The skepticism of blockchain technology is borne out of a lack of specific problems it solves. Which happens to also be the bedrock of the conventional startup wisdom -- value derived from solving a problem or exploiting an opportunity.
So much of the blockchain hype is focused purely on the technology and the valuation of the tokens / coins. Not the problem it solves.
It's distributed trust. That's the problem it solves. It's incredibly cool technology. That solves a specific problem.
The analogy to the early internet is not a good one. The internet solved a huge number of problems -- of distribution, of speed to deliver value to the customer, of freedom of information, of transparency, of fidelity of communication, and more. That's why it's changed society.
I would love to know which societal problems can be reduced to a distributed trust problem. That would convince me that I'm wrong about blockchain technology.
Actually, "Distributed trust", if the distribution is wide enough, enables "Trustless transfer of value and information".
For me that's a clearer way to think about its potential.
Number one problem it solves is obviously money. With an algorithmic stabilization mechanism, you can now have a fair and unmanipulated currency. (Basecoin, MakerDAO, Havven, ...)
From there, you can have programmatic incentivization. This allows you to solve a huge variety of problems that the internet only began to solve.
For instance :
You can now scale privacy networks like Tor that, in its current state, requires benevolent node operators (of which there are too few), and thus take private communications to the mainstream. (Orchid, Mainframe, ...)
In a similar vein, you can make mesh networks like Firebase actually global by incentivizing the node operators. Bye bye ISP monopolies. (Open garden, Rightmesh, ...)
If you add an identity system (say your government supplies its citizens with a blockchain ID), technologies such as zero-knowledge proofs could allow you to vote on various issues from your home, anonymously and un-censorably. Hello Democracy. (Sovrin, ...)
And if you really want to make your imagination run wild, checkout projects like nCent or Fetch.ai, which propose visions that totally redefine how society, as a network of humans, could function.
I think you're doing blockchain and human ingenuity a disservice by framing the question that way. Many corporations haven't revolved around "solving a problem", but instead making existing solutions more efficient.
There were people letting out apartments before AirBnb, and there were taxi cars before Uber - yet we feel that these companies are making our lives easier.
Also your question is very much centered around your own world view. What about the Venezuelans who are mining bitcoin becauause theyir own currency is at an all time high inflation rate? Isn't that example enough to at least partially answer your question about how blockchain addresses societal problems?
> It's distributed trust. That's the problem it solves.
As someone else has pointed out, trust is still not distributed. You still have to trust whoever created the rules and wrote the code (from maliciousness and errors).
Especially when that distributed trust is paid/earned with CPU cycles. The incentive is not clear besides periodic speculatory bursts.
If blockchain (not Bitcoin necessarily) adds "cheaper" to any of its use cases then it's just as legitimate as most Silicon Valley startups.
Uber is cheaper taxis. AirBnB is cheaper hotel rooms. Are these ponzi schemes? Maybe, but they create jobs and benefit the consumer at the expense of entrenched institutional players, which I would say is a good thing.
Payments is a huge one. Bitcoin didn't solve it because it's slow. There's a new generation of chains (mostly PoS, not PoW) that may solve it. Maybe it's gen 4 or 5. Eventually the technology will catch up.
What about PayPal that's trustless? Millions (billions?) of people rely on PayPal to take payments and there are plenty of stories where those people have lost their money without recourse. An on-chain PayPal would be game changing and a lot more fair than the alternatives.
What about voting that can't be tampered with? Yeah, that's not game changing. /s
Blockchain is a promising but immature technology. Like all technologies when they start.
The tech world, despite all of its benefits, is doing a fantastic (in a bad way) job of consolidating power towards the top. Time and time again we see that there are really no benevolent dictators (remember when everyone trusted Google and Facebook?). Blockchain has the potential to balance that out.
What I really like about blockchain is it's going to progress regardless of what you think about. It simply does not care that you don't think it's a good idea. It doesn't care if it threatens banks or governments.
It progresses by everyone acting in their own self interest. But the end result has the potential to deconsolidate power. When has that ever been the case in human history?
Most of the people I encounter who don't like crypto are the ones who are angry that they didn't buy BTC back in the day. Well, guess what? You didn't miss anything. Things are just getting started. Do your research and find something you think may be promising (or enable promising tech) and invest in it.
It is just the next round of the "Uber for X". Little attention is paid specifically to what that technology and business model provide. We end up getting hundreds of startups that use the buzzword to secure funding but quickly flame out when they realize that the advantages don't really matter to their specific market. However that doesn't mean there are not viable "Uber for X" or blockain business ideas out there.
> It's distributed trust. That's the problem it solves
I don't know that to be true exactly. I don't think that distributed trust is a problem really. I also don't think that blockchain itself actually solves for it. From what I can tell, and I may be naive here, with bitcoin for example two people enter into an agreement and a transaction is made and I guess the blockchain agrees to it and commits it to the chain through magic (hashing). But the trust is put in the wrong place I think, should the network have trusted the transaction was correct? I suppose bitcoin has keys that attempt to ensure ownership of the coins, but I don't think that is a blockchain thing precisely. I'm just rambling... I'd like to hear more about why you think blockchains solve for distributed trust.. also why is distributed trust a problem to begin with.
