You Do Not Need Blockchain: Popular Use Cases and Why They Do Not Work • Hacker News Board

Re: You Do Not Need Blockchain: Popular Use Cases and Why They Do Not Work

#121

Post by menage » Fri, Feb 22, 2019, 6:44 PM UTC

denart2203 wrote: post #36

"However, this system is vulnerable to a very simple threat: a dishonest seller can make a copy of a real bottle with a token, fill it with wine of lower quality, and either steal you..." The argument around “someone that doesn’t care about tokens” is weak because that applies to any authenticity solution. The idea behind the authenticity guarantees would be that every step along the way, you add a record that the ob…

I don't think you even need a blacklist for this to be of real benefit - if every fancy bottle sold is expected to be accompanied by a blockchain transaction moving the bottle's certificate (originally produced by the winemaker, and unforgeable) then you'll only be able to sell a fancy bottle of wine if at some point in the past you've purchased an equivalent bottle from someone else with a certificate.

There is still the chance that someone along the way consumes the real wine or sells it (at a loss?) to someone who doesn't care about authentication, and then sells on a fake bottle with the real certificate - but:

- at least in that case there would be a well-defined chain of owners that should make it much simpler to figure out who's doing the counterfeiting.

- you can only do this once for each real bottle that you purchase, since you can't forge the certificates.

Re: You Do Not Need Blockchain: Popular Use Cases and Why They Do Not Work

#122

Post by shepardrtc » Fri, Feb 22, 2019, 6:45 PM UTC

gregschlom wrote: post #33

I've said this several times before on this site but will keep repeating it: there's exactly one use case where the blockchain is a superior (and, in fact, the only) solution: when you can't use contracts and the legal system to ensure trust between the parties. In other words, anything illegal. For any other conceivable use case, a database and a contract between parties are a superior solution. Edit: To clarify wha…

> For any other conceivable use case, a database and a contract between parties are a superior solution.

Except when banks are transferring money across borders. In order to have trust, they currently need what's called nostro and vostro accounts. Meaning, Bank A parks money in Bank B, and Bank B parks money in Bank A. So that if a transfer is fraudulent, there will be money to cover it.

How is that better than blockchain?

Re: You Do Not Need Blockchain: Popular Use Cases and Why They Do Not Work

#123

Post by josaka » Fri, Feb 22, 2019, 6:45 PM UTC

gregschlom wrote: post #33

I've said this several times before on this site but will keep repeating it: there's exactly one use case where the blockchain is a superior (and, in fact, the only) solution: when you can't use contracts and the legal system to ensure trust between the parties. In other words, anything illegal. For any other conceivable use case, a database and a contract between parties are a superior solution. Edit: To clarify wha…

My sense is the set of scenarios where "you can't use contracts and the legal system to ensure trust between the parties" is broader than just illegal agreements. Contract often fail when the damages for breach are too small, diffuse, and heterogeneous, making class action unsuitable. And many contract provisions are often not honored in bankruptcy. Litigation is an unwieldy tool and preferably avoided where possible.

Re: You Do Not Need Blockchain: Popular Use Cases and Why They Do Not Work

#124

Post by sonnyblarney » Fri, Feb 22, 2019, 6:46 PM UTC

gregschlom wrote: post #33

I've said this several times before on this site but will keep repeating it: there's exactly one use case where the blockchain is a superior (and, in fact, the only) solution: when you can't use contracts and the legal system to ensure trust between the parties. In other words, anything illegal. For any other conceivable use case, a database and a contract between parties are a superior solution. Edit: To clarify wha…

It is good to remind people of the nature of legal enforcement which will essentially be required in such cases, but 'illegal stuff' is definitely not the only use case.

For example - banks could feasibly use blockchain for clearing trades.

Right now there is a 'single point of trust' for such things which even financial institutions want to break out of.

Blockchain could theoretically enable distributed exchanges.

The 'rule of law' is still essential in that context, but blockchain could work there.

This is only one example of 'regular real world use'.

FYI / caveat: the 'hardest part' about getting these more distributed systems going is getting large financial entities to agree on the nature of the exchange, and hammering out of the real world details. At that point, blockchain becomes a secondary and not necessarily essential component.

Re: You Do Not Need Blockchain: Popular Use Cases and Why They Do Not Work

#125

Post by rublev » Fri, Feb 22, 2019, 6:47 PM UTC

shepardrtc wrote: post #116

jVinc wrote: post #84

Earlier quoted context omitted.

> but who owns the database? And who enforces the contract? And who owns the actual data? > Blockchain provides satisfactory answers to all those problems. What problems? I mean your arguing like something like public transportation is an impossibility without blockchain backing because: "Who owns the stations, who enforces the schedules and who owns the actual busses?" Those are not problems. They are all just quest…

But what if two banks are transferring money between themselves? Which bank owns the database? Why should the other bank trust that database?

