Okay, I don't want to come down too hard on this article, but I think it's nearsighted. Sure, it's true that _today's_ blockchains have many downsides the article brings up, but it's written as if those won't change or improve.
It feels to me a bit like claiming in the 90's that the internet isn't the future because you can't download that much stuff at 56k speeds.
They mention "immutability" being a problem - so much so that it somehow disallows typos or undos. That's just not true - you just represent the updates as changes in their own right (which better reflects reality than literally altering history). There's nothing about "the blockchain" that can't record human error or corrections.
They go on to talk about how proof of stake doesn't solve all problems by mentioning, "The Bitcoin blockchain is currently 157GB in size, and that’s at a very low transaction speed. The idea of everyone mining on their phone is just laughable."
Once again, they are talking about current implementations - I don't see how this is inherently a restriction in the technology, and there are (reputable) companies working on this exact thing.
The amount of money I have in cryptocurrencies can basically be rounded to zero, so I don't have much skin in this game - I just think blog posts like these aren't really making compelling points other than "the current technology today has many flaws", which I think is uninteresting to most.
A global distributed ledger is less cumbersome to develop and more efficient to run, when it uses a transactional NoSQL database, than a blockchain.
In almost all use cases, there are existing identity, reputation, and legal frameworks that a distributed ledger can depend on. Here's an article I wrote about how most of the time you're better off with a database instead of a blockchain: https://blog.fauna.com/distributed-ledger-without-the-blockc...
There are some cases where existing identity and legal frameworks can't be used, where proof-of-work has some interest. My other problem with proof-of-work is that it can't scale because it always demands that blockchains use more energy than the economic value they are protecting. Here is an analysis of how blockchains aren't immutable: https://www.coindesk.com/blockchain-immutability-myth/
> It feels to me a bit like claiming in the 90's that the internet isn't the future because you can't download that much stuff at 56k speeds.
The internet had tremendous utility at 56k speeds. The blockchain so far is mostly just useful for propagating itself and propping up the value of cryptocoins. There are some exceptions, such as using the blockchain to notarize documents (although has any court actually accepted blockchain-notarized documents as having legal power?), but the author's criticisms are well-founded. Even Ethereum Smart Contracts aren't particularly useful because in order to affect anything not on the blockchain you need an oracle, which destroys the whole decentralized 'trustless' concept.
> They mention "immutability" being a problem - so much so that it somehow disallows typos or undos. That's just not true - you just represent the updates as changes in their own right
The author already covered this. You can't undo a transaction without the cooperation of the other party. Accidentally send 10BTC to someone when you meant to send 1BTC? You're entirely beholden to the whims of the recipient to decide whether to refund you. Nobody else can do it. Or perhaps more importantly, if someone steals money from you, it's impossible to recover (because you can be sure the thief isn't going to refund it).
If you're using the blockchain in a manner where you can trust the recipient to be on board with correcting any errors, what benefit are you getting from the blockchain?
> I just think blog posts like these aren't really making compelling points other than "the current technology today has many flaws", which I think is uninteresting to most.
The only two points tied to "current technology" in the article are complaints about the blockchain speed and the blockchain size. But it turns out the first problem is going to be solved by literally not using the blockchain for most stuff (which pretty much proves the article's point), and the second problem is still a legitimate problem. Even if you can mine without having the full blockchain, someone is going to need to have it in order to actually validate the whole thing periodically. If we get to the point where the blockchain is so large that only a few major players can afford to have the whole thing, then we've lost the 'trustless' aspect because now we have to trust those major players when they say the blockchain validates properly.
Well, he has a point. Unless you use a cryptocurrency, I can't think of anything that needs the blockchain. I have seen plenty of people trying to shoehorn the blockchain into areas that don't need it - goods distribution, electricity supply, you name it and someone is trying to do it. Almost all of those things would actually work better with a centralised database.
The Blockchain is an awesome technology for an incredibly niche market. So his article is right - in most cases, you probably don't need a blockchain.
> Okay, I don't want to come down too hard on this article, but I think it's nearsighted. Sure, it's true that _today's_ blockchains have many downsides the article brings up
I read the article as a criticism of the status quo, in which case the prospect of future potential would be irrelevant.