The problems of trust that blockchain aims to solve are currently solved by the banks, the state and legal systems. Our society is built on this enormous system of trust that is backed by hard power (threat to hardship, violence and coercion) and if these systems collapse, then blockchains will suddenly be extremely valuable.
Blockchains in theory are much more efficient and than governments, so this is what people are betting on, without putting it in so many words.
If you think of it, governance is one the biggest monopolies out there and some competition might not be a bad idea for people with large amount of assets.
I'm not sure you've framed the problem and solution correctly, but here is one obvious societal problem solved by Bitcoin:
How does Scihub receive funding to support the service it provides?
If you tried to fund it using Paypal, Visa/Mastercard, etc., it's quite likely that those payment systems would have already blocked the payments from reaching the service providers.
Because it is substantially more difficult to prevent Bitcoin transactions from being added to the blockchain, you can move "payment system" further down the list of "things to attack." Now you've got DNS and some others at the bottom of the list.
Furthermore, Bitcoins can be used to pay directly for things like VPS and other tech. I see over 92 Btc received at the address that pops up on Scihub's website, so this is a pretty big deal. (over half a million $ at today's going rate.)
So whatever the downfall of Scihub will be, it is very unlikely to be due to an attack (even a coordinated one) against the Bitcoin payment system.
That is the most obvious extant application of blockchain technology that provides a benefit to society:
* mostly publicly funded research locked away in proprietary databases
* illicit public database digitally publishing that publicly funded research
* Bitcoin used to pay to run the service that makes the public research available to the public
I don't think that is at all worth all the hype, energy, and money being thrown at blockchain technology. Nevertheless it is a real answer to a real question.
I don't think it's too hard to find potential problems it can solve, but it's not necessarily needed to solve it.
1. Imagine you use FB. Instead of FB having all of your data, it's stored on the blockchain (encrypted). The problem we have now is if a new social network comes along if you create an account you lose all of your previous data (which may or may not be what you want). This would let you easily bring in any old data that you want.
2. I want to transfer funds/ownership or whatever to someone in X number of years. Instead of going through a lawyer, paying money, I make this a smart contract.
3. Right now most payment processors do not work with adult industries and the ones that do charge exorbitant fees. Blockchain can bring those fees down a lot and let performers keep a lot more of their money.
4. We rely on sites like stackoverflow and what not. If those sites were to go down we would lose all of that information (if it wasn't archived). If that was run on the blockchain as long as a few people were still using the site it could stay running.
5. It's also just a solution to the problem of "send money to someone". That was solved by banks and cash, but blockchain can be another solution that doesn't require an insane amount of infrastructure, employees, call centers, etc to run. Ya, it creates its own set of problems (no chargebacks, still may need escrow services, etc) but maybe those can be run more efficiently than our current system.
6. I think voting is something that could happen on the blockchain. Boom, now anyone can verify the results of the election. People can't as easily scream election fraud.
The whole reason Bitcoin uses a hilarious amount of energy is that it barely uses trust (you have to trust the core maintainers and big miners not to screw themselves...).
Distributed trust is the little cash box by a vegetable stand on the side of the road.
Blockchain probabilistically solves Byzantine generals problem. That's pretty awesome result with significant business consequences once people start applying it everywhere where they need to trust somebody in trustless environment. If its devs manage to address scaling issues, it could be one of the backbones of Internet, e-commerce, sharing economy etc. It can be also misused to cement certain societal divisions.
The only one I've seen that might go somewhere is filecoin.
However, I think people are underestimating how the market for ""enterprise private blockchain"" will play out. The same organisations that spent money on X509 PKI non-solutions will pay millions for blockchain. At this level, nobody likes talking about the problem solved. It's solutions all the way, especially enterprise solutions.
I’ve been trying to answer this question for myself for a few months now. Reading the different VC, academic, and tech’s writings, I’ve come up with a longer list than I thought—some more compelling than others.
One of them that I find really interesting is the ability of people to create these autonomous organizations. An entity separate from governments or existing forms of business with programmable incentives that are highly durable. They can exist as long as there’s one node still running somewhere in the world. As for its applications besides being potential investment vehicles, I’ve been curious if they provide the missing implementation piece for grander visions of old alternative economic theories of coordination and ownership like worker coops or some topics in the works of Posner & Weyl (Radical Markets).
1. I can send a letter to anyone, because anyone has an address. Not everyone has an email address. Plus I can add small physical things, and it's more personal with handwriting and a little perfume ;).
2. If I need quick communication, I just call them.
A lot of arguments that are anti-blockchain and anti-cryptocurrency (based on other tech besides blockchain) can be used in the same way with email.
I can give you pretty convincing arguments why email will fail because we already have traditional snail mail (which can do a lot more), and phone (which is faster and more direct).
Fact is that cryptocurrencies, smart contracts and other blockchain applications live 100% on the internet, which means it's faster, cheaper, simpler, global (= not tied to countries and specific companies)
>> I would love to know which societal problems can be reduced to a distributed trust problem. That would convince me that I'm wrong about blockchain technology.
