A blockchain ensures that some sequence of agreements was made in a way that everyone can trust. If everyone keeps their secret keys secure and solely in their possession, then no activity can be forged on the network by any significant likelihood.
Anywhere this concept has value, a blockchain has value. That's all there is to it. The rest is fairy dust and noise.
I don't really follow a lot of the discussion in this article. As I see it, most of the buzz around blockchains is just wild speculation and fantasy. For example, why would be want a "fat" protocol? In any other context in technology, "fat" anything is considered bad. Technologies are supposed to be "thin", simple, efficient, and composable. So why would the opposite be praised in this case? Furthermore, the characterization of existing foundational internet protocols as "thin" and blockchain protocols as "fat" seems like an inversion of truths. By my understanding, it would take as long or much longer to become well versed in all the nitty-gritty details of TCP/IP, DNS, etc. than it would to gain a solid understanding of Ethereum.
Also, where is the need for software ecosystem micro-economies?
None of this makes any logical sense to me. It seems people have gotten it in their heads that the simple technological innovations of hash trees and distributed consensus protocols are going to somehow make them rich. And they're finding weird ways of justifying this.
It seems like in most cases, the tokens are being used as a way for the developers to get funding to implement their project without the bureaucracy and costs of doing a real IPO.
That would be fine on its own, but they're almost all pretending this is not the reason for it, and that the token is necessary. This is an obvious lie in nearly every case when you dig into the details. Nearly every dapp that has its own token can be cloned to use Ether without any detriment to the product.
> A blockchain ensures that some sequence of agreements was made in a way that everyone can trust. If everyone keeps their secret keys secure and solely in their possession, then no activity can be forged on the network by any significant likelihood. Anywhere this concept has value, a blockchain has value. That's all there is to it.
Note an important caveat -- a centralized third party can also provide such a service. So you have to further subdivide the space into use cases where the blockchain has to compete against such services, and use cases where a public ledger is desirable in and of itself.
Wealth is built through control, while a distributed ledger rejects control by design. Now distributed ledgers have utility, but that does not necessarily mean they will create business value for entrepreneurs and investors.
It's almost like how regulation has value in society, but regulation is decidedly not profitable and businesses usually reject it.
The "fat protocol" meme you're talking about has already come and gone.
It was only a valid hypothesis when there's only a single dominant chain. Not anymore. It's becoming more apparent that there will be multiple chains, which means these chains compete for usage, so naturally "all the value aggregate to fat protocols" is not valid anymore.
So you're right, the "fat protocol" should not be the norm. And it's really cool to see the landscape progress in this direction even though just last summer everyone took for granted that "fat protocol" will be the norm.
p.s.
There are so many "startup people" who are too lazy to delve deep into how the tech actually works, who just read some medium blog posts and watch some youtube videos and think they know everything. These people end up producing shallow content that's basically a parroting of what they read online.
To people who actually have touched the code and building on these technologies, these things are so obviously outdated.
> A blockchain ensures that some sequence of agreements was made in a way that everyone can trust. [...] The rest is fairy dust and noise.
Amen. "Blockchain" is today's fad just like the "nanotech" mania of yesteryear. That doesn't mean there aren't advances and opportunities, but it feels like 90% of the people promoting it can't even give a high-level explanation of why it's a good fit for their use-case.
> For example, why would be want a "fat" protocol?
This may seem weird, but bear with me: I think this is like people talking about intellectual property (copyrights, patents, franchises, etc.) The underlying idea is that you can create some core framework which everyone wants to use (or can't avoid) and that therefore you can collect rent (or at least sew up an incredible starter bonus) making it more consequential than the individual pieces.
The current internet is (perhaps thankfully) a contrast, where nobody (AFAK) is making big bucks off of TCP-IP/HTML/Browser licensing fees.
It would take as long or much longer to become well versed in all the nitty-gritty details of TCP/IP, DNS, etc. than it would to gain a solid understanding of Ethereum.
I have to agree to this as I have written software to implement at least one networking protocol. On the contrary, I still haven't been able to wrap my head around Ethereum.
I'm sure most of us know that TCP/IP and all the other networking protocols are thin by design, for good reasons. Speed and reliability. It seems strange to write a connection-oriented protocol (TCP) that runs on a connection less protocol (IP) but this design is efficient and serves the purpose.
Calling the current bloating in blockchain protocols as a dramatic paradigm shift is an exaggeration. From what I see, the current blockchains protocols are bloated (as compared to TCP/IP) because they are encapsulating the application logic within themselves so as to achieve decentralization in a highly secure manner. (Based on my frugal understanding). It's a new way of doing things, perhaps not necessarily a paradigm shift.
Note to self - Understand blockchain in depth, may be it is a paradigm shift.
Upgrade cost of network complexity: The Internet has smart edges ... and a simple core. Adding an new Internet service is just a matter of distributing an application ... Compare this to voice, where one has to upgrade the entire core. - RFC3439 (2002)
Monegro believes that this paradigm shift affects the way that developers should think about their applications: “The combination of shared open data with an incentive system that prevents “winner-take-all” markets changes the game at the application layer and creates an entire new category of companies with fundamentally different business models at the protocol layer.”
Ok, thin protocols + fat apps --> fat protocols + thin apps. Neat theory. But this is putting the cart before the horse. Please can someone ELI5 to me:
* What problem does the fat-protocol, thin-app paradigm solve?
* Why would anyone be interested in developing a thin app for my fat protocol any more than anyone is interested today in developing a thin protocol that I can put my fat app on top of?
* Why is thin-protocol, fat-app considered to be in need of fixing in the first place? I consider the fact that apps capture more value than protocols to be a direct consequence of the free market. Apps capture business value because they solve actual user problems. Protocols define ways to build apps. But frankly I don't see a great demand for new protocols, and I consider that reason enough for the fact that protocols can't capture much value. To say that that would change with the blockchain is IMO equivalent to saying the market has it all wrong. What am I not seeing?
Early blockchains like bitcoins might have this thin/fat protocol aspect, but this is much less true of newer blockchains like ethereum. Granted, with programming languages like Solidity we are still quite limited but there are some interesting developments ongoing, like possibly integrating the webassembly tech with some blockchains, to allow more flexibility on the application layer (see ewasm for ethereum).
But generally speaking, this protocol issue is of little interest for end users.
What is of interest to them is the fact that their data can become decentralized with the blockchain, and the power balance can be shifted back to them. With all the tech majors becoming so powerful thats a really big deal.
Imagine you’ve spent your whole life investing millions of dollars in entrepreneurs. Building models and testing hypotheses with no real agency: you can’t control what the CEO does or the product the engineering team builds or the way they market the product. Your job is to provide returns for your LPs. That’s it.
Now imagine, instead of spending thousands of hours interacting with and managing people, their problems, watching painfully as they try to figure out the market they specialize in, I tell you that you can invest in something else. That thing, we’ll call it a token. This token does work. It can be used to compute something. Or helps make something easier. I’m not clear on the specifics, but I can tell you one thing: if you buy it, and if you tell other people about it, merely the act of owning it increases its value.
I have just given you something you don’t get a lot of in your career, true, direct self agency. You are unequivocally sure that you are creating value because it’s you who is selling the value! You bought, the price rose, you know if other people get excited the price will rise again. It’s exciting, you don’t have to deal with people mucking about directly, and you’re doing your job: generating returns.
The house of cards here is the assumption that these tokens can be used for something, anything beyond a store of value. Because if that’s true, it’s not really speculation. You’re an early adopter of a paradigm-changing protocol.
The default assumption here is that engineers are like ants: we build for the sake of building. Give us a canvas and we will build dApps (or what-have-you) just for the sake of building them.
The truth is, engineers are not ants. We build things to make our lives easier or more fulfilling. I started programming, for example, to build video games. Many people build things to automate their homes. When you build for an employer, the end goal is always to do something for the customer.
