My personal stance on why Blockchain is often not required is that a core feature of the Blockchain - decentralization( based on a lack of trust on a single entity) is not needed in the business world. In business, trust is an essential factor by which you pick your partners and suppliers, and often businesses reject cheaper offers in favour of business partners they know and trust based on past cooperations.
The various crypto meltdowns of the recent years show that crypto actually involves lots and lots of trust.
From the frontend doing what it really says, through intricacies of how the smart contracts work, manual control over wallets, and trusting the business logic.
Transaction security is kind of the last thing to worry about.
There are scenarios where a multi-party ledger can be useful in business...
Think about a logistics chain where everybody needs to know that a record wasn't modified in retrospect.
But then you only need a mini-blockchain along the lines of what IBM calls blockchain, you may have a few industry players and say a customs agency agree to sign the entries and then there will be no dispute about whether an entry was signed on a particular day. Energy cost of that is negligible. (and you don't need to put the actual transaction info into the ledger... just the signature is enough so everyone on the chain can confirm later that it wasn't modified).
All of this is also pretty ancient tech by now... IBM just basically jumped on the blockchain branding bandwagon I'd say...
Isn’t this an argument for blockchains? If you could rely on blockchains instead of trusting based on past cooperation, you could save money and thus add more value. Obviously blockchains have a cost, but in some cases the cost savings you could achieve may outweigh that.
That's a false dichotomy. Anyone would choose someone they trust most out of other need-to-trust counterparties. If there was an alternative to not use any unnecessary counterparty at all - that would be even better. E.g. if you transfer Bitcoin from country A to country B you know for sure that it will arrive without any intermediate bank inserting their opinion in the process and causing surprising delays.
The author falls into the same trap as many others who write about blockchains: “people will build centralized apps on top of the decentralized protocol, so there is no need for the decentralized protocol in the first place!”
A better way to understand blockchains is as a base settlement layer: they are a shared, permissionless and open source protocol that is resistant to takeover by a single entity.
What this means is that a company, like Meta or Coinbase or even a US bank, can build a centralized platform that lets users manage their crypto assets. But as long as users can still withdraw into a non custodial address, they have the option to escape to that neutral base layer.
This is a different design than what we see currently in the web and banking sector. You can hold ETH or an ENS domain with nothing but a private key. But with a .com domain, if you want to withdraw from GoDaddy, you will be forced to transfer that into another centralized service like Namecheap that will also extract rent. There is no “neutral base layer” with traditional digital assets.
Assuming you are allowed to transfer into the base layer. Most currencies and finance have a similar decentralized base layer: Cash. However in many jurisdictions your ability to transfer into that base layer is severely restricted due to money laundering, anti-terror-financing and / or currency-control regulation.
> as long as users can still withdraw into a non custodial address
Uh, that’s a pretty big “if”, right? It’s completely up to the custodian whether you can withdraw or not, and we’ve seen several large platforms freeze withdrawals recently (and then fold). To an average individual, the hypothetical possibility of withdrawing to the “base layer” is at best a marginal improvement over the existing financial system; hardly a revolution.
> But as long as users can still withdraw into a non custodial address, they have the option to escape to that neutral base layer.
Using blockchains for money is just about the most absurd solution a society can come up to the problems of financial centralization. Money is a form of power and the solutions to power problems are always political.
We need a financial system that protects individual privacy while reducing the options for money laundering, tax evasion, bribes, fraud and all the types of crimes motivated by money. There is a inherent contradiction in these requirements, the hope that a private actor or some non-accountable peer to peer algorithm can find a good political compromise is an ideological pipe dream.
> they are a shared, permissionless and open source protocol that is resistant to takeover by a single entity
Sure, but what’s an actual real world use where that’s a good thing? For domain names it’s exceptionally useful that a stolen, infringing, or fraudulent domain can be recovered through the legal system.
