Bitcoin's Shared Ledger Technology: Money's New Operating System
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Re: Bitcoin's Shared Ledger Technology: Money's New Operating System
#2It's unfortunate this is basically (another) piece on the funding that chain.com recently landed. The article itself has about zip in the way of new content related to blockchain technologies.
Re: Bitcoin's Shared Ledger Technology: Money's New Operating System
#3The "shared ledger" analogy for blockchains is limiting. If you want to understand the potential applications, you should stop using it in your thinking.
Blockchains give us publicly writable databases. Such a thing never existed before. A blockchain has one or more programs that define what can be written to the public database. Bitcoin's program is mostly about distributing the 21 million coins to miners and preventing users from sending more bitcoins than they own.
A blockchain's program can manage any data, though. There are so many human interactions that are governed by private databases—that used to be the only way to do it. The sea change you are about to witness is those interactions transitioning to public databases. Everything will be rebuilt, especially where companies are charging for those interactions, like Uber and Airbnb.
Applications will be able to read from and write to all of the public databases, and they will all use the same cryptographic identities for seamless integration. Every application can trivially have payments built in. Or ride hailing. Or package shipping.
Network effects are public goods, and we now have the technology to provide them in a public manner. Go build something.
Re: Bitcoin's Shared Ledger Technology: Money's New Operating System
#4One of two things: I either do not understand Wall Street's obsession with blockchainesque technologies, or Wall Street's obsession with it is totally emblematic of their buzzword-obsessed technology-ignorant groupthink that fried the tech industry in the late 90's.
I'm seeing companies like this pop up all over the place. Blythe Masters's new venture[1], which made the cover of this month's Bloomberg Business, seems to be the pinnacle.
Bitcoin technologies solved some very important problems in the creation of currencies: double spending, decentralization, cost distribution, &c. These are not problems that need to be solved in securities trading. One company running on one platform doesn't have a double spendng problem. Decentralization is irrelevant. And cost is no issue.
Yes, the securities trading industry is wrought with disgusting inefficiencies, and technology should play a central role in becoming more efficient, but I do not see how shoehorning in blockchain tech helps in any way. If keeping track of ownership and transfer of securities is such a cumbersome process, make a company that keeps track of ownership and transfer of securities. Use computers. Use web interfaces. Make transactions publicly viewable. Create robust contract definitions. Remove paper trails. Hire programmers. Pay AWS. But I have no clue how they think blockchain technology adds to any solution here.
I don't know. Someone please explain.
[1] http://www.bloomberg.com/news/features/2015-09-01/blythe-mas...
Re: Bitcoin's Shared Ledger Technology: Money's New Operating System
#5One of two things: I either do not understand Wall Street's obsession with blockchainesque technologies, or Wall Street's obsession with it is totally emblematic of their buzzword-obsessed technology-ignorant groupthink that fried the tech industry in the late 90's. I'm seeing companies like this pop up all over the place. Blythe Masters's new venture[1], which made the cover of this month's Bloomberg Business, seems…
People pay Nasdaq to make their trades reliable and safe.
Reliable and safe trades can now be done by a swarm of computers running free software, and they only charge a tiny margin over the costs of bandwidth, energy and storage.
How is Wall Street supposed to make money now? They're all trying to find out, and they all need to be the first. Financial profits will be much smaller, and the slow movers will have a smaller slice of a smaller pie.
Re: Bitcoin's Shared Ledger Technology: Money's New Operating System
#6For all the bubble talk...if there is any sign of a bubble, it is Bitcoin. Bitcoins are completely worthless, they have no value. The price action shows it - they are currently bouncing between $230 and $235, six months ago that was $260, and one year ago it was $400. It is headed to $0.
The smell of scam is all over it. The inventor hides his identity. Bitcoin companies are awash in scams and criminal charges - Mt. Gox, Butterfly Labs etc.
The Bitcoin hype machine can't answer one simple question - why do Bitcoins have any value? They can't give a rational answer to this. You can get a Florida real estate swamp land sales shop, or MLM organization running for a little while, but eventually it folds.
I'm glad to see that two people who have had a long, long history of observing financial markets agree with me - Warren Buffett and Charlie Munger. They've been around long enough to see every snake oil scam under the planet. That's why Munger says Bitcoins are "rat poison" and Buffett expressed similar sentiments.
Incidentally, I knew this when Bitcoin was $460 and even mentioned it on HN ( https://news.ycombinator.com/item?id=6753545 ). Those who listened to me saved themselves from losing half their investment. Soon enough I will be pointing to this post when it halves again to $115-$118.