The draw of Ethereum, seems to me, to be that eventually somebody will have to build something insanely valuable, right? Statistically, it’s gotta happen. I think that’s a ridiculous premise: if centralized tools are always faster with more mature ecosystems, engineers will always go there to solve their daily problems. The question to me really seems to be, “do we need truly immutable ledgers and transaction histories? Do we need 100.0% reliability in transaction history at the cost of orders of magnitude more energy expenditure, or is 99.9999999% okay?” As a cute anecdote, Life has been remarkably successful with a 10^-7 error rate in DNA polymerase. I have a feeling most industries will be fine without, and it’s actually probably cheaper to have a reasonable facsimile (or statistically insignificant approximation) of immutability (human intervention and accountants included) than a guarantee. Especially if, in order to be guaranteed, it needs to be public.
So, what you’re seeing is speculation that engineers could build something one day using an application development paradigm that’s not actually clearly or obviously more powerful. It’s worse speculation than betting on startups with teams of people who reliably execute, masked by the illusion of self agency as an owner and promoter of a token.
tl;dr: Somebody remind me of this post in a decade and we’ll see where it all ends up. The technology will grow and evolve. I’m not sold on any of this, and investors who aren’t building anything but themselves are holding tokens telling people to go experiment and build things isn’t an attractive signal. (It seems like VC flipped on its head and the incentives are poor for engineers - so, for now, let these investors play hot potato with each other for a while. I’ve seen a few of Vitalik’s tweets and it seems even he’s concerned about these incentives.)
It solves some problems, especially when it comes to networks of shared information where no one actor trust any other single actor.
But as usual, as soon as a lot of money is to be made, non-techies get dollar signs in their eyes and --without understanding the tool-- jump in and start using it for everything.
> For one, Ethereum is unable to access real time data from outside the blockchain. Developers need to rely on trusted third party data providers, called oracles, to provide smart contracts with outside information like weather, random numbers, or currency values.
I feel like this is more of a feature than a bug. If you're weaving applications into the blockchain, would it really be wise to have that chain communicate with abstract data off of the chain itself? Seems an unnecessary burden for the chain to bare!
Great article. I've recently gotten into Ethereum Dev and Solidity. It's really fun, fun stuff. This isn't directly addressed in the Ethereum portion of the article, but it's good to keep in mind that these things are all works in progress. Limitations today are non-such tomorrow; we don't quite know where the train is headed.
You, Developer, can help it get to wherever you feel it needs to go. Remember that before deciding not to contribute. :)
What I don't understand is how Ethereum can describe their dapps as "trustless" when all the trust is still centralized in an oracle. This can even happen accidentally, such as with the Mayweather/McGregor smart contract breakage. [0]
But now imagine if BoxRec had intentionally reported false results from their website in order to make a lot of money on the bet. People would lose their money, and there would be no recourse.
Verifiable oracles are extremely hard to create. In fact I think that the creation of verifiable oracles is the single biggest challenge facing science and engineering. Full disclosure, I am quite biased about this since part of my PhD work is to create a language to specify measurement processes.
How do you know whether the numbers you are getting reflect something about the real world? How do you know that your data hasn't been tampered with intentionally or unintentionally?
Data provenance is extremely difficult, and that is only half the problem. The other half of the problem is determining whether you have actually measured what you think you have measured. (Note: there may be some additional halves lurking around as well.)
To give some concrete examples. You find a picture of a CEO groping someone, how do you know whether it is real? Does it matter if you want to short the stock of the company, given that you know that other people will not verify it? What if the photographer's camera automatically pushed a stream of hashes of sensor contents and GPS locations to a source with a verifiable timestamp?
How about the equivalent for a microscope sensor to ensure that the raw data from the sensor was verifiable, and that all transformations of that data needed to be published in a form that would allow anyone to verify that the raw data could be transformed to the final data?
How about a contract that specifies that if a freezer temperature rises above X degrees C for more than 3 minutes then the freezer owner must pay Y dollars to the owners of the contents of the freezer. What does it take to build sensors that the owner of the freezer would trust enough to enter into such a contract?
tl;dr Verifiability of data from oracles is extremely difficult, and much a bigger challenge than building a blockchain that could make use of it. GIGO will be a big stumbling block.
I took this as a point of explaining what Oracles are/do. Too often Ethereum proponents skip talking about Oracles when it comes to discussing attack vectors on Eth smart contracts.
> Developers need to rely on trusted third party data providers, called oracles
It's ironic that they mention Augur by name in the article, but are apparently unaware its main innovation is the decentralized oracle that just so happens to have a prediction market built on top of it.
> I feel like this is more of a feature than a bug.
That is indeed 100% by design. All smart contract code in Ethereum has to be deterministic to guarantee computational consensus, and of course this can only be done by having a closed EVM.
It's all the same thing every year on HN. People trying to find all sorts of excuses for Bitcoin existence - blockchains, smart contracts, ICOs - as long as they don't have to accept that Bitcoin's main purpose is and always was to have an alternative to the financial system, crippling regulations, government control and taxes. In other words, everything people hate about libertarians, they try to ignore in Bitcoin. Because they can't just ignore Bitcoin - it's not going away for some reason.
And it's not going away because there's a demand for Bitcoin. Why? Not because blockchain is some sort of an innovation. It's because people want a currency not controlled by any state institution. It's because people want freedom. Deny that all you want, it's not going away.
I agree. "Bitcoin as anarcho-capitalist proof of concept" does seem to be the correct framework for understanding why it exists, why it works the way it does, and what one might find valuable about it. On that front it's been at least a partial success. I can't buy a cup of coffee with Bitcoin, and I doubt I ever will, but the fact that it works at all is a lot more than I suspected we would see at this point. It's definitely caused me to rethink quite a few of my assumptions about macroeconomics.
That doesn't justify why anyone else should be shoehorning blockchains into their projects.
Earlier today I saw that Kodak is going to be launching KODAKCoin later this month as a mechanism to somehow assist photographers in selling and distributing their work. Presumably Kodak trusts Kodak. Any photographer who wants to use Kodak's tools to control the distribution of their work has to trust Kodak. Kodak has an IT department. They don't need trustless or decentralized. What they need is a boring ol' SQL database.
Maybe cryptocurrencies are a good idea, maybe they're not. That's more of a political and economic question than a technical one. Either way, they clearly do work more or less as advertised. What I'm still waiting to see is someone who is not a libertarian bent on the destruction of the global financial system using the blockchain to successfully solve any other previously intractable problem.
>Bitcoin's main purpose is and always was to have an alternative to the financial system, crippling regulations, government control and taxes.
Does bitcoin really do any of those things? Right now, btc core is not an alternative to cash- a problem that maybe will be fixed in time, but currently only seems to be getting worse. If bitcoin really did take off as a global currency, the IRS would audit unreported bitcoin transactions- and it'd have your financial records because the corporations and individuals you interact act with would cooperate, and it'd only need a few to start to deanonymize you. It seems like the blockchain would almost make the tax job easier, because all transactions are public unless people move from bitcoin to a zerocoin model. Even then, the IRS would pursue those who didn't report and have transaction information from vendors to work to identify fraud.
So, bitcoin doesn't seem like an alternative to taxes. Also have no idea what it has to do with most government regulation. And, is it really an alternative to the financial system? Yes, people can use bitcoin instead of a checkings or savings account- but still need to use traditional services to invest in the market, and the financial system will continue humming along making more money from money and making gobs of money profiting off everyone else's market inefficiency whether it's working in usd or btc.
So, what are we left with? It seems like core btc is only an alternative to a speculative investment in something that the federal reserve cannot print. And believe it or not, the vast majority of this country either doesn't care about quantitative easing, or believes in basic macroeconomics. Core right now seems to just be a LARP fantasy for libertarians convinced that "this time we can finally get rid of the evil Fed and their evil money printing". It'll never happen, and if it does offfer any kind of freedom, it's the freedom to go back to pre-fiat boom and bust cycles of economic hell detached from modern macroeconomic theory.
Eh, to most people right now bitcoin is an investment they could maybe get rich off of. I don't think most recent investors are thinking about any sort of social ramifications beyond "what if I get rich?"