>>they are a shared, permissionless and open source protocol that is resistant to takeover by a single entity
And to prevent that takeover by a single entity (AKA 51% attack) it uses a very expensive (as in processing power) mechanism - proof-of-work to delegate the right of adding new transactions to the chain. And that makes is unscalable because as the network grows, you need more processing power. It flies in the face of economies of scale. It's a feature not a bug but that also makes it unsuitable for any business use cases.
Like any other market, consolidation will eventually lead to 2-3 whales will end up controlling majority of the nodes and can control an entire chain. In fact some of the new age blockchain startups are straight up centralized. What they are peddling is anything but a shared, permission-less and trust-less blockchain.
The blockchain is the solution to a specific problem Bitcoin has, so when people and businesses were saying "we like blockchain but not Bitcoin", it just didn't make any sense.
The problem is how to be able to synchronize an ever-growing database across an unlimited number of peers, and the answer is "through chunks we call blocks".
Blocks are not needed to sync a growing transation database, as exemplified with Mimblewimble blockchains, whose sync just downloads the UTXO set and list of all transaction kernels.
You can store things that aren’t money on a blockchain.
If you think a distributed mutually-distrustful ledger is useful but shouldn’t be used for money, the statement “we like blockchain but not Bitcoin” makes sense.
I’m not a fan of crypto currencies and markets, but is there not a use case for a distributed ledger? It is my understanding that that’s all a blockchain really is.
Crypto actually works kind of great as a speculative casino. If you think that isn't a real world use case then you may have a rather rose tinted view of the world.
Crypto has been rallying like all speculative assets. If crypto was like beanie babies (as HN group think says) it would have crashed years ago and stayed dead.
Good writeup. It's amusing to me all the VCs and developers running around trying to find the "killer app" for blockchains, somehow not realizing that reinventing money is the most killer app possible.
VCs know blockchain has no use case. They are only in it to flip the tokens to starry eyed idiots and make most of their money back without a real IPO or dilution.
I don't think you can judge the validity of an idea, or a technology, or anything really by looking at its (perceived) failures. The fact you don't think blockchains don't work for bank transfers, shares, currency, contracts, or whatever else doesn't mean they aren't useful. It just means no one has found a use that you think is appropriate yet, or they haven't persuaded you that you're wrong about any of the things you don't like.
The one thing that gives me a ray of hope about blockchain is git. A git repo is a very similar to a blockchain. It has blocks, and each block has a payload, and they're all chained together in a way that allows distributed additions. git looks, walks, and quacks like a blockchain. It's just lacking the consensus bit really. As someone who would gladly apply git to practically every problem in tech it makes me think that blockchains could be really damn useful if only people would stop trying to pretend they're the future of money.
- OFAC just sanctioned Tornado Cash which enabled truly private digital cash equivalent
- HN: "There aren't that many uses for blockchain"
- Is privacy considered not a use case anymore? Who here is still following PG advice? Has anyone talked to *their users* recently? Because privacy is a pretty good use case!
A very good explanation of why Blockchain is useless for anything else other than storing speculative tokens. A public, permission-less and trust-less ledger of transaction that uses proof-of-work as a consensus mechanism to add new transactions to the ledger is expensive and slow by design. It's a feature not a bug. That makes it unsuitable for any real world use case at scale. In order to make it fast and cheap - a private, permissioned, trustful blockchain kind of defeats the purpose and thus pointless.
Blockchains can encapsulate identity and payment in a single transaction. If someone were to tie these to HTTP requests (the 402 response, for example) then they would have micropayments for Web requests (API requests).
People always focus on the speculative trading of the assets, but the real killer use case is stuff making calls to other stuff to do more stuff. AI models paid for with micro transactions is going to be a thing. It's just going to take time to get there.
Hyperledger can offer a chain of authenticated data ownership transfers, and has several use-cases outside the classical database approaches.
It does however solve key logistics issues with distributed inventory ownership transfer involving 3rd parties. For example, Walmart has successfully deployed a blockchain system, and reported good performance of the technology under high-volume stress.
