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

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

#221

Post by dragontamer »

sgeisler wrote: post #206
dragontamer wrote: post #146

Earlier quoted context omitted.

But that's where small-claims court comes in. It mostly only costs you your time, you aren't really allowed to bring in a lawyer to argue on your behalf, etc. etc. Depending on your location, the MAXIMUM damages for small-claims court is $5000 to $10,000. The whole system is designed so that smaller issues can be resolved quickly. > And many contract provisions are often not honored in bankruptcy That's literally the…

> If you put 20 BTC into an exchange (in promise for 550 ETH or whatever), but the exchange goes bankrupt... you lose both your BTC and your ETH. You have to go through the courts to try to get your money back. That's actually solvable with atomic swaps [1]. They anable you to trustlessly exchange crypto currencies at an agreed on price. [1] https://en.bitcoin.it/wiki/Atomic_swap

Nifty trick!

Unfortunately, it doesn't generalize to BTC / USD (or other fiat currency), which is probably the bigger exchange that most people use.

----------

The second issue is that BTC / ETH prices can change dramatically. Set your timer too long: and your opponent can use time to take advantage of the trade... only executing it when the BTC/ETH exchange floats towards their favor.

Because BTC / ETH prices vary dramatically on a day-to-day basis, "gaming" the exchange price is going to be trickier. With a traditional exchange, you either market order (always get a price, immediately), or limit-order (get the price as soon as the threshold is reached).

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

#222

Post by narrator »

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…

There's one other situation, when there is a business where nobody trusts the brokers. The diamond industry is a good example. Where does a diamond come from? Sellers don't want to know when buying from shady brokers and obfuscating or altering the origin is extremely valuable and hard to detect, so brokers have huge incentives to cheat and thus the database can't be centralized.

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

#223

Post by AnthonyMouse »

turtlesdown wrote: post #211
AnthonyMouse wrote: post #137

Earlier quoted context omitted.

> In other words, anything illegal. Not exactly. It's anything for which the legal system is not effective. For example, you can have a perfectly legal contract, but the other party is in a corrupt foreign jurisdiction that would never find in your favor in the event of a breach. Then you can't contract with them because they have no incentive not to breach, without an alternative method of ensuring compliance that d…

> For example, you can have a perfectly legal contract, but the other party is in a corrupt foreign jurisdiction that would never find in your favor in the event of a breach. Then you can't contract with them because they have no incentive not to breach, without an alternative method of ensuring compliance that doesn't rely on their corrupt government. International trade has perfectly good mechanisms for dealing wit…

Your workarounds have potentially higher overhead. "Just factor in additional costs" is equivalent to destroying otherwise-productive low margin transactions. Even for higher margin transactions, higher overhead is no advantage.

> Probably still illegal to do business with you if the government has outlawed work with specific sanctioned countries, etc.

The whole point is the cases where it's not.

Many banks and payment processors won't do business with you when your business isn't worth the effort of verifying you. That doesn't mean it's necessarily illegal for the bank, much less the seller of whatever you're buying, to do business with you. But you can't do the perfectly legal transaction if the customer has no way of paying.

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

#224

Post by pbhjpbhj »

ddebernardy wrote: post #193
greglindahl wrote: post #153

Earlier quoted context omitted.

You don't "need" to offer these guarantees. Personally, I'm happy with paper ballots.

Me too. In large part because paper ballots offer these guarantees. But there's a swath of elections and voting going on (in universities, within political parties or unions, etc., but also official elections in parts of the US or in Estonia) that that use e-voting to cut costs or improve participation. They currently lack these guarantees yet those elected end up in charge of millions in budget.

Picking on one point here:

In your electoral system is there a way to verify your vote was counted. Like a stamped voting slip?

I've thought that a good way in an electronic system would be to give you a vote code (maybe a single letter), and a verification code. You'd enter the verification code, the screen would show all candidates/voting options with a "vote code" and you'd verify by finding your vote code matched. The vote code prevents coercion.

Such system doesn't show your vote is included in the result, but shows the system has record of the vote you cast.

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

#225

Post by Barrin92 »

naasking wrote: post #191
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…

> Guys, this works. It's literally how the world works. There's no question that it works. The question that blockchain-like solutions seek to explore, is whether it works better than a technological solution which can eliminate most of the layers you describe. The world is deeply complex, more complex than any single human can understand. If operating in the world can be simplified to the point of being understandab…

But you're not making anything simpler. There is a reason we have lawyers and courts and insurers and whatever middle men are supposed to be cut out, and that is because contracts, and insurance and law are hard, and nobody wants to write 200 smart contracts a day where one mistake empties your wallet in unrecoverable ways.