But yes I agree with you that it is fundamentally anarcho-capitalist. You are certainly not wrong, and this is the source of my objection to bitcoin and most other cryptocurrencies. Although I don't view anarcho-capitalism as "freedom" like you do, but that's a debate for another time.
Personally I see a lot of different areas where the blockchain will be extremely useful.
The reason I think that is very simple.
The blockchain allows us to create scarcity in an otherwise abundant medium.
This means that potentially (and yes it will take time) we will see be able to mimic the physical space and create items that are to some extent unique (even though the can be copied. The art market is based on exactly this principle)
It's extremely interesting when it comes to things like secondhand markets where we can buy and resell assets without having to deal with licensing issues from some central owner.
Things like ebooks that can increase in value because of the people who owned them, digital "Pokemon cards" to create unique digital assets, virtual goods without the need for the original creator of the game to be up and running.
In other words, it allow us to have a digital world where what we do creates a unique footprint and doesn't just get's obsolete and where the end user gets to tap into the value chain of technology even if they are not able to work in the technology space.
These are some of the things I believe is interesting. I am not anarco-capitalist or libertarian and I don't care if it was pushed primarily by them just like I don't care that my country was based on wars and slavery and killing other people.
The blockchain, the way I look at it at least, is a "protocol" like TCP-IP.
it's a very noble approach, but the facts are not in your favour. The 'people' that keep bitcoin valuation high are: early adopters (including ones who lost access to their wallets), HODLers and speculators and perhaps a few casual drug buyers. As a mainstream currency, BTC is pretty useless at world scale.
It's all the same thing every year on HN. People trying to find all sorts of excuses for Bitcoin existence - blockchains, smart contracts, ICOs - as long as they don't have to accept that Bitcoin's main purpose is and always was to have an alternative to the financial system, crippling regulations, government control and taxes.
It has not yet succeeded in this purpose as it is not yet a viable alternative currency except in extreme cases where the government-backed currency has failed completely.
9 years is nothing when we're talking about currency. It's not even a fraction of a single lifespan. Bitcoin's rate of money supply has slowed dramatically in the last few years (as it was programmed to do), limiting its ability to expand to accommodate new markets. Instead of becoming more widely accepted, organizations such as Steam are dropping support for it, due to volatility and increased transaction fees: which is exactly what would be predicted when a currency supply is limited but the economy around it is growing (or trying to grow-- scarcity of currency cause an economy to stagnate until an alternative is found).
There is definitely a portion of people that this applies to. However, I’d wager that the majority of the Cryptocurrency market capitalisation is from people that really want to become millionaires really fast.
Yet so far I still see almost nothing on the block chain (beyond its core currency use case) that is useful outside the domain of block chain stuff.
The only exception is things like Sia, and that's not cost or convenience competitive with Amazon S3 or Backblaze.
Where is the value here? When I visited this I was expecting to see at least something about building something useful for... something... Building what for the blockchain?
Oh kitties. Yeah.
I am absolutely aware of the fact that early stage tech often looks like a toy, but here's the thing. PCs were a toy but it didn't take long at all (VisiCalc, etc.) before they had actual uses. BBSes were a toy but they were immediately useful to their users for trading data and messaging.
We are now about eight years into block chain and beyond its one core use cases there is almost nothing. Whatever value has been delivered seems extremely minor compared to the vast sums of money being spent, making this perhaps the worst ROI I've ever seen.
Can someone provide a counter example? What are people doing in the real world with this stuff?
> Whatever value has been delivered seems extremely minor compared to the vast sums of money being spent, making this perhaps the worst ROI I've ever seen.
What's even worse, from my POV, is the humongous amount of electricity that is used to support the blockchain. And to what end?
Personally, I won't start believing in the blockchain until a non-wasteful alternative to the present PoW scheme gets developed and actually deployed. Right now, this looks to me like the most direct way of turning human vices into cooking us live on this planet that humanity has ever invented.
My favorite part about the blockchain is that it is a standard building block for decentralized byzantine consensus. Throw Ripple's XRP Consensus algorithm at 50-100 nodes and you know that 30% or more would have to be compromised to break the guarantees.
That's really cool because I can code the rest of the interface (front end etc.) with sloppy security and then ACTUALLY BOLT ON a secure layer with guarantees at the end.
Makes development much more streamlined. As the author of a huge codebase (https://qbix.com/platform) I worry that there are lots of security holes. With such a large attack surface, most new open source projects are swiss cheese, like early Wordpress (which is still full of holes from plugins).
Here, we just build our MODEL layer with a blockchain and KNOW the rules are going to be enforced.
Combine that with IPFS and a token and suddenly you don't have to pay for hosting to scale to billions of people. It's nice.
Why use a blockchain instead of a database? Because multiple organizations are involved and each wants to control the database.
If a thing moves across multiple organizations then you can make a case for a blockchain application, logistics is an obvious example, but there are others like asset (expensive paintings / vintage wine) provenance.
In the centralized world with a thin protocol layer that captures little value and a fat application layer that captures a lot, we see far, far more development in the application layer. When you invert where the most value is captured, you invest where the most work is done.
That said, all sorts of open source projects have shown that there are plenty of people willing to sacrifice their ability to capture value if it means they can produce even more value that is instead captured by users.
For example, steemit.com: a social network where you get paid (in tokens) for producing/curating content. As the network grows, the token gets more valuable, so there's a strong incentive for early users to join it.
I'm not sure yet steemit will end up being a winner in this field, but I find this a very smart approach for challenging the network effect of big competitors.
its only a matter of time before bank settlement and cross border payments are all done on blockchain. I would think that asset tracking and real esate deeds are a great application. Asking why these things aren't on the blockchain yet is like asking why businesses aren't using the internet in the 1970s.
I've had meetings with prospective clients that opened with, "We have $problem, can we use blockchain to solve it?" where anything that doesn't qualify as a blockchain is cast to the wayside because it doesn't scratch that buzzword itch.
(Amusingly, I've witnessed one pitch where the person called it "bitchain" and it sounded like "ba-ching!" and I was waiting for the follow-up to what I thought was onomatopoeia for a cash register sound. I've since learned to not abbreviate cryptography as "crypto" lest I attract sketchy prospects.)
A couple weeks ago a startup pitched blockchain solutions for government problems (I work at a government agency in Brazil). The presentation sounded like Scientology, lots of circular arguments and bold claims without much substance.
I asked a few questions and he dodged them like a professional politician:
* what do you do if you need to reverse a transaction (lets say, court order)
* what if someone loses his wallet/password
* some people claims blockchain is over-hyped
He said that I being skeptical proves my ignorance and I should study more about the subject instead of challenge him.
Remembered the short tale "The Emperor's new clothes", I'm unable to see the king's clothes because they are made of a magic fabric invisible to the stupid. I guess the magic fabric is made of blockchain.
Does your problem gets easier/solved with a permissionless ownerless database, if "yes" then you need a public blockchain, if "no" you need something else.
[Question] What technology, based or not on blockchain, would enable an entity to write relatively large amounts of data in a "sustainable" way -- sustainable meaning, that the data is independent from whoever wrote it (can survive it)?
Writing data to the blockchain solves this problem, but the cost is large and performance is dismal.
Writing hashes to the blockchain at specified intervals, delivers proof of existence, at an acceptable cost and performance, but does not really make sure the data itself will survive its original author.
In general, it's a red flag to see people promoting some technology or idea without concrete, end to end examples, and circular logic. It's okay for the authors to make speculations, but I am disappointed at their excessive handwaiving in answering just two simple questions.
a) Do "dapps" really to use their own tokens instead of USD or even ETH to function?
b) How are closed ecosystems that utilize "utility tokens" benefitting customers? How are closed ecosystems better than open systems, open protocols?
a) they could use ETH, but if you launch your own token you get two advantages:
- funding (ICO)
- an economic incentive for attracting early users (give tokens for using your app in the promise that they will be worth more in the future)
b) if a user earns tokens that value over time, that's a huge win: imagine if all the time you spend on apps today, generating valuable data to a few companies, would generate in turn some of these tokens back to you?
