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You Do Not Need Blockchain: Popular Use Cases and Why They Do Not Work

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Re: You Do Not Need Blockchain: Popular Use Cases and Why They Do Not Work

#211

Post by turtlesdown »

AnthonyMouse wrote: post #137
gregschlom wrote: post #33

I've said this several times before on this site but will keep repeating it: there's exactly one use case where the blockchain is a superior (and, in fact, the only) solution: when you can't use contracts and the legal system to ensure trust between the parties. In other words, anything illegal. For any other conceivable use case, a database and a contract between parties are a superior solution. Edit: To clarify wha…

> In other words, anything illegal. Not exactly. It's anything for which the legal system is not effective. For example, you can have a perfectly legal contract, but the other party is in a corrupt foreign jurisdiction that would never find in your favor in the event of a breach. Then you can't contract with them because they have no incentive not to breach, without an alternative method of ensuring compliance that d…

> For example, you can have a perfectly legal contract, but the other party is in a corrupt foreign jurisdiction that would never find in your favor in the event of a breach. Then you can't contract with them because they have no incentive not to breach, without an alternative method of ensuring compliance that doesn't rely on their corrupt government.

International trade has perfectly good mechanisms for dealing with this at present. See: Letters of Credit.

> You may also have jurisdictions (like the US) where the process may be more fair, but it's unreasonably expensive, so if you're transacting with parties with a high probability of getting into disputes, something that can resolve them programmatically without litigation is an advantage.

The easy workaround to this is just to factor in additional costs for doing business...

> You're not a criminal, but you have bad credit or are from a disreputable country etc., so you're treated as one by the government or the rules targeting actual criminals cause companies to not want to do business with you, and you thereby need some alternative way to engage in your legitimate activities.

Probably still illegal to do business with you if the government has outlawed work with specific sanctioned countries, etc. Also, letters of credit.

Re: You Do Not Need Blockchain: Popular Use Cases and Why They Do Not Work

#212

Post by audunw »

turtlecloud wrote: post #94
melkiaur wrote: post #3

I hate the blockchain hype. I think most uses can be solved by a simple database hosted by a trusted authority. Yet, just reading the first two samples, I already disagree with them. Re the 1st one: it's true only if the transporter doesn't risk anything if the sensor is tampered with. As soon as you introduce strong fines and/or consequences if a validating authority randomly checks your goods and discover some tamp…

What if the trusted authority is the Chinese government? would you still keep your same opinion? At the core of it, it is a transfer of power from larger organizations to the people.

> What if the trusted authority is the Chinese government? would you still keep your same opinion?

It's not about how nice the trusted authority is. It's about the value the trusted authority provides.

If you're doing business in China, although you might not entirely trust the Chinese government, and might not like them, they'll still provide more value than a "trust-less" system. China is not a lawless state after all, and if you want to do business there you'll have to deal with them at some level.

> At the core of it, it is a transfer of power from larger organisations to the people.

It's not though, if there's no actual transfer of real power. It's naive to think that blockchain themselves do this. If people tried to circumvent the Chinese state with blockchains in any meaningful way, China would crack down on it, and they'd be very efficient at it. Because real power is about interfacing with the world in real ways, and a well-functioning state will always maintain that power.

It's possible that, through democracy or other forms of pressure, people could make the government and businesses accept, use or interface with blockchain technology. But if people do have that kind of power over these entities, people by definition have the kind of power that makes the value of blockchain tech vanishingly small.

Blockchains provide value - not when you don't have any party you trust fully - but when you don't have parties that can provide any kind of value through their trust. I.e. failed states and lawless territories basically.

Re: You Do Not Need Blockchain: Popular Use Cases and Why They Do Not Work

#213

Post by skilgarriff »

the_gastropod wrote: post #202
oarabbus_ wrote: post #156

Earlier quoted context omitted.

>I'm saying: you need the blockchain if and only if you are doing things that are illegal in your country. It's a decision criteria for when you need the blockchain. This is, at face value, simply false. I want to send $5 to a poor African family. I'll even relax my criteria - I'm willing to wait _up to 3 business days_ for this African family to receive my $5. I live in California. Could you please point me towards…

Transferwise is both faster and cheaper than sending Bitcoin. And it doesn't require your poor African family to sign up for a probably poorly run poor African Bitcoin exchange.

You are assuming they can't pay for services in Bitcoin - which they can. There are a number of things that currently accept Bitcoin, and that number is only growing imo.

Re: You Do Not Need Blockchain: Popular Use Cases and Why They Do Not Work

#214

Post by snowwrestler »

will_brown wrote: post #201
gregschlom wrote: post #33

I've said this several times before on this site but will keep repeating it: there's exactly one use case where the blockchain is a superior (and, in fact, the only) solution: when you can't use contracts and the legal system to ensure trust between the parties. In other words, anything illegal. For any other conceivable use case, a database and a contract between parties are a superior solution. Edit: To clarify wha…

>Guys, this works. It's literally how the world works. How about corporate stock? You know how many third parties are involved with the markets and the added costs of those third parties? Even with a corporation with a stock ledger, stock trusts who own them, banks/brokers who handle all the buying/selling of stock...things don’t work. Take the Dole case where the corporation had almost double the number of stock iss…

The problem with Dole was that there was not one single central ledger of stock transactions that was being kept updated in real time.