I feel like Namecoin, the first Bitcoin fork, is ready to replace our current DNS system. The transaction fee for registering domains is comparable to current prices, and it gets us out of this horrible situation where we trust companies and governments not to abuse their power and sign new certificates (this is not just a theoretical issue). The problem of associating signing keys with domains is about as basic as you can get with distributed trust systems.
The problem that blockchain solves is trusted timestamping and in that realm exactly same mechanism was used for a long time before it was called that. Various proof-of-something mechanisms layered on top of that solve the "distributed" part of the problem with varying degrees of trust and efficiency.
I would argue there's value beyond distributed trust: smart contracts (though you could argue that this is merely an application built upon the concept of distributed trust), the tokenization of physical assets (think real estate, oil and gas exploration/drilling/royalties, etc.), and more generally the ability for money to become a "product". These are all domains that blockchain is enabling, though it remains to be seen whether these problems/opportunities are solved via blockchain or not.
Speaking as a longtime skeptic, A16Z has actually produced the single clearest answer I've seen to that question: blockchains may be good for bootstrapping new network effects by giving early participants in a network (in a Metcalfe's Law sense of network) an incentive to participate. Pure utility tokens can be like call options on the eventual value of the network if it gets off the ground. It's a novel way of solving a collective action problem.
Except the early adopters don't need to actually participate in the network, just acquire and hoard tokens. There's almost no connection between the profits and the actual advocacy, resources and risks required for the network to succed.
So the incentive structure is quite different from, say, the stock market or even a kickstarter. It's more like a tradeable Ponzi with strong incentives to overpromise and overhype in the early phase, and to get out when the valuation approaches the claims without actually delivering anything more than yet another speculative asset.
The best thing I've seen blockchains used for, besides currency, is as an integration platform for a non-centralized supply chain. There's really no money in it, since there aren't any gatekeepers, but that's sort of the point.
The idea is that the farmer picks his carrots, puts them in a box and sends them off to the carrot juice guy. When he does this he puts a upc code on the side of the carrot box and then puts the code into the blockchain as I shipped this thing to the carrot juice guy. Carrot juice guy receives carrot juice, makes carrot juice with carrots in box and then says, I used these carrots to make this juice in these 300 bottles. <Blockchain> Ships it to distributor. Distributor says I received these carrot juice shipments. <Blockchain> I then sold 1-30 to convenience store A <Blockchain>. End consumer bought one at 3:30pm and got sick. You have the record of how it got there and how much time it spent everywhere, etc. The thing here is there is no centralized supply chain company who controls everything, everyone just puts it on the blockchain that NO ONE OWNS. This is a net gain for everybody in the network, but there is no centralized profit there, except for maybe some systems integrators working at the edges.
This is why blockchain will probably be this kind of subtle thing that doesn't make anybody a lot of money, but just seeps into industry over time. It's a bit like containerization in a way. Huge global impact, but not really any one company who made their fortune on the container technology itself, but all the companies around it benefited.
>Blockchains may be good for bootstrapping new network effects by giving early participants in a network (in a Metcalfe's Law sense of network) an incentive to participate.
Unless I'm being extra dense today, this is the un-clearest answer I've read yet.
The 'may' qualifier also does not inspire confidence.
SpankChain - it's porn on the blockchain, check it out - beta.spankchain.com.
If you accept the premise that blockchains are coordination platforms, because they dramatically reduce the cost of making credible commitments to future cooperation, then you should accept that the most disruptive opportunities will require unprecedented levels of coordination - coordination at a scale that most people think is impossible or infeasibly expensive, but that those who have mastered cryptoeconomics know is now feasible.
Imagine the differences in coordination potential of two societies where only one has mastered time, and you start to get a sense of why this technology is so powerful.
> Trust is a new software primitive from which other components can be constructed.
This kind of talk is extremely misleading. At the end of the day, we're still people buying and selling goods and services from other people. The most blockchain can do is remove some types of middle-men (financial or otherwise), but the endpoints will always be human. Trust between humans will always be a requirement to buy and sell goods and services.
Just like chatting with someone over an encrypted channel can't make you trust the person you're chatting with, only the channel itself.
Perhaps blockchain's "killer app" is an automated escrow service. How exciting... :-/
Trust isn't really a feature of blockchains, nor is it a byproduct (or "software primitive") of blockchains. Bitcoin was designed to avoid a need for trust, so it really just steps around the issue of trust in a distributed ledger.
This is a critical misunderstanding that a lot of people are still preaching and perpetuating. You can't really build systems that rely on trust on top of a blockchain, and those who have tried are mostly just moving (human/corruptible) authorities of trust to more obscure places. You can, however, build systems that do not require trust on top of a blockchain, though there are some very serious limitations that confine those systems/applications to digital-only transactions.
In other words, I can be reasonably assured that the Bitcoin you sent me is spendable by me (that it hasn't been double-spent) and that a government can't just issue 21 million more Bitcoin tomorrow, but that tells me absolutely nothing about whether or not I can (currently or in the future) "trust" your address on the blockchain, nor can it be tied to any kind of meaningful identity without reintroducing a real-world authority that requires my trust.
Bitcoin has proven itself to be useful on the payment side of transactions, but I'm unconvinced that blockchain tech will ever be able to facilitate the delivery side of transactions (unless it's a digital asset being delivered) without compromising the fundamental aims of Bitcoin.