I got downvoted the last time I said this, but cryptocurrencies are actually pretty nice for doing exactly what their purpose is: sending money over the internet. Do you know how hard it is to get Stripe or Paypal to approve you for international credit card processing? If you're a "hacker" working out of your apartment, they automatically assume you're trying to launder money and shut you down, even if you've worked hard to provide solid documentation that you are who you say you are and you're doing what you say you're doing. Even if they do approve you it can take months to integrate into their system. And that's with Stripe and/or Paypal, without Stripe and/or Paypal it's impossible. Until crypto. With crypto you can set up a transaction system in a day, by yourself. I think that's great value.
Yeah, it's nice to be able to just send money internationally to friends/clients/whoever without using your private information / real world identity / whatever. If cryptocurrencies stayed as the small nerd money that no one cares about, that would be great.
But of course, capitalism ruined everything, now the buttcoins are 99% used for speculation and scams, there was literally a PonziCoin lol, prices are huge and volatile, transaction fees are huge, the GPU market is completely screwed, there is attention from governments and businesses, and (back to the topic of the article) everyone wants a fucking blockchain instead of a database. (note: If you just want an immutable proof of non-tampering, you need Certificate Transparency!! Not a slow power-wasting system designed around libertarian "trust no one" wank.)
Well, of course something that skirts around regulations will require less red tape. Once the government catches up, you'll be required to do similar hoop jumping for cryptos. Exchanges suffer this problem already, don't they?
In my personal experience, the transfer fees, transaction times, and the fact that the market can crash overnight, makes cryptocurrencies more trouble than they're worth, at least at the moment.
The ease of setting up online payments is a double edged sword.
On one hand, it makes it a lot easier for someone to earn some money on their side project.
But on the other hand, it also makes it a lot easier for scammers et al. to accept payments from their victims. And that's not to mention that you can't do chargebacks with Bitcoin, unlike if I get scammed with my CC where I can ring my bank and reverse the charges.
Too bad humans ruined the stability of such currencies by building marketplaces designed to enable speculation. I mean I guess it's inevitable and maybe you can argue market places will help CC stabilize quicker, but it's disappointing from a purist perspective. I think there's great value in a decentralized currency that is resistant to manipulation by a central power. But bitcoin stopped being that lately.
The funny thing about it all is that Bitcoin really stopped functioning like a currency over a year ago, these days its really more of a speculative asset more than anything else.
Very interesting, and mostly right imho. Still no killer app for any blockchain so far, but lots of problems already well known. I'm almost disappointed the author didn't mention the ecological disaster that goes with the energy consumption, instead of just talking about the price.
yeah proof of work is turning out to be a pretty unsustainable idea - i'm not sure if proof of stake truly can be considered the victor yet but it seems like a huge step in the right direction.
(Completely agreed that there hasn't been a killer app yet in the space - but I think i'm more optimistic about the chances of that happening at some point)
What I feel has never been discussed is not whether blockchain or decentralization is a good idea rather how does decentralization will work? The issue is not whether immutability is bad idea rather how will it work in case of disputes?
The only answer I keep hearing is - well, game theory can take care of it. This misses the point that if people are aware of the rules, they will find ways to break it.
We saw a good example of how "we need 51% for manipulation" works in real life during Status ICO. F2pool which held 25% of the mining power was able to manipulate the ICO holding back ethereum transactions:
Opening this article, I was hoping to get a technical discussion as to why an application might or might not need blockchain. Unfortunately, I was met with a ranting article with a few straw man arguments about why blockchain is flawed.
The first point the author makes is the disadvantage of immutability. Claims that few systems benefit from immutable transaction records. First of all, I don't think that's true. Many systems do, not just financial systems with double entry bookkeeping. Event sourcing is a well defined architecture pattern in back end systems, and it turns out that immutable event logs are actually incredibly useful. It's also pretty well known that you don't erase history in financial systems. That is one of the pillars of double entry bookkeeping.