Re: Bitcoin's Shared Ledger Technology: Money's New Operating System
#7The "shared ledger" analogy for blockchains is limiting. If you want to understand the potential applications, you should stop using it in your thinking. Blockchains give us publicly writable databases . Such a thing never existed before. A blockchain has one or more programs that define what can be written to the public database. Bitcoin's program is mostly about distributing the 21 million coins to miners and preve…
It gives you a publicly writable database that is only secured by people desiring to throw away large sums of computation in an environmentally unfriendly manner.
Writes are also slow (10 mins...) and requires relatively high bandwidth and space to be used securely.
There's no reason that AirBnb or Uber would want their database to be public, slower, and broken as soon as people lose interest in splitting up mining.
In fact, the more valuable stuff goes on a block chain, the more people will want to break it in order to be able to manipulate that information.
It's neat how the generals problem can work when the blockchain is for money. If it weren't for money, then why would people have an incentive to throw computation at it? To secure their AirBnb trip? If it's only AirBnb that has such an incentive, then suddenly it's a massively expensive enterprise to do so compared to running a normal distributed database that they control read/writes to.
Re: Bitcoin's Shared Ledger Technology: Money's New Operating System
#8One of two things: I either do not understand Wall Street's obsession with blockchainesque technologies, or Wall Street's obsession with it is totally emblematic of their buzzword-obsessed technology-ignorant groupthink that fried the tech industry in the late 90's. I'm seeing companies like this pop up all over the place. Blythe Masters's new venture[1], which made the cover of this month's Bloomberg Business, seems…
People pay Nasdaq to make their trades reliable and safe. Reliable and safe trades can now be done by a swarm of computers running free software, and they only charge a tiny margin over the costs of bandwidth, energy and storage. How is Wall Street supposed to make money now? They're all trying to find out, and they all need to be the first. Financial profits will be much smaller, and the slow movers will have a smal…
> People pay Nasdaq to make their trades reliable and safe.
How much of the value people see in Nasdaq is the technical systems that execute the trades?
I'd argue that the technical systems that reliably execute trades are important; Nasdaq would fail if they didn't work reliably, but having a reliable system to execute trades doesn't make it easy to setup a competitor to the Nasdaq, you know what I mean? The technical systems are necessary but not sufficient; the rest of what you need to set up a stock exchange is absolutely huge.
I'll make the analogy of e-bay. I think most people would agree with my assertion that the technical challenges of building a competitor to ebay are trivial when compared with the effort that would be required to get the buyers and sellers to leave ebay and join your new platform.
Re: Bitcoin's Shared Ledger Technology: Money's New Operating System
#9One of two things: I either do not understand Wall Street's obsession with blockchainesque technologies, or Wall Street's obsession with it is totally emblematic of their buzzword-obsessed technology-ignorant groupthink that fried the tech industry in the late 90's. I'm seeing companies like this pop up all over the place. Blythe Masters's new venture[1], which made the cover of this month's Bloomberg Business, seems…
Me too mentality; Bloomberg journos have been extra gullible with regard to BTC. One of them actually had his coins stolen because he showed a QRcode on tv. Like every other journalist these days they'll just print whatever the PR agency sent them.
Re: Bitcoin's Shared Ledger Technology: Money's New Operating System
#10One of two things: I either do not understand Wall Street's obsession with blockchainesque technologies, or Wall Street's obsession with it is totally emblematic of their buzzword-obsessed technology-ignorant groupthink that fried the tech industry in the late 90's. I'm seeing companies like this pop up all over the place. Blythe Masters's new venture[1], which made the cover of this month's Bloomberg Business, seems…
People pay Nasdaq to make their trades reliable and safe. Reliable and safe trades can now be done by a swarm of computers running free software, and they only charge a tiny margin over the costs of bandwidth, energy and storage. How is Wall Street supposed to make money now? They're all trying to find out, and they all need to be the first. Financial profits will be much smaller, and the slow movers will have a smal…
> Reliable and safe trades can now be done by a swarm of computers running free software, and they only charge a tiny margin over the costs of bandwidth, energy and storage.
Do you have an example of such a market today?
It's actually not NASDAQ that makes trades reliable and safe. Sure, they're involved in many trades, but the more relevant entity in this context might be DTCC [1]. The fact that almost no one here will have ever heard of DTCC before may help illustrate the size of the gap in understanding between the US securities markets today and "Let's use the blockchain to trade stocks for free."
[1] https://en.wikipedia.org/wiki/Depository_Trust_%26_Clearing_...