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The Blockchain Bubble Will Pop, What Next?

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Re: The Blockchain Bubble Will Pop, What Next?

#131

Post by zaphar »

nostrademons wrote: post #88
castlecrasher2 wrote: post #53

Earlier quoted context omitted.

>The biggest problem in the world today is lack of trust and the failure of institutions. That's a pretty strong statement, one that I would disagree with, mostly because it's so vague. How did you come to that conclusion?

Because of what's happening in [government, media, science, public spaces, labor markets]. I view all of them as examples of the same underlying phenomena. In government, you have the UK voting to remove itself from the EU, and then when the referendum passed, the prime minister resigning, all of the major proponents of the referendum resigning, and Scotland threatening to secede from the UK (again). You have a U.S.…

Trust has always been a problem. A trustless currency doesn't solve the problem any more than anything else has. Blockchains can't and won't solve the UK brexit problem. It won't solve the US politics problem. It won't solve the businesses too big to fail problem or the politics, power, and money corrupting people problem.

I agree that trust in institutions is a problem but blockchain won't solve it. It will just displace it. In return if you aren't careful you'll lose the benefits of third party arbitrators. The very thing that in the current system gives you any hope of righting the wrongs that the systems you don't trust have inflicted on you.

It's quite probable that rather than making things better cryptocoins will make them worse. It's also quite probably that they will devolve into the very thing they were trying to avoid becoming. As a case in point: Ethereum forked because of a bug in a smart contract. A central authority had to step in to right a wrong. (You can't trust people to write correct software). And that was early on in the cryptocurrency history. There will be more such occasions and each one will prove that not only can you not trust your bank to always get it right. You also can't trust the cryptocurrency developers or the smart contract developers.

Re: The Blockchain Bubble Will Pop, What Next?

#132

Post by silverlake »

m-i-l wrote: post #7

I used to think that the blockchain bubble was like the dotcom bubble, in that the core technology was actually genuinely transformative, so that even after the bubble burst and all the over-valued companies went bust, the technology would remain and continue change our lives. However, I must admit I'm starting to have my doubts now. It was 10 years in to the dotcom era that the dotcom bubble burst, and by that time…

Blockchain tech is still 10+ years from being practical. But it could be useful in developing countries with bad governments and endemic corruption. In the 1st world things work well enough.

Re: The Blockchain Bubble Will Pop, What Next?

#133

Post by zaphar »

fastball wrote: post #119
jcranmer wrote: post #90

Earlier quoted context omitted.

After all, it's not like people breaking into computers and stealing stuff from them is anywhere near as common as people breaking into houses or bank vaults.

I don't have the stats, but I actually would guess that robbery is way more common than hacking personal computers which results in the retrieval of useful information.

I make it a habit not to bet. But if I were a betting man I'd take you up on that. Hacking personal computers is a huge blackmarket industry and it costs society a lot of money. The average person (i.e. not you or me) don't even know they've been hacked and are just joined to some botnet without their knowledge. But a hacked computer is a hacked computer and if the hacker want's the bitcoin wallet they can get it.

Good luck getting the bitcoin back after that.

Re: The Blockchain Bubble Will Pop, What Next?

#134

Post by nradov »

malloryerik wrote: post #121
m-i-l wrote: post #7

I used to think that the blockchain bubble was like the dotcom bubble, in that the core technology was actually genuinely transformative, so that even after the bubble burst and all the over-valued companies went bust, the technology would remain and continue change our lives. However, I must admit I'm starting to have my doubts now. It was 10 years in to the dotcom era that the dotcom bubble burst, and by that time…

Maybe we should consider that the blockchain's killer app is the truth. This is the case with bitcoin, since the purpose of the blockchain is to be, for example, trustless, protecting you from someone whom you don't trust lying about your bitcoin transactions. Bitcoin will show you the truth about those transactions. The blockchain also tries to protect against fraudulent double spends and do on, and this like all fr…

That's naively idealistic. In unstable political environments when someone with power and weapons wants your property he'll just take it. No one cares about "truth". And they can use threats of violence or imprisonment to force people to update any property registry to their liking.

Re: The Blockchain Bubble Will Pop, What Next?

#135

Post by coralreef »

michaelchisari wrote: post #117
stale2002 wrote: post #48

Earlier quoted context omitted.

