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Why blockchain is not yet working (2018)

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Re: Why blockchain is not yet working (2018)

#121

Post by throw0101a »

nexthash wrote: post #11

I think the #1 reason blockchain doesn't work is very simple - the technology is broken beyond fixability. This article is two years old, but the same variations of these excuses always come up when the crypto ideologues are grilled on why their utopiaic vision hasn't come about, for all of blockchain's existence. Blockchain is awful for most things compared to a centralized or distributed database: it is inefficient…

> https://imgur.com/a/RlUj9Ed

This decision flow chart is Figure 6 of NISTIR 8202, "Blockchain Technology Overview":

* https://csrc.nist.gov/publications/detail/nistir/8202/final

See page 53 of the PDF ("42" at the bottom of page, 'physically').

If you need a handy guide to give to someone to explain blockchain (though not crypto currencies), it's hard to go wrong with send people this link.

For a more finance-y, the CFA Institute has a useful white paper:

* https://www.cfainstitute.org/en/research/foundation/2021/cry...

Re: Why blockchain is not yet working (2018)

#122

Post by packetlost »

lima wrote: post #54
nexthash wrote: post #11

I think the #1 reason blockchain doesn't work is very simple - the technology is broken beyond fixability. This article is two years old, but the same variations of these excuses always come up when the crypto ideologues are grilled on why their utopiaic vision hasn't come about, for all of blockchain's existence. Blockchain is awful for most things compared to a centralized or distributed database: it is inefficient…

> the technology is broken beyond fixability [citation needed] Crypto ideologues are a strawman. Anyone working on the actual tech agrees that blockchains are useful if, and only if, you can't rely on a single party and need a decentralized, trustless append-only database. Otherwise, why bother with the extra complexity? That's the whole point of blockchains, after all. Technology choices are complex set of trade-off…

Correct. The problem is there's virtually nothing that actually benefits from those things. A strong case case could be made for a truly decentralized global currency and maybe smart-contracts, but not "a store of value" or "revolutionizing supply chain bookkeeping".

Re: Why blockchain is not yet working (2018)

#124

Post by canoebuilder »

jcfrei wrote: post #77
nexthash wrote: post #11

I think the #1 reason blockchain doesn't work is very simple - the technology is broken beyond fixability. This article is two years old, but the same variations of these excuses always come up when the crypto ideologues are grilled on why their utopiaic vision hasn't come about, for all of blockchain's existence. Blockchain is awful for most things compared to a centralized or distributed database: it is inefficient…

This is the typical argument on a very technical board such as HN where blockchain is synonymous with a specific implementation. But that's an outdated way to think about blockchains. Yes, Bitcoin's implementation is a huge resource hog and slow. But for most newer projects "blockchain" just means an auditable trail of state changes. Whether you implement this with the shiniest newest db paradigm or some simple SQL d…

>However the fact that we now have a global consensus over the ownership of digital assets that's something new and valuable.

It's also completely contrived. Being digital means infinitely replicable, or thereabouts. Do we really need this game of artificial scarcity?

People used to talk about things like property records, but if this realm of artificial scarcity is going to interface with the realm of actual scarcity in the real world, it's still going to need the systems of adjudication that already exist in the real world.

Code is law. But law is not code, otherwise legal disputes would have long since been settled and we wouldn't need systems of courts and various legal avenues to surface new areas of contention and revisit old areas in new light.

If the above wasn't an issue. How do you get past the resource hogginess? These things are currently handling a minuscule portion, if that, of what their proponents propose they take on, and they are already comically massive resource hogs. How can they scale?

Re: Why blockchain is not yet working (2018)

#125

Post by throw0101a »

pjkundert wrote: post #73
payne92 wrote: post #68

Earlier quoted context omitted.

> "The only good use cases that come to mind is if there is some particular reason for you to evade the conventional and easier systems of communication and storage." * Nailed it * I've long said the killer app for blockchain already exists: international money laundering and untraceable transfers. This also happens to be the precise use case where folks want to "evade conventional and easier systems".

Until you need international remittances or business payments. Then, Crypto at its worst is far better than international Wire Transfers, etc.

Better than, say, Transferwise or XE.com? Can you explain how?

Re: Why blockchain is not yet working (2018)

#126

Post by loceng »

ignoramous wrote: post #112

I genuinely think HN is subject to what Clay Christensen put as "disruptive innovation" when it comes to Blockchain and friends (strange to say that for a community as opposed to a company). I understand that many on HN think of the many ICOs as Ponzi schemes, and other tech (like identity, DBs, VPNs, apps, or even alternate WWW) built on top as smokes and mirrors; but the industry being built around it is very real…

That is speculation at the moment, a lovely fantasy to imagine to come to fruition for any technology; a market cap that has reached $1 trillion including price manipulation, I'm unsure it warrants that valuation - and arguably it's not simply that high due to price manipulation.

I do believe blockchain could help us solve some fundamental problems - but only if it's tied to real trust and democratic processes.

