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

#281

Post by snowwrestler » Fri, Feb 22, 2019, 9:55 PM UTC

will_brown wrote: post #274

snowwrestler wrote: post #214

Earlier quoted context omitted.

The problem with Dole was that there was not one single central ledger of stock transactions that was being kept updated in real time. Would blockchain have solved that? It's centralized in that there is one ledger. But natively resolving and publishing transactions at high speed is not a feature of blockchains yet. A centrally managed ledger without distributed calculations would be way faster. Also worth noting tha…

>A centrally managed ledger without distributed calculations would be way faster. Right which will never occur in the current system because each middleman needs to justify their place to keep their piece of the pie. Like I said it’s a system with tons of middlemen (who don’t add value) who could be ripped out and replaced with Blockchain. Dole was “ultimately resolved” only after complex class action litigation that…

If we can imagine "ripping out" the middlemen and replacing them with blockchain, then we can also imagine ripping out the middlemen and replacing them with any other centralized ledger.

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

#282

Post by arcticbull » Fri, Feb 22, 2019, 9:55 PM UTC

oarabbus_ wrote: post #156

gregschlom wrote: post #80

Earlier quoted context omitted.

I'm not saying: you don't need the blockchain because you shouldn't be doing bad things. I'm saying: you need the blockchain if and only if you are doing things that are illegal in your country. It's a decision criteria for when you need the blockchain. I'm making no moral judgement. And there are very good reasons to want to do things that your government deems illegal (for example, donating to a political organizat…

>I'm saying: you need the blockchain if and only if you are doing things that are illegal in your country. It's a decision criteria for when you need the blockchain. This is, at face value, simply false. I want to send $5 to a poor African family. I'll even relax my criteria - I'm willing to wait _up to 3 business days_ for this African family to receive my $5. I live in California. Could you please point me towards…

You want to send five DOLLARS to a poor African family. Here's a few questions.

(1) Since the African nation in question doesn't accept either dollars or bitcoin, you're going to have to convert the currency one way or another. Buying BTC is not cheap, you pay ~1%+ to Coinbase, so that's 5 cents right there. Transaction fees on Bitcoin are $0.36 right now. Then you're going to have to convert it to something they can spend in their local country, and good luck to you. That second transaction is going to cost them another $0.36, and so is any other transaction they may be wanting to spend the BTC in. If they're making purchases of just $1, thats a THIRTY SIX PERCENT transaction fee.

(2) Does this poor African family have a phone, laptop or computer, and access to get to their nearest BTC exchange/ATM? Are there any in your country in question?

(3) WU is $1. Other services exist and are priced competitively. Have you looked into M-PESA?

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

#283

Post by arcticbull » Fri, Feb 22, 2019, 9:56 PM UTC

skilgarriff wrote: post #213

the_gastropod wrote: post #202

Earlier quoted context omitted.

Transferwise is both faster and cheaper than sending Bitcoin. And it doesn't require your poor African family to sign up for a probably poorly run poor African Bitcoin exchange.

You are assuming they can't pay for services in Bitcoin - which they can. There are a number of things that currently accept Bitcoin, and that number is only growing imo.

>> number is only growing IMO

Please cite sources to justify your opinion because every graph I've seen has accepance going down.

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

#284

Post by bunderbunder » Fri, Feb 22, 2019, 9:59 PM UTC

tastyfreeze wrote: post #257

bunderbunder wrote: post #181

Earlier quoted context omitted.

I can't speak to banks, but I have some personal experience with this sort of thing in the case of trading. I'm guessing it's at least somewhat similar to how it works among banks. 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 pictur…

And what if a lowly peasant like me wants to synchronize with the big trading firms' feeds? Do I need to sell a kidney to play on the same field? Blockchain does exactly this without everybody having to sort out discrepancies. Everybody getting the same picture is built in. Just the possibility of there being discrepancies in the ledgers you described would have me looking for a better way. I would much rather have t…

> And what if a lowly peasant like me wants to synchronize with the big trading firms' feeds?

It's all pretty highly regulated, and you'd need a license before you're allowed to even think about hooking directly into an exchange. If you've got lowly peasant money to work with, it would be much more cost effective to go through the retail channels, just like every other person who isn't a corporation.

> Blockchain does exactly this without everybody having to sort out discrepancies.

No, it doesn't. The nature of the discrepancies that cause trouble in practice, and the ways they sneak in, are simply not things you can solve by chaining hashes and throwing a proof-of-work algorithm into the mix. The very suggestion puts you one blue suit and some pointy hair away from being able to star in a Dilbert strip about trying to use buzzwords to solve problems you don't understand.

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

#285

Post by Slartie » Fri, Feb 22, 2019, 9:59 PM UTC

skilgarriff wrote: post #97

gregschlom wrote: post #87

Earlier quoted context omitted.

While at the same time increasing the collective cost for everybody else? (ie: wasting energy).

Is it wasting though? Do you consider vaults a waste? Do you consider 2-3% CC fees a waste? We already have costs built into the current system (e.g. cc fees to make up for fraud, security systems around protecting gold + cash). Electricity is just the cost of that specific system - I think calling it a waste is not necessarily justified.

2-3% CC fees are a waste. But you don't need blockchains to fix that. You need someone to legislatively force the CC companies to stop playing the cashback bullshit game, which is the real cost driver (much more than fraud) as it funnels money from cash and debit card users to high-reward CC users, while burning a lot of it on the way for managing all of that overhead that is of no help at all when it comes to making financial transactions.

It happens to be that the EU is such a "someone". In EU countries, CC interchange fees are limited to 0,3%, debit fees to 0,2%, effectively resulting in much cheaper rates to be paid by merchants (whether big or small) for card acceptance.