> In an era in which the internet is increasingly controlled by a handful of large tech incumbents, it’s more important than ever to create the right economic conditions for developers, creators, and entrepreneurs.
I'm happy to see that people are taking decentralization seriously. Blockchain has its place as a public ledger, but as everyone knows, scaling it has issues.
Recently, MaidSafe released a new whitepaper for a new decentralized consensus mechanism, called PARSEC, which they detailed in their blog post[0]. It does not use a blockchain. I'm surprised it didn't get more attention. I'd like to see some serious peer review on the paper.
There's some serious kool-aid going on here, which is unfortunate, because they at least wrote that they're focused on non-speculative use cases. Contrary to the announcement's characterization, crypto-powered platforms don't inherently fulfill the promise of equitable decentralization and immutability.
Ethereum has already demonstrated that one is wise to worry if the rules of the game will change later on. And blockchains enable distributed, trustless consensus, but accomplish it with the majority (50%+1) of vested nodes in agreement, which manifests as either a tenuous truce based on human trust to avoid mutually-assured destruction, or as an anything-goes monopoly where the largest cartel wins. Hardly any different from easier, cheaper ways of accomplishing the same thing.
Bitcoin's innovation was incentive in the PoW block reward, Ethereum's was embedding a VM in the client. Everything else has been minor variations on prior art, or speculative bullshit.
More and more traditional money will flow into Crypto, not because Crypto is the answer for everything, but people just want to bet on the something that might in some form change everything in the future.
I really get surprised by the boolean arguments whether blockchain is of any use arguments on HN. I mean there's so much activity, money, talent in Crypto since last year. Goldman Sachs CEO said actually in the nicest way that Crypto is not gonna be the future [0]. I wonder why we can't have arguments like this instead of behaving like a know-it-all.
So have we completely lost the battle for the meaning of the word "crypto"? Because I clicked this link expecting to read about a new kind of cryptography.
Or crypto is just another hype that will burst like the dot com bubble. However, I have to say, compared with the companies of the dot com bubble the blockchain space has very little to offer. The other day I saw an ad for an IoT ML ICO.
If you’re an insider, there’s a somewhat big technical mistake in there that kind of undermines their credibility.
> Blockchain computers are new types of computers where the unique capability is trust between users, developers, and the platform itself.
Trusting somebody implies they’re in a position to hurt you, which makes it undesirable in a secure system. Unfortunately, trustless systems tend to be cumbersome and impractical. What makes Bitcoin interesting is precisely that it’s a remarkably practical system built on a trustless base.
> If there is another “crypto winter,” we’ll keep investing aggressively.
This is how the good investors win. They have real definable thoughts of their own about technology. The truth is that most VCs aren't much more than bad money managers that chase other bad money managers around in circles.
It's not that VCs are stupid. It's that new technology is complex and very few people at all understand it. Even very good technologists can't understand more than a few areas with any level of expertise.
I really believe that decentralization will blow up the entire VC world itself but even this phenomenon will be a huge opportunity for some small number of VCs to profit from. Probably firms doing stuff like this.
The problem w money is that it represents the fruit of human labor but also allows speculation. We have arrived at a point where accumulated wealth through speculation that human labor ( and therefore self worth ) are devalued. That money from financial investments (speculation) can be ploughed back into speculation removes the human effort that generated the money in the first place. To restore human value we need a simple restriction. Capital gains should only be spendable on real stuff - things, services, etc. whereas money from human work should be unrestricted. The block chain is a perfect tool to keep track of monetary transactions and would allow automatic enforcement of this regulation
Blockchain technology itself is not that novel. All the technologies it used have already been there for a while, even the PoW.
But after reading all the arguments and discussions, my opinion is that blockchain simply reflects the human's desire for a more transparent, secure and fair IT systems.
Current IT systems work, just it is not transparent, so people do not know whether it is doing as it claims.
Since there are strong requirements, there will be one revolution. Imagine if the government adopts such transparent and fair system, who cares whether it is centralized or not?
This just strikes me as wrong. His chain of logic does not lead to distributed ledgers. Mainframes, PC's, iPhone, distributed ledgers? Before I dive in I must say that the new trend for people to use blockchain as a noun describing the underlying system of Bitcoin and other coins is highly annoying and cringey. None the less, blockchain is not a peice of technology. It's a contract backed up by probablity and the nature of the internet. The contract is a big lumbering thing that has a life of it's own -- for each implementation of this "tech" you are stuck with that beast which, if you are even able to get enough people to feed it, will fluctuate wildly in many capacities before eventually dying. It's not like a new mems accelerometer where once it's out you can now just pump out thousands of units. The nature of Bitcoin (i refuse to use the blockchain noun) lends itself much more to being a global complement to centrally managed monetary systems (or stand on it's own as the world's currency, but I don't think that would be optimal).
I totally agree with A16Z here. Blockchain skepticism is not hard to find on HN and beyond. First, the ecosystem is vast and evolving quickly. If you've "tuned out" by dismissing blockchain, then don't be surprised when your industry gets disrupted in 5-10 years. I think we'll begin to see business logic open-sourced on the blockchain. For example, existing SaaS model incentivizes closed-source, centrally managed repositories. For example, a CRM-focused blockchain might place the business logic for managing customer relations and sales on-chain and enable competing clients to build on the protocol. A CRM built in this way might enable multiple "thin clients" to build and an ecosystem to develop around it. I think we're a ways off, but that sort of thing is just one of the use-cases that excites me about it.
