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The Blockchain Bubble Will Pop, What Next?

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Re: The Blockchain Bubble Will Pop, What Next?

#121

Post by malloryerik »

m-i-l wrote: post #7

I used to think that the blockchain bubble was like the dotcom bubble, in that the core technology was actually genuinely transformative, so that even after the bubble burst and all the over-valued companies went bust, the technology would remain and continue change our lives. However, I must admit I'm starting to have my doubts now. It was 10 years in to the dotcom era that the dotcom bubble burst, and by that time…

Maybe we should consider that the blockchain's killer app is the truth.

This is the case with bitcoin, since the purpose of the blockchain is to be, for example, trustless, protecting you from someone whom you don't trust lying about your bitcoin transactions. Bitcoin will show you the truth about those transactions. The blockchain also tries to protect against fraudulent double spends and do on, and this like all fraud is also lying, untruth.

Likewise, the economist Hernando de Soto Polar's work on property rights and "dead capital" has led to his creation of a blockchain app to allow people in unstable political environments to prove their property claims. If the old data is destroyed in the flames of the next revolution or hacked by your neighbor bribing an official, it doesn't matter as much because you have your claims on a global registry, and that global registry contains the truth.

And maybe when machine learning can allow bad actors to create false media, change what a politician has said in a video, perfectly alter or even create fictional recordings of conversations in order to deceive, the blockchain may provide some shelter for the truth.

Edit: Of course there is a caveat: bad data in, bad data out.

Re: The Blockchain Bubble Will Pop, What Next?

#122

Post by mythrwy »

codebje wrote: post #118
mike_hearn wrote: post #107

Earlier quoted context omitted.

One end goal of blockchains is indeed that they become the system of record, and that legal agreements are English translations of what the code says rather than the other way around. That might sound scary, but I'd point out a few things: 1. That future is still a long time away. The legal system is very conservative. 2. These systems don't have to be perfect, just better than what we have today. Yes, I certainly wo…

Blockchains aren't better than what we have today for property. At least the victim in your deed fraud article was able to recover their property, albeit at significant cost. How are people going recovering funds from the Mt. Gox theft? Let alone the oracle problem, people keeping a digital asset secure and safe for decades, the chance of the software being 100% bug free first time, the total lack of incentive to run…

Just as many blockchains are actually much less private than traditional financial tools, blockchains can actually make theft much more difficult than traditional financial tools.

Re: The Blockchain Bubble Will Pop, What Next?

#123

Post by sudoscript »

sp527 wrote: post #112
EthanHeilman wrote: post #77

Earlier quoted context omitted.

>The biggest problem is that blockchains are inherently not scalable. Blockchains can be made extremely scalable. You can break the problem into transaction volume (how many transactions can be processed on average per sec) and transaction velocity (how fast a particular transaction can be approved). Transaction volume scalability results almost entirely from checking that the rules of the system have been followed i…

> The thing that keeps me up at night is not scalability, it is user adoption beyond the use cases which Bitcoin already successfully fulfills. This felt like the canary in the coal mine that the anarchist crowd has wholesale ignored for years. Joe and Jane LIKE that the dollar is backed by the full faith and credit of USG. From the POV of the average person, crypto is fairy dust next to a currency endorsed by what i…

What do Joe and Jane think about the mountain of debt they’ve had to pile up? What do they think about the bankers who decide what happens to their money, and the politicians who decided to bail them out? Do they really have abs much faith in USG as you say? By the last election, largely seen as a middle finger to governing elites, I’d say probably not.

Yes, they like the convenience of the dollar but they are also suffering from the consequences of fiat money. You might say they’re too stupid to understand that, but there are many Joes and Janes who understand gold and may even want to go back to a gold standard. If they can understand gold, they can understand the value of Bitcoin.

Re: The Blockchain Bubble Will Pop, What Next?

#124

Post by jwhite »

woodman wrote: post #85
m-i-l wrote: post #7

I used to think that the blockchain bubble was like the dotcom bubble, in that the core technology was actually genuinely transformative, so that even after the bubble burst and all the over-valued companies went bust, the technology would remain and continue change our lives. However, I must admit I'm starting to have my doubts now. It was 10 years in to the dotcom era that the dotcom bubble burst, and by that time…

First: the dotcom bubble burst five years after it began, and the technological advancements didn't see "mass adoption" - because they were not consumer facing. I get the feeling that you're thinking that pets.com was the dotcom bubble... the bubble was centered around telecom technology - not retail websites. The bubble is fairly disconnected from what one would describe as the success of the internet today - web 2.…

On your first point: I seem to remember plenty of companies that failed that were not telecom. In fact when I went looking just now I found a bunch of listicles about retail startups that failed.

The telecom bubble and crash was almost a side-effect. The telco executives saw the web taking off and used it to justify wildly over-inflated projections of traffic demand growth, and then began building out debt-financed networks to meet it. When the traffic didn't materialize (partly because the dotcom bubble burst), they had a bunch of overcapacity not generating revenue to service the debt that financed it, and that killed them.

Re: The Blockchain Bubble Will Pop, What Next?