I'll give you one. The year is 2010. And I am a normal citizen and I want to donate money to WikiLeaks without the banks colluding to stop my financial transaction, even though nobody has been convicted of a crime. How do you do it? The only way I can think of to do this easily (easily being the key word!) is a cryptocurrency transaction. Banks and credit card companies collude all the time in order to censor financi…

> I want to donate money to WikiLeaks Trustworthiness of Wikileaks aside, do you think that's a $500 billion market? Donating to activist organizations?

https://qz.com/775159/theres-a-500-billion-remittance-market...

"Worldwide, 230 million people send $500 billion in remittances each year, primarily using firms like Western Union, Moneygram, and RIA, which together control 1.1 million retail locations and account for more than 25% of the world’s annual remittance volume."

Re: The Blockchain Bubble Will Pop, What Next?

#136

Post by coralreef »

bepotts wrote: post #17

In all seriousness, what are the advantages Blockchain has over a public SQL database with limited reads and writes that also maintains a public transaction history? Cause when I hear people talk about the problems Blockchains solves (outside of cryptocurrency which is a whole other topic), I don't see what advantages Blockchain has over that. A public SQL database isn't the most "clean" solution, but it'll save ever…

If you lived in Greece or Venezeuala, you may have a different opinion about your government's fiscal policies and trustworthiness.

Re: The Blockchain Bubble Will Pop, What Next?

#137

Post by fbonetti »

pembrook wrote: post #44
tCfD wrote: post #6

The problem with blockchain is actually rooted in hazy, unexamined assumptions about the viability of 'decentralization' that are are used as if they are conclusions rather than premises for justifying the technology's utility. I think ultimately the conversation will turn to discuss the cost premium entailed by a decentralized coordination problem solving system of any kind, and whether it centralization is really a…

People have an abstract distaste for "trusted intermediaries" because they think the intermediary just sits in between you and somebody else while collecting fees for adding no value. In many cases the fees absolutely need to be reduced through market competition. However the root of this thinking is wrong. Intermediaries do add value. Humans are inherently un-trustworthy animals, and you pay your fees to buy the val…

Centralized intermediaries are only trustworthy as long as they’re incentivized to be truthful. If another party comes along and offers them a bag of cash, the intermediary might choose to betray its clients’ trust.

Decentralized miners, on the other hand, are highly incentived to tell the truth, because it’s the only way they can collect fees.

You’re right that you have to pay for the truth either way; the difference is that the decentralized approach gives you stronger guarantees.

Re: The Blockchain Bubble Will Pop, What Next?

#138

Post by cinquemb »

pembrook wrote: post #20
coralreef wrote: post #11

Earlier quoted context omitted.

A lot of the utility from blockchain doesn't come from being able to do "new" things. They come from being able to do old things better: cheaper, more securely, free from the interference of trusted parties / government. It remains to be seen which processes the blockchain will take over. Some are obvious, ie. prediction markets, sports gambling, money remittance. Some are more complex, and will require frameworks to…

>"They come from being able to do old things better: cheaper, more securely, free from the interference of trusted parties / government." Name one thing that blockchain has made, or is even close to making cheaper or more secure or trustless? The largest application of the technology has been bitcoin thus far, and bitcoin is more expensive; less secure than the traditional financial system (where if you get hacked yo…

Not as big as the bitcoin market but corda's growing[0] use for forwards contracts between parties[1].

Though it seems like this is an instance of blockchain "like our current financial system, with intermediaries and trust and regulation", but with cost/time savings by reducing the amount of humans involved in the transaction reconciliation process.

Many more examples of old finance firms using blockchain [2], though a far cry from the whatever is going on in the cryptos in use with consumer discretionary trading.

[0] https://github.com/corda/corda

[1] https://www.thetradenews.com/commerzbank-replicates-fx-trade...

[2] https://www.globalcustodian.com/news/technology/

Re: The Blockchain Bubble Will Pop, What Next?

#140

Post by nradov »

craigc wrote: post #18

The biggest problem is that blockchains are inherently not scalable. That is more or less by design, but it limits the types of applications that can run on top of them. I think a more likely outcome is that most types of payment infrastructure and settlement/transaction layers move to blockchains and not actual applications. For example, it’s not too difficult to imagine the stock market switch to tokenized stocks t…

There is zero need for blockchains in real estate registries. Real estate property rights are enforced by the government, ultimately through threat of official violence. So the government might as well maintain a centralized real estate registry since we're effectively forced to trust them anyway.
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