API, it was one of the easiest parts, literally less than 10 lines.


That makes sense, but what about auditing (in isolation) the read-only replicas?

I suppose I could implement my own hash-chain to verify the authenticity? (aka, no missing data)


Sure, you hash(transaction info + hash of previous transaction) and sign that with a private key, and you store it as a text field in the database.

In my country, all invoicing software must implement that (it's part of the SAF-T format that we must deliver to the IRS), and it took us less than ten lines of Ruby to do it. It's literally concatenating a few strings, then using some crypto library to hash and sign it.

Verification is just doing the same process, then checking if the signed hashes match.


Maybe look into datomic


The radical organizations I'm familiar with (Socialist parties) are big on centralization the whole aim of that current of thought is the centralization of power within the state controlled by the workers ('Dictatorship of the proletariat' to use the Marxist term for it). So from that perspective I don't think a centrally controlled blockchain is a big impediment - may even be desirable.


I don't think that has ever happened in serious cases, but for all enterprise people who ever thought about it, Plasma is the solution.


> If control of your blockchain is centralized, it's no better than an ordinary database

Actually, it's much worse from an efficiency point of view. Which means that all those applications are fad-driven.

I'm sure there can be genuinely useful applications for blockchain tech, but for now the only truly compelling one I'm aware of is to execute unlawful transactions (I don't count speculating on the price - something I've done too a bit - as genuinely useful).


because of the yet still lack of privacy I am not sure that right now it is most compelling for unlawful transactions. There are many use cases (like you mentioned) and most are used only by a handfull of people, but growing by the day the more stuff getting developed (lightning, ...)


One of the bigger problems with blockchain is that there aren't many field experts working in the space. For example if you look at a voting blockchain you will be hard pressed to find an experienced psephologist working with the team.

Without experience most of the team is made of people who might have read up on the topic and thought - "Well! This can be changed via blockchain". What they don't realize is academic exhortations are vastly different from practical implementations.

For example, if everyone could implement that amazing trading system from that trading book, everyone would be millionaire. But that is never true. Another good example of this is the mistaken understanding of banking and especially Visa:

https://www.forbes.com/sites/francescoppola/2018/04/21/bitco...

What this means blockchain solutions either run into issues during build or work in a very specific circumstances.

For example, the building block of most cryptocurrency is game theory - if someone takes over 51% then rational economical thing to do is continue the chain. But what if we have an irrational actor who doesn't care? Or what if people can manipulate the change even below 51%. A good example is the F2Pool's manipulation of Status ICO with 25% hash rate:

https://themerkle.com/f2pool-allegedly-prevented-users-from-...


Rationality only works if you’re true motivation is financial. I suspect that anyone with the means to achieve a 51% majority is playing a different game than you or I. At that level power becomes the motivation and the power to crash it all on a whims notice is infinitely more valuable than any profit obtained. That scenario is heaps more frightening to me as bitcoin (and other blockchain coins who make it through the inevitable great cryptocurrency filter) become more popular, we may see a power struggle between nations and individual high level players. Who knows though, it’s all fascinating to watch either way. There are smarter people than me studying this every day and it really does feel like we are on the dawn of some societal breakthroughs.


- getting to 51% is no easy task. - if an irrational actor can get to 51% and decide to wreck havoc, the current transactions are impacted. The community will come together to hardfork away. The last transactions preserved in the blockchain are not. - if the above happens, then the particular blockchain does not deserve the position it holds and deserves to go down. It is no longer censorship resistant.


Bitcoin caused excitement when it proposed a technical solution to a problem that previously required a trusted intermediary—money, or, more specifically, the problem of guaranteeing and controlling money supply and monitoring the repartition of funds on a global scale. It did this by developing a distributed database that is cryptographically verified by an entire network of peers and by linking the production of new money with the individual incentive to maintain this public repository.

The problem was much more narrow than this: double spending prevention by an incentivized network of peers.

The basics of cryptographically secure electronic cash had been worked out long before Bitcoin came along in 2008.

What was new was the idea of replacing the mint (a trusted entity through which all transactions must flow) with an open P2P network secured by monetary incentives and probabilistic settlement.

With no controlling entity at the center of the system, no valid transaction can be censored. This is the new force that Bitcoin unleashed on the world: censorship-resistant electronic commerce.

The fact that Bitcoin's main value proposition is censorship resistance leads many in the affluent minority to miss the point of Bitcoin entirely. They don't have a money censorship problem (at least none they care to face), and they view everyone who does as morally inferior.


A "money censorship problem" is the funniest unintentional euphemism for money laundering I've seen in a while, congrats.


How do you launder money with Bitcoin that you were unable before?


