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

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

#141

Post by ffwd »

PKop wrote: post #79
altcognito wrote: post #40

Earlier quoted context omitted.

Except deflation instead of inflation. Instead of sticky wages you'll be pressured to drop your hourly rates. Borrowing money would increase the cost of the loan, depending on the rate of value increase, you're looking at negative interest rates. Everything about deflation makes zero sense.

You've identified who suffers and who benefits from the reversing of value positions caused by deflation vs inflation. But you haven't explained why its "worse"? So borrowers are disadvantaged compared to lenders (savers). And wage earners are in a better position relative to wage payers.. ? That's what I take away from your statement. But, one's ability to buy things seems to be improved... Should we want an inflati…

> But, one's ability to buy things seems to be improved...

It's only improved if there is a lot of investment and new / more products coming out. deflationary currency promotes holding on to your money so that it goes up in value, but if everyone does that there will be less products / services and the value of the currency will ultimately go down. If currency has some inflation, then it's used as a transaction currency so that you want goods rather than currency, so the product becomes the important thing. If you have too much inflation however you get way too much money for the amount of products, so you want stable inflation.

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

#142

Post by nemo44x »

root_axis wrote: post #118
corv wrote: post #116

Earlier quoted context omitted.

ICO's are clearly enjoying a use. Largest crowdfunding in history can't be ignored - whether it ends in tears for most investors is another matter entirely.

I asked for a practical example. Just because a bunch of people decided to spend their money on internet tokens does not mean it is useful. How is it useful ?

You did ask for practical. First I'll say this isn't easy to answer in concrete terms. But someone will one day.

One concept would be to raise funds that can allow you arbitrage at a scalable level. Request funds (ICO) and have the smart contract enable a certain subset of those funds for your organization to use to arbitrage other crypto's. Profits are spread across stakeholders based on their investment, represented as the tokens they generated in the ICO.

Enforce this by only allowing a certain part of the funds to become available at certain times based on performance. Stake holders could vote using a contract to determine if more funds should be released.

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

#143

Post by serg_chernata »

gjem97 wrote: post #95
serg_chernata wrote: post #34

Earlier quoted context omitted.

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?

PoS seems to be definitely happening for Ether.

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

#144

Post by ckastner »

root_axis wrote: post #112
nemo44x wrote: post #98

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 begin…

The source of the distaste is obvious: breathless hyperbole without much substance to show for it. Posts like yours are a great example of it. In this very comment you write: > leading the charge on what could be the next major technical revolution Unsubstantiated hype. Where is the revolution? A common thread among cryptocurrency enthusiasts is that the revolution is coming... except it never does. When you talk abo…

> bitcoin remains difficult and relatively unsafe to use (for the non-technical masses)

Even assuming it were trivially easy and perfectly safe to use, there are numerous other risks currently associated with it.

Just look at its recent volatility, for example.

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

#145

Post by stale2002 »

DINKDINK wrote: post #123
wildbunny wrote: post #59

Earlier quoted context omitted.

If miners chose to mine on a chain that no-one wants, then everybody has to grudgingly go along with it, or cease to transact. The longest chain is always the most valuable.

>If miners chose to mine on a chain that no-one wants, then everybody has to grudgingly go along with it No, if the miners mine on a chain that doesn't meet consensus rules, users will not follow it. If miners decide that the coinbase issuance schedule isn't to their liking, and decide to revert it back to 50 bitcoins per block, users will reject those blocks. This is a fundamental governance property of a blockchain…

Kinda sorta.

Yes, users can reject Hard Forks.

But the problem is that soft forks can do basically anything. Yes, even increase the block reward, in a roundabout way, (by using added extension blocks that have special rules, and then requiring all transactions to go through the extension blocks.)

Although from the perspective of a non-conforming Node, this would just look like a DDOS style mining empty blocks attack.

At this point the only thing that users can do is change the Proof of Work algorithm. .... But, if the big players in mining have a bunch of GPUs on standby... well, it is not even guaranteed that this will work.

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

#146

Post by root_axis »

nemo44x wrote: post #138
root_axis wrote: post #118

Earlier quoted context omitted.

I asked for a practical example. Just because a bunch of people decided to spend their money on internet tokens does not mean it is useful. How is it useful ?

Groups of actors across the world can make an agreement that is enforced by a smart contract. When an actor fails to live up their obligation they are refused payment. There is no way to take off with something that is not yours. There is no reliable or efficient way to cheat. You don't have to know the other actors you are making an agreement for something with. Can you do this now without a smart contract? Of cours…

> make an agreement that is enforced by a smart contract

Please give me an example of how an agreement can be enforced by a smart contract.

> When an actor fails to live up their obligation they are refused payment

It works the same way with colored pebbles.

> There is no way to take off with something that is not yours

Why not? I know this is an abstract question in this context which is why I asked for a practical example so we could share a thought experiment regarding how the use of a smart-contract would play out in real life.

> There is no reliable or efficient way to cheat

Cheat what? Once again this is totally abstract. Seems to me like cheating is just as easy if not easier because the role of law-enforcement is questionable at best and nonexistent at worst. To cheat, all I have to do is agree to the terms of the contract then violate it after I have secured the funds or property. Then what?