This is one of those edge cases most will never encounter unless they are handling millions of transactions an hour. It's a good problem to have though... =)
Working professionally with VMI / 3rd party inventories, I don't see how Blockchain would solve anything that isn't solved already. Maybe a well implemented blockchain solution is solving it easier, that's it so.
The main problem with third party inventories is always the question is the reported inventory levels and movements are actually correct. The real world answer to that is counting, together with the third party if so desired. Blockchain doesn't help with that since in itself it cannot guarantee that the physical movements and the dogital information flow are always in sync.
Blockchains are an alternative pricing model for data hosting. Instead of a monthly bill, the transaction fee gets the data stored forever-ish. As scaling techniques are implemented, this makes more applications suitable for storing data on chain.
People here on HN are such NPCs when it comes to blockchain. Yaah sure cite another times that VISA has more tx volume or whatever.
I've been working more than seven years in this tech and don't let yourself be deceived - wide scale PKI and immutability of storage is very useful for lots of things.
Sure, 99% of all projects are shitcoins. But it changes nothing about the core tech.
E.g. there are people building quietly the new software supply chain package managers with fully content-addressable and re-producible builds where all hashes are stored onchain to be immutable. But yeah, it's not a VC funded milliondollar project so people can't be happy/angry about it
It seems to me that this whole issue is fairly simple: does the blockchain technology solve any real-world problem that people have?
A mere analysis of its logic says it does not, actually, solve any meaningful problem whatsoever. Secure transactions are already feasible, it doesn't prevent mischief and the way to settle a dispute is always the same (through the legal system) and decentralization prevents it from scaling.
This is like saying there aren't many uses for computers, they just manipulate 1s and 0s very quickly. It's true but it fails to understand why that's enough.
Blockchain enables digital peer to peer trustless exchange of money (and various other things of which the utility can be debated, many of which are low value) but that's enough. That's a lot
Saying that blockchain is bad at being a database for all of these other things is like saying a cpu is bad at heating your home. Again, technically true and not particularly insightful, because they happen to be really good at manipulating 1s and 0s
The most amazing feature of Blockchain is the anonymity provided by monero/zcash/tornado etc. However it's being banned by governments because it can be used to launder money.
Found this less convincing than expected. They seem to mostly base the criticism on (a) it's cheaper to use non-blockchain equivalent for the use cases they could think of, and (b) some point in the blockchain equivalent process generates a need to trust another party.
It seems to me that block chains will win at the things they are good for a bit the way git won at version control: decentralised systems just require lower overheads and less barrier to entry in general, so people just automatically use them.
It's fine to point at legacy use cases where all the trust relationships are already established. Those are living off fully amortised costs. But new systems do not have that benefit and for that context, you are faced with a proposition of having to set up a whole lot of new trust infrastructure and associated processes.
So for example, if you were setting up a library today and there were no pre-existing library systems out there. You might want to maintain a history of who borrowed each book, so you know who last had it. You will either have to establish a whole legal entity to become the owner of the books, electronic systems to track them and administer everything, and everyone will have to agree on its governance, who controls it and most importantly, trust them implicitly not to tamper with the transactions.
It'll be a whole lot of work. So why would you do all that work when you can opt for a block chain with literally no overheads?
> It seems to me that block chains will win at the things they are good for a bit the way git won at version control: decentralised systems just require lower overheads and less barrier to entry in general, so people just automatically use them.
Git really only had an inflection point of adoption when Github came out and offered a really compelling centralized service. Before Github, there wasn't a huge drive to move away from SVN (there was some but it was more because the new decentralized ones were better in other ways besides being decentralized and fixed some annoying bugs that SVN had) and it was much less certain that git would win out over mercurial or bazaar or one of the others.
My experience at the time was also that the decentralized nature of git/hg/etc was arguably a barrier to their adoption. Existing teams were used to a workflow with a central repository and it wasn't clear how you would replace that with these decentralized tools. You had to do a lot of work to come up with a new workflow for your team or you made a central server somewhere and tried to make them work as similarly as possible to a centralized system. I remember a lot of pushback on moving to git from people who didn't understand the whole decentralized thing and found it more confusing than what they were used to. And with Github, that seems to be the approach that the vast majority of the world has gone with. Yeah, you can use git as a fully decentralized tool and there are people who prefer that to using Github, but that's pretty uncommon compared to how many teams just centralize with Github.
