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The Blockchain Bubble Will Pop, What Next? (approximatelycorrect.com)
238 points by baxtr 7 months ago | hide | past | web | favorite | 321 comments

Here's the big reason I've gotten skeptical about blockchain: it seems like very few people are excited about actually using it. Almost everyone talking about it is excited about getting rich from trading currencies or starting a blockchain-based company. And plenty of people are excited about a grand vision for how it might transform society one day, or how it might solve problems they think other people might have. But it seems like almost nobody is genuinely excited to use any blockchain product themselves purely because it does something useful or fun or cool, and with no monetary interest in the tech taking off.

This is all in stark contrast to the 90s internet boom when, sure, there were lots of speculators and lots of get-rich-quick dreamers, but there were also tons of random people genuinely excited about using the internet who never stood to make a dime from it.

A lot of the grand visions behind blockchain mania are indeed compelling, and I suspect something blockchain-ish will take off at some point in the future. But it will probably be a distant descendant of anything that exists today.

Am I wrong about this? Are there blockchain-based products that have lots of users who are using them because they like using the product and not just because they're hoping to get rich off the hype?

The Internet in some sense starts with, at the very latest, the Treaty of Bern in 1874. Because the Internet is just the current physical incarnation of the Network.

(The Treaty of Bern says how to make physical letter post work internationally the way we're used to today, before that it was a colossal pain in the arse)

The Network is like the Word, it's fundamental to what we are, the precise implementation may change, but the idea is forever.

Automobiles, T-shirts, babies brought up almost exclusively by their immediate biological parents, cow milk as a normal human beverage, portraits, funerals, the novel - these are all "just" culture and might become unfashionable and go away over the longer term or in other contexts - they're not fundamental to what we are. But the Word and the Network are right at the centre of what we are, as people.

Blockchain is just a weird cultural blip. It's not even T-shirts, it's Pork Pie Hats. People keep trying to make it a thing, but it's not a thing.

People were pretty excited about using Bitcoin to buy drugs, but it turns out you need a more stable and convenient currency even for drug dealers to be interested.

That was the high water mark of consumer interest as far as I've seen. Everything else is just intrigue driven by the get-rich-quick aspect.

I'll say that for that category they haven't lost interest. Although many places have moved to monero for obvious reasons. They don't care too much they can just exchange it immediately. That industry REQUIRES that payments can't be stoppped/tracked so decentralization makes perfect sense here. Most industries don't have that requirement, and usually benefit from centralized systems.

People are also excited to launder money

How is BTC any better than USD or EUR for laundering money?

Density. A single 128GB microSD card can hold a lot of bitcoin in the space that could not fit even one $100 bill. No enormous briefcase and predetermined set of answers for law enforcement.


I mean, what he said IS tecnically correct. You can easily fit a 256-bit key in a 128GB micro SD.

Sure, there will be a lot of space left, but what he said is technically correct :D

For hard drugs you may be correct, however there is a booming online pharmaceutical black market where BTC reigns king.

I thought the blockchain technology had the potential to help financial sector. Not the virtual currency itself but there are a lot of agreements, transactions and settlements which are done in a untrustworthy environment which makes it slow and resulting in settlements [0]. I thought this is also the reason why it takes so long to transfer money from one bank to another. I thought these processes could benefit from blockchains and smart contracts. Basically speeding up the whole process not requiring the banks to trust anyone [1].

[0] https://en.m.wikipedia.org/wiki/Payment_system

[1] http://cjel.law.columbia.edu/preliminary-reference/2016/deve...

The simple feature of reducing settlements from days into seconds is by itself a great use-case. However, there is a lot of structural incentives against it. If you're a big bank and make nice transaction fees because your clients trust you to make a secure, legal, and successful transaction, you probably don't want blockchain, because it's a threat to your business model. That's certainly one of the major reasons it's taking so long to be accepted by mainstream banks.

But long term, banks will need to accept faster transaction times. Blockchain or not, it's ridiculous you need to wait days to transfer money when you can send email in milliseconds.

Rather than accept Bitcoin, it's far more likely big-banks will get together and form their own crypto coin, which will enable faster transfers, but keep them in control. They'll get regulations passed that will make Bitcoin and most other crypto currencies illegal or legally risky, whereas their system will be blessed by regulators.

Under this scenario (I think the likeliest), the existing power hegemony stays this same, crypto-currency's idealistic roots become viewed as naive and antiquated, and consumers get slightly faster transfers through their same old banks with marginally lower transaction fees.

The simple feature of reducing settlements from days into seconds is by itself a great use-case. However, there is a lot of structural incentives against it. If you're a big bank and make nice transaction fees because your clients trust you to make a secure, legal, and successful transaction, you probably don't want blockchain

A centralised system with trusted nodes is far better for transaction times - this is the worst use-case for a distributed ledger. Blockchains try to avoid trusted nodes, and thus their transactions are slower, because they are multi-node, by design.

Banks already provide transfers in seconds (perhaps not in your country).

Banks make money because clients trust them, they are insured, provide reversible transactions etc, not because their transactions are slow.

> The simple feature of reducing settlements from days into seconds is by itself a great use-case.

The reasons for why settlements take days, and not seconds, is procedural, not technical. If the financial world wanted instant settlements, we would have had them decades ago.

The financial world optimizes for intent and compliance, not speed. This is why settlements take days, and why cryptocoins aren't very interesting to it.

Transferring money from one account to another account is as simple as updating two rows in a database. That the database is not a distributed proof-of-work ledger has nothing to do with it taking days.

As others have pointed out, plenty of other countries have this. The United States doesn't because it's "not a country": there isn't a single financial services regulatory jurisdiction, there's 50 different ones, and enough people are opposed to the federal government on "principle" (?) that there's no support for useful coordination efforts.

Good point. A lot of comments here about relative settlement times. But it occurs to me that most of these are in the context of transfers/settlements within a jurisdiction. What is the story on moving money between countries? At the moment I'm have to pay significant premiums to accomplish this (and it is not usually instant). Am I missing something?

> If the financial world wanted instant settlements, we would have had them decades ago.

As a confirmation - they wanted it and they have it: https://en.wikipedia.org/wiki/Single_Euro_Payments_Area#SEPA...

Australia also has instant transfers between banks, see https://en.wikipedia.org/wiki/New_Payments_Platform

Can you expand on this a little more? Why does the financial sector want settlements to take longer?

Invariably for some fraction of transactions you'll later find out the settlement shouldn't have been executed. It doesn't matter whose "fault" that is, either way somebody will get screwed when this happens. If you wait longer, you may detect this before settlement completes and nobody gets screwed.

In my country there's a scam where people find out you're buying a house through a particular solicitor with a large cash transfer, then they send you an email or even a physical letter saying there's a problem, the solicitor just found out their firm got a new bank, or whatever, please transfer the house money to the new account. Of course it's a lot of money so most people will want to check this is right - they provide their phone number on the message. This number, of course, is part of the scam and a "secretary" will answer saying your solicitor is busy right now, but yes, they're very sorry, the message is genuine and please use the new account details.

The large sums involved mean this scam is very lucrative even if it doesn't work on say, 99% of potential victims.

If the victim realises they've been scammed ten minutes after the transfer, chances are good the bank can fix it, because settlements aren't really instant. If they realise the next day, or two, or three days later, the money is gone. It went to a mule, who has already forwarded it, the police might arrest the mule if they can find them, but the mule doesn't have your money, they're just another sucker.

presumably for time to detect and prevent fraud or illegal transactions.

They also get the interest on your money before passing it onto the next party, multiply that by everyone and it's a not insubstantial sum.

Risk aversion (against fraud, criminal activities, etc.) and also because a bank earns money as long as it can hold that money, every day that money is accruing interests so if you can hold on that money for longer it makes you more money without any downsides.

Doesn't that become a zero-sum game, or close to, when you take into account the aggregate effect of all money transfers?

>But long term, banks will need to accept faster transaction times. Blockchain or not, it's ridiculous you need to wait days to transfer money when you can send email in milliseconds.

Already happening.

SEPA Instant is either being released or in trial phases. My bank is trialing it, a <10 second transaction costs 1€ fee flat, normal SEPA is still free.

And banks offer me more in terms of personal security. If I lose my debit card, I get all damages reimbursed. If the bank gets hacked, there is insurance.

Unless I fuck it up myself, I'm going to be saved by the bank.

On the other hand, on Bitcoin I can fuck it up myself but if someone else fucks me up then I'm SOL and can go eat ham for all that Bitcoin cares.

For the average users the question of using Bitcoin has become irrelevant with SEPA Inst. Banks are faster with it and offer more features.

I don't understand this thing about slow financial transactions. Does it really take days to send money from one account to another in the US?

Here in India, we have a thing called IMPS. You can send money instantly from one account to another. Transaction cost is a flat Rs. 5 (less than $0.10) for any transaction size.

There are other newer protocols as well such as UPI which I haven't really used because IMPS serves my needs perfectly.

Sending money to another account is basically a non-issue here.

From my understanding, US transactions can take a week if you're unlike and the banks need to shovel around a bit.

And tbh, the banking situation in the US is just amazingly bad. Horrifyingly bad if I believe the more out-there stories I hear from people.

The only time I got charged a fee was for a transaction into the US (the fee was currency exchange fee and nothing else). And the fee was seperate so the transaction amount was unchanged.

Yet in the US it seems possible that banks will take a piece of a transaction for themselves.


In search of a solution to a problem nobody but the US had, we have blockchain now.

> the banking situation in the US is just amazingly bad

At one time I used to get paid from a US employer's Bank of America account. I also had an account in the same bank, but transferring the money between our accounts in the same bank took 3 days. I presume due to some split between business/personal banking, but still absolutely ridiculous. We switched to sending the payments to my European account through SWIFT, and those payments happened same-day.

No, it's not slow (for the most part) because "reasons", it's slow because they are legally allowed to be slow and they can finagle a bit more profit that way.

How does Bank of America profit off of making transfers between Bank of America accounts slower than making transfers to other banks?

Because then they can float the money and put it in things that earn them interest...

E.g. debit from Bob's account on Monday, put in <money market/whatever> from Monday until Thursday, and then put it Alice's account on Friday.

But they invest money that's sitting in a checking account already, there's no difference between it sitting in an account and it being "in transit"

I guess they don't pay interest to neither the sender or the receiver while it is "in transit"?

> it's ridiculous you need to wait days to transfer money when you can send email in milliseconds.

This is only a problem in the USA. By contrast, in Britain, the Faster Payments Service (https://en.wikipedia.org/wiki/Faster_Payments_Service) has provided transfers within a few minutes for more than 10 years now.

You manifestly do not need a "blockchain" to solve that problem.

The problem is industries such as the financial sector are extremely resistant to change. Banks are still using COBOL! They are so slow to adapt, it could take a decade or more for blockchain technology to be integrate.

This is a stronger endorsement of COBOL than it is of blockchain...

And that's why my new startup is all about COBOL on the Blockchain! Next step is an ICO to raise enough money to thaw out some good COBOL programmers...


I am constantly surprised by this point of view. Blockchain is a solution to a number of problems that were previously unsolvable, yet so much of the discourse is around the idea that decentralised trust doesn't really solve any useful problems. True many of the applications are hype, but we need to recognise these for what they are and move on to more interesting things.

To me the best example is the travel industry. Decades ago a small number of companies managed to get manual back office systems moved to centralised booking and reservation systems. This had a huge impact on the ability to sell inventory and open up the world of online travel agencies.

These centralised platforms are still around and they are now a huge problem. The software is bloated, complicated and slow, integrating with any GDS is painful and only ever allowed on their terms. It is amazing to me the amount of time and effort and startups that have gone into just trying to find the cheapest flight available.

This is fertile ground for decentralised trust. Having a local copy of the live flight inventory or a large aggregate set of hotel inventory would revolutionise the travel industry. Sure there are also applications around settlement and financing, but to me the most exciting thing is the ability to build customer applications on large sets of provably correct, trusted data. And to do this freely in the manner you chose with the technology you chose.

Your choice of "the best example" of decentralised trust solving useful problems supports the original poster's contention that the blockchain industry is desperately trying to sell itself as the solution to problems it's badly suited to. Virtually nobody in the travel industry is excited about blockchain, still less as a GDS replacement.

Decentralisation and anonymity are useless to the travel industry and from the point of view of the industry players, public access to local copies of all their [current and historical] inventory and reservation data is an alarming bug, not a feature. What they actually want is for a buyer to be able to via an API (i) access the current price for each relevant item of inventory that's currently on sale from lots of providers (ii) update a single private canonical record belonging to the one [necessarily trusted] party they buy from (which may or may not affect the availability of inventory for future queries). The reason the systems are slow is because pricing and routing is incredibly complex and diverse, and the associated datasets are enormous (and often computationally expensive to process even without a layer of cryptographic crap on top). It's something of an understatement to say that turning that into thousands of local copies of an ever-growing blockchain which needs to be updated to account for a million reservations per minute is not going to be an improvement...

