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The blockchain paradox: Why DLTs may do little to transform the economy

oii.ox.ac.uk

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Re: The blockchain paradox: Why DLTs may do little to transform the economy

#91

Post by _Marak_ »

hdhzy wrote: post #86
jeffnappi wrote: post #82

DLTs are inefficient by design. The energy consumption is unsustainable with the technology as it stands. For example Bitcoin consumed an estimated 40 million KWh in the past 24 hours - 137KWh per transaction . Enough to power ~1.3M American homes. Many of the alt-coins are even worse. Source: http://digiconomist.net/bitcoin-energy-consumption

I wonder what's the energy consumption of an average credit card transaction (including keeping the infrastructure, charge backs etc.)...

From the article:

VISA Network Statistics

VISA's estimated annual electricity consumption (TWh) 0.54

Number of U.S. households that could be powered by VISA 50,000

Electricity consumed per transaction (KWh) 0.00651

Number of seconds the electricity consumed by 1 VISA transaction could power 1 U.S. household 19

Number of VISA transactions that could be powered with the electricity consumed by 1 Bitcoin transaction 20,983 `

Re: The blockchain paradox: Why DLTs may do little to transform the economy

#92

Post by isubkhankulov »

dragonwriter wrote: post #57
isubkhankulov wrote: post #23

the article is spot on when it comes to Distributed Ledger Technology (DLT) but misses the point of Bitcoin. Many in the community cite the lack of governance as a strength of Bitcoin. It's resilience is a virture because it becomes difficult to corrupt, unlike centralized governance of traditional payment methods.

> Many in the community cite the lack of governance as a strength of Bitcoin. Bitcoin has opaque governance; it does not have a lack of governance. > It's resilience is a virture because it becomes difficult to corrupt It is not at all difficult to corrupt. (Arguably, since it's fundamentally based on “them what have they gold, make the rules”, it's foundationally corrupt and takes nothing additional to corrupt. But,…

opaque? have you seen the bitcoin dev mailing list? or the github issue list?

Re: The blockchain paradox: Why DLTs may do little to transform the economy

#93

Post by isubkhankulov »

Nursie wrote: post #31
isubkhankulov wrote: post #23

the article is spot on when it comes to Distributed Ledger Technology (DLT) but misses the point of Bitcoin. Many in the community cite the lack of governance as a strength of Bitcoin. It's resilience is a virture because it becomes difficult to corrupt, unlike centralized governance of traditional payment methods.

I think you might have missed the point of the article - bitcoin is still governed by a small group of people, but its governance is informal and chaotic. It is not governance-free.

not small at all. any substantial change needs buy in from users, miners and developers. not to mention companies.

Re: The blockchain paradox: Why DLTs may do little to transform the economy

#94

Post by MediumD »

wildbunny wrote: post #18

He misses the point that the developers do not control bitcoin; the miners control bitcoin. The developers suggest improvements which will only be adopted if the miners support those improvements. The miner's interests are purely profit based, so they will not adopt changes which reduce their chance of profit.

I don't see how this is a good thing? If what you are describing is true, it ends in those rich enough to buy the majority of nodes in the network, being able to control the entire blockchain. Pay-for-power doesn't seem like a good solution for governance.

Re: The blockchain paradox: Why DLTs may do little to transform the economy

#95

Post by gjem97 »

serg_chernata wrote: post #34
jwildeboer wrote: post #24

Earlier quoted context omitted.

Thank you for pointing out that the users of bitcoin (and other cryptocurrencies) have effectively no say in the design of the system they have to trust. This will ultimately limit the very trust needed to keep it alive IMHO.

I would say that this is exactly why Proof of Stake seems to be in higher regard than Proof of Work for new currencies as well as Ether's eventual transition later this year. Among other reasons, of course.

Is it generally accepted that this is inevitable? Or is it going to be a SegWit/Unlimited sort of situation?

Re: The blockchain paradox: Why DLTs may do little to transform the economy

#96

Post by isubkhankulov »

dragonwriter wrote: post #57
isubkhankulov wrote: post #23

the article is spot on when it comes to Distributed Ledger Technology (DLT) but misses the point of Bitcoin. Many in the community cite the lack of governance as a strength of Bitcoin. It's resilience is a virture because it becomes difficult to corrupt, unlike centralized governance of traditional payment methods.