Besides, what do you mean by "closed" exactly? The data being on the public blockchain should actually encourage integration by default. For example, several new dapps are being built on top of IPFS for data, using uPort for identity, Aragon for governance, etc.
However, OP nor Naval, really understand the protocol, or wouldn't be supporting non-blockchain things like ethereum (there is nothing that you can do with ethereum but not with git).
>One of these developers, Vitalik Buterin, was frustrated by Bitcoin’s immobilism
I am amazed at how HN is selling a promo story invented for media by ethereum as a company. Digging IRC logs would reveal how Vitalik convoluted each aspect of the tech(and was often wrong)to the point that the devs stopped caring and let him be. Even technically, I have answered this on HN and other places numerous times - tell me one thing you can build with ethereum but not with bitcoin? (On the opposite, ethereum can't do money - mutable chain).
Reading old logs may also reveal something about the project Vitalik had before getting involved with Ethereum: Selling access to his quantum computer ... for mining Bitcoins.
Strange how the PR puff pieces around Ethereum never seem to mention this project. Amazing also how the quantum computer seems to disappear as the pre-mined coins were sold off.
Ethereum isn't useful for smart contracts; they are too expensive to call methods on chain and EVM is too inflexible and bug prone.
The only use for ethereum is shittokens, and you could practically coingen these for free, and trade forever. No load on the shared commons, isolate activity to the specific coin. The only advantage is the ECR20 standard that aids exchange integration.
SV is all a blaze about Ethereum, but I tell you, this too shall pass.
Long on other smart contract platforms, but not ETH.
>>The only advantage is the ECR20 standard that aids exchange integration.
That's a massive advantage. Several decentralized exchange protocols are being developed, and a decentralized exchange, EtherDelta, is the most utilized DApp on Ethereum: https://ethgasstation.info/gasguzzlers.php
Ethereum's network effect in crypto-assets is growing stronger every day, with 91 of the top 100 tokens now ERC20 tokens:
> Alternatively, the distribution of value in the blockchain paradigm can be described with fat protocols and a thin application layer. This paradigm shift is possible due to the innovation of cryptographic tokens.
As a long-time decentralization activist, this sentiment makes me want to tear my eyeballs out. Why are cryptographic tokens necessary to implement fat protocols? Why does "standardizing communication across applications" now also have to mean "implementing a global, secure financial market" in the process?!? This is maddening to me and nobody has explained to me why blockchains are a requirement to do this.
>>“Historically the only way to make money from a protocol was to create software that implemented it and then try to sell this software (or more recently to host it)… With [cryptographic] tokens, however, the creators of a protocol can ‘monetize’ it directly and will in fact benefit more as others build businesses on top of that protocol.”
>>Previously, the creators of open communication protocols for the Internet, largely DARPA researchers and non-profit contributors, could not align financial incentives with protocol development. In contrast, protocol creators today can issue “tokens”, like Bitcoin and Ethereum, that represent the value of their decentralized protocols.
The key is that it can "align financial incentives with protocol development".
The negativity in this thread reminds me of the internet in the early nineties.
If someone had said that one day there will be a company that does billions by allowing people to fundamentally share their cat pictures and send each other happy birthday messages people would have laughed their asses off.
The blockchain can be seen as a giant immutable feed. Make of that what you will.
It reminds me more of the P2P mania of the early 2000s - P2P was going to decentralize and revolutionize absolutely everything, and well, it didn't. It stayed in its narrow lane, providing benefits where it made sense.
That's strange. The blockchain hype reminds me instead of the late 90s dotcom bubble, and CryptoKitties reminds me instead of the Beanie Baby Mania of the same era.
I don't remember any of the early internet negativity that Bitcoin supporters do.
Every time I see a Ycombinator article on Blockchain, I can't stop but feel a bitterness from the years of nasty comments I got here when advocating for Bitcoin, Ethereum and Blockchain technology here.
Anyone thinking of building anything on Ethereum should probably read and comprehend this recent blog post from the folks at BitGo: https://medium.com/@lopp/the-challenges-of-building-ethereum... There are many nasty subtleties and hidden traps they learned the hard way that aren't obvious.
Hey,I would probably say the white paper for BitCoin is a good place to understand what a blockchain does, I find the yellow paper for Ethereum more useful for development. You probably want to run a private nodes for ethereum, & a dev node for bitcoin, cheaper & no issues of space to experiment on both. Genesis file for bitcoin is quite interesting for a soft fork. I've tried to used both React & Meteor as webframeworks for a possible dapp..had more luck with Meteor-:) Tried to connect heroku to a private chain as well..Got distracted but it seemed feasible -:) Lots & lots of solidity code on github by Ethereum developers & & even an open source framework to do static code analysis for security -:) Lots of stuff on developers on bitcoin.org. Ethereum has diff versions, so you want to look at the documentation for the latest version byzatine, i think & it was also quite interesting thar they have multiple clients in diff langs, i just started with one & got used to that -;) Information from previous versions is also useful. Lots of altcoins are also opensource so Good Luck building -:)
It is misleading to describe etheteum as Turing-complete. If it were, an infinite while loop would soon crash the network. (As mentioned in the article, the processing of Ethereum contracts is powered/funded by a finite valuable currency called gas)
A novelty of the unfolding blockchain revolution is the realisation that there is a world of interesting non-turing-complete things to be built. We all assumed that anything non-turing-complete a waste of time. Surprise!
What you want to say here is that ethereum takes a large step towards creating a flexible development platform.
EVM function like an instruction-set for this distributed computer. This may be close to the way forward. But solidity is not. A quick port of JavaScript, it is still in the old software mindset.
Ethereum has problems ahead of it. Just as C has an endless capacity to create memory leak bugs, Solidity offers opportunity for contracts that will drain people's accounts. Each time it happens, it will be reputational damage for the community.
If you wanted to learn Ethereum, it might make more sense to start with raw EVM than Solidity. Play at writing a macro assembler. Once you were tooled up, you might try your hand at becoming the Brendan Eich of the blockchain. Until you do, we are stuck with Brendan Eich.
If we do not find such an expression, general-purpose, public-access blockchain will gain permanent mistrust, and fail.
Message-driven concurrency is here to stay though. I am building a concurrency language centred around message-driven consensus-engines. (github.com/solent-eng/solent) It is designed to be host-distributed, but operated by a single party and not multi-party.
Here's my two cents. Is it a fad and a bubble? Most likely.
But do not discount value that the token creates as a network effect. Think of the currency as an investment vehicle to reward people who jump on to the network first. Consider Facebook, the first hundred customers are billions of times more valuable then the last hundred.
Once this fad dies, people should start joining the networks they plan to use, and early adopters will be rewarded for helping creating the network.
On top of that, it decentralizes the control of the network but temporarily provides capital for it's creators. It does not ensure that their system will belong to them in purpituity. Which is a good thing!
So far the main benefit is democratizing investment, as has been stated here before. I love that I can get in on early stage projects without being a well-connected angel investor. Coins are like new, sexier penny stocks.
So this is exactly how I got started on a silly Ethereum side project over the holiday. Truffle, solidity docs, and reading the crypto kiddies code is all you need. I'm mostly interested in how Ethereum and other blockchain technologies work - there's no denying that building a dapp is just a fundamentally different experience from building a web app today and that in itself is exciting.
I'm mostly not interested in anything financial. Decentralization, immutability, and a built-in way to pay for usage are the main features of Ethereum (possibly combined with IPFS) that get me going.
Blockchains, in part, provide the following value proposition:
Provable [X] without a central authority.
[X] can be the following:
Ex.
Currency - Bitcoin
Computation - Ethereum
Anonymous currency - ZCash
Storage - Filecoin
etc.
Most of us would agree that central authority is too strong in many aspects of the economy and technology. The key question is for what values of [X] does the value proposition make sense? The core technology is less than 10 years old, anyone being too confidant in where this road goes should put it in a larger timeline. Besides not losing your money, as hackers we can only explore what may be possible.
Under a limited set of conditions, with some cost [Y] to keep the system running. The bitcoin network is extremely expensive, for example.
The key question is for what values of [X] does the value proposition make sense?