These institutions exist because division of labour and trusted institutions are a way to handle complexity and to pool risk. If my lawyer screws up or the court screws up there's an institution I can go to. If I make an error in my smart contract because I work eight hours a day and know nothing about contracts then I'm just royally screwed.

You're not making things simpler by eliminating the institutions whose professional job it is to manage risk and trust and handing it back to everyone.

That is why all systems are centralised to some degree, because it's how we manage complexity. That's also why not everyone forks the entire blockchain and piece by piece crypto transactions move onto managed exchanges, and it's why we all work in companies where people have property rights and hierarchies rather than just run around as individuals sub-contracting each other 50 times per day.

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

#226

Post by scoopitywoop »

dragontamer wrote: post #221
sgeisler wrote: post #206

Earlier quoted context omitted.

> If you put 20 BTC into an exchange (in promise for 550 ETH or whatever), but the exchange goes bankrupt... you lose both your BTC and your ETH. You have to go through the courts to try to get your money back. That's actually solvable with atomic swaps [1]. They anable you to trustlessly exchange crypto currencies at an agreed on price. [1] https://en.bitcoin.it/wiki/Atomic_swap

Nifty trick! Unfortunately, it doesn't generalize to BTC / USD (or other fiat currency), which is probably the bigger exchange that most people use. ---------- The second issue is that BTC / ETH prices can change dramatically. Set your timer too long: and your opponent can use time to take advantage of the trade... only executing it when the BTC/ETH exchange floats towards their favor. Because BTC / ETH prices vary d…

This is what stablecoins are for, such as USDT, TUSD, etc.

I'm sure you'll bring up the point that you still need exchanges for USD -> stablecoin. You can alternatively use crypto ATMs, or trade with someone you know.

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

#227

Post by pjc50 »

aboodman wrote: post #126
pjc50 wrote: post #110

Earlier quoted context omitted.

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.

Which classes of dispute does blockchain make impossible? It can attest that a key signed a particular transaction, but that doesn't necessarily mean it was done by or intended by the owner. General purpose computer security just isn't quite good enough for that, that's why smartcards and secure enclaves exists.

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

#228

Post by SilasX »

snowwrestler wrote: post #218
SilasX wrote: post #44

Earlier quoted context omitted.

Really? You (seriously plan to resort to) go(ing) to court over every contractual dispute? Even $5? HN Bandwagon, Monday: "Don't you understand that courts exist to make it so no one can break a contract without penalty?" HN Bandwagon, Tuesday: "Lol don't go to court over $5, that's stupid."

From the comment you're replying to: > there's a multi-layered system in place to resolve disputes, starting from the customer support call center, reviews, bad publicity, and going all the way to the courts. So no, I don't think the plan is to go to court over every contractual dispute.

Did you see how that part was marked as an edit? It was added after my reply.

Furthermore, it reinforced my original point that it's really not all that reassuring that the (slow-moving) legal system will enforce contracts, because it's an expensive process, and you need other protocols on top of that in order for trade with untrusted parties to work.

As of the edit, the parent seems to agree. So maybe my comment wasn't as stupid as you're implying, and maybe there's a reason that commenters mark the late changes to their posts as edits.

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

#229

Post by scoopitywoop »

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…

> when you can't use contracts and the legal system to ensure trust between the parties

what about transmitting value over the internet without relying on an external system? You know, like digital cash (but actually cash, not airline points that require a central actor to approve the transaction).

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

#230

Post by [deleted] »

nickpsecurity wrote: post #210
shepardrtc wrote: post #197

Earlier quoted context omitted.

> All the big players have got real-time feeds they're sharing with each other to keep track of who's made what transactions, and they're constantly reconciling them against each other, to make sure that everyone's looking at the same picture. That is exactly what blockchain is. It is literally doing that. > None of this is strictly necessary, because there is a central source of truth that you can rely on. But who i…

"That is exactly what blockchain is. It is literally doing that." It isn't: it's a chain of hashes with signature. Those predate blockchains that do things like wasteful mining. An example was Surety's timestamping service. A hashchain using standard primitives is way less wasteful, supports higher transaction volume, is cheaper, and can take advantage of hardware acceleration in client and server devices. One of rea…

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