Would blockchain have solved that? It's centralized in that there is one ledger. But natively resolving and publishing transactions at high speed is not a feature of blockchains yet. A centrally managed ledger without distributed calculations would be way faster.

Also worth noting that Dole was a weird enough case to be news-worthy, and that it was ultimately resolved. I think it takes more than a few edge cases to justify completely rebuilding the entire basis for a major part of the global financial ecosystem.

Re: You Do Not Need Blockchain: Popular Use Cases and Why They Do Not Work

#216

Post by roywiggins »

Swenrekcah wrote: post #188
dragontamer wrote: post #146

Earlier quoted context omitted.

But that's where small-claims court comes in. It mostly only costs you your time, you aren't really allowed to bring in a lawyer to argue on your behalf, etc. etc. Depending on your location, the MAXIMUM damages for small-claims court is $5000 to $10,000. The whole system is designed so that smaller issues can be resolved quickly. > And many contract provisions are often not honored in bankruptcy That's literally the…

Unfortunately not every country has a small claims system. Also, I’m not entirely sure how etherum contracts work but if using them means money is transferred automatically upon objectivly measured completion, then I would very much like that even if I did have access to a small claims court.

> I’m not entirely sure how etherum contracts work but if using them means money is transferred automatically upon objectivly measured completion

That's the problem right there- defining "objectively measured completion" in such a way that the contract can act on.

Re: You Do Not Need Blockchain: Popular Use Cases and Why They Do Not Work

#217

Post by vackosar »

gregschlom wrote: post #33

I've said this several times before on this site but will keep repeating it: there's exactly one use case where the blockchain is a superior (and, in fact, the only) solution: when you can't use contracts and the legal system to ensure trust between the parties. In other words, anything illegal. For any other conceivable use case, a database and a contract between parties are a superior solution. Edit: To clarify wha…

Recently two govs in South America traded via Bitcoin avoiding gold and international payment systems.

Re: You Do Not Need Blockchain: Popular Use Cases and Why They Do Not Work

#218

Post by snowwrestler »

SilasX wrote: post #44
gregschlom wrote: post #33

I've said this several times before on this site but will keep repeating it: there's exactly one use case where the blockchain is a superior (and, in fact, the only) solution: when you can't use contracts and the legal system to ensure trust between the parties. In other words, anything illegal. For any other conceivable use case, a database and a contract between parties are a superior solution. Edit: To clarify wha…

Really? You (seriously plan to resort to) go(ing) to court over every contractual dispute? Even $5? HN Bandwagon, Monday: "Don't you understand that courts exist to make it so no one can break a contract without penalty?" HN Bandwagon, Tuesday: "Lol don't go to court over $5, that's stupid."

From the comment you're replying to:

> there's a multi-layered system in place to resolve disputes, starting from the customer support call center, reviews, bad publicity, and going all the way to the courts.

So no, I don't think the plan is to go to court over every contractual dispute.

Re: You Do Not Need Blockchain: Popular Use Cases and Why They Do Not Work

#219

Post by roywiggins »

oarabbus_ wrote: post #156
gregschlom wrote: post #80

Earlier quoted context omitted.

I'm not saying: you don't need the blockchain because you shouldn't be doing bad things. I'm saying: you need the blockchain if and only if you are doing things that are illegal in your country. It's a decision criteria for when you need the blockchain. I'm making no moral judgement. And there are very good reasons to want to do things that your government deems illegal (for example, donating to a political organizat…

>I'm saying: you need the blockchain if and only if you are doing things that are illegal in your country. It's a decision criteria for when you need the blockchain. This is, at face value, simply false. I want to send $5 to a poor African family. I'll even relax my criteria - I'm willing to wait _up to 3 business days_ for this African family to receive my $5. I live in California. Could you please point me towards…

Western Union can send $5 to Ghana. They'll charge you a dollar. I can't speak to the actual speed, but they claim minutes, and the recipient gets to pick up their money in cash from their nearest affiliated agent. WU has a pretty extensive network.

https://www.westernunion.com/us/en/send-money/app/start?SrcC...

If not WU, there's probably some other remittance company operating in their area. The fees might be pretty exorbitant though, especially for small amounts.

Re: You Do Not Need Blockchain: Popular Use Cases and Why They Do Not Work

#220

Post by shepardrtc »

nickpsecurity wrote: post #210
shepardrtc wrote: post #197

Earlier quoted context omitted.

> All the big players have got real-time feeds they're sharing with each other to keep track of who's made what transactions, and they're constantly reconciling them against each other, to make sure that everyone's looking at the same picture. That is exactly what blockchain is. It is literally doing that. > None of this is strictly necessary, because there is a central source of truth that you can rely on. But who i…

"That is exactly what blockchain is. It is literally doing that." It isn't: it's a chain of hashes with signature. Those predate blockchains that do things like wasteful mining. An example was Surety's timestamping service. A hashchain using standard primitives is way less wasteful, supports higher transaction volume, is cheaper, and can take advantage of hardware acceleration in client and server devices. One of rea…

There are more blockchain consensus algorithms than just Proof-of-Work. Its probably the most inefficient, and that's well known. I personally prefer Ripple's consensus algorithm.
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