A more balanced article would point out the pros and cons of immutable systems, but to flippantly argue that immutability is useless? That's just lazy.
Tracking shipment of goods on a blockchain has many advantages. Namely, you can create a shared protocol for the data of shipment tracking, and you can open that blockchain up to certain parties to sign as the good moves along the supply chain. It doesn't have to be "trustless". A particular app's blockchain might only be open to a few trusted parties to write to. Not all transactions have to be written to a single, global, immutable ledger. There are still great benefits to sharing a common blockchain among specific, trusted, cooperative entities.
On POW and the electricity argument, I think we waste electricity on lots of frivolous things. I'm willing to bet Christmas lights also consume more than the state of Delaware. However, it's not the processing of transactions that the electricity is being spent on, it's the creation of new coins.
POS is a good alternative. I think many coins are starting to leverage POS. Ethereum will be switching to that soon.
Still, POS vs POW has nothing to do with "why you probably don't need a blockchain". These are implementation details that vary per blockchain/coin.
Scale also varies dramatically among coins. Ripple already processes 1000s of transactions / second. Lightning network on BTC is growing rapidly. Ethereum has scaling solutions in the works. Other chains have completely different properties than the top two and have different answers for the scaling issues. These issues will be solved with time.
As for rants on ICOs and scams, etc. I mean, do you know how many people have been scammed from phishing e-mails? Does that mean we should not use e-mail? No. As always, caveat emptor, do your own research, and don't take unnecessary risks.
> On POW and the electricity argument, I think we waste electricity on lots of frivolous things. I'm willing to bet Christmas lights also consume more than the state of Delaware.
Delaware used 11.26 TWh of electricity in 2016 ("total retail sales", i'm ignoring the direct use bit, sue me):
A light user of LED christmas lights ("1 to 3 wreaths, a garland, and a total of approximately 10 strings to wrap their outdoor trees"!) will use 96 watts while operating for 5 hours a day, 30 days a year, for 14.4 kWh in total:
I don't think you are right that electricity is consumed only for the creation of new coins. The proof of work is done for every block of transactions, and would still be part of the system if no new coins were created.
I would not bother if I were you, I've never seen a coverage so negative of blockchains as the one we have on HN. Every week you have a new article looking like this, full of straw man arguments, never any pro/cons. "You Probably Don't Need a Blockchain", yeah you probably did not need a website in 1999 as well, and web technologies were crap. Cryptocurrencies are completely new field which needs time to mature, basing the potential future of it on current technologies isn't very wise.
I remember the Dropbox post on HN full of people asking why they would need it when they can use USB keys and ftp, I feel cryptocurrencies are clearly underestimated the same way here on HN.
I think the focus in the article and in the comments is all wrong. The benefit of blockchains is on the businesslevel. If you have several manufacturers, of course you can integrate with all their databases, but that requires an enourmous amount of managements and hours in meetings and implementation. The next step, which i guess some banks have done is to cooporate on a common solution which is operated and run by a commonly owned entity. This also requires tons of management and a whole new organization which eventually becomes its own business area. A third option is like uber for transporting goods, a huge independent third party which is efficient, but eventually gets too powerful, so people revert to one of the other solutions. Blockchains on the other hand has a model for distributing trust and operations. It provides a more general solution to a mexican standoff than months of meetings and long contracts. Your contract is embedded in the blockchain. Of course the blockchain needs to be updated and maintained, so i think the real issue with blockchains would be that people cannot agree to using a single one for a specific purpose. But then it is much easier to agree to using a blockchain than to use solution x provided by company y because of all the organizational overhead it could abstract away.
Most companies will adopt permissioned blockchains if they decide to use blockchain technology. It's just not common to expose your data and logic to people outside your organization even if encryption is involved. Right or wrong it's a culture thing. Because of that it's just another technology option like an API server backed by a relational database.
Blockchains and smart contracts are complicated. There have already been a large number of security issues. There is also a lot of research into making the technology performant. Picking a centralized authority is much less risky because the organization is betting on proven technology.