> I am constantly surprised by this point of view. Blockchain is a solution to a number of problems that were previously unsolvable, yet so much of the discourse is around the idea that decentralised trust doesn't really solve any useful problems.

Those two things aren't mutually exclusive. Blockchain solved some very interesting technical problems, much like a lot of advanced math might do. But as you pointed out, the discourse is around whether or not blockchain solved any useful problems, not just interesting problems.

Like others, I have yet to be convinced of a use case for which blockchain is the best solution (other than cryptocurrencies).

> Blockchain is a solution to a number of problems that were previously unsolvable,

Name one.

Paying for porn without revealing identity

Byzantine Generals Problem?

Is there a formal proof of that yet? (Not being sarcastic, genuinely curious)

I was with you on this application for a while but then I thought back to my own experiences a long time ago supporting hotel booking systems. Regular ecommerce is a walk in the park compared to the complexity of a hotel booking system, even for a single hotel that has a modest quantity of rooms.

In broad brush strokes for someone wanting to skim money off people booking hotel rooms by selling rooms cheap (e.g. lastminute.com) the holy blockchain does indeed sound like the answer to all their prayers but it does not do anything to solve the hard problems that cannot be simplified even with a simple country hotel.

Only if you have been at the sharp end of fixing hotel booking systems do you appreciate some of the finer points. You really cannot double book rooms and yet every day that simple country guest house might have someone on the phone wanting the same room at the same time that there is someone at the front desk and someone trying to book through lastminute.com. Locking that record is a time critical thing even if the hotel is out in the countryside where nothing ever happens and time moves slowly. That room could also have bookings on it from people that got married there five years previously and are on the way back for their anniversary, therefore there could be a substantial amount of data tied into that slot. Furthermore, that room could be booked but if the guest does not show up before a given time then it is up for sale again. So that availability presented as yes/no on the website is not as simple as a yes/no, there are other provisional states depending on what has been paid and who has showed up. There might not even be the option to bump those guests into a more deluxe room if those more deluxe rooms have someone walk through the door and take them.

Ian Dury and the Blockheads probably have better insight and knowledge than a venture capitalist and the blockchains have about how to improve upon the current state of the art when it comes to hotel inventory management. Rome was not built in a day and neither were the booking systems needed to cater for visitors to Rome. It is just not that simple. Fast broadband cannot be relied upon for a lot of hotels, so the idea of updating a blockchain and sending it out to every Tom Dick and Harry chancer on the internet hoping to sell 'cheap rate' rooms with them all being instantly updated is not the hospitality system I would want to be doing support for.

If the de-facto was 'decentralized' and I worked in hospitality systems support and a new 'centralized' idea came along I would be straight on that bandwagon and you would not be able to stop me!

Maybe it just depends on what end of the telescope you are on. My perspective is the business end, with the dawn starts, skipped break times and extra hours put well into the small hours, fixing real problems for real people with real expectations of service.

The people I see in the blockchain space do not have any knowledge of the problem space that their change the world solutions purportedly seek to address, as mentioned I was with you at the start of what you had to say here, but, on second thoughts I don't think that blockchain is a magic bullet even for the simple task of getting a room booked in the smallest of hotels. Furthermore, the task isn't just getting a room booked as a yes/no thing, there is this bigger problem of hotel booking management and centralised systems, well trained staff, hard working staff and technical support is the glue that makes it all work as an apparently 'yes/no' thing. At best blockchain is woefully naive and, from a support perspective, a disaster if ever implemented in this seemingly simple 'use case'.

To extend your analogy to the internet, just consider that ARPANET was being developed decades before the dotcom boom. And it didn’t look anything like the AOLs/Compuserves through which I first experienced the internet. I agree that if blockchain takes off like that, it’ll probably be in a form we can’t yet imagine.

But what makes you think it's an arpanet?

Even then there were exciting, compelling use-cases.

The vast majority of the "decentralized" trend is nonsense.

I met a blockchain company co-founder at a conference in Silicon Valley that we can call "Alfie" for the purposes of this post. After a brief chat at the conference Alfie graciously took me out for a nice dinner. During the dinner Alfie asked if I wanted to be an advisor to their company. Another well respected friend of mine was already tying their name to the company so I had hope that it would be reasonably legit. They told me that they had raised $30M in foreign funding

The #1 thing I have learned about advising startup founders is that if they don't communicate well then they typically don't do business well. In this case after our dinner Alfie basically vanished on me and stopped responding to my emails/messages. When Alfie finally got back in touch and offered to send the advisory agreement I told them I wanted to take it slow. That I didn't feel comfortable linking my name with their company just yet but I would help them unofficially for now. I've learned to trust my gut and never do something until I feel comfortable with tying my name to it.

A month or so after Alfie got back in touch with me another friend we can call "Sally" reached out to grab dinner in SF. Sally was at that same Silicon Valley blockchain conference that I met Alfie. Sally was visiting SF for work again so we had dinner. Sally told me that they were recently in a foreign country at another blockchain conference when Alfie couldn't muster up the funds to pay for their hotel room. Sally ended up letting Alfie stay in their room for the night.

Sally learned that Alfie has not actually closed $30M in funding yet. They had instead been verbally committed a $30M investment. They had actually raised over $1M but it was spent with all the traveling. No tech built at all. No money to build tech.

I ran into Alfie and their partners again at a NYC blockchain event a few months after that. Alfie confirmed the story but said they had now closed on the $30M. Yet they were at the event fundraising for more money.

It just doesn't add up.

Anyway, Alfie aside there are even bigger scammers out there. Lots of pump and dump nonsense.

However, I believe in the team behind ShopIn (http://www.shopin.com). The founding tech team for PriceLine is being led by a serial entrepreneur I have known for years. I think they have a reasonably good chance of proving that you can do something disruptive with blockchain.

Time will tell.

I was highly skeptical about blockchain as well because the only practical application seemed to be cryptocurrencies, and those will never be allowed to grow to a point they become dominant (they can be regulated in such a way normal people won’t want any).

But ... then I went to an evening where the identity applications were explained. Using a blockchain to have assertions made about your identity, like where you studied, where you were born, what employer’s you’ve had in such a way that the assertions can’t be forged, can’t be doctored, can’t be stolen, and aren’t locked away in the databases of an institution. I heard stories of people who lost their proofs of identity by having to flee a warzone and were unable to prove to EU governments and employers they were who they were (to the point of being stripped of their bank accounts because banks only let people with official paperwork hold accounts). And I have to say, there’s something there. I’m still skeptical about cryptocurrency, but not about blockchain.

That all sounds great, but how does it actually work? So there's an immutable entry describing you in a database, then how do you convince someone that you're the person it describes? Do you need to memorize a private key? If it gets forgotten/compromised, then you've lost your identity forever.

The only way I can imagine physical verification would be to have a microchip implanted in your arm, but that would be unthinkably worse than the current system of (thankfully) mutable, replaceable paper documents we use today.

One of the most intriguing projects involving blockchain I’ve noticed is e-Estonia which I would file under useful, however it may not qualify as solely a blockchain-based product. Here the reasoning for incorporating the (KSI) blockchain is to prevent tampering.

Citizens have access to a number of digital services that includes but aren’t limited to voting, banking, and healthcare.

They've reported; “Since 2014, more than 27,000 people from 143 different countries have been granted Estonian e-residency”.

I find this example to be exciting.




> A lot of the grand visions behind blockchain mania are indeed compelling, and I suspect something blockchain-ish will take off at some point in the future.

Totally agree. Recently had a discussion with a friend regarding what we felt would be an ideal approach to implementing blockchain and email. Essentially and selfishly how we needed it to behave.

Naturally upon doing a little bit of research lo and behold this endeavor had already been taken up. Exciting I found myself thinking, That’s pretty cool my friend agreed. Fast forward and read past a few more paragraphs and again lo and behold this project is an ICO and with this token you can send emails and blah blah blah.

Very disheartening (at least for me personally) to say the least. Not to say a project like this will fail, just saying that it seems the imagination for blockchain products as of now seems to be limited to just ICO’s.

"There is no blockchain technology in the X-Road"


I keep hearing about this e-residency, but what can you actually do with it? What is it useful for?

If their corporate taxes are lower than in your country (after calculating for what you have to pay according to the double taxation agreement the two countries have) then it's worth it opening your company there.

Depends on how high the corporate taxes are in your country. If it's worth it, the big advantage is that everything can be done online.

You can setup a company and base it from there. You can be in Timbuktu, Ulaanbatar, etc and be running a European company trading with parties all over the world. There are probably other benefits but that one clinches it for me ;-)

Not much, really. You can setup a company remotely, only to have to come to Estonia anyway to try to open a bank account and most likely get rejected.

Hmm... I don't know. The more I think about blockchain, the more I get excited about quicker app creation because the payments channel is less hard. Though, I'm idealizing blockchain here, I haven't looked into the technicalities of how to integrate bitcoin, for example, into an app. But ideally this ease of use for developers would be a thing.

I'd get excited about that.

I just think of what it'd be like - once companies actually starts utilizing "blockchain" with real purpose.

You are obviously living in a privileged, rich society. In many poor countries were inflation is insanely rampant, and banks are not trusted, everyone wants a way to store wealth without the government,bank,or person robbing them blind.

>> Almost everyone talking about it is excited about getting rich from trading currencies

Maybe, but why is it a bad thing? This can create powerful network effects. Facebook benefited from network effects derived from the fact that people want to be liked. Cryptocurrencies benefit from network effects derived from the fact that people want to get rich. The problem is that the network effects of cryptocurrency are so powerful that people didn't even need to offer an underlying product/service in order to benefit from it; I think that will change in the future though because the market is now saturated.

Blockchain is so much more complex than the basic internet/web. The excitement is about building the first gen of blockchain tech, and the vision is over many decades - the last Bitcoin will be mined around 2140.

Compare to the web, which brought huge change, but decentralized governance is much harder for the lay person to understand. Most people haven't even considered many of the problems it proposes to solve.

So the value of Bitcoin/crypto is held up by the excitement of the change it heralds. It's just going to take a while. (And the trading and investment is the means to the end in getting it going).

But yes, let us wait for the clowns to depart.

I used to think that the blockchain bubble was like the dotcom bubble, in that the core technology was actually genuinely transformative, so that even after the bubble burst and all the over-valued companies went bust, the technology would remain and continue change our lives. However, I must admit I'm starting to have my doubts now.

It was 10 years in to the dotcom era that the dotcom bubble burst, and by that time we'd had massive maturation of the technology and the start of mass adoption.

However, we're approaching 10 years since the start of the blockchain era, and there are signs that the bubble is bursting already, but in terms of progress it is nowhere near where the dotcom era had got to by this stage, and there's not much indication of anything that appears that it will be particularly long lasting or widely adopted. Sure there's niches like settlement systems and security tokens, but not something that a member of the public is going to use on a daily basis like they do with many of the internet based companies.

Maybe we should consider that the blockchain's killer app is the truth.

This is the case with bitcoin, since the purpose of the blockchain is to be, for example, trustless, protecting you from someone whom you don't trust lying about your bitcoin transactions. Bitcoin will show you the truth about those transactions. The blockchain also tries to protect against fraudulent double spends and do on, and this like all fraud is also lying, untruth.

Likewise, the economist Hernando de Soto Polar's work on property rights and "dead capital" has led to his creation of a blockchain app to allow people in unstable political environments to prove their property claims. If the old data is destroyed in the flames of the next revolution or hacked by your neighbor bribing an official, it doesn't matter as much because you have your claims on a global registry, and that global registry contains the truth.

And maybe when machine learning can allow bad actors to create false media, change what a politician has said in a video, perfectly alter or even create fictional recordings of conversations in order to deceive, the blockchain may provide some shelter for the truth.

Edit: Of course there is a caveat: bad data in, bad data out.

Your comment is exactly why I believe many blockchain (and even cryptocurrency) technologies are useless.

There seems to be this underlying pull for many crypto/blockchain enthusiasts that this technology frees us from the constraints of governments and society. "The truth is in the blockchain" and "There is no government in charge" are common refrains.

The thing is, unless you want to be a true hermit, you can't escape the bounds of society. Nobody really cares about the "truth", they care what society says is acceptable (and what governments will enforce). I'm pretty sure there were a lot of contracts between Native American tribes and American settlers that were basically ignored, and everyone knows this, but there aren't any title companies that are worried about this fact.

You're taking an absolutist view. Crypto currencies weren't intended to free people from every constraint of society, just a few constraints, and only to a degree.

Crypto clearly has the potential to make enforcing trade and currency restrictions far more difficult. When it's too difficult to enforce a rule, governments can (1) stop enforcing it; or (2) ratchet up the penalty when someone does get caught as a deterrent. The second option can lead to unpopular disproportionate punishment, and slowly melts away towards the first one (e.g., war on drugs).

Crypto-currency won't take down governments, especially overnight, but they clearly have a long-term potential to alter some levers of power.

