Ask HN: What was impossible earlier that is easy in the BTC and ETH blockchains?

[noloblo]

What was impossible to build a few years ago has become incredibly easy if not simple in bitcoin/ethereum blockchain?

If you were to rebuild any of the consumer facing web apps/web infrastructure technologies which would you rebuild on top of the ethereum blockchain

[Meekro]

Despite the blockchain hype, "money" is the killer app for bitcoin and ethereum.

Before bitcoin, an online business would be taking a huge risk if it accepted a credit card payment from someone in Latvia. The fraud rate on such payments is probably 50%. With bitcoin, it's safe and fast. I own such a business (a VPS hosting company) and Bitcoin really has been a great solution for us.

Before bitcoin, a legal pot shop would have to deal with cash because no bank would give it an account. Having all this cash around creates a danger for the employees, not to mention the armored car drivers. Bitcoin is a tool that can be used to solve the problem.

[ceejayoz]

You've just shifted the risks from the business to the customer. As a customer, my credit card gives me significant protection from paying for a VPS from someone who intends to scam me.

Somehow, I suspect more people have had Bitcoin keys stolen by malware than have had their armored cars robbed.

[klodolph]

"Money" is not a single app, it is three apps in one. It's used to store, transmit, and account for value.

[hudon]

I definitely wouldn't say "fast". I can tap my phone with apple pay or insert my VISA chip card and it takes <5 seconds.

I agree though that for payments where the merchant can't be banked or VISA doesn't want to support them, Bitcoin or cash are the only other options.

[joegosse]

Maybe to be more precise "anonymous cash replacement" is better?

Electronic "money" in general has long been available through credit cards, PayPal, etc but at higher cost and loss of anonymity

[udsloiwdaa]

Investing in crypto-currency is investing in blackhats, password lists, botnets, spam servers, click farms and M(alware)aaS. in currency collapse of struggling small countries and tax evasion in larger ones. it's investing in money laundering, corruption, opinion manipulation, corporate and political espionage and election tampering. in ransomware and plain-old ransom. in child pornography and drug, weapon and organ sales. investing in CC is investing in the ugliest side of humanity, and business.is.booming. investing in human misery used to be elite exclusive, but now even you can do it!

[tho9Ohx1eo]

Right. This all started with the first bitcoin. We had a paradise before.

[vosper]

By no means impossible before, but now much easier: Dark net markets, money laundering, unregulated securities offerings, ponzi schemes, scams, ransomware, and, to a lesser extent, gambling.

Since you asked about rebuilding web apps, I'll link you to patio11's comment, which leads with "Blockchain is the world's worst database"

https://news.ycombinator.com/item?id=13420777

[hudon]

Spot on, these along with: political donations, funding activism, information marketplaces (think wikileaks but the leaker gets paid).

Anything that a government or regulatory body would want to censor, basically, is made significantly easier with Bitcoin/the blockchain.

[blusterXY]

patio11 was entirely wrong about bitcoin.

[z3usH44mr]

It is a very common mistake to look at btc and other cryptocurrencies through the lense of what you know money is right now, in the context of the infrastructure that exists around it. The real possibilities lie in the infrastructures that can emerge around this new technologies. Consider the fact that crypto is inherently agnostic about who or what holds it. You can be a person, an institution, a script, or an object (think self-driving, self-owning, self repairing cars), or think trafficlights you can pay to turn green for you :).

then there is the possibility of true microtransactions. What are the fundamental parameters of internet commerce in our day and age. I would argue that there is roughly three kinds of dominant transaction. One of purchases of goods/services (Amazon etc), software as a service (Spotify), and then there is the vast space of businesses that basically live of the advertising they sell through brokers such as facebook and google. There is really no alternative for this lower limit of transactions. With bitcoin you can imagine a world where people offer content online (say music) and offer consumers the choice of a microtransaction/listen or to consume the same content with ads, without having to give up control over their content to third parties such as spotify. The possibilities are really quite endless.

[theamk]

Today's bitcoin confirmation fee is 88140 satoshis (~$2) according to https://bitcoinfees.21.co/

Does not sound like a good idea for microtransactions.

[jamespitts]

If I had the resources, I would rebuild all of the consumer-facing web apps using blockchain-based smart contracts. I expect that all web apps will be rebuilt in this way to an extent, either from within or by way of competition.

