Thank you for your comment. Looking at all the doubt and hate about blockchain & cryptocurrencies on HN lately, I personally can't help but wonder where have all innovators gone.
Confirmation Bias at work. You're invested, so you want it to take off.
Yet none of those blockchain enthusiasts could tell me a
single USP that blockchains had over storage in a normal database on any concrete use case, with the sole exception of cryptocurrencies.
And the reason is simple: all those applications have none of the properties and problems the blockchain solves - which is an elegant niche solution tailor made for mutually mistrusting entities working together on a distributed ledger. That barely exists in real life.
Centralized systems are what you want in 99% of cases. They're more reliable, better controlled, have infinitely more throughput and usually, you want to be able to roll back transactions under certain conditions (fraud, mistakes, etc.)
Sure, you could store anything in a blockchain. Sure, something yada yada blockchain could "replace Netflix". It's just that apparently nobody can tell me _why_.
My only concern right now is that I can't short Blockchain technology because the relation of hype to actual usefulness and potential is so incredibly large that it will drag a big chunk of the tech sector down the drain.
In stark contrast to AI which is just as hyped, but isn't just supposed to "change everything" since years - it's actually starting to do so on a spectacular timeline.
> Yet none of those blockchain enthusiasts could tell me a single USP that blockchains had over storage in a normal database on any concrete use case, with the sole exception of cryptocurrencies.
> And the reason is simple: all those applications have none of the properties and problems the blockchain solves - which is an elegant niche solution tailor made for mutually mistrusting entities working together on a distributed ledger. That barely exists in real life.
> Centralized systems are what you want in 99% of cases. They're more reliable, better controlled, have infinitely more throughput and usually, you want to be able to roll back transactions under certain conditions (fraud, mistakes, etc.)
While we're high on the hype cycle for blockchains and crypto currencies, it's easy to find actors that do not understand the limitations of the technology. It has heavy drawbacks when compared to centralized systems. That is true, I agree with that part of your comment.
What your position misses, are the huge unrealized upsides of blockchain tech. It's natural, because they are potential, unrealized and, as such, difficult to defend. Let me try my hand at it anyway, as high level as possible so we don't get lost in use case minutiae.
Blockchain allows you to eschew the need for a single central trusted party. This allows for fluid ecosystems, removing the need for a monopoly/oligopoly in scenarios that today require one. This removal of a market deficiency is known to increase innovation, through competition.
If you find it difficult to imagine use scenarios for blockchain, look for deficient markets caused by the need for centralized trust: monopolies and oligopolies. In each, you'll find an opportunity to create a more competitive market through blockchain.
> If you find it difficult to imagine use scenarios for blockchain, look for deficient markets caused by the need for centralized trust: monopolies and oligopolies. In each, you'll find an opportunity to create a more competitive market through blockchain.
How? This is just vague handwaving that doesn't actually explain how the blockchain can solve real problems. As of now, bitcoin is the only demonstrable use case for a blockchain, and while I don't think anyone could convincingly argue that bitcoin is useless, it's not going to cause an economic revolution like the advent of the internet.
> How?
By simply eliminating intermediaries. A middle man always takes a cut somehow. If you can eliminate him, both parties can enjoy better rates. Here are some non vague ways blockchains can help real problems:
- What if a kind of youtube existed where advertisers paid content creators directly instead of youtube taking a large percentage? And it was censorship resistant.
- What if we could build app stores that don't take a 30-50% cut.
- How about an entire p2p marketplace without fees like ebay? openbazaar.org
- What about getting paid for things that are impossible right now because of CC tx fees? This unlocks microtransactions & an entire attention economy (see yours.org, steemit.com, more incoming)
- How about p2p digital rights management to allow artists to keep more of their income? Several in the works.
- How about any service that exists to keep records? I would love to see the day Pacer was replaced by a blockchain.
- What if a kind of reddit could exist without centrally moderated channels and armies of fake users?
- What if p2p rented data storage could be a fraction of the price of dropbox without selling your data?
- What if you could rent computing power in a p2p fashion?
- What if network/VPN rules could be tokenized in the hardware and network access could be metered and charged per minute in crypto?
- What if you could receive payroll as a minute by minute stream?
- What if the lottery was provably fair and 1000 times less of a ripoff?
- What if we could replace obviously flawed political polling with prediction markets?
I could write this list all day. Not vague handwaving, all of these things are being worked on or already exist.
> What if a kind of youtube existed where advertisers paid content creators directly instead of youtube taking a large percentage? And it was censorship resistant.
Youtube taking a large percentage has nothing to do with the nature of the technology and everything to do with the fact that they have no competition due to insane network effects and highly optimized research driven UX. Also hosting, indexing, and reliably streaming hundreds of TB of high quality video is not a trivial problem. Further, you cannot escape censorship when your concern is advertising revenue.
> What if we could build app stores that don't take a 30-50% cut.
Once again, this is not a technology problem: Google and Apple will never allow app store competitors on their platform, otherwise someone would have already done this (and it was done during the early iPhone days with the Cydia store available only by breaking Apple's security - no blockchain required)
> What about getting paid for things that are impossible right now because of CC tx fees?
The same problem exists with bitcoin tx fees such that all the proposed solutions to this problem involve finding a way to avoid the blockchain at all costs.