I don't wish for myself or others to escape the bounds of society and government (ok, maybe some of the bounds but that's another talk). Indeed my premise is that individuals, society and government must all be bound to each other in order to have a desirable society, and the sin qua non of this is respect for the truth.

As for government, I happen to prefer democracies, and they are especially beholden to truth. When saying that the blockchain's killer app might be the truth, I'm thinking about how it could help save our democracies.

As for The Truth, as in the ultimate truth, for when you'd use quotation marks -- the "truth" -- I'm not going there. We need only concern ourselves with the notion of truth as opposed to lies.

To clarify the distinction, see how this doesn't work:

"Is it true that you were in Symphony Hall at the time of the murder?"

"Is it 'true'?... What do you mean by that slippery word, 'true'? This notion of 'truth' is simply whatever we agree on and therefore irrelevant."


And if the truth is simply what is agreed upon, then are lies simply what is not agreed upon?

If so, perhaps we can agree together that the year is 1984.

Nothing of what you are saying is something blockchain technology addresses.

Hi, excuse the delay.

I was saying that blockchain might help address fraud, against untruth or deceit. For example I believe that yes, the American Indians would have been better off with unalterable titles to their lands. Would it have changed history? I don't know, but in other situations it might, and for that I point you to Hernando de Soto Polar's site. https://desoto.com

I was also saying that the claim that "nobody cares about the 'truth'" (and so blockchain is not useful) is misplaced, and that in this case there's no good point for using the word truth in quotes as if it were something illusory. There are times when quotes around the word truth make sense, like in philosophy, but this is not one of them. An exception is if you are talking about the potential to use the blockchain to make lies permanent.

And third I was responding to your statement that people who support the blockchain are often hoping to be freed "from the constraints of governments and society", and that my comment was a good example of this. Your comment might be correct about others, but I'm not a libertarian or anarchist. Rather, I'm a bit worried that technology like machine learning and even just social media have the potential to weaken and even destroy our democracies by using lies (doctored video, for example) as political tools.

But you don't even need machine learning and social media. In Russia, lies have undermined what began as democracy under Yeltsin to such a degree that it is now for all intents and purposes a dictatorship. In Russia the playbook is basically as follows: an event occurs that makes the Kremlin look bad. The Kremlin uses its media outlets to make up alternative truths (lies), several versions, some more implausible than others. The person seeking the truth, what actually happened, is now looking into a hall of mirrors. Not being able to see anything clearly and having to spend their energy disproving several false versions, no meaningful discourse happens. The event, in this way, has been neutralized by lies. If a blockchain can help with this kind of problem, then I'm interested.

Edit: Btw, I'm not like a cryptocurrency enthusiast, don't program Ethereum contracts, own no BTC or any other crypto, and believe and have argued here at HN that BTC is a bad currency because of volatility with makes credit and debt impossible. Additionally BTC is used for crime and as a way to cash in on fraud, malware, threats and so on, and I'm not interested in any of that.

So specifically on addressing fraud, this only helps the merchant. You could make an argument that decreased fraud decreases costs but human greed overtakes that assumption. So then what’s left from the consumer side? What if the merchant send you a bad product? They have no incentive to make it right. You could argue that eventually it will put them out of business from bad reviews however this doesn’t always work in practice and you’re still out of your money for the original bad product. With a centralized system we can just reach in their account and take it, refunding you your money and costing the merchant more in the long run, further making them want to do legit business. This permanent contract you speak of is a double edged sword that cuts the consumer more than the merchant.

That's naively idealistic. In unstable political environments when someone with power and weapons wants your property he'll just take it. No one cares about "truth". And they can use threats of violence or imprisonment to force people to update any property registry to their liking.

Of course de Soto Polar's vision isn't all-powerful but it is worth looking into just the same.

Here's his website: https://www.desoto.com/

And from one of many many articles:

"In the late 1980s and early 90s, de Soto played a key role in ending the Peruvian Terrorist group Shining Path’s violence by getting the Peruvian government to recognize poor property owners’ land deeds."


> Maybe we should consider that the blockchain's killer app is the truth.

That isn't any objective truth though, it's merely the consensus as defined by the majority of current participants weighed by the processing power they command.

It may seem like a subtle distinction, but I think it helps make the benefits and risks clearer.

If so then the ultimate application of blockchain is authentication of recorded video as actual, unadulterated video of an event.

Yes, that is a possible application of "blockchain technology", given a broad-enough definition of what constitutes "blockchain technology".

But the consensus-based proof-of-work (or proof of storage, or proof of memory, etc.) models aren't really necessary or even clearly desirable.

There are timestamping systems dating from long before "blockchain" (at least 1990, probably before) which involve sequential hashes, with each subsequent hash also including the previous one (in some respects this is a very simple blockchain), and then if desired you can roll them up through a directed graph to one master hash produced periodically and published immutably -- printed in a newspaper was one approach, or posted to Usenet, but you could think of others -- such that it validates all previous hashes as having been created before a particular time.

Guardtime was doing this back in 2007 or 2008 and printing the top-level daily or weekly hashes in the newspaper; I noticed they are now marketing themselves as a "blockchain" company, which is astute marketing (and I'd do the same if I were them, probably), but the ability to do secure timestamping existed in several forms without blockchain.

The reasons these systems weren't used have less to do with technical feasibility than lack of pressure to implement them.

> sequential hashes, with each subsequent hash also including the previous one

Isn't this "in principal" what a blockchain is? Just because they didn't call it a blockchain back then doesn't mean it isn't.

You could also consider Git to be a blockchain of sorts.

What distinguishes Bitcoin in particular is proof of work which provides a means by which distributed untrusted actors can transact in a trusted way. The actual chain of hashes just records these transactions.

The answer to that is tricky because it depends on intent.

Taking an expansive definition of blockchain as a log of sequential, cryptographically verifiable transactions seems okay enough. At the point where we're nitpicking what is/isn't blockchain, that's not a useful exercise, because the real question is whether this is the right solution for the right problem.

On the other hand, "blockchain" is a highly loaded term, and choosing to label something on the margins "blockchain" means diffusing the legitimacy of application onto the marketing term, or vice versa. In that sense, I'd be hesitant to lump this marginal example into "blockchain" specifically instead of just "cryptography stuff".

No, blockchain does not enforce anything about the original video. It only enshrines the version published initially by putting it (or a hash to save space) on a permanent public record.

Why stop at video? Every application that creates any file should take a hash of it and upload it to a public blockchain. You could use it to identify tampering with any individual file. If deployed more broadly (e.g., on the file system level), you could easily identify if your systems have been hacked.

> Maybe we should consider that the blockchain's killer app is the truth.

That isn't any objective truth though, it's merely the consensus as currently defined by the majority of participating processing power.

First: the dotcom bubble burst five years after it began, and the technological advancements didn't see "mass adoption" - because they were not consumer facing. I get the feeling that you're thinking that pets.com was the dotcom bubble... the bubble was centered around telecom technology - not retail websites. The bubble is fairly disconnected from what one would describe as the success of the internet today - web 2.0, the rise of APIs.

Second: The region of experience that blockchain tech is best suited to revolutionize, finance, is also the one that is most sensitive to rapid change and most heavily regulated. The US government is still grappling with the idea, hell - the NIST draft that was supposed to provide some clarity of what cryptocurrencies actually are got totally nuked by every interested party. I'm still waiting for the IRS to issue a clarifying statement on the tax handling of a hardfork so that I can amend last year's filing. It has led to a very strange situation where a hands-off approach has allowed for development, but also prevented integration.

On your first point: I seem to remember plenty of companies that failed that were not telecom. In fact when I went looking just now I found a bunch of listicles about retail startups that failed.

The telecom bubble and crash was almost a side-effect. The telco executives saw the web taking off and used it to justify wildly over-inflated projections of traffic demand growth, and then began building out debt-financed networks to meet it. When the traffic didn't materialize (partly because the dotcom bubble burst), they had a bunch of overcapacity not generating revenue to service the debt that financed it, and that killed them.

> In fact when I went looking just now I found a bunch of listicles about retail startups that failed.

Their contribution to losses in the dotcom bubble were measured in the millions. Telecom, last mile service providers and B2B losses were measured in the billions. [0] You obviously know those lists are infotainment.

> The telecom bubble and crash was almost a side-effect.

I'd characterize it as more of a feedback loop. They weren't simply increasing capacity with the expectation of a customer demand that didn't materialize, they were pushing through an evolutionary hump in search of a global minimum. The world would look very different today if they hadn't, at great cost, setup the network the way it is today - pushing way beyond the original design of NAPs (Network Access Points) to IXPs (Internet Exchange Points). I guess you could attribute the change to capacity, but I'd say it is more accurate to describe it as a recognition of inevitable scalability problems and as a result - a change in philosophy. That change, the official government handoff, occurred in '95. There was also an amazing amount of very interesting R&D work going on, from strange new operating systems to packet switching on fiber optics without copper interruption. Even Enron was getting in the game by trying to setup a commodity market for bandwidth. The entire situation reminds me of the evolutionary problem, where you've got massive metabolic costs in brain size growth.

So no, it wasn't an overestimation of traffic growth. Everybody was trying to figure out the way the new world would work, a lot of people got it wrong.

Also... 401k participation spiked in '95 - I don't think that is a coincidence.

[0] https://money.cnn.com/2000/11/09/technology/overview/

I'm confident that there is significant real value to be gained from blockchain technology but at least 99% of projects today are just empty buzzwords. Most wealthy people in the blockchain space are well-meaning but they don't know what they're doing; they invest their money all over the place based on superficial whitepapers and buzzwords.

I think that it will take several more years before we start seeing useful blockchain applications.

It's possible that the bubble may have to burst before the industry can progress though. Right now, smart people might be intrigued by blockchain technology but most of them don't want to get into the space because of the level of speculation.

Right now, it's just more profitable to launch some generic buzzword coin that does nothing than to launch one that actually does something useful.

Just like in AI right now, there are a lot of people who just want to make a lot of money and they don't care how.

we are -80% from ATH, I don't understand why peoppe talk about the bubble will burst in the future. It happened already.

Bitcoin down 80%?

when it was at 5800 and ATH was around 21000? kind of yes

TFW mods downvote facts

A lot of the utility from blockchain doesn't come from being able to do "new" things. They come from being able to do old things better: cheaper, more securely, free from the interference of trusted parties / government.

It remains to be seen which processes the blockchain will take over. Some are obvious, ie. prediction markets, sports gambling, money remittance.

Some are more complex, and will require frameworks to work within trusted parties: ie. tokenizing physical assets or securities that exist outside the blockchain world. Identity management.

>"They come from being able to do old things better: cheaper, more securely, free from the interference of trusted parties / government."

Name one thing that blockchain has made, or is even close to making cheaper or more secure or trustless?

The largest application of the technology has been bitcoin thus far, and bitcoin is more expensive; less secure than the traditional financial system (where if you get hacked you at least have some recourse); and you still have to trust intermediaries like Coinbase to acquire the Bitcoin and Bitpay to actually buy anything with it.

And I know the canned response to that is usually "why can't X new cryptocurrency solve these problems eventually? The internet had its problems at first as well."

But you solve those problems by making bitcoin exactly like our current financial system, with intermediaries and trust and regulation. And minus the hilarious waste of time, money, and energy that is proof-of-work.

Not as big as the bitcoin market but corda's growing[0] use for forwards contracts between parties[1].

Though it seems like this is an instance of blockchain "like our current financial system, with intermediaries and trust and regulation", but with cost/time savings by reducing the amount of humans involved in the transaction reconciliation process.

Many more examples of old finance firms using blockchain [2], though a far cry from the whatever is going on in the cryptos in use with consumer discretionary trading.

[0] https://github.com/corda/corda

[1] https://www.thetradenews.com/commerzbank-replicates-fx-trade...

[2] https://www.globalcustodian.com/news/technology/

I'll give you one.

The year is 2010. And I am a normal citizen and I want to donate money to WikiLeaks without the banks colluding to stop my financial transaction, even though nobody has been convicted of a crime.

How do you do it? The only way I can think of to do this easily (easily being the key word!) is a cryptocurrency transaction.

Banks and credit card companies collude all the time in order to censor financial transactions between people who have committed no crimes.

Do you have a better way of easily sending censorship resistant financial transactions? Because Bitcoin worked just fine back in 2010 for this usecase, even though the banks tried to censor it on their platform.

With bitcoin, what would stop governments from passing laws making certain addresses tainted resulting in people that send coins to or receive coins from them to be audited and having to explain why and how they linked to certain causes.

What makes you think if bitcoins (or any *coin) becomes the main currency in a country or region, we would not have laws were all addresses would need to be linked to people (or companies) and the ledger would not be used for figuring out and persecuting people supporting certain causes?

Well, for one, the government would actually have to make such a law, and then suffer the political consequences.

I would much prefer that the government is forced to actually follow the legal process, instead of what happened in 2010 with WikiLeaks, where the government made vague illegal threats against the banks, in order to censor transactions between people who broke zero laws.