Bitcoin is a blockchain that's been structured to inherently be an MLM, and if you think through to the conclusion - say once 50% of the population has bought into Bitcoin, and now a growing majority require the remaining society to adopt Bitcoin to realize their gains - to unnecessarily, unreasonably transfer wealth from later adopters weighted towards earlier adopters - then you can how conflict will occur when the remaining 50% of society don't want to be left holding the bag, with no one else to then buy more Bitcoin for the last adopters to get wealth transferred to them; and this is why it also mimics a Ponzi scheme - it's just that there isn't a single controller liker Madoff, but instead it's controlled via a global, decentralized system that anyone can participate in.

Re: Why blockchain is not yet working (2018)

#127

Post by bildung »

andreaorru wrote: post #99
bildung wrote: post #66

Earlier quoted context omitted.

It is mentioned in passing, but not discussed in depth. I don't think it plays a large role (mostly because it was a consequence of the economic development - they didn't just went off gold because they felt like it), most importantly because the same curve can be seen in other industrial economies in the same period - which didn't use gold before. I guess the computer revolution plays a large role, significantly alt…

Thanks for sharing your perspective. I've read the entire article but it seems to discount the thesis that the technological revolution played a primary role. It seems to me that like most macroeconomics issues, it's a multivariate phenomenon, so correlational studies can only get you so far. Do you have books you would recommend on the subject?

The technology angle in the article is not quite what I meant. Alexander looked at how low-skill jobs and high-skill jobs developed, i.e. the new demand for high-skill jobs was not enough to get a higher share of the profits, but what I meant is that this also changed the landscape and structure of companies itself. The introduction of computers changed how companies organized themselves, enabled outsourcing etc. Companies before often were very vertically integrated, and the digitalization enabled organizations to spin off subdivisions into suppliers etc., which made it harder for unions to achieve higher wages. (A bit amusing that that went so far that vertical integration nowadays is all the rage again, with Tesla as the most vocal. We went full cycle after Ford started it 100 years ago :)

Sadly I can't seem to find the article anymore, but there was a publication by Robert Brenner that showed that the fundamental changes of the early 70s also affected Soviet Russia in quite similar ways.

Edit, sorry, forgot your literature question. I think the two important keywords are Fordism and Post-Fordism, as economic literature usually seems to use these terms to describe what changed before and after the early 70s. The Wikipedia article on Post-Fordism lists a few theory lines and their authors: https://en.wikipedia.org/wiki/Post-Fordism

Re: Why blockchain is not yet working (2018)

#128

Post by janoc »

RurouniK wrote: post #52
genericacct wrote: post #45

Earlier quoted context omitted.

Especially considering market cap is a totally made up number and if everybody tried to get out at once they would get a fraction of a fraction of it. (1) But it's pointless to tell this to a cryptofreak because they're so heavily invested in it they make zealots look reasonable. (1) not to mention the fact that as soon as there is volatility exchange sites go down, even the bigger ones.

Wait until you find out what happens when people try to take out their money all at once from banks... I remember back in the day when people used to call early internet users internetfreaks and zealots. Now it's the same with Bitcoin. Whatever...

Yes, we all remember well what happened e.g. with Mt Gox.

Not sure what your point here is - as if panic and runs on the banks were somehow magically prevented by crypto.

Re: Why blockchain is not yet working (2018)

#129

Post by oblio »

hannob wrote: post #114
jcfrei wrote: post #77

Earlier quoted context omitted.

This is the typical argument on a very technical board such as HN where blockchain is synonymous with a specific implementation. But that's an outdated way to think about blockchains. Yes, Bitcoin's implementation is a huge resource hog and slow. But for most newer projects "blockchain" just means an auditable trail of state changes. Whether you implement this with the shiniest newest db paradigm or some simple SQL d…

So Blockchain is a fancy word for something like a Git repository?

> Blockchain is a fancy word

Blockchain is a funding key word.

There, fixed that for you.

Re: Why blockchain is not yet working (2018)

#130

Post by mikegreenberg »

packetlost wrote: post #122
lima wrote: post #54

Earlier quoted context omitted.

> the technology is broken beyond fixability [citation needed] Crypto ideologues are a strawman. Anyone working on the actual tech agrees that blockchains are useful if, and only if, you can't rely on a single party and need a decentralized, trustless append-only database. Otherwise, why bother with the extra complexity? That's the whole point of blockchains, after all. Technology choices are complex set of trade-off…

Correct. The problem is there's virtually nothing that actually benefits from those things. A strong case case could be made for a truly decentralized global currency and maybe smart-contracts, but not "a store of value" or "revolutionizing supply chain bookkeeping".

Note that both use cases (decentralized global currency and smart contracts) rely on altruism which cannot be guaranteed by human actors but is entirely deterministic within the chaos of humanity (with a sufficient number of honest actors) using a blockchain. That is the value prop: distributed consensus with "quick" convergence toward an agreed upon truth.
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