This already occurs and has been occuring. Has zero relevance to blockchain. Heard of escrow?

Re: You Do Not Need Blockchain: Popular Use Cases and Why They Do Not Work

#126

Post by aboodman » Fri, Feb 22, 2019, 6:49 PM UTC

pjc50 wrote: post #110

aboodman wrote: post #99

Earlier quoted context omitted.

> a database and a contract between parties are a superior solution. Do you believe that this is a permanent state, or a temporary one? Is there a potential blockchain-like thing that could exist which would be better than a database and a contract? Because to me, the current system leaves room for improvement: - resolving conflicts across jurisdictions is extremely expensive - resolving conflicts even within one jur…

The blockchain doesn't resolve disputes, it rules them out of scope. The response from blockchain advocates to vendor fraud is "caveat emptor". The dispute is still there.

I'm not sure I completely follow you, but there's nothing preventing a party from making use of the legal system or contracts or whatever in addition to a blockchain.

I still think that making some common classes of dispute impossible is highly valuable.

Re: You Do Not Need Blockchain: Popular Use Cases and Why They Do Not Work

#127

Post by yarrel » Fri, Feb 22, 2019, 6:49 PM UTC

gregschlom wrote: post #33

I've said this several times before on this site but will keep repeating it: there's exactly one use case where the blockchain is a superior (and, in fact, the only) solution: when you can't use contracts and the legal system to ensure trust between the parties. In other words, anything illegal. For any other conceivable use case, a database and a contract between parties are a superior solution. Edit: To clarify wha…

Anyone treating a blockchain as a database is already off to a bad start. It's at best a prunable transaction log. Sure, you can use a blockchain to construct a database, but even the Nakamoto whitepaper talks about discarding old transactions.

There exist many cases in which something is not illegal but is inefficient, unjust, lacks sufficient trust to reach a contract or lacks sufficient incentives to comply with a contract. There exist many other cases in which people cannot afford to hire a lawyer to enforce a contract, or cannot afford to hire as many lawyers of as high a calibre as the other party.

So presenting blockchains as a) databases that are b) only good for illegal activity is doubly incorrect.

There are also many bad and unnecessary uses of databases and contracts...

Re: You Do Not Need Blockchain: Popular Use Cases and Why They Do Not Work

#128

Post by vpmpaul » Fri, Feb 22, 2019, 6:51 PM UTC

gregschlom wrote: post #33

I've said this several times before on this site but will keep repeating it: there's exactly one use case where the blockchain is a superior (and, in fact, the only) solution: when you can't use contracts and the legal system to ensure trust between the parties. In other words, anything illegal. For any other conceivable use case, a database and a contract between parties are a superior solution. Edit: To clarify wha…

> It's literally how the world works.

So the world works perfectly in your opinion?

The good thing about blockchain is it lowers the cost bar for crazy expensive business legalize. It of course needs more work but a proper smart contract setup placed in front of a judge leaves little need for a dozen lawyers and business consultants to see the intent of the contract.

The main issue is that the current very expensive and inefficient setup benefits middle men that produce very little value. Transitioning away from that will eventually happen and that will be the reason blockchain and smart contracts explode in value and usefulness.

Re: You Do Not Need Blockchain: Popular Use Cases and Why They Do Not Work

#129

Post by twic » Fri, Feb 22, 2019, 6:51 PM UTC

shepardrtc wrote: post #122

gregschlom wrote: post #33

I've said this several times before on this site but will keep repeating it: there's exactly one use case where the blockchain is a superior (and, in fact, the only) solution: when you can't use contracts and the legal system to ensure trust between the parties. In other words, anything illegal. For any other conceivable use case, a database and a contract between parties are a superior solution. Edit: To clarify wha…

> For any other conceivable use case, a database and a contract between parties are a superior solution. Except when banks are transferring money across borders. In order to have trust, they currently need what's called nostro and vostro accounts. Meaning, Bank A parks money in Bank B, and Bank B parks money in Bank A. So that if a transfer is fraudulent, there will be money to cover it. How is that better than block…

It's better because you just described the entire mechanism in forty-four words.

Re: You Do Not Need Blockchain: Popular Use Cases and Why They Do Not Work

#130

Post by jondubois » Fri, Feb 22, 2019, 6:53 PM UTC

Blockchain is a fractional reserve system which can be used as a payment layer. That's it. The whole point of blockchain tech is to create hype and incentivise collaboration towards a shared financially beneficial goal.

Saying that blockchain has no use cases is like saying that money has no use cases. It incentivizes, it corrupts, it buys loyalties, it buys positive news coverage - These are the most important use cases of all and blockchain is great at that. Potential value is real value, even speculative value is real value.

People should not diregard the benefits of Blockchain any more than they should disregard the benefits of VC money. They're both mechanisms of mass collaborative incentivization and corruption.

The only way to beat corruption is by democratizing it so that anyone can do it.