It forces everything out in the open, instead of giving a couple banks the power to made hidden agreements between each other in order to collude and censor perfectly legal financial transactions.

And so far, the government has NOT made such a law. So guess what, that means it works!

This is not about people breaking the law. This is about people following the law, and yet private parties are STILL able to censor transactions through collusion and because of a few vague, and probably illegal, threats from the government.

The fact that the government has so far NOT been able to pass such laws, is innovation in and of itself. It means that it works right now for the purpose of making censorship resistant transactions, because before people WERE succeeding in censoring them, and yet now they aren't!

Read up on money services business and the various regulations they must follow, including the anti money laundering regulations. You may find yourself surprised at what laws exist.

Coinbase seems to already do this to a degree. If you transfer to a flagged address your account is banned with zero explanation or recourse. This will likely be the norm going forward for any reputable exchange.

Given the size of Bitcoin's keyspace, what would you surmise is the cost to a particular cause of "tainting" one of its public keys?

The government can do whatever it wants, the point is that it’s decentralized design makes it basically impossible to censor.

> I want to donate money to WikiLeaks

Trustworthiness of Wikileaks aside, do you think that's a $500 billion market? Donating to activist organizations?


"Worldwide, 230 million people send $500 billion in remittances each year, primarily using firms like Western Union, Moneygram, and RIA, which together control 1.1 million retail locations and account for more than 25% of the world’s annual remittance volume."

That's not an answer to the question above...

It's funny that the downvoters haven't really come up with a valid argument why Bitcoin is not a valid use case for this.

It's much more difficult to prove that person A transferred money to B via Bitcoin than it is via regular financial transactions due to Bitcoin's pseudonymity. Similar it's equally difficult to prevent this from happening.

Just that the you do not seem value in this (censorship-free transactions), does not make the argument invalid.

> I am a normal citizen and I want to donate money to WikiLeaks without the banks colluding to stop my financial transaction, even though nobody has been convicted of a crime.

Time will tell if Wikileaks was really a noble cause, or if the banks were right all along.

It is now 8 years later, and yet the organization has not been convicted of any crimes. Time already did tell who was right and who was wrong.

But even IF they are convicted of a crime sometime in the future, this is 8 years later.

Censoring financial transactions should require a court order. Signed by a judge, and done through the normal criminal justice system. And it should be done publicly, so that judges and politicians are held accountable for their actions.

In America, due process is a constitutional right, and if someone is guilty of a crime, there is a process that we should be going through.

Punishment should not be inflicted upon others outside the court system via secret agreements and collusion between oligopolies.

We have laws and human rights for a reason. Don't be so quick to throw them away.

Let's go to slide #2 then-- Scihub. They take Bitcoin which they ostensibly use to pay for the servers that serve up the science journals.

Do we need time to tell if Scihub is a noble cause?

Most of the people downvoting you probably never had to think about making a censorship free transaction

PKI is now quite trivial. It's easy for anyone to keep a log mapping a public key to some type of identifier.

Maybe not government, maybe just humans in general. Decentralisation, blockchain, smart contracts, cryptocurrency, AI and IoT could really start coming into their own further into the future when we start having more autonomous agents performing those little tasks on our behalf, like a smart fridge ordering more milk and interacting with a drone to ensure payment and delivery without having to bother a human.

But I'm not getting the sense that any of the huge amounts of money being invested is going into much other than feeding the crypto ecosystem at the moment.

True story: VCs specialising in funding blockchain projects told a dev team "You guys are building a proper business, that's great but it means it won't 100x in a short period, so isn't really what we're after".

You sound incredulous about this – VCs have a pretty clear business model, funding slow-growing steady businesses is not it.

But VCs normally try to fund genuine businesses - in this case, by suggesting they weren't interested in a "proper business" (as in a legitimate business) and were wanting something to exit in the "short term", the insinuation was that they just wanted a sham / fake business that they could use to fool people just long enough to do a 100x pump and dump.

To be fair, that business model includes obscuring that aspect of the business model as much as possible.

> True story: VCs specialising in funding blockchain projects told a dev team "You guys are building a proper business, that's great but it means it won't 100x in a short period, so isn't really what we're after".

Sounds like that VC firm knows what VC is, and would correctly give that answer regardless of specialization. Nothing to do with blockchain.

The public didn't buy most of their stuff online 10 years into the web either, but now Amazon dominates.

Blockchain needs a dominant company to stay relevant. As with Amazon, the entire company doesn't have to be tied to it, it can have onchain/offchain components.

I think this becomes easier as tooling becomes easier as well for developers and for users.

Banks and financial institutions are also big consumers of blockchain tech. Jibrel is putting fiat, realestate, and other assets on chain, for example, which is convenient for ownership tracking, but banks can also make on-chain/off-chain arbitrage. So while the average consumer can gain benefits from some of these blockchain projects, adoption by big banks, governments, and institutions are a greater sign of things to come IMO.

"I think this becomes easier as tooling becomes easier as well for developers and for users." Agree, this is what we're working on.

> we're approaching 10 years since the start of the blockchain era

By that standard, the start of the internet era was in the early 80s, almost 20 years before the dot com crash.

Don't forget that Ethereum has only been live for 3 years. This is still very early technology.

"there are signs that the bubble is bursting already"

The bubble is barely even starting. There might even be another bubble and crash before we get to the real one. These are just practice bubbles.

> Sure there's niches like settlement systems and [...] but not something that a member of the public is going to use on a daily basis ...

I'd argue that settlement systems aren't a niche system and is something most of us use on a daily basis -- if not more frequently. Unless you're using cash for everything, every transaction you make goes through a settlement process, sometimes multiple times.

People often talk about how inefficient blockchain is, but they rarely have a grasp on how horribly inefficient our current settlement systems are. They are slow, expensive, inefficient, and complex.

I have doubts if it'll be widely used outside of the financial space, and I recognize that may be the context in which you were using the adjective "niche", but I do think it has the potential to be transformative within that space, and I think that space is potentially bigger than many of us realize.

One of the points is that settlements systems are private permissioned blockchains, which don't take advantage of one of the main innovations of the public blockchains, i.e. decentralised trust. Interestingly I noticed that the recent Bank of England Real Time Gross Settlement Proof of Concept report[0] didn't even use the term "blockchain", preferring instead to use the term "distributed ledger technology" - I wonder if they are concerned about negative connotations the term "blockchain" might be starting to have.

[0] https://www.bankofengland.co.uk/-/media/boe/files/payments/r...

I do agree with you on a lot of your points, the current state (and "value") of cryptocurrencies is extremely over inflated, but I don't think we can use the dotcom bubble as any sort of guide to when the blockchain bubble will burst. They are fundamentally very different things.

I feel like most cryptocurrencies will die a slow death over the coming months with the ones that actually provide value decreasing in price but not dying, with the herd will be culled down to ~20 or so. Blockchain is a useful concept, and tokens of value are a key concept in adoption.

I don't think we've seen any truly useful applications of the technology, but I also feel like its too early to write it off completely. It would only take one great application of blockchain for it to become an important part of our daily lives, but I think the focus at the moment is in the wrong areas.

You might like saito.tech. Very early stage, but it is a genuine solution to blockchain scaling that powers applications rather than apps. Be sure to check out the decentralized (on-chain) Reddit for a sense of how flexible a big-data PKI network can be.

There are other interesting projects nearing fruition like Radix and Gun that are trying to create different types of distributed databases that have some of the properties of blockchains.

Blockchain tech is still 10+ years from being practical. But it could be useful in developing countries with bad governments and endemic corruption. In the 1st world things work well enough.

The dot com era actually started in the late 1960s with packet switching networks. It took 50 years to get mass adoption. The first really working cryptocurrency was in 2008. I expect mass adoption by 2058.

Web != packet switched network. But, if you want to go that far, the first cryptographic hash functions were being designed in the late 1970s, so cryptocurrency has a decade or so to go before it'll be "late" by that standard, and it's progress so far has been lackluster compared to the internet's as of 40 years after it's "packet switching network ancestry".

The web is an application. PSNs are a fundamental innovation. A fundamental innovation is a conceptual leap that brings about a qualitative (not quantitative) jump in capability. Before it something is simply impossible. After it that thing is possible.

The fundamental innovation was the development of the very first practical decentralized network that can achieve secure reliable consensus among minimally trusted peers. Bitcoin's way is not very efficient and may not be the only way to do it, but it proves that it's possible and shows one way it can be done.

It generally takes an absolute minimum of twenty to thirty years for something to go from lab bench prototype to mass adoption, and that's fast. 50 is more typical. Bitcoin was a lab bench prototype.

But what about the bubble? Cryptocurrency is indeed in a bubble, but it's a bubble built on radically underestimating the amount of time (and work) it will take to go from proof of concept to mass adoption. As the saying goes people tend to over-estimate progress in the near term and under-estimate it over longer spans of time.

The cryptocurrency bubble is also not very big. The numbers are huge from the perspective of an individual or a small company but from the perspective of the global economy it's the equivalent of taking a piss in the ocean. If you look at the global financial industry as the target market, cryptocurrency collectively hasn't scratched the surface. Far more money than the entire cryptocurrency valuation crosses the Atlantic and Pacific in the form of conventional wire transfers every day.

I receive a salary in cryptocurrency for quite a long time, and I always try to be as objective and unbiased about articles on the future of blockchain and cryptocurrencies as much as I can. But articles like this truly disappoint me because there is no actual reasoning for such a strong and confident statement in the title.

The whole article just says that a single encounter with a not-the-cool-tech-guy confirmed author's suspicions that there is no underground value in blockchain technology. Which is strange to hear from a professor in ML – the last person you would suspect to make such a generalization from the single data point.

And that's not to mention that observable "blockchain boom" is, in fact, just trading on the crypto-exchanges boom, which has nothing to do with actual potential and benefits of blockchain and cryptoeconomy, which is itself a field of research even more complicated than ML world.

Is your salary in cryptocurrency, or is it really in USD/Euros/whatever, converted to cryptocurrency at the current exchange rate on payday?

For now it's tied to EUR amount and converted on the average exchange rate for the last 5 days before payday.

For now? Do you expect that to change?

getting your salary paid in crypto currency is nuts. But fair play to you.

How do you pay bills? What cryptocurrency do you get? How do you / your employer handle currency fluctuations?

Maybe he's getting paid in DAI[0], a decentralized stablecoin?

0: https://makerdao.com/

To be more precise I have a choice of being paid fiat/crypto (it's ETH) in any ratio I choose. So it can be 100%/0%, 50%/50% or 0%/100%. For now I'm using 50%/50%, so I'm not completely out of the "classic" financial system :) But I know people who are.

IMHO it does not make much sense receiving a salary in an asset such as a crypto "currency". At least for the vast majority.

It sounds senseless that purchasing power of someone that is averse to risk (which I would say is almost everyone in western countries) is that volatile.

With this I'm not saying thay I'm pro fiduciary money or central banks controlled by established institutuions but this is the way it works.

Again I'm not saying this is your case.

In all seriousness, what are the advantages Blockchain has over a public SQL database with limited reads and writes that also maintains a public transaction history? Cause when I hear people talk about the problems Blockchains solves (outside of cryptocurrency which is a whole other topic), I don't see what advantages Blockchain has over that. A public SQL database isn't the most "clean" solution, but it'll save everyone a bunch of time and money over the resource intensive blockchain verification process.

This idea that centralization is always evil, or that public actors are inherently untrustworthy and we need some mathematical algorithm to verify all interactions between them strikes me as one of those Silicon Valley idiosyncrasies that Silicon Valley haters laugh at.

Append-only/log-structured databases are worthwhile (SQL databases end up similarly structured internally). "Mining" and all the overhead it entails is only worthwhile if you need zero-trust, and few if any use cases do.

true. it's not like Governments falsify data, forge evidence and all that. It's crazy to think the world needs zero trust.

How do consensus protocols help here?

Currently we trust information by the source it comes from. It’s an authority-based model.

Consensus shifts that trust from authority figures to others in your group. Bottom-up trust instead of top-down.

Sorry, I should have made more clear what I mean:

When Governments falsify data, in my opinion bottom-up consensus doesn't help, since governments then also could simply participate in that consensus-forming process (see 51% attack)

you think a government of Burma for example can 51% attack Ethereum? The purpose of all this is to put all their balance sheets and title deeds etc on the global blockchain not a private blockchain they control in their offices.

You think the government of Burma, for example could successfully attack an append-only public database product hosted and managed by another country where a large number of interested parites are acting as auditors?

are you seriously suggesting that small countries should keep their important data on centralized servers controlled by another country? its worthless to discuss the million reasons why this will never happen and why sorry

Government actions are important because of the identities involved. A statement that's non-repudiably signed with an official government key seems far more useful for holding a government to account than an anonymous consensus that "the government said this"

Maybe a different but related question worth asking is: what does a blockchain accomplish that cryptographically signed audit logs in a centralized database don't?