The key question is for what values of [X] - [Y] does the value proposition make sense. And, what contextual conditions must be maintained to preserve the decentralization advantages of [X]? In other words, the transactions could be decentralized and anonymous but if you have to sign up for a centralized exchange to participate, those benefits might be moot for you.
If you're interested in the intersection of blockchain and AI/ML check out the decentralized AI summit coming up on Feb 1st. https://decentralized-ai.com/ there are going to be a ton of good speakers and people into crypto/blockchain + IoT, Robotics, Autonomous Vehicles, etc -- it's like the world's faire of the future.
I've wondered about the fat protocol concept. At the root of it, the token that allows the developers to monetize their fat protocol has to make sense as an investment. In other words, what are the investors getting when they buy this token? why should they expect a return? this, I don't understand very well.
People are so upset about blockchain being useless.
Meanwhile I use it regularly to do business transactions from the command line and shell scripts, which appeals to me greatly as a hacker who does business.
Open source finance! It's the future, guys.
Sorry about the speculative bubble. It's not really my fault though. Traders and investors are a bit crazy.
You don't need a blockchain to "do business transactions from the command line and shell scripts" so I don't find your personal counterexample particularly compelling
Where I can see blockchain being more 'actually' useful is in simple things, like verifying the integrity of the app (or anything really), ala checksum hashes.
It makes a lot of sense for us to store them on the blockchain rather than hosting it on a webpage.
You need blockchain only when you want to prevent double spending of _something_. A linked list where only one node can have a valid pointer to the previous node.
For checksum hashes, unless double spending is a problem, IPFS will suffoce.
Inevitably because of the ICO component, there will be a lot of applications that tries to use block chain to search for a problem to solve more inefficiently than not using block chain. With the main idea so they can get the ICO to work for them.
> “Historically the only way to make money from a protocol was to create software that implemented it and then try to sell this software (or more recently to host it)… With [cryptographic] tokens, however, the creators of a protocol can ‘monetize’ it directly and will in fact benefit more as others build businesses on top of that protocol.”
And what was wrong with developers finding a market, developing a software and then monetizing it? I have tons of ideas each day, some of them blockchain related too but it seems unethical to use other people's money to test my hypothesis.
We were talking specifically about protocols like TCP, IP, DNS or even P2P. It was nearly impossible to monetize protocol level work before cryptocurrencies
Ethereum isn't decentralised to a large degree (see the DOA). Given such a thing, one may as well use a standard web stack.
Also, that makes any guides written for devs on the subject of negative utility. It wastes their time; since the premise, that the new paradigm derives its value from censorship resistance, is breached.
It takes some serious non-thinking to support Ethereum. The price is high, the value is low.
davesque|8 years ago
Anywhere this concept has value, a blockchain has value. That's all there is to it. The rest is fairy dust and noise.
I don't really follow a lot of the discussion in this article. As I see it, most of the buzz around blockchains is just wild speculation and fantasy. For example, why would be want a "fat" protocol? In any other context in technology, "fat" anything is considered bad. Technologies are supposed to be "thin", simple, efficient, and composable. So why would the opposite be praised in this case? Furthermore, the characterization of existing foundational internet protocols as "thin" and blockchain protocols as "fat" seems like an inversion of truths. By my understanding, it would take as long or much longer to become well versed in all the nitty-gritty details of TCP/IP, DNS, etc. than it would to gain a solid understanding of Ethereum. Also, where is the need for software ecosystem micro-economies?
None of this makes any logical sense to me. It seems people have gotten it in their heads that the simple technological innovations of hash trees and distributed consensus protocols are going to somehow make them rich. And they're finding weird ways of justifying this.
fragsworth|8 years ago
That would be fine on its own, but they're almost all pretending this is not the reason for it, and that the token is necessary. This is an obvious lie in nearly every case when you dig into the details. Nearly every dapp that has its own token can be cloned to use Ether without any detriment to the product.
coffeemug|8 years ago
Note an important caveat -- a centralized third party can also provide such a service. So you have to further subdivide the space into use cases where the blockchain has to compete against such services, and use cases where a public ledger is desirable in and of itself.
meri_dian|8 years ago
Wealth is built through control, while a distributed ledger rejects control by design. Now distributed ledgers have utility, but that does not necessarily mean they will create business value for entrepreneurs and investors.
It's almost like how regulation has value in society, but regulation is decidedly not profitable and businesses usually reject it.
cocktailpeanuts|8 years ago
It was only a valid hypothesis when there's only a single dominant chain. Not anymore. It's becoming more apparent that there will be multiple chains, which means these chains compete for usage, so naturally "all the value aggregate to fat protocols" is not valid anymore.
So you're right, the "fat protocol" should not be the norm. And it's really cool to see the landscape progress in this direction even though just last summer everyone took for granted that "fat protocol" will be the norm.
p.s.
There are so many "startup people" who are too lazy to delve deep into how the tech actually works, who just read some medium blog posts and watch some youtube videos and think they know everything. These people end up producing shallow content that's basically a parroting of what they read online.
To people who actually have touched the code and building on these technologies, these things are so obviously outdated.
Terr_|8 years ago
Amen. "Blockchain" is today's fad just like the "nanotech" mania of yesteryear. That doesn't mean there aren't advances and opportunities, but it feels like 90% of the people promoting it can't even give a high-level explanation of why it's a good fit for their use-case.
> For example, why would be want a "fat" protocol?
This may seem weird, but bear with me: I think this is like people talking about intellectual property (copyrights, patents, franchises, etc.) The underlying idea is that you can create some core framework which everyone wants to use (or can't avoid) and that therefore you can collect rent (or at least sew up an incredible starter bonus) making it more consequential than the individual pieces.
The current internet is (perhaps thankfully) a contrast, where nobody (AFAK) is making big bucks off of TCP-IP/HTML/Browser licensing fees.
deepGem|8 years ago
I have to agree to this as I have written software to implement at least one networking protocol. On the contrary, I still haven't been able to wrap my head around Ethereum.
I'm sure most of us know that TCP/IP and all the other networking protocols are thin by design, for good reasons. Speed and reliability. It seems strange to write a connection-oriented protocol (TCP) that runs on a connection less protocol (IP) but this design is efficient and serves the purpose.
Calling the current bloating in blockchain protocols as a dramatic paradigm shift is an exaggeration. From what I see, the current blockchains protocols are bloated (as compared to TCP/IP) because they are encapsulating the application logic within themselves so as to achieve decentralization in a highly secure manner. (Based on my frugal understanding). It's a new way of doing things, perhaps not necessarily a paradigm shift. Note to self - Understand blockchain in depth, may be it is a paradigm shift.
contingencies|8 years ago
From http://github.com/globalcitizen/taoup
msla|8 years ago
I'd rather use a fat client than a thin one:
Thin client: Primarily just a display. No local processing, or effectively none. Controlled from outside.
Fat client: A processor with a display attached. Nontrivial local processing. Controlled by me.
Maybe fat clients are inefficient. Maybe I'm not thinking right. I still want control.
gjvc|8 years ago
Alex3917|8 years ago
Sure, and that's several trillion dollars per year worth of the global GDP.
rsp1984|8 years ago
Ok, thin protocols + fat apps --> fat protocols + thin apps. Neat theory. But this is putting the cart before the horse. Please can someone ELI5 to me:
* What problem does the fat-protocol, thin-app paradigm solve?
* Why would anyone be interested in developing a thin app for my fat protocol any more than anyone is interested today in developing a thin protocol that I can put my fat app on top of?
* Why is thin-protocol, fat-app considered to be in need of fixing in the first place? I consider the fact that apps capture more value than protocols to be a direct consequence of the free market. Apps capture business value because they solve actual user problems. Protocols define ways to build apps. But frankly I don't see a great demand for new protocols, and I consider that reason enough for the fact that protocols can't capture much value. To say that that would change with the blockchain is IMO equivalent to saying the market has it all wrong. What am I not seeing?
jklepatch|8 years ago
But generally speaking, this protocol issue is of little interest for end users.