So "impossible" is a charged word, as is "easy". I would say that it was previously far more costly and difficult to implement the following:

- programmable, highly-reliable, do-it-yourself financial instruments

- services that cannot feasibly be shut down

- verifiably revocable authentication

- data that cannot be modified or deleted

- functionality that cannot be modified or deleted

- complex business interactions involving numerous parties that can be verifiably traced, from start to finish

Disclaimer, because everyone loves to bring up The DAO incident: the above capabilities hold true unless the community decides otherwise after a ridiculously onerous debate. Even then, the unaltered data/code can still live on.

[klodolph]

This is not a judgment of BTC/ethereum, but any service which wants to transmit value and protect against repudiation but avoid government scrutiny is vastly easier with BTC/ethereum. This includes Silk Road and most modern ransomware.

[gitpusher]

Previously it would've been very difficult to convince complete strangers to hand over millions of dollars in a matter of minutes.

[Pilfer]

It wasn't impossible before, but with BTC/ETH it's far easier to launder money. With a Cryptocurrency tumbler [1] it's almost untraceable.

Previously, you had to carry the cash yourself, or use a service to transfer the wealth for you (through falsified business transfers, casinos, diplomats, flight attendants, etc.) Now you don't need all that, you can practically do it yourself. There are less people involved and it's harder to trace.

[1] https://en.wikipedia.org/wiki/Cryptocurrency_tumbler

[scottmp10]

Compared with cash, digital currencies are much harder to launder. It will be obvious when you try to cash out that the money went through a tumbler. With cash, you always have plausible deniability unless you were physically seen receiving it in some illegal manner.

[wheelerwj]

no, this is just plain wrong. the amount of controls in place, banking hosyility, and the market liquidity make digital currency terrible options for laundering.

[cjbprime]

Decentralized naming -- Bitcoin solves Zooko's triangle.

https://en.wikipedia.org/wiki/Zooko%27s_triangle

Hrr, I see the Wikipedia page says that Bitcoin doesn't provide "human-readable". But I think it does. You can register names on the blockchain and assign them to bitcoin addresses using OP_RETURN comments, with every party agreeing on who knows which human-readable name, despite having no centralization.

[clamprecht]

Aaronsw's take on this (from January 2011): http://www.aaronsw.com/weblog/squarezooko

[ajarmst]

I'm not sure what you mean by "Solves Zooko's Triangle", as the Triangle is an assertion of a problem (trilemma) that can't be solved. If you mean "refutes", I disagree. Besides the problem with names, bitcoin is, of course, vulnerable on the security side---to 50% or more of computing power being used maliciously (or being fraudulently converted to hidden malicious use). While the distributed nature of bitcoin strongly mitigates this once the network is big enough, the point of Zooko's Triangle is that you have to accept no better than mitigation of risk on at least one leg, not its elimination. The possibility of Sybil attacks also point out issues associated with the anonymity of other network participants and the possibility of hidden collusion.

[KaiserPro]

>"When inflation is at the target rate of 3% that means that the central bank will default on 3% of the amount of debt it guarantees within a year."

Thats patently false. Government debt is sold in the form of bonds. They make up the bed rock of the whole economy. Precisely because they can "print money" they don't default on debt. Government bonds are considered "zero risk"

Yes, a central bank can default on foreign debt, or if they can't print their own money (see greek banking problem.)

however this underscored the fundemental misunderstanding of how money works.

>"By offering short term credit to each other market participants will be able to engage in economic exchange without having to pay the cost of money.

>Because market participants will effectively be creating new money with every transaction they will be expanding the money supply and increasing economic growth with every transaction."

Thats litrally how the entire banking system works now. Thats how credit cards work too. Thats how B2B credit works. What is not tackled here is risk. Sure free credit is great, but how do you know if someone can settle the debt? In this (unrealistic) world, the credit ratings agency becomes the dominant force.

Speaking of which, there is no reason why a small buisness can't offer its own line of credit, without using a bank. However the reason why credit cost money is because there is risk. Interest is a function of risk and supply. Sure a coffee shop _could_ settle bills at the end of the week, but the cost of administering that system is non trivial. The risk of loss is also non trivial.

Bitcoin or Etherium does nothing to stop that.

In short, this article is flawed.

[KaiserPro]

post script:

> "As decentralized digital exchange replaces central banks the effective money supply will increase dramatically."

this is also known as hyper inflation.

[hustlechris]

ICO.

ICO is Ethereum's killer app - and that's ok for now.