Setting aside the specific technical details, in concept a database of cryptographically signed audit logs and a blockchain aren't so different - blockchain adds decentralization and a trust/truth resolution formula, at the cost of a different set of scalability concerns. So when is that decentralization specifically useful?

The above, but published and witnessed (and signed) by others; I think that's often called a 'sigwit' system as shorthand.

Thanks for the reference! I got curious and looked it up. Turns out the term is 'segwit'.

But more to the point, turns out some cryptocurrency implementations move the transaction database to a segwit system because of the scalability problem.


The main innovation is that blockchain is decentralized and yet still verifiable. A public SQL database is in nature centralized. Even if you were to try and shard it out to everybody in the network you have the difficult time of cross verifying such data heavy records.

> A public SQL database is in nature centralized

Why would a SQL database be centralized in nature?

Just as your n nodes hold the entire blockchain, you would have n nodes holding the entire SQL database.

Of course, you could have a blockckain only on one node, centralised. That wouldn't make it inherently "centralized", however.

Same with SQL databases.

There aren't any decentralised SQL engines really. There are distributed databases that provide SQL-like abilities, like Spanner, but they're optimised for huge scale and not low trust. They're still expected to be run by a single organisation, not a p2p network of many organisations.

I am the lead engineer on Corda, which is an open source 'enterprise' (i.e. institutional/industrial) blockchain-inspired platform. But if you don't like the B word you can think of it as a decentralised database that can be queried using SQL. The intro to the technical white paper describes some of the issues with "just run a public SQL database" approach:


Why not just use a shared relational database? This would certainly solve a lot of problems using only existing technology, but it would also raise more questions than answers:

• Who would run this database? Where would we find a sufficient supply of angels to own it?

• In which countries would it be hosted? What would stop that country abusing the mountain of sensitive information it would have?

• What if it were hacked?

• Can you actually scale a relational database to fit the entire financial system?

• What happens if the Financial System™ needs to go down for maintenance?

• What kind of nightmarish IT bureaucracy would guard changes to the database schemas?

• How would you manage access control?

So, it's ultimately a system that tries to address these questions and many others too. If you can solve these issues then you can suddenly actually propose an entire market putting all data into a single database engine, and at that point things can get a lot more robust and efficient. But it just wouldn't be politically possible on any sort of scale to do that with Postgres.

Thanks for the writeup and the whitepaper.

I find it hard to follow the distinction between decentralised and distributed, especially since all of the points above would apply to your implementation, as well:

All the decentralised networks rise and fall with enough political pressure, becasue they all have a weak spot - some form of organizational structure that needs to be kept alive by some entity. In your case (from the whitepaper):

> A network map service that publishes information about nodes on the network.

The legal entity that will maintain this service will be faced with enough pressure to shut it down once the state in which this entity happens to operate in implements laws that happen to render some of the content in the database illegal.

If someone provides a solution to this, that would be groundbreaking. Until today, no such thing exists.

Why not jump on the Corda mailing lists and follow along as we work on these things?

The network map is a component I've spent a lot of time thinking about and working on, to make it more and more decentralised over time. Because yes a lot of users flag the same thing you have.

Corda has some simple features to mitigate this. For instance nodes have an additional-node-info directory where you can drop NodeInfo files. These act as overlays on the data received from the zone's network map. If the zone operator removes a party from the network map for some reason (maybe a court order, maybe a commercial dispute, or whatever) then you can just drop their NodeInfo file in this directory and it'll be as if they're still in the map.

So the idea is that the zone operator acts as a coordinator and provider of advice, but it doesn't have real control - node operators can always override whatever advice it's giving out.

But Blockchain cannot exist outside of cryptocurrencies. It's a system where popularity of a cryptocurrency is crucial for blockchain's security. So if it can't succeed as a cryptocurrency there is no blockchain to talk about. And once it succeeds we can start solving hard peer to peer trust problems with it.

Uhh HyperLedger from IBM is used to build blockchain systems without an unerlying cryptocurrency.

The use of cryptocurrencies within blockchain is to "promote" the adoption/distribution of a system. However, there are other cases where the stimulus for the adoption is non-monetary (e.g. access to the information) and thus a crypto-currency is not needed.

I agree 100% with this.

Maybe there are some slight advantages in some edge use cases - but if someone came out with a company that was "modified public SQL database technology" would people be investing their money and declaring it important to the future of technology? The answer would be no.

I haven't seen a better approach for decentralised verifyable databases yet. Postgres for example offers several approaches for mirroring or decentralisation however non of them feels certanly clean and all of them come with their own downsides.

I agree that we are not there yet to use it as a simple drop in solution for such problems. But we are certanly getting there.

Also there are no limited reads (or writes for that matter) every actor of the blockchain can modify their local version as much as they want.

The SQL database has to be maintained by someone and with enough political or legal pressure the maintainer can be forced to change it, not so with a blockchain.

Instead, with a blockchain such pressure results in a fork of the chain, which in some cases (notably those involving token ledgers) may be even worse.

You've never heard of a blockchain fork? Where the developers change the blockchain... It's happened before for different reasons.

With enough political or legal pressure, you easily deploy a "51% attack" on the chain, and fork it as you like.

Just as the NSA runs almost all the Tor exit nodes nowadays, what would stop a government from running the majority of blockchain nodes and gain consensus majority?

> With enough political or legal pressure, you easily deploy a "51% attack" on the chain, and fork it as you like.

A 51% attack can do two things: Enable "double-spend" attacks - where the hash rate majority will ignore a block which was previoulsy mined and had a "confirmed" transaction, and instead mine from an older block which didn't have that transaction - but instead place a transaction paying themselves the money back. Anyone accepting payments over Bitcoin should use their common sense as to how many confirmations they should wait depending on the amount of money being transmitted. A 51% attack might eventually be able to write a chain longer than the current one, but it will take some time - and there is the chance that if it fails, the miner will have wasted his electricity costs.

The other attack a 51% hash power can perform is denial-of-service. They can ignore blocks containing transactions they do not want to include in the chain, and as long as they continue to mine the longer chain, those transactions will not succeed.

51% attacks can not change the rules of Bitcoin (although there are many people who wrongly believe this to be the case). If you try to change the rules, the rest of the network will reject your blocks and ignore you.

> what would stop a government from running the majority of blockchain nodes and gain consensus majority?

The costs, primarily. In the case that one party did accumulate a majority of hashing power, the network participants can agree to change the hashing algorithm to one which runs on commodity hardware. That would be many billions of dollars of specialized hardware equipment going down the drain, and will only make the system stronger by encouraging individual participation. Monero did this successfully, and plans to do it each 6 months to deter attempts to game their proof-of-work.

Not as easily.

If you lived in Greece or Venezeuala, you may have a different opinion about your government's fiscal policies and trustworthiness.

Why do proof-of-work fans believe that the only alternative to trusting nobody is trusting everybody?

You get out of the proof-of-work mess by trusting one entity, and it doesn't have to be the government. And to use proof-of-work, you implicitly trust the people who wrote all the code you use anyway.

Not sure what you mean.

How do the people decide who to trust? An individual can be coerced and becomes a single point of failure in the system.

Your argument against simple verified ledgers was "but the government of Venezuela!". The simple solution is to not put the government of Venezuela in charge of your ledger.

Make it require multi-party consensus if you want, to reduce single points of failure. DNSSEC (for all its faults) runs on trusted multi-party consensus [EDIT: apparently not the way I think] and isn't a blockchain. But of course anyone or any set of people can be coerced, including you. That will never not be true.

"How do you decide who to trust?" applies to every endeavor in life, so if you want to go do philosophy instead of blockchain, fine.

PoW solves this by economically incentivizing block production, and thereby creating a cost to anyone that would try to cheat the system. You don't need to trust any party, you trust the math.

You said not to put the government of Venezuela in charge of the ledger. But when the government of Venezuela sends armed forces to the offices of your trusted party to confiscate its servers and equipment, what happens to your ledger?

Yes, I know that's the argument for PoW, but PoW completely sucks in every way compared to trusting somebody.

If the government of Venezuela takes all your computers and puts you in jail, what happens to your Bitcoin?

If I'm in jail, my bitcoin still exists and when I get out, I could access it so long as I've memorized my seed words, or backed them up, or shared them with a family member I trust, who could use it while I'm incarcerated. It is not easily seized, and if you are careful, not easily identifiable.

Using trust to secure your ledger is like driving without insurance; sure its cheaper and more efficient, until it isn't.

Your family member that you trust gave your seed words to the government, under duress.

In a world that relies on not trusting anyone, you are screwed no matter what.

Putting a gun to someone's head will always be a security problem, in any system. In this case, it is not system threatening because no entity has power over the network.

I may have relied on my family to keep a password secret, but that affects only me. The government cannot coerce the entire system unless it is prepared to put everyone in jail. Bitcoin lives on, and will not be stoppable. This is the power of a trustless system.

What do you mean by "trusted multi-party consensus"? The TLD zones that actually matter are operated by individual organizations.

You know a lot more about this than me, so I'll defer to you.

All I meant is that:

* there is cryptographic consensus involved

* there is no single point of failure

Therefore it's a counterexample who people who claim that everything but PoW has a single point of failure. Am I wrong?

I don't mean to jump on you, but, yes: there are multiple single points of failure in DNSSEC, which is a simple tree-structured PKI, like we had in the 1990s. There's a "consensus" of a sorts between parent and child, but the parent can override it. Whoever controls .COM can, by fiat, sign Google.com records.

Got it.

Would you say that cryptography can create a system where you can trust a set of people, without having to trust one single entity, and without destroying the planet with PoW? And can you give me a better example to use next time?

(For what it's worth, I picked DNSSEC because it had a memorable example of a "key-signing ceremony", perhaps the only instance of such a thing I've heard of that wasn't someone launching a blockchain. I realize that DNSSEC sucks anyway.)

There's ceremony and some distribution for the management of the root keys. But almost nobody is a client of the root namespace; the most important namespaces are the classic TLDs and ccTLDs. The keys for those are controlled, by and large, by the governments that control those TLDs.

The problem with blockchain is actually rooted in hazy, unexamined assumptions about the viability of 'decentralization' that are are used as if they are conclusions rather than premises for justifying the technology's utility.

I think ultimately the conversation will turn to discuss the cost premium entailed by a decentralized coordination problem solving system of any kind, and whether it centralization is really a problem that needs such an redundantly-expensive solution in the first place. Also whether decentralization is really sustainable indefinitely or merely a transitional phase from one centralized regime to another one.

People have an abstract distaste for "trusted intermediaries" because they think the intermediary just sits in between you and somebody else while collecting fees for adding no value. In many cases the fees absolutely need to be reduced through market competition.

However the root of this thinking is wrong. Intermediaries do add value. Humans are inherently un-trustworthy animals, and you pay your fees to buy the valuable peace of mind the intermediary provides.

So we know trust costs money. The question is whether the cost of decentralized cryptographic trust will ever be lower than centralized trust. The Rube Goldberg machine that is bitcoin has proved the answer at least for the foreseeable future (the next few decades) is...no.

Centralized intermediaries are only trustworthy as long as they’re incentivized to be truthful. If another party comes along and offers them a bag of cash, the intermediary might choose to betray its clients’ trust.

Decentralized miners, on the other hand, are highly incentived to tell the truth, because it’s the only way they can collect fees.

You’re right that you have to pay for the truth either way; the difference is that the decentralized approach gives you stronger guarantees.

Yes, intermediaries add value but in many cases they get paid disproportionately, define rules and regulations that range from one sided at best and truly evil at worst. And this has been going on for a long time and people are understandably irritated and looking for alternatives.

If the system wasn't so unfair, we probably wouldn't need to look for alternatives. Fixing the current systems is impossible at this point as the intermediaries have grown too big and too strong, so people are looking for alternatives.

It’s strange. Blockchain and crypto currencies biggest advantages are simultaneously its biggest detractors.

It may have its day if global systems fail for some reason, but right now it’s just not something that anyone really wants. Both people and companies are inherently risk averse and like stability.

The biggest problem is that blockchains are inherently not scalable. That is more or less by design, but it limits the types of applications that can run on top of them.

I think a more likely outcome is that most types of payment infrastructure and settlement/transaction layers move to blockchains and not actual applications. For example, it’s not too difficult to imagine the stock market switch to tokenized stocks to buy and trade shares of companies. Or perhaps deeds to property in the real estate world could be issued on top of a blockchain.

I think the real value is removing intermediaries and allowing people to control their own finances, shares, land, etc where you can cryptographically prove that you own it. Building a decentralized Uber that is slower and more difficult to use does not make much sense to me.

I think we will see these things develop. Remember TCP/IP was developed in the 1970s so it took almost twenty years before HTTP came out, and another 5-10 years before people really started using it.

If ownership of a house is decided by contracts, written by lawyers, then adding a blockchain will only add issues, since it can get out of sync with reality. And if the blockchain is the source of truth, it means that stealing your house-token will result in you losing your house.