Distributed systems are ideal for many applications. Distributed systems verified by many 'miners' is even better, but at some point, we have to admit that the technology is flawed in key points:
- power consumption, considering global warming, is a huge waste;
- the speed all nodes communicate between each other (not even counting the great firewall of China) can't be improved after some point (BTC lightning network is NOT a real solution - read an article about how exactly it works)
Proof of stake is a VERY BAD idea that creates more problems than it solves. All I have to do to take over the chain is buy 1 coin more than anyone else on the chain..
All other problems could be solved in the future (reversible transactions, regulation/privacy etc), but with these 2 major drawbacks, blockchains are not feasible, in my opinion.
It would be nice if this was called, "Why would I need a Blockchain?" or something. It's pretty clear the author hasn't gone deep enough to tell other people how relevant Blockchain might be to their lives. A change in title/tone would avoid the crimes of confidence.
The growth of the blockchains will slow drastically, as the flaw in 'Metcalfe's law' - which states that the number of potential connections in a network is proportional to the square of the number of participants-becomes apparent: most people have nothing to sign for each other! By 2020 or so, it will become clear that the blockchains' impact on the economy has been no greater than the fax machine's.
> On smart contracts: "Of course, writing programs that produce permanent financial consequences gives me some pretty serious anxiety, and I would hope that most senior engineers would feel the same."
I don't believe most senior engineers would feel the same. It's hard to imagine our world today without programs that produce permanent financial consequences. They are everywhere.
Okay, go write a "smart" mortgage and put all your money into it. Let me know how you feel about this.
Of course every bug has financial effects, software is designed to make money in the vast majority of cases. But to write software that can literally drain every single last dollar from your clients or yourself in an unrecoverable fashion just because _any_ programming error is insanity to me.
At some point in the article they mention that an alternative to the proof of work could be to use the proof of stake: the oldest stake build the next block. Did I understand correctly? How can that work? Doesn't it create multiple problems to do that?
My less romantic, medium-term outlook on this is that all of these thought-police projects are trying to enforce a combination of nonstate binary answers and an (informational) monoculture to a messy capitalist world with the single technological argument of a distributed/anonymized/encrypted/irreversible database that has little relevance for the actual underlying idea.
Looking at the past eight+ years, and other than opening up speculation and dubious activites for a new group of people, we have not seen a single project that would ever highlight the usual required 10x benefits, let alone the promise to change the behavior of the regular user. It's merely porting a fraction of existing stuff behind cumbersome UX — With all respect for infancy of technology but what if porting my contacts, having one single login, a distributed social network or to-do list aren't just that important as the proponents are arguing for? Obvisouly all of these attempts have already failed several times. This is not the equivalent of killing Gopher through HTTP by a new experience, making information available for the first time, introducing a new socially acceptable interaction or killing industries and middlemen by means of __raw__ technology (In each case there was always more to it). Even torrenting is already more or less dead in favor of OTT because people are lazy bastards that don't care how the content gets streamed to their TV. And what if customers actually like collecting flight miles, having someone who picks up the phone when their CC was compromised, when the taxi driver harassed them, their car title got lost or their 401k was hacked off their account?
IF breaking up the power consolidation in whatever industry with blockchain tech being the primary method, the starting line is at what's already out there and then offering real advantages and incentives (other than coins) that can only be achieved through a public ledger — Obviously there are potential and often cited areas like real estate, voting and medical records but all of these seem to me as an admistrative job for a missionary movement to enforce standards and not a private startup. And yes, I get the argument for using it in adversarial areas but we're talking business here.
> Blockchains typically use the “Proof of Work” system, where multiple participants try to solve a difficult problem in order to certify a block to be valid.
Apparently no one has told him that a blockchain is just a data structure and has nothing to do with proof of work.
No, that's just a hash chain, and it has existed for decades, long before the blockchain ever appeared. For example, every POS software in my country was legally required to implement that before the Bitcoin paper was published. The blockchain is a particular implementation of an hash chain, designed to work well for transactions using some sort of distributed consensus algorithm (of which proof-of-work is a category).