Tell that to the people of Cyprus


The reason why Cyprus got a "bailin" rather than a bailout (liquidity extension from central bank) is precisely because the place has a reputation for money laundering, e.g. https://euobserver.com/justice/139688


So when banks freeze funds eg in Argetina or Venezuela this is because of money laundering prevention, never any other factors like um I dunno, money supply issues? :)


Cyprus, like all the Eurozone countries, traded away the currency right of issuance to the ECB in return for the stability of the Euro, in much the same way as some countries "dollarised" to get away from exchange rate fluctuations.

The Argentine and Venezuelan situations had a different cause: the economies had tried to peg to the dollar, but that requires capital controls in crisis situations to avoid capital flight.

In each case the fundamental problem is that a country can't print other countries' money; either they have to accept (a) the possibility of a bank run or (b) the possibility of a floating currency dramatically changing in purchasing power.

Bitcoin solves (a), IF AND ONLY IF people hold their own bitcoins rather than using exchanges. Bitcoin and gold advocates tend to avoid talking about problem (b) or pretend a rapid shift in purchasing power can't happen in the presence of a fixed money supply, which is contradicted by history.


So credit card companies cutting off people trying to donate their own money to wikileaks is now preventing 'money laundering'. Good one.


Wikileaks? Yeah, it actually is. Try picking an organization that didn't participate in criminal activity in 2016 and isn't holed up in an Embassy trying to evade arrest.


How about sci-hub?

http://sci-hub.tw/#about


Neither of those things are true. The question in my mind is, do you know that, or are you just repeating garbled information you've heard elsewhere?


Then cite evidence.


"Wikileaks" is an organisation, it can't be holed up anywhere. Assange is in the embassy for reasons that are officially speaking unrelated to Wikileaks - unless of course, you agree with him that he's being persecuted for his Wikileaks work via false sexual assault allegations?

Whichever it is, if he'd done illegal things presumably there'd be an open case against him for those things but there isn't. Even the sex charges were dropped (they'd have never survived court anyway, hence the paranoia). Now he's simply stuck because of his prior attempts to evade arrest.


No, that's just spending legal money on alleged illegal activity. Laundering is making illegal money look legal, to enable eg an embezzler or a drug cartel to participate in the formal economy.


Except for the fact that you can conceal the source of the cryptocurrency asset, then the recipient can exchange it for clean money. That's textbook money laundering. Can you tell me how much of Wikileaks' donations come straight from international organized crime? No, and I can't either.


Resort to bitcoin for WL donations had nothing to do with money laundering. People were cut off from donating by credit card companies and banks disabling WL accounts under pressure from the State Department. It still wasn't illegal to donate to them, and bitcoin donations can be explained without bringing intent to conceal into it.


I have both a money censorship problem and believe Bitcoin is a horrifying system considering what it does to the planet.


Well, the blockchain hype is easy to criticize. Tech people refer to its inefficiencies and how it is just a decentralized database. Political people point out that the real world is much more complex than what a blockchain can represent.

I would argue that its strength lies in another area: It gets people excited. It makes people start thousands of new projects and companies, millions read all the news articles and a huge crowd invests a lot of money into the space.

And, of course, it gets people excited because it hits a nerve. It promises a change of power structure in the world. Away from monolithic, opaque, political structures to democratic, transparent, border-less systems. Changing the role of everyone from a helpless observer to an actice participant.

Obviously the build-up is messy and over-promising but it may very well change the core infrastructures of how the whole world currently operates - economically, politically and socially.


The ratio of people who's nerves are hit because crypto can change the power structure, to those who're interested in it because it has the potential to turn a young person's $10k creditcard borrowings into $1m, is probably pretty close to 1:100.

I mean, name the 10 biggest use cases. Bitcoin is 10 years old, it is a household name, it's been in every newspaper, every developer in the world has heard of it, it captured orders of magnitude more angel and venture investment than say a google or facebook did. It should have some genuine users who are using it not because it's a volatile asset class with an average annual return of >10x.

It's virtually impossible to find any usergroup of significance anymore. Outside of course the asset class, which so far hasn't changed the power structure so much as it has made a few techies and rich people (paper) rich.


I thought that it gets people excited because there is a lot of dumb money to be made in it, regardless of whether or not your work will result in any added value to the world.


Bitcoin gets people as excited as tulip fanatics in 1636.

Blockchains aren't widely exciting. There are some interesting applications, yes... but there are not millions of people following blockchains, there are not "thousands" of new projects. It's a quiet back-end evolution, not a revolution in the public-facing world.


Exactly. If it was something conventional it would not get the attention of a full blog post saying why it is bad or the general mob-hatred at HN.


> Instead, local publicans stepped in and extended credit to their customers; the debtors were well-known to the publicans, who were in a good position to make an assessment on their credit worthiness.