Do you use an intel processor vulnerable to Meltdown/Spectre, or with a vulnerable IME? Do the people you know and love know and understand about these? What if you lose your token? You can't sell your house anymore? Custody of crypto-currencies is a giant headache. It feels like moving away from bank accounts and payment cards and going back to gold coins and bearer bonds. Great for people in the business of selling vaults, sucks for everyone else.

One end goal of blockchains is indeed that they become the system of record, and that legal agreements are English translations of what the code says rather than the other way around.

That might sound scary, but I'd point out a few things:

1. That future is still a long time away. The legal system is very conservative.

2. These systems don't have to be perfect, just better than what we have today.

Yes, I certainly wouldn't trust ownership of my house to a general purpose laptop or smartphone on which I install lots of other apps and which are optimised for high performance and low cost. I wouldn't trust ownership of my house to any computer today.

But the idea that bank-run paper based systems are 100% secure is not true - they routinely go wrong just through basic mistakes and screwups, let alone actual fraud.

Consider all the cases of ID theft in America. There's a specific kind of ID fraud where someone literally steals your house:


Or how about this case where convicted murderers learned how to forge their own release paperwork whilst inside the prison, and then successfully got themselves released:


Possible because the only thing authenticating prisoner release orders was easily duplicated patterns on a piece of paper.

Banks and paper based systems don't have to be perfect because when they go wrong I have recourse to fix it. The blockchain technologies that everyone talks about have no recourse because they are peer to peer. Because they have no recourse the bar they have to meet is significantly higher than the bar that a bank run paper system has to meet. They effectively have to be perfect. Without that perfection they will have to build in some form of recourse and as soon as you do that you are on the road to duplicating the very things= they claim to eliminate, centralization.

I think it would be much much worse to have a blockchain be the system of record.

If someone sneaks into your house when you leave your computer logged on, and transfers your house to them, do you legally have to move out immediately?

> But the idea that bank-run paper based systems are 100% secure is not true - they routinely go wrong just through basic mistakes and screwups, let alone actual fraud.

Nobody expects bank systems to be 100% secure. Banking -- and in fact the entire free market economy -- would not happen if it was required that the systems be secure. It's just the opposite: it is assumed that bank systems will fail or be abused in all sorts of strange and unexpected ways. This is why market participants will only invest if they have the right to appeal to neutral third party representative of justice.

> One end goal of blockchains is indeed that they become the system of record and that legal agreements are English translations of what the code says rather than the other way around.

It's safe to say that blockchains will never become some sort of indisputable system of record. That is, blockchains will never become sovereign. To be a sovereign and force others to obey your laws you need armies. We have already seen in cases where disputes rise on the blockchains that they get settled in real courts of the real sovereigns. In cases where crimes are committed but the blockchain hides identity you get investigations by, again, real LEOs of real sovereigns.

Blockchain enthusiasts suffer from very fundamental misunderstandings of how economic activity actually happens. This isn't surprising: the vast majority of people have absolutely no idea how the modern global economy actually works. But the blockchain crew are betting real money based off this misunderstanding and, frankly, they're going to pay for it. Nothing costs more than ignorance.

That's not to say that the underlying technology is hopeless. I expect we will see strongly permissioned and heavily regulated blockchains that build upon existing laws and institutions. Corda [1] et al have the right idea. These blockchains don't really replace anything, they're just distributed computing platforms that can greatly lower existing transaction costs. There are enormous inefficiences in global trade because buyers and sellers from different regimes don't trust each other and the cost to establish that trust is very high.

[1] http://corda.net/

I'm glad you like Corda, given I designed a lot of it ;)

These topics have a lot of nuance. I didn't mean the end goal of blockchains is to actually replace governments; as you point out that's impossible because software systems don't have armies. But it's perfectly possible for a digital system to become a system of record and for what's on that system to be enforced by the courts however. Consider that the main way we make payments today is electronic, courts have no problem reasoning about or enforcing such payments.

So we have to distinguish between system of record, and system in which the final judgement rests with humans. You can certainly write a contract-as-code which still can be broken or overridden by judges.

Blockchains aren't better than what we have today for property.

At least the victim in your deed fraud article was able to recover their property, albeit at significant cost. How are people going recovering funds from the Mt. Gox theft?

Let alone the oracle problem, people keeping a digital asset secure and safe for decades, the chance of the software being 100% bug free first time, the total lack of incentive to run a blockchain node on a registry chain, or the complexity of rolling crypto when the current algorithm becomes too weak in 10-15 years…

Nope. This is yet another problem blockchains are hopelessly ill-suited to tackling.

Just as many blockchains are actually much less private than traditional financial tools, blockchains can actually make theft much more difficult than traditional financial tools.

I didn’t say that all the problems have been figured out, but I feel like you are being a little close minded with regards to the idea. Maybe properties would use some form of multi signature transactions so a single person hacking it would not be able to take over ownership. Perhaps there would still be some sort of intermediary.

I am not saying just add a blockchain on top of the existing infrastructure. That does not make much sense. I’m saying replace the existing infrastructure completely.

Ten years ago people didn’t think solving the double spending problem was possible. It’s silly to try to imagine the future of blockchain innovation when thinking about it only how it exists today.

That’s like in 1995 saying that no one would ever want to watch videos on the internet because the download speeds and quality would be so poor.

> Remember TCP/IP was developed in the 1970s so it took almost twenty years before HTTP came out, and another 5-10 years before people really started using it.

There were significant barriers to entry – network connections were slow and enormously expensive into the 90s – but TCP already had significant value by the 80s (see e.g. FTP). Within a few years of the web arriving in the 90s, there were businesses using it for revenue-positive activity.

In contrast, blockchains were available to everyone on the Internet very early on and have yet to find a single case where they’re cost effective despite the barriers to entry being orders of magnitude lower.

IMO one of the best use cases is DNS records. Using a p2p blockchain means I don't need to make any external network calls to lookup addresses. It also means, that if I trust my local client hasn't been compromised then all address mappings are valid, as they required hard cryptography to set via a signed transaction that was accepted by the network.

DNS records change rather frequently. Wouldn’t this grow rather quickly, creating the same problems which lead to replacing /etc/hosts with the decentralized DNS model?

As we speed toward the era of deep fakes and extreme forgery of media, I wonder if blockchains might play some crucial social role as sources of truth and proof.

How specifically would you use a blockchain as a source of truth and proof for media, and how exactly would that be superior to digital signatures applied using tamper-resistant hardward embedded in recording devices?

So... uh... why wouldn't someone just fake a photo and not use your blockchain?

>The biggest problem is that blockchains are inherently not scalable.

Blockchains can be made extremely scalable. You can break the problem into transaction volume (how many transactions can be processed on average per sec) and transaction velocity (how fast a particular transaction can be approved).

Transaction volume scalability results almost entirely from checking that the rules of the system have been followed i.e. that each block in the chain is valid. We now have very fast systems for recursively proving the validity of blockchains. For instance coda [0] requires very little space or computation (constant in the number of transactions) for a party to be convinced the blockchain is valid. Under such a system you could increase transaction volume by orders of magnitude.

Layer two protocols, such as the lightning network [1], offer near instant transaction velocity.

We can solve the scalability problems of blockchain. The thing that keeps me up at night is not scalability, it is user adoption beyond the use cases which Bitcoin already successfully fulfills.

[0]: https://codaprotocol.com/ [1]: https://lightning.network/

> The thing that keeps me up at night is not scalability, it is user adoption beyond the use cases which Bitcoin already successfully fulfills.

This felt like the canary in the coal mine that the anarchist crowd has wholesale ignored for years. Joe and Jane LIKE that the dollar is backed by the full faith and credit of USG. From the POV of the average person, crypto is fairy dust next to a currency endorsed by what is perceived to be the most economically stable nation on the planet.

Joe and Jane don't understand nearly enough about economics or technology to really care about crypto or to ever be capable of using it securely independent of a third-party facilitator like Coinbase. They want cheap, fast transactions with guarantees, insured bank accounts, and a human being they can call for support when something goes wrong. Visa and JPM already give them that. Coinbase is a total reinvention of a system with no marginal benefit. Bitcoin doesn't solve a problem Joe and Jane will ever care about. About the only thing is does solve, at least in the short-term, is their FOMO about living analog in a world beset by runaway digital progress.

I totally agree with your sentiment, but I will say one thing. If there is some shock in the world economy crypto could be a way out.


- A bank run where every bank goes under and it is not possible to easily bail them out

- The government has to increase inflation and we far exceed the 2% target

- The existing financial system gets hacked and records get destroyed

Not saying any of this is likely, but it could happen.

The US dollar has only been backed by nothing since 1971. That is a very short amount of time in the history of the world. You can see that in that same period of time debt has skyrocketed and production output vs. wages have diverged significantly. It would be somewhat presumptuous to assume that the existing system is going to last forever.

That said, it doesn’t mean that crypto currencies are THE answer, but they are a possible answer.

Finally “the most economically stable nation on the planet” is $21 trillion in debt.

I think if something like Bitcoin does end up reaching mass adoption it won’t be because people CHOOSE to use it, it will be because they are FORCED to use it because no one wants to accept dollars anymore.

That's not how economics or the banking system actually work. The Federal Reserve can issue effectively unlimited credit to solvent banks in case of runs. The government has no way to directly "increase inflation". Generally when bank runs occur it's because the bank has a lot of bad loans; when loans go bad it effectively removes money from circulation thus decreasing monetary inflation.

There is no single central "financial system". Individual financial institutions get hacked all the time. It's not a major problem.

Ultimately the US dollar (and other fiat currencies) are backed by something: a government with an effective monopoly on violence over a particular territory including all the people and assets therein. In the real world that's a lot more powerful than any cryptocurrency fantasies.

Those were three separate ideas. A bank run would most likely be a result of deflation, yes, but it is not guaranteed that if that were to occur that the bank would be able to stay solvent.

The inflation example can already be seen in Venezuela, where the people there have been using cryptocurrencies as a way to survive.

> Ultimately the US dollar (and other fiat currencies) are backed by something: a government with an effective monopoly on violence over a particular territory including all the people and assets therein.

Are you suggesting that the US military will use force to ensure that people use the dollar and that is its backing? I am not saying you are wrong, but that is not exactly a friendly thought. Sounds more like a dictatorship than a free market economy.

>Are you suggesting that the US military will use force to ensure that people use the dollar and that is its backing?

Not the OP, but the governments' 'monopoly on violence' usually refers to the fact that they hold position as the sole enforcement authority. Dollar is 'backed' by a reputation/record of US government fulfilling it's debt obligations. As the enforcement authority, they can/will use force to secure an operating revenue via tax collection. The specifics of what people use to transact, is more flexible. So the dollar is backed by US Government's ability to fulfill it's future debts. The method it uses to extract (something of value, payment is currently required in $ format) from it's citizenry to pay them is less important, but a 'monopoly on violence' sure helps with collection efforts ;-)

This is exactly the point: the fed can conjure unlimited credit out of thin air. Cryptocurrencies can't.

The limitation becomes a feature: debt can't be inflated way.

We are one major crisis away from people preferring an asset that can't be inflated, or forcefully converted by executive order, under threat of confiscation.

When that happens, you will be right: by Gresham law, people will prefer paying for stuff (including taxes) in fiat currency.

Of course cryptocurrency debt can be inflated away. Fork the blockchain, or switch to another one entirely. Who's going to force me to pay? It's just bits.

you assume people care about the fork. if people dont and only want the original, or if the smartcontract is not updated to allow the fork at a lesser rate, you're stuck

But nobody ever forces you to pay- the goods and services just stop coming your way, or you lose your collateral.

Inflating the debt is not a problem because of the small consumers, but the government. Seignorage tax affects the small consumers.

What do Joe and Jane think about the mountain of debt they’ve had to pile up? What do they think about the bankers who decide what happens to their money, and the politicians who decided to bail them out? Do they really have abs much faith in USG as you say? By the last election, largely seen as a middle finger to governing elites, I’d say probably not.

Yes, they like the convenience of the dollar but they are also suffering from the consequences of fiat money. You might say they’re too stupid to understand that, but there are many Joes and Janes who understand gold and may even want to go back to a gold standard. If they can understand gold, they can understand the value of Bitcoin.

> We can solve the scalability problems of blockchain. The thing that keeps me up at night is not scalability, it is user adoption beyond the use cases which Bitcoin already successfully fulfills.

Fair point. But none of the biggest chains right now are nearly as scalable as using something like AWS or Azure or Google Cloud. Unless they are able to handle the same amount of traffic, there is no reason for someone to use them for typical applications.

On the development side it will be more cumbersome to develop for, and on the user side it will be slower and/or more costly to use.

>But none of the biggest chains right now are nearly as scalable as using something like AWS or Azure or Google Cloud.

I agree, just because we can scale them doesn't mean we will invest the time and energy to do it. Lots of solvable problems in cryptography but very few people working on them.