Thoughtful legislation and an effective, fair and trusted executive branch, both with the necessary checks and balances, trump any blockchain, at least as long as we are talking about legal transactions.

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

#286

Post by gnopgnip » Fri, Feb 22, 2019, 10:00 PM UTC

skilgarriff wrote: post #106

gregschlom wrote: post #80

Earlier quoted context omitted.

I'm not saying: you don't need the blockchain because you shouldn't be doing bad things. I'm saying: you need the blockchain if and only if you are doing things that are illegal in your country. It's a decision criteria for when you need the blockchain. I'm making no moral judgement. And there are very good reasons to want to do things that your government deems illegal (for example, donating to a political organizat…

I can send 1 bitcoin from myself living in Minnesota to my friend living in Japan for the equivalent of $0.46. That's an improvement over the existing system. I don't have to trust anyone in between to get my money to him. How would that be as possible and as "trustless" without blockchain?

The real cost is much higher than that, because you are not paid in bitcoin in the US, and your friend in Japan cannot spend bitcoin to buy food or pay rent. You also have to trust multiple entities along the way.

You can send money to Japan using moneygram, or transferwise, or a number of other services for a lower all in cost.

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

#287

Post by arcticbull » Fri, Feb 22, 2019, 10:04 PM UTC

oarabbus_ wrote: post #186

nsxwolf wrote: post #51

Earlier quoted context omitted.

Credit card companies have a good system for handling $5 disputes. They write them off.

And either the merchant or the company gets stuck with the $5 dispute, while the guilty party enjoys a free $5. Nice system!

That's absolutely not how the chargeback system works. Further, the blockchain system is entirely irreversible so $5 or $500,000 once you get scammed gone is gone and you have zero recourse. Nice system.

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

#288

Post by roenxi » Fri, Feb 22, 2019, 10:07 PM UTC

skilgarriff wrote: post #106

gregschlom wrote: post #80

Earlier quoted context omitted.

I'm not saying: you don't need the blockchain because you shouldn't be doing bad things. I'm saying: you need the blockchain if and only if you are doing things that are illegal in your country. It's a decision criteria for when you need the blockchain. I'm making no moral judgement. And there are very good reasons to want to do things that your government deems illegal (for example, donating to a political organizat…

I can send 1 bitcoin from myself living in Minnesota to my friend living in Japan for the equivalent of $0.46. That's an improvement over the existing system. I don't have to trust anyone in between to get my money to him. How would that be as possible and as "trustless" without blockchain?

The $0.46 figure is deceiving though; at the moment the cost of running the blockchain is being paid for by the 4% inflation rate. That cost is being masked by the high volatility and speculative forces controlling the bitcoin price, so you aren't really paying it.

At some point, miners aren't going to be paying for themselves by inflating the monetary supply, and then the cost of what they are doing is going to rise to be more than a centralised database tracking everything. Because the mining process for bitcoin is so expensive relative to updating a database controlled by trusted entities, ie, banks. And that will manifest in transaction fees.

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

#289

Post by arcticbull » Fri, Feb 22, 2019, 10:09 PM UTC

skilgarriff wrote: post #97

gregschlom wrote: post #87

Earlier quoted context omitted.

While at the same time increasing the collective cost for everybody else? (ie: wasting energy).

Is it wasting though? Do you consider vaults a waste? Do you consider 2-3% CC fees a waste? We already have costs built into the current system (e.g. cc fees to make up for fraud, security systems around protecting gold + cash). Electricity is just the cost of that specific system - I think calling it a waste is not necessarily justified.

Credit card fees are 2-3% for a reason -- you can get 2% cash back as a customer with a no-annual-fee card for instance. Then there's the fact that credit cards are loans, and there's a cost to lending. Finally, credit cards come with protections (chargebacks), guarantees, additional warranties and all sort of other customer-friendly services that people want. And obviously are willing to pay 2-3% for.

In the EU where people don't want the system to work like that interchange fees were capped in 2015 at 0.2% for debit and 0.3% for credit [1]. If that's what you want, there's a proven model for establishing it. In Australia it's capped at 0.88% for credit and the greater of 16.5c or 0.22% on debit [2].

Did you know Bitcoin alone ALREADY used 0.5% of world electricity at the end of 2018, even though nobody really uses it? [3] It's like we're all paying a 0.5% surcharge on top of everything we do, which is double the price of EU interchange. Just to support some ancap pyramid scheme that people agree solves largely 1 class of problem: payments for illegal goods and services, while pretending to solve all the worlds problems, just poorly.

[1] https://www.adyen.com/blog/all-you-need-to-know-about-the-eu...

[2] https://www.adyen.com/blog/card-processing-in-australia-just...

[3] https://www.sciencedaily.com/releases/2018/05/180516131236.h...

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

#290

Post by will_brown » Fri, Feb 22, 2019, 10:11 PM UTC

snowwrestler wrote: post #281

will_brown wrote: post #274

Earlier quoted context omitted.

>A centrally managed ledger without distributed calculations would be way faster. Right which will never occur in the current system because each middleman needs to justify their place to keep their piece of the pie. Like I said it’s a system with tons of middlemen (who don’t add value) who could be ripped out and replaced with Blockchain. Dole was “ultimately resolved” only after complex class action litigation that…

If we can imagine "ripping out" the middlemen and replacing them with blockchain, then we can also imagine ripping out the middlemen and replacing them with any other centralized ledger.

Umm...can we? If you rip out the existing middlemen where does the “centralized ledger” come from but another middle man.