If an author does not understand what he is talking about, then his conclusion should be ignored. This article is laughable, I would suggest doing your own research before listening to baseless prose. Below, we see why this might not be a sound article:
> The first miner that solves the problem is rewarded with a few Bitcoins, hence the unkind comparisons to Ponzi or MLM schemes.
Author clearly does not understand what MLM and Ponzi schemes are, likely throwing them out as buzzwords to associate mining with scams.
> Actually trying to make computers in general reflect the real world is a very hard task, and the blockchain does nothing to solve this issue.
Black and white statements are a red flag; it's likely this guy does not know much and was hired to "write posts about bitcoin". Blockchains and other emergent structures may trigger tons of research into automata theory. Blockchains do get us one step closer to representing globally unique objects. Seems like the author didn't ponder at all.
> One of the most common proposed usages of blockchain is to track the shipment of real world goods, including everything from food to diamonds. On the surface this sounds great, you could easily and trustlessly prove that the shiny rock in your beloved’s ring wasn’t mined by children in a war torn region, fantastic!
The author's sarcasm here is very telling of his lack of imagination. To swiftly denounce technology that doesn't exist in its full form yet is incredibly presumptuous.
> Ebay purchaser did not deliver? Tough. Someone held you hostage until you sent them bitcoin? Tough. Private key hacked, or hard drive destroyed? That’s unfortunate for you.
As if these problems are not applicable to fiat currency...
> The only way to recover bad bitcoin transactions is to convince everyone to do a hard fork
This is possible with smart insurance contracts with two user segments: insurance providers, and insurance seekers.
> [Refunds due to faulty transactions] would rapidly clutter up the chain full of “oops” transactions, which would pretty quickly make you wonder why you’re bothering at all.
Did this guy just forget that faulty transactions make up almost no relative volume? This is a moot point. Even if every single transaction was faulty, it'd only be a factor two more in size according to the Author. The author thinks that a factor of two is a worthy point here. I am really starting to question the validity of these points.
> It turns out, that there’s very few systems that truly benefit from an inability to amend or update transactions.
Okay, I can say that too. Where's the source?
> The idea of everyone mining on their phone is just laughable.
The idea of everyone carrying around a device that computes faster than the supercomputers Feynman was playing on is just laughable.
> On top of that, as best I can tell a large percentage of Ethereum contracts are literal Ponzi schemes and ICO tokens
So, you can't tell very well? AFAIK the logic here is also flawed; even if most of the ICOs were scams, it says more about the people doing ICOs than it does about the concept of the ICO itself. Again folks, this article contains a lot of misinformation. I highly suggest doing your own research before making decisions.
while I agree with most points I don't see what new value this blog article provides. There is no indepth analysis, only opinion. And not even new ideas. This is exactly what we criticise about most blockchain lovers.
[+] [-] dack|8 years ago|reply
It feels to me a bit like claiming in the 90's that the internet isn't the future because you can't download that much stuff at 56k speeds.
They mention "immutability" being a problem - so much so that it somehow disallows typos or undos. That's just not true - you just represent the updates as changes in their own right (which better reflects reality than literally altering history). There's nothing about "the blockchain" that can't record human error or corrections.
They go on to talk about how proof of stake doesn't solve all problems by mentioning, "The Bitcoin blockchain is currently 157GB in size, and that’s at a very low transaction speed. The idea of everyone mining on their phone is just laughable."
Once again, they are talking about current implementations - I don't see how this is inherently a restriction in the technology, and there are (reputable) companies working on this exact thing.
The amount of money I have in cryptocurrencies can basically be rounded to zero, so I don't have much skin in this game - I just think blog posts like these aren't really making compelling points other than "the current technology today has many flaws", which I think is uninteresting to most.
[+] [-] jchanimal|8 years ago|reply
In almost all use cases, there are existing identity, reputation, and legal frameworks that a distributed ledger can depend on. Here's an article I wrote about how most of the time you're better off with a database instead of a blockchain: https://blog.fauna.com/distributed-ledger-without-the-blockc...