User adoption is the toughest nut to crack. Right now the two largest use cases of cryptocurrencies are financial speculation and illegal activity. Both are huge turn-offs for the average prospective user.

What’s the value proposition for an average Joe to use bitcoin over fiat currency?

There is zero need for blockchains in real estate registries. Real estate property rights are enforced by the government, ultimately through threat of official violence. So the government might as well maintain a centralized real estate registry since we're effectively forced to trust them anyway.

It would be useful in places with corruption. Would make it harder for clerks to retroactively change things. Of course it makes bribes easier also.

nobody wants to censor Uber. Think bigger. Censorship, transparency etc. Uber and Airbnb are wrong examples, they don't need those kind of things. Now think governments

That’s an interesting perspective to be sure, but let’s back up a bit. Has a blockchain proven that it can run a smaller organization yet? What happened to the DAO after all the hype and scandal?

I’m not in the anti-blockchain macro-economics fiat-currency camp or anything, but is it unreasonable to say that this stuff needs a lot more time to develop? There’s no way in hell I’d go along with laws from a blockchain-government backed by SHA256 and ED25519 in 2018, would you?

what do you mean a "blockchain government"? yes I would love all the laws of my country and everything else to be on a transparent unforgeable ledger for sure.

The point is that let's see a "blockchain organization" (like the DAO or something) succeed first before scaling it up, you know?

I was about to make a snarky comment about sitting next to one idiot on an airplane and coming to a conclusion about a whole field. But then he sort of covered it in the last paragraph:

> although the dot-com crash walked back valuations and chastened investors, a mature climate of internet businesses emerged in its wake. Today, technology firms account for 7 of the 10 largest companies in the world. The market didn’t overestimate the Internet, only the current crop of entrepreneurs.

Yes, it's like the mostly urban legend about tulips, currently the tulip industry is worth billions.

All industries will pop (I predict there will be another recession!), the only thing of value is knowing when and by how much.

Thing is, there was not a single speculative mania in the history of humanity that didn't crash and burn. Some of those new industries eventually outgrew expectations, but universally they achieved this long after the original speculators lost most of their investments.

But what about the Big Pop?

My thinking about the blockchain/cryptocurrency space shifted significantly when I changed my perspective from thinking about technology to thinking about problems.

The web caught on because in the late 80s, the biggest problem in the world was that we were starved for information. We didn't know it yet, because we'd never lived in any other world, but once we could fire up Netscape and view homepages from people who lived across the world, or talk in real-time on AIM with people half a world away, or ask any question of Google and get answers, or find whole communities of people who were interested in that incredibly niche interest that we'd despaired of ever meeting someone else to share it with, or view the satellite & street view images of any address on earth, or order any product off Amazon and have it delivered tomorrow to our front door, it was apparent what we were missing out on. And that has spawned multiple trillion-$ companies.

The biggest problem in the world today is lack of trust and the failure of institutions. (Which, ironically, may have been been caused by the web and the huge amount of information it made available.) And blockchains address this. They don't solve it - actually, my biggest resistance to Bitcoin & blockchain hype earlier, and my biggest risk factor now, is that Bitcoin doesn't actually solve the problem it's purporting to solve. People still get screwed when transacting in Bitcoin, they just get screwed by scammers & hackers rather than the government & big corporations.

But the problem still exists, and people are aware of it now. Satoshi's greatest contribution was to create something that could semi-plausibly fix it and then release it into the world, which generates all sorts of attention from other entrepreneurs. Just like Tim Berners-Lee's original WWW browser was pretty clunky by modern standards, Bitcoin is pretty clunky by modern standards. But it's attracted a lot of minds into refining & replacing it, and as long as there's a problem, there's a market, and there's a good chance that eventually somebody will figure it out.

(Or not. Who knows, in the 60s everyone was sure there was a market for flying cars and robot vacuum cleaners. We did eventually get both flying cars and robot vacuum cleaners, but so far the market for them is much smaller than anticipated.)

>The biggest problem in the world today is lack of trust and the failure of institutions.

That's a pretty strong statement, one that I would disagree with, mostly because it's so vague. How did you come to that conclusion?

Because of what's happening in [government, media, science, public spaces, labor markets]. I view all of them as examples of the same underlying phenomena.

In government, you have the UK voting to remove itself from the EU, and then when the referendum passed, the prime minister resigning, all of the major proponents of the referendum resigning, and Scotland threatening to secede from the UK (again). You have a U.S. president who starts his term with under 50% approval rates, the lowest since WW2 [1], to cries of "not my president", and Congressional approval ratings below 20%. You've got continued polarization - instead of converging on compromise candidates in the center, the Republicans has moved rightwards toward nominating actual Nazis (5 running in 2018) [2], and the Democrats have moved leftwards toward nominating actual socialists [3].

In the media, you've got an Overton Window that doesn't overlap - no matter where you are on the spectrum, there are publications with a large readership who are publishing what you perceive to be blatant falsehoods. Take a look at the comment sections of the same story on Breitbart [4] and News & Guts [5]. Could you imagine a reader of one reading the other with any sort of any open mind? Would you consider anything you read there an example of trust?

In science, you have movements such as anti-vaxxers who would reject one of the most important health advances of the last century because they don't trust it. You have continued rejection of climate science, largely because it's inconvenient. You have a replication crisis in many social scientists.

In public spaces - go to an airport and listen to the loudspeaker say "Please report any unattended baggage or suspicious persons to the nearest TSA agent" and think about what that's saying about the level of trust in society and the constant messages of fear. There was another recent story on HN about air marshals secretly tailing random civilians [6]; that's not exactly something that happens in a society that trusts its citizens. There's also continuing helicopter parenting [7] and the assumption that everything around you is dangerous, which tends to become a self-fulfilling prophecy.

And in labor markets - I did a bunch of market research on a startup to fix unemployment a couple years ago. My hypothesis was that with all the startups desperate for workers, and workers desperate for jobs, it was a simple information problem to match up supply to demand and make everything efficient. What I found was that hiring isn't really an information problem, it's a trust problem - employers are terrified of getting a bad hire and so reject a lot of candidates that with a little training could be great employees, and similarly employees are terrified of ending up in a career dead-end and so are unwilling to invest in significant self-study or commit to a career path or potential employer. End result - unemployment and underemployment even though there are both workers and jobs available.

All of these are pretty far afield from cryptocurrencies, but you asked why I believe the #1 problem in the world is lack of trust, and that's why. A world where people trust each other is one where they're willing to take risks on the assumption that they won't be taken advantage of, and that is...very far from the state of the world right now.

[1] https://projects.fivethirtyeight.com/trump-approval-ratings/

[2] https://www.vox.com/2018/7/9/17525860/nazis-russell-walker-a...

[3] http://www.cc.com/video-clips/jzbxb9/the-daily-show-with-tre...

[4] https://www.breitbart.com/big-government/2018/07/29/trump-wa...

[5] https://www.newsandguts.com/trump-will-shut-government-doesn...

[6] https://news.ycombinator.com/item?id=17635761

[7] http://www.dailymail.co.uk/news/article-462091/How-children-...

Trust has always been a problem. A trustless currency doesn't solve the problem any more than anything else has. Blockchains can't and won't solve the UK brexit problem. It won't solve the US politics problem. It won't solve the businesses too big to fail problem or the politics, power, and money corrupting people problem.

I agree that trust in institutions is a problem but blockchain won't solve it. It will just displace it. In return if you aren't careful you'll lose the benefits of third party arbitrators. The very thing that in the current system gives you any hope of righting the wrongs that the systems you don't trust have inflicted on you.

It's quite probable that rather than making things better cryptocoins will make them worse. It's also quite probably that they will devolve into the very thing they were trying to avoid becoming. As a case in point: Ethereum forked because of a bug in a smart contract. A central authority had to step in to right a wrong. (You can't trust people to write correct software). And that was early on in the cryptocurrency history. There will be more such occasions and each one will prove that not only can you not trust your bank to always get it right. You also can't trust the cryptocurrency developers or the smart contract developers.

Trust in, and disagreements over monetary policy may actually be at the root of many of the problems you outline. The euro crisis was likely a significant contributing factor to Brexit. The US bailouts of 2008 are still are source of political contention.

Yes Ethereum forked, but that actually gives users a choice, and still does. Some people who disagree with the choice to step in can still run and transact using Ethereum Classic. With both Bitcoin & Ethereum, market forces seem to be doing a decent job of maintaining consensus.

The difference here is that the source code for the EVM is open source and auditable. And I wouldn't use a smart contract that isn't the same, open source and auditable. This is my realm of expertise, this is how I think about systems and interactions, it's my turf so I have far higher levels of trust executing a smart contract then walking through the TSA scanners.

Yes, but our demographic is a very small part of the wider target audience so what makes sense for us does not at all make sense for them. Any solution that requires the market as a whole to level up to our level of expertise has the same problem for them that we have when walking through TSA scanners. The only difference is that now you are the TSA which again only shifted the problem. It didn't solve it.

Thats where web of trust comes in and empowers us, the engineers, compared to the past. Let's say my relative is having an issue with her mortgage, something that should be fairly straightforward to codeify in a smart contract. In the past, I'd have to shrug my shoulders and help her with a human communication problem. In the future I might be able to actually inspect the code of her mortgage. This allows me to assert my understanding about how it works. I can say, I know it's correct or I know it's incorrect. This is in contrast to modern day where it's much harder for me to understand, therefore I would likely shrug my shoulders and say, I don't know, you'll have to contact an expert.

It's similar to another example. I moved my mom over to use Linux as her operating system. I now know, for a fact, that her system is secure and updated. I trust the distribution to audit and package software safely, therefore my stress levels are much much lower and I barely get technical support questions from my mother, compared to before.

Smart contracts enable this same level of trust to develop for complex protocols between people & computers, like mortgages, insurance, DNS, software package building and distibution systems. It allows for advances levels of trust to develop in the system itself, and as an engineer I can now transmit that trust through my web of relationships which is how it reach and benefit non technical users. In a way, it allows for engineers to take more responsibility for the systems we live within, versus today where you have to pay me to give a shit and I try to take as little responsibility for the systems I support because I know they are fucked up and broken and I don't want to be the one on the hook when someone gets hurt by the system I and responsible for.

Proof of work blockchains arent solving anything here, theyre a step further in the “do not trust” direction. However i think consortium chains may have potential.

I think you have stated the right symptoms and identified a great angle. Indeed the fact that "similarly employees are terrified of ending up in a career dead-end" is related to the increase in the width of the Overton window. Indeed it's "ironic" that it's happening at the same time there is an explosion in the amount of information available. And indeed it's about institutions. But once we make those extraordinary observations, we tend to use a vocabulary centered around the world trust, and run the risk of veering off course. The multiple subtle uses of the word "trust" weaken the argument. For example you could argue Uber, Airbnb also happened and they use a huge amount of trust.

A trick I like ot do is to replace the word trust with "adhesion", a more precise word. It focuses the debate on a narrow phenomena and enable a different framework of thought. It also suggests conclusions about what's happening and highlights interesting features.

Our conscious decisions are made inside a symbolic fabric. For the sake of the arguments, let's reduce human beings to symbolic organisms living in an information ecosystem. That ecosystem is grounded in a physical reality, which govern its functionning. The way it works when embodied in parchment scrolls is different from the way it works when it's printed text.

What we usullay call information revolution is what happens when the physical artefacts underpining our information ecosystem change. When it happens it also changes the laws of our symbolic reality. A mental universe where, using google instant, one is able to refine a query, ten discover what she is actually looking for, learn that it actually exists, find related topics, compare them, find highly relevant comments, again and again... dozens of times a day is a totally different mental universe than the one we had merely 20 years ago.

If you were to close your eyes, suppress any thoughts about your physical surroundings, consider how we collectively process information and compare it to previous era, you would conclude that our minds have been propulsed into a sci-fi future and are living some kind of star trek fantasy.

That is maybe controversial, but the consequences about who we have become are interesting. Using again the symbolic organism metaphor, as the governing laws of our symbolic reality have changed, we also have evolved. Far more than we acknowledge. Our inner selves are being projected so far in the future, we are becoming aliens to our previous selves. Imagine if the strength of gravity was reduced to a thousandth of its current strength. The effect it would have on our bodies would be dramatic. That is what is happening to us.

You don't have to agree with that, but if you do you will start to see the problem. Our institutions which really are symbolic machinery or building, have been built implicitly following the laws of our symbolic reality. But while we are changing under the action of our new environment, our institutions are not.

The distance is growing, between people and the institutions that purport to guide them. As if they are gliding through them. They are less and less made of the same matter. What we are witnessing is an adhesion crisis.

Wearing those lenses, you will see more and more signs of what you mentionned in your comment. Lack of trust is the form it takes when people are actively engaging in a particular situation like during elections. Most of the time a growing minority is subconsciously deconnecting from institutions without even realizing it and without an ounce of ill will. Right now, some tech workers, working in Big Co are reading this site at this very moment, just to relax a little bit. Not realizing it's the 21st century equivalent of reading a anarcho-communist rag at lunch time while working for Ford circa 1920. The difference is nowadays you have to do it to stay relevant.