> This trust emerges from the mathematical and game-theoretic properties of the system, without depending on the trustworthiness of individual network participants.
I'm very uncomfortable with the idea of game theory as the base of trust. Mathematics as used in cryptography is a pretty solid base, but game theory feels like something entirely different.
How do I know that there isn't a participant in the game that is willing to just smash the board? The existing blockchains like Bitcoin do have a certain amount of centralization, so this is not about a very large number of individuals where you could find some comfort in statistics. What if a state actor decides to smash the board, they could probably exert enough pressure on the large players?
What if there are more subtle ways to extract short term gains that game theory didn't anticipate?
I'm a bitcoin skeptic turning to bitcoin owner. For me, it's worth to look at bitcoin from gold perspective. You can pose similar questions to gold and try to answer them.
Can I transact with bitcoin/gold?
Is bitcoin/gold a good value storage?
What problem does bitcoin/gold solve?
Is bitcoin/gold solving trust problem?
Any answer for gold can be interpreted for bitcoin. Bitcoin is better than gold in many ways.
Bitcoin, like gold, is real. Crypto technology is real and works. Bitcoin is limited. There's a computer network running to support it. Bitcoin is not tulip.
Gold is still around. I don't think we'd ever ditch it. Why do we value bitcoin? I don't really know for sure. But I feel certain that bitcoin is real. And we need to do more work to understand it.
As we currently stand the tradeoffs for Blockchain based companies make no sense in the business world. The author's conceit is that Blockchain based businesses trade scalability for "trust" and that new business opportunities will be unlocked due to this capability. The problem with this idea is that trust is currently not a limiting factor for most businesses. Centralized services are trustworthy enough for the majority of consumers and are far cheaper to run at scale.
Every single blockchain based business idea I've heard of would be better suited as a centralized service. It is my strong belief that a16z will lose their shirt on this fund.
I hope for all of our sakes that it's more profitable for a16z to invest in real blockchain startups and leverage their experience to uncover exciting, legitimate applications of the technology than it is to just day-trade cypto assets.
[+] [-] endlessvoid94|7 years ago|reply
So much of the blockchain hype is focused purely on the technology and the valuation of the tokens / coins. Not the problem it solves.
It's distributed trust. That's the problem it solves. It's incredibly cool technology. That solves a specific problem.
The analogy to the early internet is not a good one. The internet solved a huge number of problems -- of distribution, of speed to deliver value to the customer, of freedom of information, of transparency, of fidelity of communication, and more. That's why it's changed society.
I would love to know which societal problems can be reduced to a distributed trust problem. That would convince me that I'm wrong about blockchain technology.
[+] [-] madeofpalk|7 years ago|reply
That's still not it. "Distributed Trust" isn't a problem, its a trait. What actual problem is solved by distributed trust?
[+] [-] leppr|7 years ago|reply
Number one problem it solves is obviously money. With an algorithmic stabilization mechanism, you can now have a fair and unmanipulated currency. (Basecoin, MakerDAO, Havven, ...)
From there, you can have programmatic incentivization. This allows you to solve a huge variety of problems that the internet only began to solve.
For instance : You can now scale privacy networks like Tor that, in its current state, requires benevolent node operators (of which there are too few), and thus take private communications to the mainstream. (Orchid, Mainframe, ...)
In a similar vein, you can make mesh networks like Firebase actually global by incentivizing the node operators. Bye bye ISP monopolies. (Open garden, Rightmesh, ...)
If you add an identity system (say your government supplies its citizens with a blockchain ID), technologies such as zero-knowledge proofs could allow you to vote on various issues from your home, anonymously and un-censorably. Hello Democracy. (Sovrin, ...)
And if you really want to make your imagination run wild, checkout projects like nCent or Fetch.ai, which propose visions that totally redefine how society, as a network of humans, could function.
[+] [-] dsco|7 years ago|reply
There were people letting out apartments before AirBnb, and there were taxi cars before Uber - yet we feel that these companies are making our lives easier.
Also your question is very much centered around your own world view. What about the Venezuelans who are mining bitcoin becauause theyir own currency is at an all time high inflation rate? Isn't that example enough to at least partially answer your question about how blockchain addresses societal problems?
https://www.economist.com/the-economist-explains/2018/04/03/...
[+] [-] raverbashing|7 years ago|reply
As someone else has pointed out, trust is still not distributed. You still have to trust whoever created the rules and wrote the code (from maliciousness and errors).
Especially when that distributed trust is paid/earned with CPU cycles. The incentive is not clear besides periodic speculatory bursts.
[+] [-] asdf_asdf_889|7 years ago|reply
Uber is cheaper taxis. AirBnB is cheaper hotel rooms. Are these ponzi schemes? Maybe, but they create jobs and benefit the consumer at the expense of entrenched institutional players, which I would say is a good thing.