There are some cases where existing identity and legal frameworks can't be used, where proof-of-work has some interest. My other problem with proof-of-work is that it can't scale because it always demands that blockchains use more energy than the economic value they are protecting. Here is an analysis of how blockchains aren't immutable: https://www.coindesk.com/blockchain-immutability-myth/
[+] [-] eridius|8 years ago|reply
The internet had tremendous utility at 56k speeds. The blockchain so far is mostly just useful for propagating itself and propping up the value of cryptocoins. There are some exceptions, such as using the blockchain to notarize documents (although has any court actually accepted blockchain-notarized documents as having legal power?), but the author's criticisms are well-founded. Even Ethereum Smart Contracts aren't particularly useful because in order to affect anything not on the blockchain you need an oracle, which destroys the whole decentralized 'trustless' concept.
> They mention "immutability" being a problem - so much so that it somehow disallows typos or undos. That's just not true - you just represent the updates as changes in their own right
The author already covered this. You can't undo a transaction without the cooperation of the other party. Accidentally send 10BTC to someone when you meant to send 1BTC? You're entirely beholden to the whims of the recipient to decide whether to refund you. Nobody else can do it. Or perhaps more importantly, if someone steals money from you, it's impossible to recover (because you can be sure the thief isn't going to refund it).
If you're using the blockchain in a manner where you can trust the recipient to be on board with correcting any errors, what benefit are you getting from the blockchain?
> I just think blog posts like these aren't really making compelling points other than "the current technology today has many flaws", which I think is uninteresting to most.
The only two points tied to "current technology" in the article are complaints about the blockchain speed and the blockchain size. But it turns out the first problem is going to be solved by literally not using the blockchain for most stuff (which pretty much proves the article's point), and the second problem is still a legitimate problem. Even if you can mine without having the full blockchain, someone is going to need to have it in order to actually validate the whole thing periodically. If we get to the point where the blockchain is so large that only a few major players can afford to have the whole thing, then we've lost the 'trustless' aspect because now we have to trust those major players when they say the blockchain validates properly.
[+] [-] TheDong|8 years ago|reply
You know what other things people said weren't the future? Tons and tons of things that failed.
You have survivor bias; there are far more things people say will not be the future that then fails and everyone forgets about.
[+] [-] chris_wot|8 years ago|reply
The Blockchain is an awesome technology for an incredibly niche market. So his article is right - in most cases, you probably don't need a blockchain.
[+] [-] ckastner|8 years ago|reply
I read the article as a criticism of the status quo, in which case the prospect of future potential would be irrelevant.
[+] [-] bencollier49|8 years ago|reply
Absolutely this. As soon as I read the article I was reminded of those 1996 "this internet stuff is a fad" pieces.
[+] [-] mjfl|8 years ago|reply
[+] [-] floatboth|8 years ago|reply
But of course, capitalism ruined everything, now the buttcoins are 99% used for speculation and scams, there was literally a PonziCoin lol, prices are huge and volatile, transaction fees are huge, the GPU market is completely screwed, there is attention from governments and businesses, and (back to the topic of the article) everyone wants a fucking blockchain instead of a database. (note: If you just want an immutable proof of non-tampering, you need Certificate Transparency!! Not a slow power-wasting system designed around libertarian "trust no one" wank.)
[+] [-] Felz|8 years ago|reply
[+] [-] calibas|8 years ago|reply
[+] [-] toomanybeersies|8 years ago|reply
On one hand, it makes it a lot easier for someone to earn some money on their side project.
But on the other hand, it also makes it a lot easier for scammers et al. to accept payments from their victims. And that's not to mention that you can't do chargebacks with Bitcoin, unlike if I get scammed with my CC where I can ring my bank and reverse the charges.
[+] [-] dcow|8 years ago|reply
[+] [-] village-idiot|8 years ago|reply
[+] [-] c-cube|8 years ago|reply
[+] [-] dack|8 years ago|reply
(Completely agreed that there hasn't been a killer app yet in the space - but I think i'm more optimistic about the chances of that happening at some point)
[+] [-] village-idiot|8 years ago|reply
[+] [-] thisisit|8 years ago|reply
https://news.ycombinator.com/item?id=16421383
What I feel has never been discussed is not whether blockchain or decentralization is a good idea rather how does decentralization will work? The issue is not whether immutability is bad idea rather how will it work in case of disputes?