> You don't have to know the other actors you are making an agreement for something with

I'll grant that this is possible and useful in special cases (e.g. online drug markets), but that is a benefit of blockchain money and smart contracts don't offer any benefit

> far less complex

This is certainly not the case, as victims of the DAO and orphaned eth blockchain can attest to.

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

#147

Post by jasode »

coldtea wrote: post #130
jasode wrote: post #89

Earlier quoted context omitted.

>anthropologist David Graeber [...] Money cannot be separated from state violence. I've read David Graeber's book. I do agree with him that the common (e.g. John Locke) narrative about money arising from direct barter is probably wrong. Money actually comes from credits/debits (aka delayed consumption). However, I disagree you need government enforced violence for the basic apparatus of money. Perhaps it's a matter o…

> If you have a small community where everybody knows each other, the people can cooperate to keep track of "accounts" of who owes what. Well, those people are then the government. In small scale communities it's one and the same -- they can all join together and deal with anybody who doesn't play nice. And these punishments are the analogous of e.g. prison. So, what you say is true, but not very important in practic…

>, as we don't live in such small communities,

Right, that's today's situation. My "government not required" is talking about how ancient money can arise spontaneously without a separate entity that we think of today as "government". If we think of "money" at its basic level of keeping track of "promises", "favors", and "trust" ... all those human instincts of coordination can precede old governments like the Roman Empire and Egyptian pharaohs. It just can't do so on a large scale among strangers.

>2 people [...] they're basically acting as a government in themselves

If we go back & forth by then redefining "government" to mean "any humans coordinating" then I suppose we could stretch "governance" all the way back to human invention of fire. If we use this all-encompassing idea of "government", then I suppose it means nothing preceded government.

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

#148

Post by moduspol »

root_axis wrote: post #136
moduspol wrote: post #125

Earlier quoted context omitted.

Watch this video [1] of Bill Gates explaining the value of the Internet to David Letterman, where he's just not getting it at all. Bill's telling him the things it can do relative to David's interests, but he just sees those as problems that don't really exist because they've already been solved. It took decades before the Internet was useful to "the masses." I don't think there's some conspiracy among VCs, but I do…

I tire of the internet comparison. You're drawing a surface-level comparison between the greatest communication and economic innovation in human history and blockchain software, because people were skeptical of both. And? That doesn't prove anything except that people were skeptical of both; nothing in that comparison speaks to the underlying nature of either things being compared. They are not the same.

Well it's in response to your rebuttal.

> Where is the revolution? A common thread among cryptocurrency enthusiasts is that the revolution is coming... except it never does.

A technology doesn't need to have all of its potential realized in the first few years of its existence.

> Where is the disruption? Bitcoin is a smidgeon of a fraction of the commerce activity happening on the internet

The Internet was a fraction of the commerce activity happening relative to Sears / JC Penney / Walmart. Yet clearly only a few decades later all of these are disrupted by the Internet.

> bitcoin remains difficult and relatively unsafe to use (for the non-technical masses) and provides zero benefits for most people.

...as was the Internet for the first few decades.

> Contrast these facts on the ground with the never-ending blockchain hype and the result is overall disillusionment with blockchains in general.

This compares directly to, "Have you ever heard of radio?"

Literally every dismissal of cryptocurrencies you made would have applied exactly to the Internet in the early '90s or prior. There are far more similarities than "people were skeptical of both." It's totally fine to take your position but it's unrealistic to claim these as reasons it can't succeed.

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

#149

Post by gjem97 »

serg_chernata wrote: post #143
gjem97 wrote: post #95

Earlier quoted context omitted.

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

PoS seems to be definitely happening for Ether.

Could you expand on that any? What's your basis for that belief?

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

#150

Post by root_axis »

nemo44x wrote: post #142
root_axis wrote: post #118

Earlier quoted context omitted.

I asked for a practical example. Just because a bunch of people decided to spend their money on internet tokens does not mean it is useful. How is it useful ?

You did ask for practical . First I'll say this isn't easy to answer in concrete terms. But someone will one day. One concept would be to raise funds that can allow you arbitrage at a scalable level. Request funds (ICO) and have the smart contract enable a certain subset of those funds for your organization to use to arbitrage other crypto's. Profits are spread across stakeholders based on their investment, represent…

> First I'll say this isn't easy to answer in concrete terms. But someone will one day.

This is not unreasonable, but you have to admit that it is a far cry from imminent revolution and a key reason why people are skeptical of this technology especially considering the bottomless pit of grandiose hype that accompanies it.

> One concept would be to raise funds that can allow you arbitrage at a scalable level. Request funds (ICO) and have the smart contract enable a certain subset of those funds for your organization to use to arbitrage other crypto's. Profits are spread across stakeholders based on their investment, represented as the tokens they generated in the ICO.

Ok, but all you've really described here is a higher level abstraction for playing the cryptomarkets rather than a useful product or service that is enabled by the technology itself. If you aren't interested in gambling your money on the cryptomarkets then this idea is useless.

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