I didn't know what a publican was, so I googled it...

pub·li·can

noun.

1. (British) a person who owns or manages a pub.

2.(in ancient Roman and biblical times) a collector of taxes.

I assume the author is referring the first definition.


Still widely used today (the former definition)


I have a problem with biased titles such as "X isn't as you want it to be" or "No, X is not Y". This makes the whole article biased and me more biased about reading it. Any valid points inside are clearly from the perspective of the writer having formed a very concrete opinion over the subject and trying to convince you. The title is like "either you are with us or against us" and trying to either make me relate to the people that are disillusioned (so offending me) or unite me against "them".


Never understood how as a customer I can 'trust' a niche blockchain deployment considering that a majority of the computing power in that network would likely lie within the organization deploying the niche blockchain in the first place.


> Fostering and scaling cooperation is really difficult.

It all depends on incentive. BitTorrent was so popular that it had to be outlawed and heavily persecuted

> It doesn’t stand in for all the slow and messy bureaucracy and debate and human processes that go into building cooperation, and it never will.

Blockchains didn't want to go there anyway. But they replace the implied trust in statespersons that lies behind any bureaucracy with machines. thats quite radical, even if you layer a huge trust-based bureaucracy on top of that.

> there is no linear-causal relationship between decentralization in technical systems and egalitarian or equitable practices socially

There is a causal relationship between centralization of the internet and monopolies/inequality and everything that people hate


Great article derailed by the final paragraph. So, the author is disappointed that we want to ignore differences rather than focus on them. Inefficient and unnecessary. I find the author's point about blockchain trying to replace politics with economics to be something worthy of more study and thought.


Crypto will end up being used as a tool for governments to control monetary flow. Congratulations.


That reminds me of this great "Too Clever By Half" essay. Seems that most revolutionary financial innovations tend to misplay the metagame.

http://epsilontheory.com/too-clever-by-half/


Can you explain how you see that happening?


Each consensus method (Proof-of-Work, Proof-of-Stake, Directed-Acyclic-Graph, etc) has weaknesses that can be exploited by a large or influential enough entity - there are no exceptions. All it takes is time.

By the time the system has reached mass adoption, we will probably come to find that there is a central entity with majority influence over it but the utility and infrastructure integration will have such momentum that changing will be effectively impossible. Fringe communities may be able to operate relatively independently, but the core will be subject to the most dystopian control and tracking system ever devised - Huxley and Orwell could not have imagined worse.

That isn't to say that life won't be improved in general - there will be major positives. However, an undercurrent of entrapment will pervade even if it isn't at the forefront of attention.


It seems likely that Proof-of-Stake can require an economic commitment which will be extremely hard to expropriate, and can at least start out with a fairly diverse group of validators. If the chain is valuable enough, it's going to be expensive to buy up enough to pervert its consensus, and doing so will result in the stake being slashed.

On the other hand, a currency which people are forced to use by law (legal tender for tax payments) will always have a huge advantage. So if governments decide to move to most transactions in the national currency taking place via cryptographically signed attestations involving government-provided keys, that will be a major move towards the kind of dystopia you're imagining.


Proof-of-Stake units don't have to be acquired via public exchange, so ownership can concentrate without visibility; same as any other crypto system. It would likely work well enough for a period of time but as the system starts to show it's age, lots of unpleasantness follows.

I fully expect governments will embrace and utilize crypto to terrifying effect. Maybe it's time for Mars colonization?


The people who control everything now are the ones with the money.

That’s not going to change with a different medium. It may change the parameters that they can control (ie no inflation) but it won’t change the inequality.

The 51% of the network will consist of a small number of wealthy as it always has.


1. Governments enact regulations preventing entities other than banks from distributing currency

2. The end


http://www.epeso.uy/

Nothing technical there but it is a central bank backed digital currency that IMHO exists as a consequence of cryptocurrencies.

My 2 eCents :P


That's a function of the public listening to the fud about Bitcoin for eight years and letting the big dogs take it away from them.


“There’s zero evidence that features such as decentralization or structurelessness pose any kind of threat to capitalism.”

Disagree.

Desktop publishing disrupted the idea of Copyright as Intellectual Property. The Internet obliterated it.

Open Source is a superior alternative to Capitalism. People cooperate on a project instead of capitalist organizations competing and trying to extract rents. In both cases, quality goes up but in the open source case, costs stay near zero the whole time. Once again this became possible because of information dissemination.

When Newton said he stood on the shoulders of giants, those giants didn’t charge rent!

Next will be open source drugs.

I would like to see a new system emerge. One where people GIVE AWAY their inventions because if they don’t, someone else will beat them to it, and control for a time the direction.

