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The Non-Innovation of Cryptocurrency

stephendiehl.com

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Re: The Non-Innovation of Cryptocurrency

#51

Post by dave_sullivan »

skohan wrote: post #14
mattdesl wrote: post #9

Blockchains and crypto tech does seem to provide solutions to many challenging problems: distributed ledgers, immutable and decentralized data, ownerless contracts and program execution, secure and decentralized ownership of a digital asset (eg: owning a domain name), programmable free markets, preventing the double spend problem, etc. These may not be problems the author is interested in, but it does not mean the te…

Can you name an example of a tangible use-case where a blockchain has been used to create real value, and is competitive against conventional technologies in the same space? There has been a lot of talk about the potential of blockchain, but so far all I have seen it used for is crime and speculation. Would love to be shown I'm wrong on this.

"This technology is only used by criminals and perverts" is a common refrain that almost always turns out to be wrong. People should relax.

Re: The Non-Innovation of Cryptocurrency

#52

Post by dkshdkjshdk »

skohan wrote: post #14
mattdesl wrote: post #9

Blockchains and crypto tech does seem to provide solutions to many challenging problems: distributed ledgers, immutable and decentralized data, ownerless contracts and program execution, secure and decentralized ownership of a digital asset (eg: owning a domain name), programmable free markets, preventing the double spend problem, etc. These may not be problems the author is interested in, but it does not mean the te…

Can you name an example of a tangible use-case where a blockchain has been used to create real value, and is competitive against conventional technologies in the same space? There has been a lot of talk about the potential of blockchain, but so far all I have seen it used for is crime and speculation. Would love to be shown I'm wrong on this.

I'll bite the bullet and assume that you're asking a legitimate question in good faith:

1) Imagine I have 100 USD and 100 EUR and I want to provide liquidity to a USD-EUR pair to get a cut of exchange fees. Which automated market maker do I need to contact in the space of "conventional financial technologies" to do so?

2) Imagine I have 1 BTC and I want to lend it (in a secure way) to get some return (in BTC). Who should I contact in the space of "conventional financial technologies" to do so?

3) Imagine I want to borrow 100 USD using BTC as collateral. Who should I contact in the space of "conventional financial technologies" to do so?

Do you consider any of the previously-mentioned use-cases to constitute crime and/or speculation? If yes, why?

Re: The Non-Innovation of Cryptocurrency

#53

Post by timkam »

redpiller wrote: post #29
timkam wrote: post #19

Earlier quoted context omitted.

Can you elaborate? I doubt your claim because "how much profit" a business makes is tied to the legal/financial system(s) the business operates in. To me it looks like we have the "object level vs. meta level" fallacy that is so typical for crypto enthusiasts: in the end, what governs our society is not crypto tech (object level), but meta level institutions. And even if these institutions were to agree that, for exa…

Here is an article about our use case: https://jonathangrosdubois.medium.com/how-leasehold-achieves...

Thank you. I took a quick look, and the article at least mentions something along the lines of my "object level vs. meta level" concerns :-)

Re: The Non-Innovation of Cryptocurrency

#54

Post by pgdx »

mattdesl wrote: post #9

Blockchains and crypto tech does seem to provide solutions to many challenging problems: distributed ledgers, immutable and decentralized data, ownerless contracts and program execution, secure and decentralized ownership of a digital asset (eg: owning a domain name), programmable free markets, preventing the double spend problem, etc. These may not be problems the author is interested in, but it does not mean the te…

> eg: owning a domain name

I just want to comment on the only tangible use case you mention.

What happens the day a rogue actor gets ahold of .gov, NSA/CIA/DHS, or Google's/Microsoft's domain and sends it to /dev/null?

The "no central authority" point of Blockchains is too risky.

Ps, saying that Blockchains solve the double spend problem is like saying the iPhone solves the "running-out-of-battery" problem; it comes with a charger. Nowhere else do we have the double spend problem, simply because we have a CA.

Re: The Non-Innovation of Cryptocurrency

#55

Post by keymone »

skohan wrote: post #32
keymone wrote: post #7

> However bitcoin is a technology which did not arise out of an engineering effort directed towards a specific problem or market inefficiency, but instead out of a anarchist political narrative that views democratic control of the money supply and law enforcement as the problem. omg this is painful. democratic control of money supply? no market inefficiencies? does author live in a separate reality? bitcoin is the bi…

I agree that Bitcoin probably has had about as much impact on the financial system as sliced bread.

It’s ok, people like you wondered why would anybody need to speak into a tube with a wire instead of meeting in person, why would anybody send a radio broadcast to nobody in particular, why would anybody send email when post and fax are ubiquitous.

Some just need time to process the upside of new tech.

