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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

#11

Post by natrius »

TheDong wrote: post #7
natrius wrote: post #3

The "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.…

Blockchains can be built without 10 minute block times or wasteful proof-of-work for mining. You can just pick people the users trust to make blocks or use proof-of-stake mining.

Blockchains are harder to break than most corporate databases.

Reading up on Ethereum will answer most of your questions.

Re: Bitcoin's Shared Ledger Technology: Money's New Operating System

#12

Post by kolbe »

natrius wrote: post #5
kolbe wrote: post #4

One 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.

People pay Nasdaq because they have to pay someone. Only SEC-registered exchanges and ATSs can confirm a transaction in publicly listed equities, then the DTC actually transfers ownership. And the amount you pay to transact stock at one of these places is the best deal you could find to transact virtually anything. I can't think of any popular good whose intermediary takes as little as exchanges like Nasdaq take (e.g. to buy $62,000 of Google stock, Nasdaq takes like 50 cents).

> 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.

When Nasdaq runs their own software, it's still free, and they pay zero margin over the cost of bandwidth, energy and storage. If you don't trust Nasdaq specifically, then you can use one of the other myriad exchanges and ATSs to trade on. And the existence of all of these trading venues have already pushed margins to an extremely competitive rate.

Re: Bitcoin's Shared Ledger Technology: Money's New Operating System

#13

Post by kordless »

Ologn wrote: post #6

For 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.…

Making a value immutable instantiates trust in a system. Systems that have trust in them are, historically, worth more than untrustworthy systems.

Blamers, like you, spend most of their time trying to convince others what to do based on biased arguments. Biases are cheap hacks/workarounds to establishing human trust and have no value to anyone, even if they did listen to you.

Re: Bitcoin's Shared Ledger Technology: Money's New Operating System

#14

Post by jzwinck »

lsc wrote: post #8
natrius wrote: post #5

Earlier quoted context omitted.

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 technic…

> How much of the value people see in Nasdaq is the technical systems that execute the trades?

Quite a bit. They do a good-sized business selling their technical systems to other markets (mostly outside the US). An example from the opposite side of the globe: http://www.world-exchanges.org/news-views/bursa-malaysia-sel... .

Of course, NASDAQ has plenty of other assets, such as its ownership of not just one but three of the national exchange registrations (it bought BX and PHLX). Not to mention all the US companies which are listed on NASDAQ (there may be a bunch of places to trade them, but NASDAQ is "home" to Apple, Facebook, etc.).

Re: Bitcoin's Shared Ledger Technology: Money's New Operating System

#15

Post by vfdfv »

Ologn wrote: post #6

For 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.…

> Bernie Sanders scam

Bernie Madoff? Different guy.

Re: Bitcoin's Shared Ledger Technology: Money's New Operating System

#16

Post by lsc »

jzwinck wrote: post #14
lsc wrote: post #8

Earlier quoted context omitted.

> 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 technic…

> How much of the value people see in Nasdaq is the technical systems that execute the trades? Quite a bit. They do a good-sized business selling their technical systems to other markets (mostly outside the US). An example from the opposite side of the globe: http://www.world-exchanges.org/news-views/bursa-malaysia-sel... . Of course, NASDAQ has plenty of other assets, such as its ownership of not just one but three…

>They do a good-sized business selling their technical systems to other markets

that's a lot like saying that because IBM and HP, ITC and TCS do a lot of contracting of the outsourced worker variety, their value is in the technical people they hire.

The value is in the connections, the name, the fact that large companies will pay a lot for my time, if they are buying that time from a company like IBM or HP, ITC or TCS, while they won't pay anything for the exact same time sold direct through prgmr.com.

The value is that relationship and reputation. The value is that if you hire those companies and things go south, your boss won't blame you for taking a risk on an unknown brand.

Re: Bitcoin's Shared Ledger Technology: Money's New Operating System

#17

Post by joeyspn »

Ologn wrote: post #6

For 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.…

> 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.

The answer is simple:

Because there's enough number of people that agrees to use it as commodity money and medium of exchange.

Re: Bitcoin's Shared Ledger Technology: Money's New Operating System

#18

Post by TheDong »

natrius wrote: post #11
TheDong wrote: post #7

Earlier quoted context omitted.

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.…

Blockchains can be built without 10 minute block times or wasteful proof-of-work for mining. You can just pick people the users trust to make blocks or use proof-of-stake mining. Blockchains are harder to break than most corporate databases. Reading up on Ethereum will answer most of your questions.

If your "blockchain" doesn't have a proof-of-work beyond trusted people, that's hardly different than a company publishing their database full of signed transactions.

I'm aware that 10 minutes is a configurable number, but there's a reason it's as high as it is.

I'm also familiar with Ethereum, and I still don't see it as better than a company-run database for anything like uber/airbnb/etc with a central company behind it.

> Blockchains are harder to break than most corporate databases.

Strange, Google and Amazon and many other sites have done just fine with databases (though there are exceptions like Ashley Madison etc) while there have already been real double-spends with the bitcoin Blockchain and numerous other issues.

Proportional to usage, I'd say bitcoin has proven to be terrible compared to databases.

So yeah, citation needed.

Additionally, if you change your mining to be "people users trust", your security is now equivalent to corporate database security -- a lead pipe to the head to get a password in.

Re: Bitcoin's Shared Ledger Technology: Money's New Operating System

#19

Post by TheDong »

natrius wrote: post #5
kolbe wrote: post #4

One 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…

> only charge a tiny margin over the costs of bandwidth, energy and storage.

The margin charged in terms of energy is massive. The bitcoin network can't handle many TPS because each transaction needs significant computational work to secure it.

On the other hand, if I trust my database I can do the tiny work to write it, make sure I've got consensus among my DB nodes it's written, and be done with it.

I'd say that bitcoin so far has neither been reliable nor safe. Hell, if you look at MtGox alone, I bet a higher percent of bitcoin users were impacted than the total number of USD users who have experienced any kind of fraud.

In addition, there was the Nth "stress test" last week which crashed nodes and delayed transactions for hours... yeah, great tiny margin and reliability...

Re: Bitcoin's Shared Ledger Technology: Money's New Operating System

#20

Post by Ologn »

joeyspn wrote: post #17
Ologn wrote: post #6

For 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.…

> 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. The answer is simple: Because there's enough number of people that agrees to use it as commodity money and medium of exchange.

That's a tautological answer. When a Bitcoin was worth over 4 times its present value a number of months ago, the same answer could be given - "it's worth that because people will pay for that".

I can give a rational answer for why commodities like apples have value, or a gallon of gasoline, or a table, or a shirt. Even houses in 2007 real estate development projects in the outskirts of Sacramento have a rational (if at one time overblown) value. There is no rational explanation why a hashed number called a Bitcoin has any value. A bar of gold had value 4000 years ago, it has value today, and if the concept of commodity value exists 4000 years from now, it will have value then.

As I said, I pointed all of this out on HN before Bitcoins lost half of their value. I'm quite confident they will be halved again from their present value, and eventually hit $0. They're worthless hashes. Your explanation for why they have value would not have me comfortable as someone holding onto such commodities. Warren Buffett and Charlie ("Bitcoins are rat poison") Munger agree with me.

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