In this world, people are more free and Basic Income lets them choose what to do with their lives. Robots do more and more work while people contribute here and there to a growing snowball.

It is the world of OpenAI, Wikipedia, WikiNews and citizens uploading videos etc. and not this lamenting about how the newspaper industry will make money.

The alternatives to Capitalism aren’t “socialism” only. They are Collaboration. Science! Open source!

A society may be “free” by anarcho capitalist standards but each individual person may fear losing their paycheck. This is not sustainable in the face of technological unemployment.

What kind of freedom is it that you are coerced by the system into committing to working on things you don’t like in a constant state of food insecurity and pne month away from homelessness? This is the situation for millions of people.

It doesn’t have to be like that. We have enough resources to feed and house everyone ten times over.


  > Desktop publishing disrupted the idea of Copyright as
  > Intellectual Property. The Internet obliterated it.
Must be some parallel universe. Or I totally misunderstood you. Are you talking about torrents? The bad news is: basic income will not cover costs of producing GoT or Breaking Bad.

  > Open Source is a superior alternative to Capitalism.
What does this even mean?

  > People cooperate on a project instead of capitalist organizations competing and trying to extract
  > rents.
As already pointed out, in many (most?) cases these projects are sponsored by capitalist organizations.

  > In both cases, quality goes up but in the open source case, costs stay near zero the whole time.
It would be nice if that were true.


I mean, strictly speaking the same group of people producing GoT now could continue to do it voluntarily while living off basic income, but you have to include the suppliers as well as the people directly working on the show in that equation.

Once your consider the full chain, you're probably looking at something like 2000+ people working full time to make Game of Thrones. How do you organize and incentivize them when there is no material reward for their labor? Right now the incentive is "we'll give you money" and the system of governance is "the person who gives you money tells you want to do". That second part is as much the problem as the first; if you had 2000 people making GoT as a labor of love, what happens when there is a schism over how it should be adapted?


I see it moving more in the direction of collaboration.

For example, Britannica was done in the way you say, while Wikipedia is a mashup of many edits by many people, and governance is done less by money and more by expertise and consensus of people with reputation.

Who says Game of Thrones needs to be done this way? We can always have capitalist projects. However, they have a totally different flavor. They suck you in, make you watch more and more, just like fb so you can make them money. Who needs these things, anyway? I for example didn’t have TV since grad school. Sure the high budget shows are cool but they aren’t essential to life.

I would even say Copyright can stat but Patents should go. Finding a life saving drug is way more major than producing a blockbuster movie.

Not to mention that a lot of stuff can now be automated, eg music production doesn’t require a 100 person orchestra anymore since you have synthesizers.

In fact, as costs come down we will have a glut of movies people produce in their bedroom. Just notice, there are no longer the “world class” mozarts and einsteins of the world. Now everything is more democratized.


> In fact, as costs come down we will have a glut of movies people produce in their bedroom.

Phrasing?


James Hogan describes a similar vision in Voyage from Yesteryear: https://www.goodreads.com/book/show/849484.Voyage_from_Yeste... .


All the big open source projects are financed by capitalist businesses which support OS strategically to "commoditize the complement". This is just capitalism working. The software may be free to the user, but they still have a cost to develop.


Also, this article's title isn't as radical as they want it to be because they are conflating distributed ledger technologies with blockchain.


What is the difference? Isn't a blockchain a specifically branded crypto-currency flavor of distributed ledger?


Not every crypto-currency flavor of distributed ledger is a blockchain. See Distributed Acyclic Graph as used by iota, for instance.


A lot has happened in the space since August 2017 when this article was written. Having said that, it's still quite relevant.


The markets that cryptocurrencies are potentially going to replace include NASDAQ, NYSE, LSE, TSE and all the other national centralized stock exchanges.

Cryptocurrencies are a superior way to represent stocks, especially software company stocks where the service can be tightly coupled to the currency itself.

There are multiple reasons why cryptocurrencies are better at representing company ownership shares:

- There is no need to trust a middleman or government to maintain your holdings. There is no room for bad actors.

- Transparency regarding who owns what (assuming that the ledger is public).

- It can never go bankrupt unless all users of the network abandon it - But they all have a strong financial incentive to keep it running.

- It doesn't need government regulation to function properly; in fact, it transcends government boundaries. Loose government regulation makes it extremely liquid. Imagine if you could buy your lunch using company stocks directly instead of cash.


I find it hard to see why people would go for a system where the transaction times are comparatively huge - you can't HFT on the blockchain, for example. And it's revealing that the cryptocurrency infrastructure has basically replicated the exchange system, complete with central counterparties and broker-dealers.

> Imagine if you could buy your lunch using company stocks directly instead of cash.

This sounds like an excellent way to complicate your tax return.




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