Payments is a huge one. Bitcoin didn't solve it because it's slow. There's a new generation of chains (mostly PoS, not PoW) that may solve it. Maybe it's gen 4 or 5. Eventually the technology will catch up.
What about PayPal that's trustless? Millions (billions?) of people rely on PayPal to take payments and there are plenty of stories where those people have lost their money without recourse. An on-chain PayPal would be game changing and a lot more fair than the alternatives.
What about voting that can't be tampered with? Yeah, that's not game changing. /s
Blockchain is a promising but immature technology. Like all technologies when they start.
The tech world, despite all of its benefits, is doing a fantastic (in a bad way) job of consolidating power towards the top. Time and time again we see that there are really no benevolent dictators (remember when everyone trusted Google and Facebook?). Blockchain has the potential to balance that out.
What I really like about blockchain is it's going to progress regardless of what you think about. It simply does not care that you don't think it's a good idea. It doesn't care if it threatens banks or governments.
It progresses by everyone acting in their own self interest. But the end result has the potential to deconsolidate power. When has that ever been the case in human history?
Most of the people I encounter who don't like crypto are the ones who are angry that they didn't buy BTC back in the day. Well, guess what? You didn't miss anything. Things are just getting started. Do your research and find something you think may be promising (or enable promising tech) and invest in it.
[+] [-] slg|7 years ago|reply
[+] [-] optimuspaul|7 years ago|reply
I don't know that to be true exactly. I don't think that distributed trust is a problem really. I also don't think that blockchain itself actually solves for it. From what I can tell, and I may be naive here, with bitcoin for example two people enter into an agreement and a transaction is made and I guess the blockchain agrees to it and commits it to the chain through magic (hashing). But the trust is put in the wrong place I think, should the network have trusted the transaction was correct? I suppose bitcoin has keys that attempt to ensure ownership of the coins, but I don't think that is a blockchain thing precisely. I'm just rambling... I'd like to hear more about why you think blockchains solve for distributed trust.. also why is distributed trust a problem to begin with.
[+] [-] rushabh|7 years ago|reply
Blockchains in theory are much more efficient and than governments, so this is what people are betting on, without putting it in so many words.
If you think of it, governance is one the biggest monopolies out there and some competition might not be a bad idea for people with large amount of assets.
[+] [-] jancsika|7 years ago|reply
How does Scihub receive funding to support the service it provides?
If you tried to fund it using Paypal, Visa/Mastercard, etc., it's quite likely that those payment systems would have already blocked the payments from reaching the service providers.
Because it is substantially more difficult to prevent Bitcoin transactions from being added to the blockchain, you can move "payment system" further down the list of "things to attack." Now you've got DNS and some others at the bottom of the list.
Furthermore, Bitcoins can be used to pay directly for things like VPS and other tech. I see over 92 Btc received at the address that pops up on Scihub's website, so this is a pretty big deal. (over half a million $ at today's going rate.)
So whatever the downfall of Scihub will be, it is very unlikely to be due to an attack (even a coordinated one) against the Bitcoin payment system.
That is the most obvious extant application of blockchain technology that provides a benefit to society:
* mostly publicly funded research locked away in proprietary databases
* illicit public database digitally publishing that publicly funded research
* Bitcoin used to pay to run the service that makes the public research available to the public
I don't think that is at all worth all the hype, energy, and money being thrown at blockchain technology. Nevertheless it is a real answer to a real question.
[+] [-] Jonovono|7 years ago|reply
1. Imagine you use FB. Instead of FB having all of your data, it's stored on the blockchain (encrypted). The problem we have now is if a new social network comes along if you create an account you lose all of your previous data (which may or may not be what you want). This would let you easily bring in any old data that you want.
2. I want to transfer funds/ownership or whatever to someone in X number of years. Instead of going through a lawyer, paying money, I make this a smart contract.
3. Right now most payment processors do not work with adult industries and the ones that do charge exorbitant fees. Blockchain can bring those fees down a lot and let performers keep a lot more of their money.
4. We rely on sites like stackoverflow and what not. If those sites were to go down we would lose all of that information (if it wasn't archived). If that was run on the blockchain as long as a few people were still using the site it could stay running.
5. It's also just a solution to the problem of "send money to someone". That was solved by banks and cash, but blockchain can be another solution that doesn't require an insane amount of infrastructure, employees, call centers, etc to run. Ya, it creates its own set of problems (no chargebacks, still may need escrow services, etc) but maybe those can be run more efficiently than our current system.
6. I think voting is something that could happen on the blockchain. Boom, now anyone can verify the results of the election. People can't as easily scream election fraud.
[+] [-] ajcodez|7 years ago|reply
[+] [-] maxerickson|7 years ago|reply
Distributed trust is the little cash box by a vegetable stand on the side of the road.
[+] [-] unknown|7 years ago|reply
[deleted]
[+] [-] bitL|7 years ago|reply
[+] [-] pjc50|7 years ago|reply
However, I think people are underestimating how the market for ""enterprise private blockchain"" will play out. The same organisations that spent money on X509 PKI non-solutions will pay millions for blockchain. At this level, nobody likes talking about the problem solved. It's solutions all the way, especially enterprise solutions.