I'm waiting for a nice github repo called "You might not need Blockchain". I kind of am actually. I heard someone trying to convince a credulous interviewer why blockchain would be the perfect solution for a bike register to prevent theft. The whole time I was thinking this could be solved by a plain old database hosted by a trusted third party.
Do we even have an established definition for blockchain?
My understanding is that a blockchain is just a data structure. Saying there aren't that many uses for blockchains is like saying there aren't that many uses for tries or red-black trees.
Blockchains don't have to be decentralized for example.
My problem with blockchains is that they AREN'T decentralized. If controlling a blockchain becomes valuable enough then it's a matter of time before someone will figure out how to profit from it and invest the required resources.
Decentralized in my mind means there is not one single source of truth.
[+] [-] littlecranky67|3 years ago|reply
[+] [-] rich_sasha|3 years ago|reply
From the frontend doing what it really says, through intricacies of how the smart contracts work, manual control over wallets, and trusting the business logic.
Transaction security is kind of the last thing to worry about.
[+] [-] janekm|3 years ago|reply
But then you only need a mini-blockchain along the lines of what IBM calls blockchain, you may have a few industry players and say a customs agency agree to sign the entries and then there will be no dispute about whether an entry was signed on a particular day. Energy cost of that is negligible. (and you don't need to put the actual transaction info into the ledger... just the signature is enough so everyone on the chain can confirm later that it wasn't modified).
All of this is also pretty ancient tech by now... IBM just basically jumped on the blockchain branding bandwagon I'd say...
[+] [-] hansworst|3 years ago|reply
[+] [-] oleganza|3 years ago|reply
[+] [-] whatisweb3|3 years ago|reply
A better way to understand blockchains is as a base settlement layer: they are a shared, permissionless and open source protocol that is resistant to takeover by a single entity.
What this means is that a company, like Meta or Coinbase or even a US bank, can build a centralized platform that lets users manage their crypto assets. But as long as users can still withdraw into a non custodial address, they have the option to escape to that neutral base layer.
This is a different design than what we see currently in the web and banking sector. You can hold ETH or an ENS domain with nothing but a private key. But with a .com domain, if you want to withdraw from GoDaddy, you will be forced to transfer that into another centralized service like Namecheap that will also extract rent. There is no “neutral base layer” with traditional digital assets.
[+] [-] adament|3 years ago|reply
[+] [-] cmckn|3 years ago|reply
Uh, that’s a pretty big “if”, right? It’s completely up to the custodian whether you can withdraw or not, and we’ve seen several large platforms freeze withdrawals recently (and then fold). To an average individual, the hypothetical possibility of withdrawing to the “base layer” is at best a marginal improvement over the existing financial system; hardly a revolution.
[+] [-] manholio|3 years ago|reply
Using blockchains for money is just about the most absurd solution a society can come up to the problems of financial centralization. Money is a form of power and the solutions to power problems are always political.
We need a financial system that protects individual privacy while reducing the options for money laundering, tax evasion, bribes, fraud and all the types of crimes motivated by money. There is a inherent contradiction in these requirements, the hope that a private actor or some non-accountable peer to peer algorithm can find a good political compromise is an ideological pipe dream.
[+] [-] petesergeant|3 years ago|reply
Sure, but what’s an actual real world use where that’s a good thing? For domain names it’s exceptionally useful that a stolen, infringing, or fraudulent domain can be recovered through the legal system.
[+] [-] yashg|3 years ago|reply
And to prevent that takeover by a single entity (AKA 51% attack) it uses a very expensive (as in processing power) mechanism - proof-of-work to delegate the right of adding new transactions to the chain. And that makes is unscalable because as the network grows, you need more processing power. It flies in the face of economies of scale. It's a feature not a bug but that also makes it unsuitable for any business use cases.