What is of interest to them is the fact that their data can become decentralized with the blockchain, and the power balance can be shifted back to them. With all the tech majors becoming so powerful thats a really big deal.
keithwhor|8 years ago
Imagine you’ve spent your whole life investing millions of dollars in entrepreneurs. Building models and testing hypotheses with no real agency: you can’t control what the CEO does or the product the engineering team builds or the way they market the product. Your job is to provide returns for your LPs. That’s it.
Now imagine, instead of spending thousands of hours interacting with and managing people, their problems, watching painfully as they try to figure out the market they specialize in, I tell you that you can invest in something else. That thing, we’ll call it a token. This token does work. It can be used to compute something. Or helps make something easier. I’m not clear on the specifics, but I can tell you one thing: if you buy it, and if you tell other people about it, merely the act of owning it increases its value.
I have just given you something you don’t get a lot of in your career, true, direct self agency. You are unequivocally sure that you are creating value because it’s you who is selling the value! You bought, the price rose, you know if other people get excited the price will rise again. It’s exciting, you don’t have to deal with people mucking about directly, and you’re doing your job: generating returns.
The house of cards here is the assumption that these tokens can be used for something, anything beyond a store of value. Because if that’s true, it’s not really speculation. You’re an early adopter of a paradigm-changing protocol.
The default assumption here is that engineers are like ants: we build for the sake of building. Give us a canvas and we will build dApps (or what-have-you) just for the sake of building them.
The truth is, engineers are not ants. We build things to make our lives easier or more fulfilling. I started programming, for example, to build video games. Many people build things to automate their homes. When you build for an employer, the end goal is always to do something for the customer.
The draw of Ethereum, seems to me, to be that eventually somebody will have to build something insanely valuable, right? Statistically, it’s gotta happen. I think that’s a ridiculous premise: if centralized tools are always faster with more mature ecosystems, engineers will always go there to solve their daily problems. The question to me really seems to be, “do we need truly immutable ledgers and transaction histories? Do we need 100.0% reliability in transaction history at the cost of orders of magnitude more energy expenditure, or is 99.9999999% okay?” As a cute anecdote, Life has been remarkably successful with a 10^-7 error rate in DNA polymerase. I have a feeling most industries will be fine without, and it’s actually probably cheaper to have a reasonable facsimile (or statistically insignificant approximation) of immutability (human intervention and accountants included) than a guarantee. Especially if, in order to be guaranteed, it needs to be public.
So, what you’re seeing is speculation that engineers could build something one day using an application development paradigm that’s not actually clearly or obviously more powerful. It’s worse speculation than betting on startups with teams of people who reliably execute, masked by the illusion of self agency as an owner and promoter of a token.
tl;dr: Somebody remind me of this post in a decade and we’ll see where it all ends up. The technology will grow and evolve. I’m not sold on any of this, and investors who aren’t building anything but themselves are holding tokens telling people to go experiment and build things isn’t an attractive signal. (It seems like VC flipped on its head and the incentives are poor for engineers - so, for now, let these investors play hot potato with each other for a while. I’ve seen a few of Vitalik’s tweets and it seems even he’s concerned about these incentives.)
C14L|8 years ago
But as usual, as soon as a lot of money is to be made, non-techies get dollar signs in their eyes and --without understanding the tool-- jump in and start using it for everything.
It will be very amusing to watch, for sure.
adamnemecek|8 years ago
goodroot|8 years ago
I feel like this is more of a feature than a bug. If you're weaving applications into the blockchain, would it really be wise to have that chain communicate with abstract data off of the chain itself? Seems an unnecessary burden for the chain to bare!
Great article. I've recently gotten into Ethereum Dev and Solidity. It's really fun, fun stuff. This isn't directly addressed in the Ethereum portion of the article, but it's good to keep in mind that these things are all works in progress. Limitations today are non-such tomorrow; we don't quite know where the train is headed.
You, Developer, can help it get to wherever you feel it needs to go. Remember that before deciding not to contribute. :)
Jasper_|8 years ago
But now imagine if BoxRec had intentionally reported false results from their website in order to make a lot of money on the bet. People would lose their money, and there would be no recourse.
[0] https://www.reddit.com/r/ethtrader/comments/6w5wcn/important...
hyperion2010|8 years ago
How do you know whether the numbers you are getting reflect something about the real world? How do you know that your data hasn't been tampered with intentionally or unintentionally?
Data provenance is extremely difficult, and that is only half the problem. The other half of the problem is determining whether you have actually measured what you think you have measured. (Note: there may be some additional halves lurking around as well.)
To give some concrete examples. You find a picture of a CEO groping someone, how do you know whether it is real? Does it matter if you want to short the stock of the company, given that you know that other people will not verify it? What if the photographer's camera automatically pushed a stream of hashes of sensor contents and GPS locations to a source with a verifiable timestamp?
How about the equivalent for a microscope sensor to ensure that the raw data from the sensor was verifiable, and that all transformations of that data needed to be published in a form that would allow anyone to verify that the raw data could be transformed to the final data?
How about a contract that specifies that if a freezer temperature rises above X degrees C for more than 3 minutes then the freezer owner must pay Y dollars to the owners of the contents of the freezer. What does it take to build sensors that the owner of the freezer would trust enough to enter into such a contract?
tl;dr Verifiability of data from oracles is extremely difficult, and much a bigger challenge than building a blockchain that could make use of it. GIGO will be a big stumbling block.
sf_rob|8 years ago
eyezick|8 years ago
It's ironic that they mention Augur by name in the article, but are apparently unaware its main innovation is the decentralized oracle that just so happens to have a prediction market built on top of it.
> I feel like this is more of a feature than a bug.
That is indeed 100% by design. All smart contract code in Ethereum has to be deterministic to guarantee computational consensus, and of course this can only be done by having a closed EVM.
vincentschen|8 years ago
snitko|8 years ago
And it's not going away because there's a demand for Bitcoin. Why? Not because blockchain is some sort of an innovation. It's because people want a currency not controlled by any state institution. It's because people want freedom. Deny that all you want, it's not going away.
vec|8 years ago
That doesn't justify why anyone else should be shoehorning blockchains into their projects.
Earlier today I saw that Kodak is going to be launching KODAKCoin later this month as a mechanism to somehow assist photographers in selling and distributing their work. Presumably Kodak trusts Kodak. Any photographer who wants to use Kodak's tools to control the distribution of their work has to trust Kodak. Kodak has an IT department. They don't need trustless or decentralized. What they need is a boring ol' SQL database.
Maybe cryptocurrencies are a good idea, maybe they're not. That's more of a political and economic question than a technical one. Either way, they clearly do work more or less as advertised. What I'm still waiting to see is someone who is not a libertarian bent on the destruction of the global financial system using the blockchain to successfully solve any other previously intractable problem.
tstactplsignore|8 years ago
Does bitcoin really do any of those things? Right now, btc core is not an alternative to cash- a problem that maybe will be fixed in time, but currently only seems to be getting worse. If bitcoin really did take off as a global currency, the IRS would audit unreported bitcoin transactions- and it'd have your financial records because the corporations and individuals you interact act with would cooperate, and it'd only need a few to start to deanonymize you. It seems like the blockchain would almost make the tax job easier, because all transactions are public unless people move from bitcoin to a zerocoin model. Even then, the IRS would pursue those who didn't report and have transaction information from vendors to work to identify fraud.
So, bitcoin doesn't seem like an alternative to taxes. Also have no idea what it has to do with most government regulation. And, is it really an alternative to the financial system? Yes, people can use bitcoin instead of a checkings or savings account- but still need to use traditional services to invest in the market, and the financial system will continue humming along making more money from money and making gobs of money profiting off everyone else's market inefficiency whether it's working in usd or btc.