But please, write down your thoughts and re-read them every couple years.

Re: The Non-Innovation of Cryptocurrency

#56

Post by lordnacho »

keymone wrote: post #7

> However bitcoin is a technology which did not arise out of an engineering effort directed towards a specific problem or market inefficiency, but instead out of a anarchist political narrative that views democratic control of the money supply and law enforcement as the problem. omg this is painful. democratic control of money supply? no market inefficiencies? does author live in a separate reality? bitcoin is the bi…

> bitcoin is the biggest invention in financial world since sliced bread

Puzzling. Is sliced bread a financial invention? The sliced bread thing has always puzzled me every time I've come across it. Is it saying that there's no real added value, or that the added value in convenience is really big?

Re: The Non-Innovation of Cryptocurrency

#57

Post by RandomLensman »

mattdesl wrote: post #9

Blockchains and crypto tech does seem to provide solutions to many challenging problems: distributed ledgers, immutable and decentralized data, ownerless contracts and program execution, secure and decentralized ownership of a digital asset (eg: owning a domain name), programmable free markets, preventing the double spend problem, etc. These may not be problems the author is interested in, but it does not mean the te…

I think for me the disconnect is that in developed financial systems most of these points are not a big issue or not even desirable given current regulation and supervision.

Few examples: (i) immutable data can clash with privacy laws, (ii) double spend is generally not a problem in centralized systems, (iii) distributed ledgers means you don't have full control of your books and records, (iv) ownerless contracts cause problems with KYC/CFT/AML/sanctions, (v) there are still courts and government force that can compel people to do things etc. ...

In order to really use these it would need a sizeable shift on how the financial structure looks like. That might happen but a lot of what I see is just a fast run through the best errors in finance over the last hundred years. For example, I see mispriced contracts because people don't understand forwards, free options being giving away etc., stuff that to me (not a lawyer) looks like ignoring securities laws, ...

I am not totally bearish on some of these ideas and technologies, but right now I think they are used and envisioned too narrowly by trying just to replace things that are often poorly understood. Example: I think the idea of making market making directly investable is great (i.e. not just being shares of an investment bank or similar). There are probably real applications outside of crypto (index components vs ETF maybe). Similarly, for DeFi to really "make it", I think it needs to be able to do unsecured lending.

Re: The Non-Innovation of Cryptocurrency

#58

Post by skohan »

dave_sullivan wrote: post #51
skohan wrote: post #14

Earlier quoted context omitted.

Can you name an example of a tangible use-case where a blockchain has been used to create real value, and is competitive against conventional technologies in the same space? There has been a lot of talk about the potential of blockchain, but so far all I have seen it used for is crime and speculation. Would love to be shown I'm wrong on this.

"This technology is only used by criminals and perverts" is a common refrain that almost always turns out to be wrong. People should relax.

It's an easily falsifiable claim if it is indeed false.

Re: The Non-Innovation of Cryptocurrency

#59

Post by alephu5 »

creshal wrote: post #16
mattdesl wrote: post #9

Blockchains and crypto tech does seem to provide solutions to many challenging problems: distributed ledgers, immutable and decentralized data, ownerless contracts and program execution, secure and decentralized ownership of a digital asset (eg: owning a domain name), programmable free markets, preventing the double spend problem, etc. These may not be problems the author is interested in, but it does not mean the te…

> Blockchains and crypto tech does seem to provide solutions to many challenging problems: distributed ledgers, immutable and decentralized data, ownerless contracts and program execution, secure and decentralized ownership of a digital asset (eg: owning a domain name), programmable free markets, preventing the double spend problem, etc. Emphasis on "seem". These aren't even problems in the practical sense, but rathe…

This. I've read many accounts of people advocating for use of blockchains in industry or government, which mostly boil down to different entities emitting documents in a verifiable way, e.g. for property ownership. As you've said this can be handled using boring PKIs and the like.

Re: The Non-Innovation of Cryptocurrency

#60

Post by skohan »

keymone wrote: post #55
skohan wrote: post #32

Earlier quoted context omitted.

I agree that Bitcoin probably has had about as much impact on the financial system as sliced bread.

It’s ok, people like you wondered why would anybody need to speak into a tube with a wire instead of meeting in person, why would anybody send a radio broadcast to nobody in particular, why would anybody send email when post and fax are ubiquitous. Some just need time to process the upside of new tech. But please, write down your thoughts and re-read them every couple years.

All of the technologies you mentioned gained wide adoption much faster than blockchain has.

> why would anybody need to speak into a tube with a wire instead of meeting in person

I am fairly sure the value proposition of instantaneous vocal communication at a distance was extremely obvious even before the telephone existed.

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