[+] [-] siavosh|7 years ago|reply
One of them that I find really interesting is the ability of people to create these autonomous organizations. An entity separate from governments or existing forms of business with programmable incentives that are highly durable. They can exist as long as there’s one node still running somewhere in the world. As for its applications besides being potential investment vehicles, I’ve been curious if they provide the missing implementation piece for grander visions of old alternative economic theories of coordination and ownership like worker coops or some topics in the works of Posner & Weyl (Radical Markets).
[+] [-] koonsolo|7 years ago|reply
1. I can send a letter to anyone, because anyone has an address. Not everyone has an email address. Plus I can add small physical things, and it's more personal with handwriting and a little perfume ;).
2. If I need quick communication, I just call them.
A lot of arguments that are anti-blockchain and anti-cryptocurrency (based on other tech besides blockchain) can be used in the same way with email.
I can give you pretty convincing arguments why email will fail because we already have traditional snail mail (which can do a lot more), and phone (which is faster and more direct).
Fact is that cryptocurrencies, smart contracts and other blockchain applications live 100% on the internet, which means it's faster, cheaper, simpler, global (= not tied to countries and specific companies)
[+] [-] blotter_paper|7 years ago|reply
I feel like Namecoin, the first Bitcoin fork, is ready to replace our current DNS system. The transaction fee for registering domains is comparable to current prices, and it gets us out of this horrible situation where we trust companies and governments not to abuse their power and sign new certificates (this is not just a theoretical issue). The problem of associating signing keys with domains is about as basic as you can get with distributed trust systems.
Are you unconvinced by this use case?
[+] [-] dfox|7 years ago|reply
[+] [-] jhoechtl|7 years ago|reply
It's often generating an artificial need where no need has been before.
[+] [-] kirbypineapple|7 years ago|reply
[+] [-] CobrastanJorji|7 years ago|reply
Election fraud.
[+] [-] deegles|7 years ago|reply
I think most people don’t trust most (other) people, so few practical applications will arise.
[+] [-] al_|7 years ago|reply
[+] [-] baxtr|7 years ago|reply
[+] [-] miguelrochefort|7 years ago|reply
[+] [-] TrevorAustin|7 years ago|reply
https://a16z.com/2017/12/08/summit-crypto-alex-rampell/
Kind of like Kickstarter or Groupon, at least in their original incarnations?
[+] [-] cornholio|7 years ago|reply
So the incentive structure is quite different from, say, the stock market or even a kickstarter. It's more like a tradeable Ponzi with strong incentives to overpromise and overhype in the early phase, and to get out when the valuation approaches the claims without actually delivering anything more than yet another speculative asset.
[+] [-] narrator|7 years ago|reply
The idea is that the farmer picks his carrots, puts them in a box and sends them off to the carrot juice guy. When he does this he puts a upc code on the side of the carrot box and then puts the code into the blockchain as I shipped this thing to the carrot juice guy. Carrot juice guy receives carrot juice, makes carrot juice with carrots in box and then says, I used these carrots to make this juice in these 300 bottles. <Blockchain> Ships it to distributor. Distributor says I received these carrot juice shipments. <Blockchain> I then sold 1-30 to convenience store A <Blockchain>. End consumer bought one at 3:30pm and got sick. You have the record of how it got there and how much time it spent everywhere, etc. The thing here is there is no centralized supply chain company who controls everything, everyone just puts it on the blockchain that NO ONE OWNS. This is a net gain for everybody in the network, but there is no centralized profit there, except for maybe some systems integrators working at the edges.
This is why blockchain will probably be this kind of subtle thing that doesn't make anybody a lot of money, but just seeps into industry over time. It's a bit like containerization in a way. Huge global impact, but not really any one company who made their fortune on the container technology itself, but all the companies around it benefited.
[+] [-] hitekker|7 years ago|reply
Unless I'm being extra dense today, this is the un-clearest answer I've read yet.
The 'may' qualifier also does not inspire confidence.
[+] [-] spanktosh1|7 years ago|reply
If you accept the premise that blockchains are coordination platforms, because they dramatically reduce the cost of making credible commitments to future cooperation, then you should accept that the most disruptive opportunities will require unprecedented levels of coordination - coordination at a scale that most people think is impossible or infeasibly expensive, but that those who have mastered cryptoeconomics know is now feasible.
Imagine the differences in coordination potential of two societies where only one has mastered time, and you start to get a sense of why this technology is so powerful.
[+] [-] TimTheTinker|7 years ago|reply
This kind of talk is extremely misleading. At the end of the day, we're still people buying and selling goods and services from other people. The most blockchain can do is remove some types of middle-men (financial or otherwise), but the endpoints will always be human. Trust between humans will always be a requirement to buy and sell goods and services.
Just like chatting with someone over an encrypted channel can't make you trust the person you're chatting with, only the channel itself.
Perhaps blockchain's "killer app" is an automated escrow service. How exciting... :-/
[+] [-] dperfect|7 years ago|reply
This is a critical misunderstanding that a lot of people are still preaching and perpetuating. You can't really build systems that rely on trust on top of a blockchain, and those who have tried are mostly just moving (human/corruptible) authorities of trust to more obscure places. You can, however, build systems that do not require trust on top of a blockchain, though there are some very serious limitations that confine those systems/applications to digital-only transactions.