So, what are we left with? It seems like core btc is only an alternative to a speculative investment in something that the federal reserve cannot print. And believe it or not, the vast majority of this country either doesn't care about quantitative easing, or believes in basic macroeconomics. Core right now seems to just be a LARP fantasy for libertarians convinced that "this time we can finally get rid of the evil Fed and their evil money printing". It'll never happen, and if it does offfer any kind of freedom, it's the freedom to go back to pre-fiat boom and bust cycles of economic hell detached from modern macroeconomic theory.
jgh|8 years ago
But yes I agree with you that it is fundamentally anarcho-capitalist. You are certainly not wrong, and this is the source of my objection to bitcoin and most other cryptocurrencies. Although I don't view anarcho-capitalism as "freedom" like you do, but that's a debate for another time.
ThomPete|8 years ago
The reason I think that is very simple.
The blockchain allows us to create scarcity in an otherwise abundant medium.
This means that potentially (and yes it will take time) we will see be able to mimic the physical space and create items that are to some extent unique (even though the can be copied. The art market is based on exactly this principle)
It's extremely interesting when it comes to things like secondhand markets where we can buy and resell assets without having to deal with licensing issues from some central owner.
Things like ebooks that can increase in value because of the people who owned them, digital "Pokemon cards" to create unique digital assets, virtual goods without the need for the original creator of the game to be up and running.
In other words, it allow us to have a digital world where what we do creates a unique footprint and doesn't just get's obsolete and where the end user gets to tap into the value chain of technology even if they are not able to work in the technology space.
These are some of the things I believe is interesting. I am not anarco-capitalist or libertarian and I don't care if it was pushed primarily by them just like I don't care that my country was based on wars and slavery and killing other people.
The blockchain, the way I look at it at least, is a "protocol" like TCP-IP.
xchaotic|8 years ago
Goladus|8 years ago
It has not yet succeeded in this purpose as it is not yet a viable alternative currency except in extreme cases where the government-backed currency has failed completely.
9 years is nothing when we're talking about currency. It's not even a fraction of a single lifespan. Bitcoin's rate of money supply has slowed dramatically in the last few years (as it was programmed to do), limiting its ability to expand to accommodate new markets. Instead of becoming more widely accepted, organizations such as Steam are dropping support for it, due to volatility and increased transaction fees: which is exactly what would be predicted when a currency supply is limited but the economy around it is growing (or trying to grow-- scarcity of currency cause an economy to stagnate until an alternative is found).
iraklism|8 years ago
flignats|8 years ago
Actually, it is some sort of huge innovation.
Kiro|8 years ago
api|8 years ago
The only exception is things like Sia, and that's not cost or convenience competitive with Amazon S3 or Backblaze.
Where is the value here? When I visited this I was expecting to see at least something about building something useful for... something... Building what for the blockchain?
Oh kitties. Yeah.
I am absolutely aware of the fact that early stage tech often looks like a toy, but here's the thing. PCs were a toy but it didn't take long at all (VisiCalc, etc.) before they had actual uses. BBSes were a toy but they were immediately useful to their users for trading data and messaging.
We are now about eight years into block chain and beyond its one core use cases there is almost nothing. Whatever value has been delivered seems extremely minor compared to the vast sums of money being spent, making this perhaps the worst ROI I've ever seen.
Can someone provide a counter example? What are people doing in the real world with this stuff?
TeMPOraL|8 years ago
What's even worse, from my POV, is the humongous amount of electricity that is used to support the blockchain. And to what end?
Personally, I won't start believing in the blockchain until a non-wasteful alternative to the present PoW scheme gets developed and actually deployed. Right now, this looks to me like the most direct way of turning human vices into cooking us live on this planet that humanity has ever invented.
EGreg|8 years ago
That's really cool because I can code the rest of the interface (front end etc.) with sloppy security and then ACTUALLY BOLT ON a secure layer with guarantees at the end.
Makes development much more streamlined. As the author of a huge codebase (https://qbix.com/platform) I worry that there are lots of security holes. With such a large attack surface, most new open source projects are swiss cheese, like early Wordpress (which is still full of holes from plugins).
Here, we just build our MODEL layer with a blockchain and KNOW the rules are going to be enforced.
Combine that with IPFS and a token and suddenly you don't have to pay for hosting to scale to billions of people. It's nice.
0x4f3759df|8 years ago
If a thing moves across multiple organizations then you can make a case for a blockchain application, logistics is an obvious example, but there are others like asset (expensive paintings / vintage wine) provenance.
https://techcrunch.com/2017/12/15/ups-bets-on-blockchain-as-...
goodroot|8 years ago
You might want to check this page out:
https://www.stateofthedapps.com
There are 938 projects listed that leverage Ethereum/Solidity.
One of my personal favourites is: https://colony.io. The whitepaper is a fun read.
bitoneill|8 years ago
https://hackernoon.com/ten-years-in-nobody-has-come-up-with-...
furyofantares|8 years ago
In the centralized world with a thin protocol layer that captures little value and a fat application layer that captures a lot, we see far, far more development in the application layer. When you invert where the most value is captured, you invest where the most work is done.
That said, all sorts of open source projects have shown that there are plenty of people willing to sacrifice their ability to capture value if it means they can produce even more value that is instead captured by users.
felipeccastro|8 years ago
I'm not sure yet steemit will end up being a winner in this field, but I find this a very smart approach for challenging the network effect of big competitors.
solotronics|8 years ago
rrecuero|8 years ago
Check SALT, millions in loans already distributed https://www.saltlending.com/
wepple|8 years ago
Nope. Still hype and noise.
CiPHPerCoder|8 years ago
I've had meetings with prospective clients that opened with, "We have $problem, can we use blockchain to solve it?" where anything that doesn't qualify as a blockchain is cast to the wayside because it doesn't scratch that buzzword itch.
(Amusingly, I've witnessed one pitch where the person called it "bitchain" and it sounded like "ba-ching!" and I was waiting for the follow-up to what I thought was onomatopoeia for a cash register sound. I've since learned to not abbreviate cryptography as "crypto" lest I attract sketchy prospects.)
A lot of the problems that you might want to solve with a blockchain probably doesn't need a blockchain. A distributed, append-only cryptographic ledger will suffice. To wit: https://paragonie.com/blog/2017/07/chronicle-will-make-you-q...
scardine|8 years ago
I asked a few questions and he dodged them like a professional politician:
* what do you do if you need to reverse a transaction (lets say, court order)
* what if someone loses his wallet/password
* some people claims blockchain is over-hyped
He said that I being skeptical proves my ignorance and I should study more about the subject instead of challenge him.
Remembered the short tale "The Emperor's new clothes", I'm unable to see the king's clothes because they are made of a magic fabric invisible to the stupid. I guess the magic fabric is made of blockchain.
elmar|8 years ago
arkona|8 years ago
Pardon my ignorance, but isn’t that what a blockchain is?
bambax|8 years ago
Writing data to the blockchain solves this problem, but the cost is large and performance is dismal.
Writing hashes to the blockchain at specified intervals, delivers proof of existence, at an acceptable cost and performance, but does not really make sure the data itself will survive its original author.
Is there another way? Can chronicle help?
viach|8 years ago
jhwang5|8 years ago
a) Do "dapps" really to use their own tokens instead of USD or even ETH to function? b) How are closed ecosystems that utilize "utility tokens" benefitting customers? How are closed ecosystems better than open systems, open protocols?
felipeccastro|8 years ago
- funding (ICO) - an economic incentive for attracting early users (give tokens for using your app in the promise that they will be worth more in the future)
b) if a user earns tokens that value over time, that's a huge win: imagine if all the time you spend on apps today, generating valuable data to a few companies, would generate in turn some of these tokens back to you?
Besides, what do you mean by "closed" exactly? The data being on the public blockchain should actually encourage integration by default. For example, several new dapps are being built on top of IPFS for data, using uPort for identity, Aragon for governance, etc.
kang|8 years ago
However, OP nor Naval, really understand the protocol, or wouldn't be supporting non-blockchain things like ethereum (there is nothing that you can do with ethereum but not with git).