As times goes, that hidden "negative" adhesion potential, is building up, opening some cracks here and there. It is passively looking for anything, institution-like, that will help channel it's energy. And crypto looks like something that at least address the problem.

This is exactly right in my opinion. The dotcom era was all about the decentralization of information, whereas blockchains are all about the decentralization of trust. Contrary to the OP, I believe that blockchain technology really started in the first alt coin boom around 2012-2013. That's when the tinkerers came out. I think blockchain infrastructure is still very early days, and scalability is still among the biggest problems to solve currently, but it's definitely being worked on and it's solvable.

> The biggest problem in the world today is lack of trust and the failure of institutions. (Which, ironically, may have been been caused by the web and the huge amount of information it made available.) And blockchains address this.

The big rub in your belief is that social groups don't scale. In a group of size of 100 people or so, standard social techniques (such as peer pressure and ostracization) can keep order. But at 10,000 people, that doesn't work. Delegation does scale. Society and civilization essentially works by creating structures that can impose norms, rules, and punishment among others and offloading the cost of doing so to people who specialize in those tasks. Now, that doesn't mean that there aren't issues of "who watches the watchmen," but it does mean that that is the question you should be asking.

One example of the problems of decentralization is the modern information delivery mechanism. Because it's feasible to serve smaller groups, our social groups have broken up into smaller echo chambers where we're fed only the information we want to hear. The ease of spreading information is also ease of spreading misinformation, and objection to censorship means there's no way to control spread of misinformation.

"The ease of spreading information is also ease of spreading misinformation, and objection to censorship means there's no way to control spread of misinformation."

Censorship is non-consensual filtering of information (the mediator censors without consent of producer and consumer of information).

This does not mean we can't control the spread of disinformation at all: by investing in education, and educating people about the importance of verification in general or formal verification in specific where possible, society could invest in infrastructure that helps in weeding out false information without twisting the consumers hand willy-nilly.

As an example: without any need for censorship, if someone claims to give a proof for a theorem that supposedly follows from set.mm I can consent to censorship by voluntarily using MetaMath to verify it without even trying to understand the proof myself, and then discover that the proof is false, without some intermediary of information needing to censor anything for me.

This is kind of the underlying theme behind the "blockchain craze", educating people the surprising applicability of logic/mathematics to the real world, even if it is very hard to design and prove the security of such systems, and to interpret the assumptions of such designs with desirable properties as being the requirements of infrastructure we need to build in order to enjoy such a decentralized commons.

Disregarding the validity of your argument in itself, trust issues cannot be solved by black boxes. Humans laws have to be enacted by humans, because the real world is messy and rules and laws need "messy wiggle room".

I respectfully disagree partially.(I agree black boxes are insufficient, unless the democratic process is modeled/accepted as a black box)

I believe in the utility of separation of powers: a true democratic legislative branch, a provable executive branch, and a mechanically verifiable judgement branch.

I don't mind if you call the democratic facet of the legislative branch messy. Learning to make proper decisions for novel situations tends to be messy, because we learn from our mistakes, and mistakes are messy.

As long as the way the population would democratically prefer the case to be judged is captured/modeled accurately by the law, the formal mechanical law is suitable. If the way the mechanical law is applied does not capture the way we want things to be handled (what I presume you refer to with a messy case) the legislative branch should be activated to change the law, and we want the legislative branch to be democratic because it's what makes sure that the population consults their ethics and feelings (community taste can not be proven, except by poll).

So the mess is restricted to just the first instance of unforeseen situations. ("History repeats itself, the first time as a tragedy, and from then on as a farce")

> As long as the way the population would democratically prefer the case to be judged is captured/modeled accurately by the law, the formal mechanical law is suitable.

I would hate to live in your world. The law is the way it is because it governs humans, and because legislation cannot capture every aspect of all facets of the law.

Mechanical application of the law is a pretty dreadful idea.

the transition towards mechanical would of course prompt an enormous amount of decisions to be settled democratically (since we have been doing them ad hoc all the time), but the democratic decision is a decision by humans, and all the following similar cases would mechanically follow the same ruling, until either the population changes its mind (through the democratic process) or the population realizes it misformalized a law by an unforeseen case which again prompts a democratic consultation.

So it would still be decisions by humans, the resolution of the law would increase and capture more detail messy real world situations of our daily lives.

The only horror is that it would force us to either treat everyone as equals before the law, or force us to democratically change the law back and forth when we choose to be inconsistent, forcing us to realize we are discriminating on some (un)identified factor.

I'm sorry, but I don't believe we can get to a state where every edge case is encoded by law, nor that mechanical application of such would be a good thing. I would use my democratic mandate to vote against such a thing.

>but I don't believe we can get to a state where every edge case is encoded by law

Neither can the current system, so any analysis would have to be comparative. I do believe we can approach such a state much quicker and more accurately through formalization.

>nor that mechanical application of such would be a good thing.

Was the formalization transistion from unwritten laws to written laws a good thing in your view? What makes quotability from a written corpus of law not horrible, but further formalization horrible?

With mechanical application I only refer to the end result taken after the verifier (judging algorithm, i.e. MetaMath or other) as a result of either a passing proof of guilt provided by prosecutor, or passing of a proof of innocence provided by defense. There is no imperative algorithm that maps cases to sentences, thats not how the law can work due to combinatorial explosion. The law is like philosophy or mathematics.

The society could unconditionally reward people for detecting inconsistencies in the law before we run into them during a trial after a tragedy thus potentially preventing it (i.e. finding a proof that the law simultaneously guarantees a right for a certain deed, yet also forbids it)

btw I enjoy this discussion, so if you can come up with more criticisms or examples please do!

> What makes quotability from a written corpus of law not horrible, but further formalization horrible?

Inflexibility. We humans are squishy and imprecise. Which is why the law is unlike mathematics, and I think efforts to make it so and to remove humans from its application are fundamentally misguided.

> The society could unconditionally reward people for detecting inconsistencies in the law before we run into them during a trial after a tragedy thus potentially preventing it (i.e. finding a proof that the law simultaneously guarantees a right for a certain deed, yet also forbids it)

My thoughts here go more to mitigating circumstances rather than inconsistencies. These are varied to the point of the near infinite, and people can judge these better than algorithms ever could as people can infer, empathise and extrapolate.


I think the iron answer from a judge is less flexible than the possibility to start a democratic petition against a scandalous oversight in the formalized law...

I was trying not to bring up mitigating circumstances, since many people don't see a good reason for their existence (I do!), but mitigating circumstances is actually one of the reasons I want formalization! The way society treats the law is highly oversimplified with one-liners like "the law is the law" and "innocent until proven guilty" and "every convicted person is guaranteed a just trial because the prosecution needs to prove their case"

But if mitigating circumstances should be brought into consideration, then in theory you can't convict a person with a certain level of punishment until you have also proven that there were no mitigating circumstances, and I am not aware of any binding rule to try and locate or identify the mitigating circumstances.

I.e. allow me to call a perpetrator "less guilty" if there are mitigating circumstances; if the prosecution wins a case in the current world without mitigating circumstances ever being brought up by the defense (because they might not be aware), we currently accept the "proof" by the prosecution, even though the punishment may be unjustly harder.

I.e. the idea that the burden of proof in the current system lies totally with the prosecution is false, because the prosecution is not trying to diminish the sentence of the defense.

By formalizing we would start a discussion on how exactly to formalize mitigating circumstances.

I might choose to commit a crime against the (much older) perpetrators of my youth trauma, and while in practice I might get mitigating circumstances, I currently have no such guarantee...

> I think the iron answer from a judge

The judge has some flexibility in how exactly to apply the law, which an algorithm does not.

> less flexible than the possibility to start a democratic petition against a scandalous oversight in the formalized law...

You can already do such, should you wish.

> By formalizing we would start a discussion on how exactly to formalize mitigating circumstances.

I don't believe we can capture all of these, nor should we try to have an exhaustive list. Such a list would likely need frequent modification as societal mores change. Better to have humans involved in the process than trying to apply to fix it afterwards.

I'm, personally, not convinced any of this is crying out for a blockchain either, even if we were to grant that automation would be a positive.

A lot of good points.

> People still get screwed when transacting in Bitcoin, they just get screwed by scammers & hackers rather than the government & big corporations

I‘d remove the „rather than“ out of the sentence: hackers can get bought by governments. Which leaves us with scammers, hackers, governments and businesses as possible screwers, no?

> The biggest problem in the world today is lack of trust and the failure of institutions.

Surely climate change, wealth inequality, or nuclear proliferation are larger issues...

If you want to say "institutions failed us and caused those problems" you might be correct, but you better back up that statement with a good replacement.

Chatting between sips of stale coffee, I collected enough data points to discover he too had no great expertise in cryptography or fintech more broadly.

I've run into way too many people like this to count. Fortunately, they're easy to spot and I'm sure someone has even created a taxonomy.

All of them, without exception, have already launched or plan to launch a token on Ethereum. That's red flag #1.

Ask them why their product/service needs a token. 9/10 can't even answer the question. Red flag #2.

The few who can mutter something about decoupling the value of their utility token from ether. You may be able to have an interesting conversation from there, but it's more likely the answer is nothing more than a highbrow version of "because money is flowing through the rivers and we aim to grab some of it." Red flag #3.

I think blockchain will end up like PageRank. Both are amazing algorithms with very narrow use cases. And maybe a few companies can generate enormous value with blockchain like Google did with PageRank, but that will be it. That's my prediction.

While I agree with you, I would not have chosen PageRank as a comparison. I cannot think of another domain where it made billions, but to me it is a pretty neat way of extracting information inside a graph.

It just needs a concept that has transitive properties in order to shine. For web pages, the transitive part is that a high quality page is more likely to mention another high quality page. It uses the indifference one might have about a lower quality page, it uses the author's implicit contract with the reader that he should be showing (and linking to) high quality content. It builds on top of man.millionYears of painstaking content filtering.

In a graph, you can run it about any property that has that transitivity. There is a paper running it on citations in physics papers [1], and it can identify some Nobel Prize winners, even if the paper has a low number of citations; the paper just has the important ones.

I deeply believe that corporations could greatly benefit from continually asking their employees "who in your coworkers had a positive impact on your work this week?", and running PageRank on top of it. You could have natural leaders emerge out of that.

[1] https://arxiv.org/pdf/physics/0604130.pdf

That is precisely why I chose PageRank as a comparison. I think it is one of the most beautiful equations invented in computer science on par with some physics equations. Yes, if you can turn your problem into a graph then you can use PageRank to determine which nodes are more important relative to the others. You can answer questions like which academic paper or website is the best? Who are the influencers in a social network? What is the summary of this article (sentences are nodes)? But the domains and use cases where it is useful is still limited and so far no one has been able to use it to generate billions other than Google.

In other words, an algorithm, no matter how amazing, is not a platform.

> I deeply believe that corporations could greatly benefit from continually asking their employees "who in your coworkers had a positive impact on your work this week?", and running PageRank on top of it. You could have natural leaders emerge out of that.

The second it becomes relevant to people’s paychecks, people will start gaming it and it’ll be political bullshit.

Anonymous blockchain sounds like fertile soil for the emergence of simple, autonomous AI. Howard Bloom's cosmology centers around Replication Strategy and Iteration. The medium of blockchain provides convenient and abundant opportunity for both. Imagine a smart contract that could sort of recursively fuel itself with prediction market earnings, and clone itself programmatically. A relatively simple 'mother' script could run generate contracts that have the ability to make predictions and bet a small sum towards that prediction. Outcomes and learnings get shared back a sidechain that is used to help generate more effective offspring. Like a live evolutionary/genetic algorithm playing with real money. Then, if you give those contracts a sort of failover mechanism to spawn a new mother script if communication with the original is lost, you could have a petri dish for a form of digital life beyond simulation.

I realize I probably may have just made an ass of myself as the article suggested is happening. That said, it seems within reason to be able to implement something along those lines given enough time and resources. The article seems to suggest that blockchain has had minimal impact, and its inevitable financial crash and inability to scale to facilitate mass adoption of digital currency makes it worthy of ridicule. I posit that general immutability and autonomous financial entities will come to define our times- and that any assumption that blockchain isn't significant because it doesn't replace your debit card in 2018 misses the bigger picture entirely.

If you had these amazing sci-fi genetic algorithms that constantly make money, why would you run them on the world's most inefficient form of computation? Why wouldn't you pay for normal, efficient computers, and keep much more of the money they make?

Blockchains will allow people to collaborate on training a shared model. At somepoint it’ll be able to predict what it should learn next better than the people training it.

You need to read what Synapse AI is doing. They're suggesting building this in their networks.

You get it man. Autonomous agents that want to exchange value for services or with each other would be better off using a blockchain than traditional fiat.

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