In other words, I can be reasonably assured that the Bitcoin you sent me is spendable by me (that it hasn't been double-spent) and that a government can't just issue 21 million more Bitcoin tomorrow, but that tells me absolutely nothing about whether or not I can (currently or in the future) "trust" your address on the blockchain, nor can it be tied to any kind of meaningful identity without reintroducing a real-world authority that requires my trust.
Bitcoin has proven itself to be useful on the payment side of transactions, but I'm unconvinced that blockchain tech will ever be able to facilitate the delivery side of transactions (unless it's a digital asset being delivered) without compromising the fundamental aims of Bitcoin.
[+] [-] eblanshey|7 years ago|reply
I'm happy to see that people are taking decentralization seriously. Blockchain has its place as a public ledger, but as everyone knows, scaling it has issues.
Recently, MaidSafe released a new whitepaper for a new decentralized consensus mechanism, called PARSEC, which they detailed in their blog post[0]. It does not use a blockchain. I'm surprised it didn't get more attention. I'd like to see some serious peer review on the paper.
Perhaps A16Z should get in touch with them?
[0] https://medium.com/safenetwork/parsec-a-paradigm-shift-for-a...
[+] [-] sarcasmic|7 years ago|reply
Ethereum has already demonstrated that one is wise to worry if the rules of the game will change later on. And blockchains enable distributed, trustless consensus, but accomplish it with the majority (50%+1) of vested nodes in agreement, which manifests as either a tenuous truce based on human trust to avoid mutually-assured destruction, or as an anything-goes monopoly where the largest cartel wins. Hardly any different from easier, cheaper ways of accomplishing the same thing.
Bitcoin's innovation was incentive in the PoW block reward, Ethereum's was embedding a VM in the client. Everything else has been minor variations on prior art, or speculative bullshit.
[+] [-] vthallam|7 years ago|reply
I really get surprised by the boolean arguments whether blockchain is of any use arguments on HN. I mean there's so much activity, money, talent in Crypto since last year. Goldman Sachs CEO said actually in the nicest way that Crypto is not gonna be the future [0]. I wonder why we can't have arguments like this instead of behaving like a know-it-all.
[0]- https://www.bloomberg.com/news/videos/2018-06-19/goldman-s-b...
[+] [-] LeoPanthera|7 years ago|reply
[+] [-] legulere|7 years ago|reply
[+] [-] pdpi|7 years ago|reply
> Blockchain computers are new types of computers where the unique capability is trust between users, developers, and the platform itself.
Trusting somebody implies they’re in a position to hurt you, which makes it undesirable in a secure system. Unfortunately, trustless systems tend to be cumbersome and impractical. What makes Bitcoin interesting is precisely that it’s a remarkably practical system built on a trustless base.
[+] [-] staunch|7 years ago|reply
This is how the good investors win. They have real definable thoughts of their own about technology. The truth is that most VCs aren't much more than bad money managers that chase other bad money managers around in circles.
It's not that VCs are stupid. It's that new technology is complex and very few people at all understand it. Even very good technologists can't understand more than a few areas with any level of expertise.
I really believe that decentralization will blow up the entire VC world itself but even this phenomenon will be a huge opportunity for some small number of VCs to profit from. Probably firms doing stuff like this.
[+] [-] bawana|7 years ago|reply
[+] [-] xmly|7 years ago|reply
Current IT systems work, just it is not transparent, so people do not know whether it is doing as it claims.
Since there are strong requirements, there will be one revolution. Imagine if the government adopts such transparent and fair system, who cares whether it is centralized or not?
So blockchain is simply a strong desire.
[+] [-] 67_45|7 years ago|reply
[+] [-] chrisco255|7 years ago|reply
[+] [-] fabian2k|7 years ago|reply
I'm very uncomfortable with the idea of game theory as the base of trust. Mathematics as used in cryptography is a pretty solid base, but game theory feels like something entirely different.
How do I know that there isn't a participant in the game that is willing to just smash the board? The existing blockchains like Bitcoin do have a certain amount of centralization, so this is not about a very large number of individuals where you could find some comfort in statistics. What if a state actor decides to smash the board, they could probably exert enough pressure on the large players?
What if there are more subtle ways to extract short term gains that game theory didn't anticipate?
[+] [-] _7fvc|7 years ago|reply
Can I transact with bitcoin/gold?
Is bitcoin/gold a good value storage?
What problem does bitcoin/gold solve?
Is bitcoin/gold solving trust problem?
Any answer for gold can be interpreted for bitcoin. Bitcoin is better than gold in many ways.
Bitcoin, like gold, is real. Crypto technology is real and works. Bitcoin is limited. There's a computer network running to support it. Bitcoin is not tulip.
Gold is still around. I don't think we'd ever ditch it. Why do we value bitcoin? I don't really know for sure. But I feel certain that bitcoin is real. And we need to do more work to understand it.
[+] [-] pg_bot|7 years ago|reply
Every single blockchain based business idea I've heard of would be better suited as a centralized service. It is my strong belief that a16z will lose their shirt on this fund.
[+] [-] deboboy|7 years ago|reply
[+] [-] TrevorAustin|7 years ago|reply