Like any other market, consolidation will eventually lead to 2-3 whales will end up controlling majority of the nodes and can control an entire chain. In fact some of the new age blockchain startups are straight up centralized. What they are peddling is anything but a shared, permission-less and trust-less blockchain.
[+] [-] tropicalfruit|3 years ago|reply
Until the government decides to blacklist your account.
Ethereum is only decentralised until it isn't.
[+] [-] PinguTS|3 years ago|reply
q.e.d.
[+] [-] russnes|3 years ago|reply
The problem is how to be able to synchronize an ever-growing database across an unlimited number of peers, and the answer is "through chunks we call blocks".
[+] [-] tromp|3 years ago|reply
[+] [-] anton_ai|3 years ago|reply
[+] [-] jnwatson|3 years ago|reply
If you think a distributed mutually-distrustful ledger is useful but shouldn’t be used for money, the statement “we like blockchain but not Bitcoin” makes sense.
[+] [-] bmitc|3 years ago|reply
[+] [-] voz_|3 years ago|reply
[+] [-] koonsolo|3 years ago|reply
https://news.ycombinator.com/item?id=31998722
[+] [-] tim333|3 years ago|reply
Crypto actually works kind of great as a speculative casino. If you think that isn't a real world use case then you may have a rather rose tinted view of the world.
[+] [-] seibelj|3 years ago|reply
[+] [-] SkyMarshal|3 years ago|reply
[+] [-] blaaaaa99a|3 years ago|reply
for everyone else, the killer app is bitcoin.
[+] [-] yashg|3 years ago|reply
[+] [-] onion2k|3 years ago|reply
The one thing that gives me a ray of hope about blockchain is git. A git repo is a very similar to a blockchain. It has blocks, and each block has a payload, and they're all chained together in a way that allows distributed additions. git looks, walks, and quacks like a blockchain. It's just lacking the consensus bit really. As someone who would gladly apply git to practically every problem in tech it makes me think that blockchains could be really damn useful if only people would stop trying to pretend they're the future of money.
[+] [-] qaq|3 years ago|reply
[+] [-] TomSwirly|3 years ago|reply
What a really strange idea. Of course you can. What better way is there to judge a technology other than its failures and successes?
> It just means no one has found a use that you think is appropriate yet,
It's been 14 years. Cryptocurrencies are only eighteen months younger than the cell phone.
We've had 14 years of promises and so far, nothing. Why would any rational person believe you?
[+] [-] timdaub|3 years ago|reply
- HN: "There aren't that many uses for blockchain"
- Is privacy considered not a use case anymore? Who here is still following PG advice? Has anyone talked to *their users* recently? Because privacy is a pretty good use case!
[+] [-] lern_too_spel|3 years ago|reply
[+] [-] yashg|3 years ago|reply
[+] [-] kordlessagain|3 years ago|reply
People always focus on the speculative trading of the assets, but the real killer use case is stuff making calls to other stuff to do more stuff. AI models paid for with micro transactions is going to be a thing. It's just going to take time to get there.
[+] [-] Joel_Mckay|3 years ago|reply
It does however solve key logistics issues with distributed inventory ownership transfer involving 3rd parties. For example, Walmart has successfully deployed a blockchain system, and reported good performance of the technology under high-volume stress.
This is one of those edge cases most will never encounter unless they are handling millions of transactions an hour. It's a good problem to have though... =)
[+] [-] konschubert|3 years ago|reply
They don't need trustlessness, they have a root source of trust.
[+] [-] hef19898|3 years ago|reply
The main problem with third party inventories is always the question is the reported inventory levels and movements are actually correct. The real world answer to that is counting, together with the third party if so desired. Blockchain doesn't help with that since in itself it cannot guarantee that the physical movements and the dogital information flow are always in sync.