#125

Post by sudoscript »

purerandomness wrote: post #105
arisAlexis wrote: post #74

Earlier quoted context omitted.

true. it's not like Governments falsify data, forge evidence and all that. It's crazy to think the world needs zero trust.

How do consensus protocols help here?

Currently we trust information by the source it comes from. It’s an authority-based model.

Consensus shifts that trust from authority figures to others in your group. Bottom-up trust instead of top-down.

Re: The Blockchain Bubble Will Pop, What Next?

#126

Post by craigc »

sp527 wrote: post #112
EthanHeilman wrote: post #77

Earlier quoted context omitted.

>The biggest problem is that blockchains are inherently not scalable. Blockchains can be made extremely scalable. You can break the problem into transaction volume (how many transactions can be processed on average per sec) and transaction velocity (how fast a particular transaction can be approved). Transaction volume scalability results almost entirely from checking that the rules of the system have been followed i…

> The thing that keeps me up at night is not scalability, it is user adoption beyond the use cases which Bitcoin already successfully fulfills. This felt like the canary in the coal mine that the anarchist crowd has wholesale ignored for years. Joe and Jane LIKE that the dollar is backed by the full faith and credit of USG. From the POV of the average person, crypto is fairy dust next to a currency endorsed by what i…

I totally agree with your sentiment, but I will say one thing. If there is some shock in the world economy crypto could be a way out.

Imagine

- A bank run where every bank goes under and it is not possible to easily bail them out

- The government has to increase inflation and we far exceed the 2% target

- The existing financial system gets hacked and records get destroyed

Not saying any of this is likely, but it could happen.

The US dollar has only been backed by nothing since 1971. That is a very short amount of time in the history of the world. You can see that in that same period of time debt has skyrocketed and production output vs. wages have diverged significantly. It would be somewhat presumptuous to assume that the existing system is going to last forever.

That said, it doesn’t mean that crypto currencies are THE answer, but they are a possible answer.

Finally “the most economically stable nation on the planet” is $21 trillion in debt.

I think if something like Bitcoin does end up reaching mass adoption it won’t be because people CHOOSE to use it, it will be because they are FORCED to use it because no one wants to accept dollars anymore.

Re: The Blockchain Bubble Will Pop, What Next?

#127

Post by jancsika »

Max_aaa wrote: post #89
stale2002 wrote: post #48

Earlier quoted context omitted.

I'll give you one. The year is 2010. And I am a normal citizen and I want to donate money to WikiLeaks without the banks colluding to stop my financial transaction, even though nobody has been convicted of a crime. How do you do it? The only way I can think of to do this easily (easily being the key word!) is a cryptocurrency transaction. Banks and credit card companies collude all the time in order to censor financi…

With bitcoin, what would stop governments from passing laws making certain addresses tainted resulting in people that send coins to or receive coins from them to be audited and having to explain why and how they linked to certain causes. What makes you think if bitcoins (or any *coin) becomes the main currency in a country or region, we would not have laws were all addresses would need to be linked to people (or comp…

Given the size of Bitcoin's keyspace, what would you surmise is the cost to a particular cause of "tainting" one of its public keys?

Re: The Blockchain Bubble Will Pop, What Next?

#128

Post by sudoscript »

aaron695 wrote: post #103
DennisP wrote: post #4

I was about to make a snarky comment about sitting next to one idiot on an airplane and coming to a conclusion about a whole field. But then he sort of covered it in the last paragraph: > although the dot-com crash walked back valuations and chastened investors, a mature climate of internet businesses emerged in its wake. Today, technology firms account for 7 of the 10 largest companies in the world. The market didn’…

Yes, it's like the mostly urban legend about tulips, currently the tulip industry is worth billions. All industries will pop (I predict there will be another recession!), the only thing of value is knowing when and by how much.

But what about the Big Pop?

Re: The Blockchain Bubble Will Pop, What Next?

#129

Post by munchbunny »

bepotts wrote: post #17

In all seriousness, what are the advantages Blockchain has over a public SQL database with limited reads and writes that also maintains a public transaction history? Cause when I hear people talk about the problems Blockchains solves (outside of cryptocurrency which is a whole other topic), I don't see what advantages Blockchain has over that. A public SQL database isn't the most "clean" solution, but it'll save ever…

Maybe a different but related question worth asking is: what does a blockchain accomplish that cryptographically signed audit logs in a centralized database don't?

Setting aside the specific technical details, in concept a database of cryptographically signed audit logs and a blockchain aren't so different - blockchain adds decentralization and a trust/truth resolution formula, at the cost of a different set of scalability concerns. So when is that decentralization specifically useful?

Re: The Blockchain Bubble Will Pop, What Next?

#130

Post by freshhawk »

aidanlister wrote: post #23
m-i-l wrote: post #14

Earlier quoted context omitted.

Maybe not government, maybe just humans in general. Decentralisation, blockchain, smart contracts, cryptocurrency, AI and IoT could really start coming into their own further into the future when we start having more autonomous agents performing those little tasks on our behalf, like a smart fridge ordering more milk and interacting with a drone to ensure payment and delivery without having to bother a human. But I'm…

You sound incredulous about this – VCs have a pretty clear business model, funding slow-growing steady businesses is not it.

To be fair, that business model includes obscuring that aspect of the business model as much as possible.
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