[lubujackson]

I think it is less about what you can do and more about what it prevents. Blockchains are really an example of triple entry accounting. A transaction is local to you, local to the party you deal with, and public and (more or less) immutable to the public. If we used, for instance, a government-run blockchain to record all business transactions making "cooking the books" much less possible (no Enron).

So it is useful for no fraud payments (guaranteed payment) and no trickery transaction/accounting, which is literally all blockchains are when you get down to it. The downside is that the transactions are all public knowledge to anyone contributing transactions. But it could immediately be used to track government spending (yeah right) or non-profit spending which should both be more or less open books.

[hudon]

Using a distributed ledger like R3's Corda (https://www.corda.net) will do what you say: prevent "cooking the books" and make transactions public and audit-able.

What the blockchain does that Corda does not is: the ability for anyone to be a transaction validator. What this ability gives the network is censorship resistance. Basically because anyone can validate transactions, no central body can say what should and should not go in the ledger.

[norswap]

Excellent question, I'd really like to know as well, to see what's beneath the hype.

What I do know: anonymous money transactions. Of course, you'll still have the anonymity loss when converting to/from dollars. While the parties are anonymous, all transactions are visible. In many cases that means that people can end up associating your bitcoin address with your identity (assuming they manage to puzzle out the patterns of your transactions and cross-check that with known addresses). Mechanisms like CoinJoin allow you to mix your transactions with those of others, in order to obscure them, but then the CoinJoin provider still sees your transactions.

[diggan]

Look into zkSNARKs which is what for example Zcash uses for completely anonymous transactions without any mixers or such.

[pmyymgf]

Escrow with shared programmable ownership, global value transfers completed in less than a hour, immutable public timestamps, self-owned online identity etc All impossible pre-blockchain

[TheDong]

> self-owned online identity

gnu-social existed long before blockchains, as did many other federated systems.

> shared programmable ownership

What does that mean?

> global value transfers completed in less than a hour

Customers of the same bank can do the same globally usually. It happens they're transferring "internal bank numbers" instead of real money, but all cryptocurrencies are also just proxies for money and both sender/receiver must be using the same crypto-currency. Not very different.

Also, paypal, snapcash, etc seem to work just fine without a blockchain.

> immutable public timestamps

The library of congress begs to differ. So does gnusocial (federated/distributed timestamp). Mailing lists were used for this purpose at some point too.

Things like freenet exist just fine without blockchains.

[joegosse]

This is a good list of inputs, though I think immutable public timestamps is the only one that was impossible pre-blockchain, and it's not clear what the value of this is.

I'd argue that the rest of them were not impossible before blockchain. From my perspective blockchain just makes these easier/cheaper.

[maesho]

Bitcoin demonstrated that is is possible to dis-intermediate the storage and transmission of value, an area that is the mainstay of the banking industry.

Ethereum allows for open experimentation, and has brought about the emergence of arbitrary tokens.

Decred has demonstrated that is it possible to dis-intermediate the process of political decision-making for a cryptocurrency.

[tinkerrr]

Does Bitcoin's simple use case of a scarce digital commodity count? It's not that useful in the US/Western Europe but is genuinely useful in certain countries like Venezuela where inflation is in the triple-digit percent a year.

[rhino369]

Is there actually a healthy bitcoin economy in the meatspace of Venezuela. Can you trade it for things? Can you buy milk with it? If not, it's really not much of a currency.

If you are just looking to hedge against inflation, you can convert to any other currency or asset just as easily, if not more easily. I assume you can buy gold ETFs in Venezuela.

[hudon]

A scarce commodity isn't new though right? People can buy gold online now and use that as a safe haven, for example. Why does it being a "digital" scarce commodity matter?

[wheelerwj]

tokenization of assets of any variety. some people will say ICO but its bigger than that.

People tend to miss the bigger picture when it comes to digital currencies. Bitcoin and the blockchain are communication protocols. They allow anyone and everyone to communicate and transact in a single unified language, making it easy for people to put something out into the world. Wether its a purchase or a remittance or a smart contract executed ICO. the currency themselves are just tools for make global statements.

[Mc_Big_G]

https://www.openbazaar.org/

An online store with:

No Transaction Fees

No Monthly Fees

No Listing Fees

No Bank / CC Required

Live Chat with Customers

Store Customization

Peer to Peer (no middleman)

[theamk]

.. no protection against dishonest sellers

.. no protection against dishonest buyers

.. no protection against dishonest website operators

[phaser]

proving that some data existed prior to some point in time using blockchain timestamps.

https://opentimestamps.org/

[djbraski]

The problem it solves is offering both anonymity and security.