[+] [-] numtel|3 years ago|reply
https://newgeocities.com/webmaster/blog/applications.html
[+] [-] margoguryan|3 years ago|reply
[+] [-] timdaub|3 years ago|reply
I've been working more than seven years in this tech and don't let yourself be deceived - wide scale PKI and immutability of storage is very useful for lots of things.
Sure, 99% of all projects are shitcoins. But it changes nothing about the core tech.
E.g. there are people building quietly the new software supply chain package managers with fully content-addressable and re-producible builds where all hashes are stored onchain to be immutable. But yeah, it's not a VC funded milliondollar project so people can't be happy/angry about it
[+] [-] syl_sau|3 years ago|reply
C. Muratori puts it more elegantly than I do: https://www.youtube.com/watch?v=kbYutOsrpvs
[+] [-] koonsolo|3 years ago|reply
If you have a better solution, please let us know. If not, then I guess crypto does have a use-case.
https://news.ycombinator.com/item?id=31996612
[+] [-] anm89|3 years ago|reply
Blockchain enables digital peer to peer trustless exchange of money (and various other things of which the utility can be debated, many of which are low value) but that's enough. That's a lot
Saying that blockchain is bad at being a database for all of these other things is like saying a cpu is bad at heating your home. Again, technically true and not particularly insightful, because they happen to be really good at manipulating 1s and 0s
[+] [-] jaimehrubiks|3 years ago|reply
[+] [-] drewcoo|3 years ago|reply
Governments don't really care much about laundering money.
[+] [-] zmmmmm|3 years ago|reply
It seems to me that block chains will win at the things they are good for a bit the way git won at version control: decentralised systems just require lower overheads and less barrier to entry in general, so people just automatically use them.
It's fine to point at legacy use cases where all the trust relationships are already established. Those are living off fully amortised costs. But new systems do not have that benefit and for that context, you are faced with a proposition of having to set up a whole lot of new trust infrastructure and associated processes.
So for example, if you were setting up a library today and there were no pre-existing library systems out there. You might want to maintain a history of who borrowed each book, so you know who last had it. You will either have to establish a whole legal entity to become the owner of the books, electronic systems to track them and administer everything, and everyone will have to agree on its governance, who controls it and most importantly, trust them implicitly not to tamper with the transactions.
It'll be a whole lot of work. So why would you do all that work when you can opt for a block chain with literally no overheads?
[+] [-] thraxil|3 years ago|reply
Git really only had an inflection point of adoption when Github came out and offered a really compelling centralized service. Before Github, there wasn't a huge drive to move away from SVN (there was some but it was more because the new decentralized ones were better in other ways besides being decentralized and fixed some annoying bugs that SVN had) and it was much less certain that git would win out over mercurial or bazaar or one of the others.
My experience at the time was also that the decentralized nature of git/hg/etc was arguably a barrier to their adoption. Existing teams were used to a workflow with a central repository and it wasn't clear how you would replace that with these decentralized tools. You had to do a lot of work to come up with a new workflow for your team or you made a central server somewhere and tried to make them work as similarly as possible to a centralized system. I remember a lot of pushback on moving to git from people who didn't understand the whole decentralized thing and found it more confusing than what they were used to. And with Github, that seems to be the approach that the vast majority of the world has gone with. Yeah, you can use git as a fully decentralized tool and there are people who prefer that to using Github, but that's pretty uncommon compared to how many teams just centralize with Github.
[+] [-] AndrewDucker|3 years ago|reply
[+] [-] rapsacnz|3 years ago|reply
[+] [-] trhway6552|3 years ago|reply
I do believe that "there aren't many uses" for blockchains, but this sound more like an inaccurate, unoriginal and badly researched opinion piece.
[+] [-] Ferret7446|3 years ago|reply
My understanding is that a blockchain is just a data structure. Saying there aren't that many uses for blockchains is like saying there aren't that many uses for tries or red-black trees.
Blockchains don't have to be decentralized for example.
[+] [-] djupblue|3 years ago|reply
Decentralized in my mind means there is not one single source of truth.