> This unlocks microtransactions & an entire attention economy (see yours.org, steemit.com, more incoming)
Microtransactions are not practical on the blockchain and most microtransaction concepts are DOA because nobody except crypto-enthusiast wants to pay 10 cents to upvote memes and cat pictures when they can do that for free, with a better selection, on sites like reddit. There is probably some limited potential for microtransactions when it comes to gaming or maybe publishing content, but once again, the real problem has very little to do with technology and much more to do with the fact that most content is crap and people don't want to pay for it.
> How about p2p digital rights management to allow artists to keep more of their income
Once again, not a tech problem. People would happily pay the artist if the artist self-published, but most don't do that because publishing through a platform or another distributor is the only practical option for discoverability. Once you're discovered, the payment aspect is a non-issue, e.g. famous artists who already deploy "pay what you want" style stores (Radiohead, Louis CK, Humble Bundle etc).
> How about any service that exists to keep records? I would love to see the day Pacer was replaced by a blockchain
Why? What problem does this solve? Storing records is already a solved problem. There are plenty of non-blockchain techniques for storing, auditing, and cryptographically verifying and securing records without any of the PoW drawbacks. Please offer even one practical example.
> What if a kind of reddit could exist without centrally moderated channels and armies of fake users
First of all, the blockchain does not solve the "fake user" problem, so I'm not sure what that means, but centralized moderation is not a problem for most people who just want to browse content and don't really care if someone gets banned for spamming "nigger" in comments. For those that really care about totally unbridled free-speech there are already non-blockchain alternatives like voat.co... what does a blockchain bring to the table?
> What if p2p rented data storage could be a fraction of the price of dropbox without selling your data
Economics of scale guarantees you'll never be able to beat a centralized solution like AWS when it comes to this type of thing. You might see some cheaper options for a time, but once the market catches up to the fact that AWS is achieving orders of magnitude cheaper storage than a faux meshnet of consumer harddrives, you'll find that this idea is totally impractical.
> What if network/VPN rules could be tokenized in the hardware and network access could be metered and charged per minute in crypto
Interesting idea, but nobody wants this.
> What if you could receive payroll as a minute by minute stream
Interesting idea, but there's no reason that employers would adopt this.
> What if the lottery was provably fair and 1000 times less of a ripoff
Not really a concern for those that operate the lottery.
> What if we could replace obviously flawed political polling with prediction markets
Vague, impractical and fraught with its own flaws.
> I could write this list all day.
Yes, but like 99% of blockchain related ideas, the problems that are actually solved are already solved without the insane drawbacks of PoW.
We also miss the upside of emailing everybody a huge Excel file, which would also accomplish distributed replication. It doesn't necessarily mean that most people fail to grasp the concept and enormous potential for sending a large Excel file, it's just that for their use case they have access to more performant tools.
> Blockchain allows you to eschew the need for a single central trusted party. This allows for fluid ecosystems, removing the need for a monopoly/oligopoly in scenarios that today require one.
Except that the system is designed for centralization towards the entity that has access to the cheapest and most subsidized electricity. While most popular cryptocurrencies have escaped that route, you can look into the variety of lower-league shitcoins, that are generally limited to a handful of miners - the rewards are just not there to compete with a giant centralized GPU farm.
What on earth tells you I'm "invested" ;) ? I'm just curious. I still don't know why you're so vindicative, I don't like either when companies use the buzzword "blockchain" in a wrong way.
Ok look, I have a stake here because I run a crypto fund but let's just be clear: in the beginning of money, refunds involved going to the person you wanted a refund from and demanding the return of your currency. It's not that different from how crypto works right now except that the transaction is much more provable. Over time, institutions that look a lot like banks will provide the refund abstraction on top of crypto, BUT that doesn't change the value of an immutable changelog for money.
Think of it this way, if you were building money for computers, it would have atomic transfers and a changelog. Those properties, it turns out, are very useful, mostly because people dramatically underestimate how many transactions are between semi-untrusted parties (I would argue it is the majority of transactions). Yes, right now, crypto is a step backwards for many transactions, but that's because institutions that would traditionally support currency can't properly model the risk so only the brave entrepreneurs who accept unbounded risk participate. Over time, like any technology, traditional institutions will accept it as the regulatory regime becomes more clear.
The analogy to the beginning of the internet is obvious (the only real question is whether governments decide to ban it).
Refunds not a big deal and no different than paying cash. Online stores have a reputation and reviews so if there's retailers out there scamming people the internet will find out quickly.
To be fair -- and I'm no blockchain booster -- transactional rollbacks should be modeled as separate operations and replacement transactions on an immutable log (or loggish thing, anyway). You can use bitemporal tracking to model invalid belief states, but your system should never be allowed to drop transactions.
Most of the practical use cases are illegal developed nations (because fundraising should be guarded for the elite). But there will be a developing nation that adopts the token economy, allowing for global crypto liquidity to flood in and be put to productive use. Stocks, bonds, notes, everything will be tradable on the global marketplace without KYC AML garbage. Just the free flow of capital to where it's needed most.
Blockchain is only innovative if you ignore the decades of DBMS development. There are very few cases where distributed consensus is needed (versus master/slave relationship), and even those cases can be served by a variety of consensus protocols with better throughput and performance characteristics.