> Many in the community cite the lack of governance as a strength of Bitcoin. Bitcoin has opaque governance; it does not have a lack of governance. > It's resilience is a virture because it becomes difficult to corrupt It is not at all difficult to corrupt. (Arguably, since it's fundamentally based on “them what have they gold, make the rules”, it's foundationally corrupt and takes nothing additional to corrupt. But,…

your second point, what are you basing that on?

Re: The blockchain paradox: Why DLTs may do little to transform the economy

#97

Post by quinndupont »

If there's a new argument to be had here (I'm doubtful, it sounds like a re-hashing of governance issues that have played out over the last year), it's this claim:

"This rule-making is what we refer to as governance."

This conception of governance is the premise for the conclusion, what Lehdonvirta calls a "paradox":

"And this leads me to my final point, a provocation: once you address the problem of governance, you no longer need blockchain; you can just as well use conventional technology that assumes a trusted central party to enforce the rules, because you’re already trusting somebody (or some organization/process) to make the rules. I call this blockchain’s ‘governance paradox’: once you master it, you no longer need it."

My own analysis draws on a more expansive definition (from Introna; Saurwein et al.): http://iqdupont.com/assets/documents/DUPONT-2017-Preprint-Al...

This expansiveness is necessary, as Lehdonvirta recognizes. Contracts are not just enforcement, they also encapsulate the processes of making ("rule-making"), or better, negotiating contracts.

So, are we authorized to go from a rule-making notion of governance to the conclusion that once this is addressed blockchain technologies will be redundant? Lehdonvirta doesn't give us any analysis of this move, but I don't think so. Rather, we need to recognize the contested forms, which are the essence of governance, and then create a socio-technical structure around them. Consider: double-entry bookkeeping is just as much a technology for governance as blockchain technology (and, of course, they share a historical lineage). Does double-entry bookkeeping go away because we "address the problem"? Hardly. Rather, we need to recognize the ways that it has developed, and by whom, and for what use. Just like blockchain technologies.

Re: The blockchain paradox: Why DLTs may do little to transform the economy

#98

Post by nemo44x »

If I had a Bitcoin for every skeptic that posts a blog on why it can't work...

This may just be my general observation but I feel like Silicon Valley hegemony has a grudge against crypto currencies and I'm not sure why. For an industry that has constantly tried new things and saw potential where no one else did, I just don't see the love for the potential of smart contracts, DApps, etc. And how this is just the beginning of what is possible and of course it's isn't perfect but it's fascinating to the curious.

I do see a lot of enthusiasm from Eastern Europeans and all across Asia and they seem to be leading the charge on what could be the next major technical revolution.

My working hypothesis right now is Silicon Valley has been getting fat on the virtually unlimited venture capital power structure and sees this as a threat they've missed out on to their power.

Maybe the disrupters are being disrupted?

Re: The blockchain paradox: Why DLTs may do little to transform the economy

#99

Post by Nursie »

isubkhankulov wrote: post #93
Nursie wrote: post #31

Earlier quoted context omitted.

I think you might have missed the point of the article - bitcoin is still governed by a small group of people, but its governance is informal and chaotic. It is not governance-free.

not small at all. any substantial change needs buy in from users, miners and developers. not to mention companies.

Practically, mining has become relatively confined to a few parties, individual users have fairly little power and the developers hold quite a lot.

Regardless of relative size of this group, governance is opaque, political and chaotic, not either absent or purely mathematical.

Re: The blockchain paradox: Why DLTs may do little to transform the economy

#100

Post by cayblood »

One aspect of his argument that seems insufficiently explored is an apparent assumption that governance is primarily a binary state, either present or absent.

It's important to recognize that different approaches to governance have different levels of effectiveness and efficiency, and one of the most important aspects of blockchain is how it presents the first real improvement on the present state of the art in governance, or the first real competition to our current forms of government. It can help consensus to be achieved more quickly and efficiently and can make corrupt government more difficult. There are further improvements to blockchains being made to make amendable blockchains where changes to blockchain protocols and contracts can be tested in sandbox environments, essentially systems in which laws and contracts can be tested to see if they produce the desired results before implementing them. The Tezos blockchain is the most notable emerging example of this.

All of these improvements present much more powerful tools for aiding just governance than our forebears had when they created the constitutional democracies that presently govern the world. Governance is not some Platonic binary that is either absent or present, but it is an ideal towards which we're always striving and taking pragmatic steps to implement. Blockchains afford us new tools with which to achieve better governance. They are not an end in themselves or a replacement for traditional governance so much as a means to implement it more efficiently.

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