The only answer I keep hearing is - well, game theory can take care of it. This misses the point that if people are aware of the rules, they will find ways to break it.
We saw a good example of how "we need 51% for manipulation" works in real life during Status ICO. F2pool which held 25% of the mining power was able to manipulate the ICO holding back ethereum transactions:
https://steemit.com/ethereum/@dhumphrey/f2pool-manipulates-u...
It wont be long before people come to realize the rules and start exploiting it.
[+] [-] chrisco255|8 years ago|reply
The first point the author makes is the disadvantage of immutability. Claims that few systems benefit from immutable transaction records. First of all, I don't think that's true. Many systems do, not just financial systems with double entry bookkeeping. Event sourcing is a well defined architecture pattern in back end systems, and it turns out that immutable event logs are actually incredibly useful. It's also pretty well known that you don't erase history in financial systems. That is one of the pillars of double entry bookkeeping.
A more balanced article would point out the pros and cons of immutable systems, but to flippantly argue that immutability is useless? That's just lazy.
Tracking shipment of goods on a blockchain has many advantages. Namely, you can create a shared protocol for the data of shipment tracking, and you can open that blockchain up to certain parties to sign as the good moves along the supply chain. It doesn't have to be "trustless". A particular app's blockchain might only be open to a few trusted parties to write to. Not all transactions have to be written to a single, global, immutable ledger. There are still great benefits to sharing a common blockchain among specific, trusted, cooperative entities.
On POW and the electricity argument, I think we waste electricity on lots of frivolous things. I'm willing to bet Christmas lights also consume more than the state of Delaware. However, it's not the processing of transactions that the electricity is being spent on, it's the creation of new coins.
POS is a good alternative. I think many coins are starting to leverage POS. Ethereum will be switching to that soon.
Still, POS vs POW has nothing to do with "why you probably don't need a blockchain". These are implementation details that vary per blockchain/coin.
Scale also varies dramatically among coins. Ripple already processes 1000s of transactions / second. Lightning network on BTC is growing rapidly. Ethereum has scaling solutions in the works. Other chains have completely different properties than the top two and have different answers for the scaling issues. These issues will be solved with time.
As for rants on ICOs and scams, etc. I mean, do you know how many people have been scammed from phishing e-mails? Does that mean we should not use e-mail? No. As always, caveat emptor, do your own research, and don't take unnecessary risks.
[+] [-] twic|8 years ago|reply
Delaware used 11.26 TWh of electricity in 2016 ("total retail sales", i'm ignoring the direct use bit, sue me):
https://www.eia.gov/electricity/state/delaware/
Bitcoin is using 50.88 TWh of electricity per year:
https://digiconomist.net/bitcoin-energy-consumption
A light user of LED christmas lights ("1 to 3 wreaths, a garland, and a total of approximately 10 strings to wrap their outdoor trees"!) will use 96 watts while operating for 5 hours a day, 30 days a year, for 14.4 kWh in total:
https://www.christmaslightsetc.com/pages/how-much-power.htm
Delaware uses as much power as ~782 million light users of LED christmas lights. Bitcoin uses as much as ~3533 million such users.
> do your own research
Excellent advice.
[+] [-] incompatible|8 years ago|reply
[+] [-] realusername|8 years ago|reply
I remember the Dropbox post on HN full of people asking why they would need it when they can use USB keys and ftp, I feel cryptocurrencies are clearly underestimated the same way here on HN.
[+] [-] jotto|8 years ago|reply
A better case against blockchains would be exploring the reasons why we shouldn't care about trustless properties that blockchains give us.
[+] [-] wonton2|8 years ago|reply
[+] [-] atomical|8 years ago|reply
Blockchains and smart contracts are complicated. There have already been a large number of security issues. There is also a lot of research into making the technology performant. Picking a centralized authority is much less risky because the organization is betting on proven technology.
[+] [-] laci27|8 years ago|reply
Proof of stake is a VERY BAD idea that creates more problems than it solves. All I have to do to take over the chain is buy 1 coin more than anyone else on the chain..