>One of these developers, Vitalik Buterin, was frustrated by Bitcoin’s immobilism
I am amazed at how HN is selling a promo story invented for media by ethereum as a company. Digging IRC logs would reveal how Vitalik convoluted each aspect of the tech(and was often wrong)to the point that the devs stopped caring and let him be. Even technically, I have answered this on HN and other places numerous times - tell me one thing you can build with ethereum but not with bitcoin? (On the opposite, ethereum can't do money - mutable chain).
xorcist|8 years ago
Strange how the PR puff pieces around Ethereum never seem to mention this project. Amazing also how the quantum computer seems to disappear as the pre-mined coins were sold off.
ShabbosGoy|8 years ago
evanvanness|8 years ago
I'll immodestly list my own first: https://www.evanvanness.com/post/166666272011/theres-no-such...
See also CoinFund's Jake Brukhman: https://blog.coinfund.io/fat-protocols-are-not-an-investment...
And Zeppelin's Teemu Paivinen: https://blog.zeppelin.solutions/thin-protocols-cc872258379f
I hear that even Joel doesn't agree with how his piece has been interpreted.
45h34jh53k4j|8 years ago
The only use for ethereum is shittokens, and you could practically coingen these for free, and trade forever. No load on the shared commons, isolate activity to the specific coin. The only advantage is the ECR20 standard that aids exchange integration.
SV is all a blaze about Ethereum, but I tell you, this too shall pass.
Long on other smart contract platforms, but not ETH.
CryptoPunk|8 years ago
Doesn't look like this is fading away:
https://etherscan.io/chart/tx
>>The only advantage is the ECR20 standard that aids exchange integration.
That's a massive advantage. Several decentralized exchange protocols are being developed, and a decentralized exchange, EtherDelta, is the most utilized DApp on Ethereum: https://ethgasstation.info/gasguzzlers.php
Ethereum's network effect in crypto-assets is growing stronger every day, with 91 of the top 100 tokens now ERC20 tokens:
https://coinmarketcap.com/tokens/
taternuts|8 years ago
geraldbauer|8 years ago
natural219|8 years ago
As a long-time decentralization activist, this sentiment makes me want to tear my eyeballs out. Why are cryptographic tokens necessary to implement fat protocols? Why does "standardizing communication across applications" now also have to mean "implementing a global, secure financial market" in the process?!? This is maddening to me and nobody has explained to me why blockchains are a requirement to do this.
CryptoPunk|8 years ago
>>“Historically the only way to make money from a protocol was to create software that implemented it and then try to sell this software (or more recently to host it)… With [cryptographic] tokens, however, the creators of a protocol can ‘monetize’ it directly and will in fact benefit more as others build businesses on top of that protocol.”
>>Previously, the creators of open communication protocols for the Internet, largely DARPA researchers and non-profit contributors, could not align financial incentives with protocol development. In contrast, protocol creators today can issue “tokens”, like Bitcoin and Ethereum, that represent the value of their decentralized protocols.
The key is that it can "align financial incentives with protocol development".
ThomPete|8 years ago
If someone had said that one day there will be a company that does billions by allowing people to fundamentally share their cat pictures and send each other happy birthday messages people would have laughed their asses off.
The blockchain can be seen as a giant immutable feed. Make of that what you will.
brandonmenc|8 years ago
briatx|8 years ago
I don't remember any of the early internet negativity that Bitcoin supporters do.
decentralised|8 years ago
makomk|8 years ago
noellar|8 years ago
cturner|8 years ago
A novelty of the unfolding blockchain revolution is the realisation that there is a world of interesting non-turing-complete things to be built. We all assumed that anything non-turing-complete a waste of time. Surprise!
What you want to say here is that ethereum takes a large step towards creating a flexible development platform.
EVM function like an instruction-set for this distributed computer. This may be close to the way forward. But solidity is not. A quick port of JavaScript, it is still in the old software mindset.
Ethereum has problems ahead of it. Just as C has an endless capacity to create memory leak bugs, Solidity offers opportunity for contracts that will drain people's accounts. Each time it happens, it will be reputational damage for the community.
If you wanted to learn Ethereum, it might make more sense to start with raw EVM than Solidity. Play at writing a macro assembler. Once you were tooled up, you might try your hand at becoming the Brendan Eich of the blockchain. Until you do, we are stuck with Brendan Eich.
If we do not find such an expression, general-purpose, public-access blockchain will gain permanent mistrust, and fail.
Message-driven concurrency is here to stay though. I am building a concurrency language centred around message-driven consensus-engines. (github.com/solent-eng/solent) It is designed to be host-distributed, but operated by a single party and not multi-party.
polkapolka|8 years ago
krisives|8 years ago
https://remix.ethereum.org/#optimize=false&version=soljson-v...
Crye|8 years ago
But do not discount value that the token creates as a network effect. Think of the currency as an investment vehicle to reward people who jump on to the network first. Consider Facebook, the first hundred customers are billions of times more valuable then the last hundred.
Once this fad dies, people should start joining the networks they plan to use, and early adopters will be rewarded for helping creating the network.
On top of that, it decentralizes the control of the network but temporarily provides capital for it's creators. It does not ensure that their system will belong to them in purpituity. Which is a good thing!
EricDeb|8 years ago
m1sta_|8 years ago
epberry|8 years ago
I'm mostly not interested in anything financial. Decentralization, immutability, and a built-in way to pay for usage are the main features of Ethereum (possibly combined with IPFS) that get me going.
ThomPete|8 years ago
I think that the first successful blockchain based company won't be doing an ICO but just launch it's token/coin because it has utility in itself.
siavosh|8 years ago
Provable [X] without a central authority.
[X] can be the following:
Ex.
Currency - Bitcoin
Computation - Ethereum
Anonymous currency - ZCash
Storage - Filecoin
etc.
Most of us would agree that central authority is too strong in many aspects of the economy and technology. The key question is for what values of [X] does the value proposition make sense? The core technology is less than 10 years old, anyone being too confidant in where this road goes should put it in a larger timeline. Besides not losing your money, as hackers we can only explore what may be possible.
Goladus|8 years ago
Under a limited set of conditions, with some cost [Y] to keep the system running. The bitcoin network is extremely expensive, for example.
The key question is for what values of [X] does the value proposition make sense?
The key question is for what values of [X] - [Y] does the value proposition make sense. And, what contextual conditions must be maintained to preserve the decentralization advantages of [X]? In other words, the transactions could be decentralized and anonymous but if you have to sign up for a centralized exchange to participate, those benefits might be moot for you.
tramGG|8 years ago
tobiaslins|8 years ago
It uses sidechains in the near future to fix the problems ethereum has at the moment
https://github.com/LiskHQ/lisk
vasilipupkin|8 years ago
mbrock|8 years ago
Meanwhile I use it regularly to do business transactions from the command line and shell scripts, which appeals to me greatly as a hacker who does business.
Open source finance! It's the future, guys.
Sorry about the speculative bubble. It's not really my fault though. Traders and investors are a bit crazy.
banachtarski|8 years ago
Toine|8 years ago
elmar|8 years ago
jaequery|8 years ago
It makes a lot of sense for us to store them on the blockchain rather than hosting it on a webpage.
nileshtrivedi|8 years ago
For checksum hashes, unless double spending is a problem, IPFS will suffoce.
sly010|8 years ago
m3kw9|8 years ago
thisisit|8 years ago
> “Historically the only way to make money from a protocol was to create software that implemented it and then try to sell this software (or more recently to host it)… With [cryptographic] tokens, however, the creators of a protocol can ‘monetize’ it directly and will in fact benefit more as others build businesses on top of that protocol.”
And what was wrong with developers finding a market, developing a software and then monetizing it? I have tons of ideas each day, some of them blockchain related too but it seems unethical to use other people's money to test my hypothesis.
rrecuero|8 years ago
ArchReaper|8 years ago
ersiees|8 years ago
unknown|8 years ago
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alexpetralia|8 years ago
nickporter|8 years ago
blockgeeks|8 years ago
vincentschen|8 years ago
johnnyzhao|8 years ago
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decorator|8 years ago
Also, that makes any guides written for devs on the subject of negative utility. It wastes their time; since the premise, that the new paradigm derives its value from censorship resistance, is breached.
It takes some serious non-thinking to support Ethereum. The price is high, the value is low.