All other problems could be solved in the future (reversible transactions, regulation/privacy etc), but with these 2 major drawbacks, blockchains are not feasible, in my opinion.
[+] [-] scalablenotions|8 years ago|reply
[+] [-] village-idiot|8 years ago|reply
[+] [-] paulsutter|8 years ago|reply
[+] [-] unknown|8 years ago|reply
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[+] [-] alendit|8 years ago|reply
[+] [-] emptybits|8 years ago|reply
I don't believe most senior engineers would feel the same. It's hard to imagine our world today without programs that produce permanent financial consequences. They are everywhere.
[+] [-] village-idiot|8 years ago|reply
Of course every bug has financial effects, software is designed to make money in the vast majority of cases. But to write software that can literally drain every single last dollar from your clients or yourself in an unrecoverable fashion just because _any_ programming error is insanity to me.
[+] [-] ainiriand|8 years ago|reply
[+] [-] stellarstep|8 years ago|reply
[+] [-] village-idiot|8 years ago|reply
[+] [-] martind81|8 years ago|reply
[+] [-] marban|8 years ago|reply
[+] [-] 2_listerine_pls|8 years ago|reply
Apparently no one has told him that a blockchain is just a data structure and has nothing to do with proof of work.
https://youtu.be/fOMVZXLjKYo?t=21m40s
[+] [-] icebraining|8 years ago|reply
[+] [-] unknown|8 years ago|reply
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[+] [-] anonytrary|8 years ago|reply
> The first miner that solves the problem is rewarded with a few Bitcoins, hence the unkind comparisons to Ponzi or MLM schemes.
Author clearly does not understand what MLM and Ponzi schemes are, likely throwing them out as buzzwords to associate mining with scams.
> Actually trying to make computers in general reflect the real world is a very hard task, and the blockchain does nothing to solve this issue.
Black and white statements are a red flag; it's likely this guy does not know much and was hired to "write posts about bitcoin". Blockchains and other emergent structures may trigger tons of research into automata theory. Blockchains do get us one step closer to representing globally unique objects. Seems like the author didn't ponder at all.
> One of the most common proposed usages of blockchain is to track the shipment of real world goods, including everything from food to diamonds. On the surface this sounds great, you could easily and trustlessly prove that the shiny rock in your beloved’s ring wasn’t mined by children in a war torn region, fantastic!
The author's sarcasm here is very telling of his lack of imagination. To swiftly denounce technology that doesn't exist in its full form yet is incredibly presumptuous.
> Ebay purchaser did not deliver? Tough. Someone held you hostage until you sent them bitcoin? Tough. Private key hacked, or hard drive destroyed? That’s unfortunate for you.
As if these problems are not applicable to fiat currency...
> The only way to recover bad bitcoin transactions is to convince everyone to do a hard fork
This is possible with smart insurance contracts with two user segments: insurance providers, and insurance seekers.
> [Refunds due to faulty transactions] would rapidly clutter up the chain full of “oops” transactions, which would pretty quickly make you wonder why you’re bothering at all.
Did this guy just forget that faulty transactions make up almost no relative volume? This is a moot point. Even if every single transaction was faulty, it'd only be a factor two more in size according to the Author. The author thinks that a factor of two is a worthy point here. I am really starting to question the validity of these points.
> It turns out, that there’s very few systems that truly benefit from an inability to amend or update transactions.
Okay, I can say that too. Where's the source?
> The idea of everyone mining on their phone is just laughable.
The idea of everyone carrying around a device that computes faster than the supercomputers Feynman was playing on is just laughable.
> On top of that, as best I can tell a large percentage of Ethereum contracts are literal Ponzi schemes and ICO tokens
So, you can't tell very well? AFAIK the logic here is also flawed; even if most of the ICOs were scams, it says more about the people doing ICOs than it does about the concept of the ICO itself. Again folks, this article contains a lot of misinformation. I highly suggest doing your own research before making decisions.
[+] [-] village-idiot|8 years ago|reply
[+] [-] erikb|8 years ago|reply
[+] [-] village-idiot|8 years ago|reply