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Why blockchain is not yet working (2018)

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Re: Why blockchain is not yet working (2018)

#251

Post by nradov »

mrharrison wrote: post #191
UncleMeat wrote: post #161

Earlier quoted context omitted.

> You as a user completely own your assets, with your public key. Cool. Why is this a thing tons of people want? > A person can have access to the same financial products that banks have access to, because they cost a fraction of a price to run then they normally do on CEX and instead of waiting for 3 days for a transaction to complete, it completes in 5 minutes. Which financial products? How many people want those t…

They don't know they want it, till they know what it means. It means independence from central exchanges, it means the money in your savings account of .01% interest account can now be directly leveraged by loans on Aave, which return 5-9% interest. No middleman managing your money. Your assets can be directly accessed by people who need it.

I don't think you understand the relationship between interest rates and risk. The reason that bank savings accounts have low interest rates is that they are zero risk (FDIC). Any asset class with a 5-9% expected return carries a substantial risk of losing you principal. In other words, sometimes borrowers default.

Re: Why blockchain is not yet working (2018)

#252

Post by selestify »

BlackInkstoan wrote: post #243
mrharrison wrote: post #191

Earlier quoted context omitted.

They don't know they want it, till they know what it means. It means independence from central exchanges, it means the money in your savings account of .01% interest account can now be directly leveraged by loans on Aave, which return 5-9% interest. No middleman managing your money. Your assets can be directly accessed by people who need it.

DEXs and PLFs still lack integration into the traditional finance infrastructure. Outside of escrowed p2p sales of cryptocurrency, centralized exchanges are the only FIAT on and off ramps. If stablecoins, custodial or noncustodial gain widespread adoption, DeFi will remain as a niche for hardcore crypto fans.

> If stablecoins, custodial or noncustodial gain widespread adoption, DeFi will remain as a niche for hardcore crypto fans.

Why? It seems the exact opposite to be — if stablecoins gain widespread adoption, there will be a lot more exposure to DeFi because you have stablecoins already and can directly partake in DeFi.

Right now the biggest hurdle is fiat -> crypto conversions and back, stablecoin or not. If you already have stablecoin because it’s widely used, then that won’t be a problem anymore.

Re: Why blockchain is not yet working (2018)

#253

Post by selestify »

mlthoughts2018 wrote: post #234
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 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.” This is the number one model for valuation of Bitcoin-like cryptocurrencies. Say you live in Venezuela and dealing with custodial intermediaries in your local fiat currency is completely untenable. You can’t store money in gold or other precious metals.…

> You’ll happily see the volatility and slow transaction process / high fees as a worthwhile overhead cost for independent purchasing power outside of your local fiat currency.

Don’t stablecoins solve the volatility problem, and NANO solves the slowness/transaction speed aspect? Granted, these features can’t be combined just yet. But they are available separately

Re: Why blockchain is not yet working (2018)

#254

Post by acdha »

ClumsyPilot wrote: post #212
packetlost wrote: post #122

Earlier quoted context omitted.

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".

Transactions between banks need clearing and settling. Many systems run on a periodict (like half an hour) net settlement, some are even slower. Blockchain is a perfect firt for those usecases. There is a reason JP morgan is developing quorum

There are two distinct classes of system pushed under the label “blockchain”: the kind like Bitcoin are enormously complicated by trying to be used between untrusted parties. The systems which are potential viable are much less expensive because all of the parties in their system are known and trusted at least to be subject to contract law. All a bank needs is public key encryption and Merkle trees, and while that might be branded as a blockchain for marketing purposes that doesn’t make it the same.

Re: Why blockchain is not yet working (2018)

#255

Post by hakfoo »

smoll wrote: post #153
ffggvv wrote: post #146

Earlier quoted context omitted.

seems like you could just do this with some sort of open source or shared standard that different providers use

Yes, but this is where politics comes into play. If you're a Google/Amazon/Samsung/any big player, why would you stick to the open standard when you could just change to a proprietary standard for more lock-in and profit? With a blockchain-based standard, you could make vendor buy-in permanent and enforceable. The only way that one of the big players could win in this new normal is if the products on their proprietar…

You could do that with any widely-adopted standard. No blockchain required. Remember that even IBM at their late-1980s juggernaut status couldn't put the genie of the ISA bus back in the bottle.

I think the trick to lasting open standards is to provide only a MVP ecosystem at launch. No one vendor is strong enough to close the platform behind them. Again, like the IBM PC, their product both needed and spawned a galaxy of add-on and compatible products, providing enough of a force to protect the open standard.

Re: Why blockchain is not yet working (2018)

#256

Post by 1996 »

Melting_Harps wrote: post #60
rorykoehler wrote: post #9

Earlier quoted context omitted.

You just recreated consumer banking.

> I think that's their point. There's a lot of discussion that 'banks will become obsolete with crypto' that forgets that banks are not the currency, they just manage it. If crypto becomes widespread banks will keep on existing, they'll just move to manage cryptocurrencies. > You just recreated consumer banking. While I personally detest the notion of such a model, and things like GME show why that is: I realized tha…

> servile wave of infantile 'technologists' that are beholden to FAANG so this is clearly what happens when even 'smart people' get things wrong: they try to justify their errors with these campaign smears. Which is why I'm glad so many are leaving CA, hopefully it can go back to it's cypherpunk roots it had in the 80s and 90s.

So true. I wish I had had the opportunity to live in the golden age cypherpunk CA of the 1970-1990s.

> Their work is not their own, and they are beholden to their employers for identity and purpose, and Bitcoin is just a reminder of why it might have been a waste of time when M1 and M2 spikes happen.

So true. If only they could listen. But they are too emotionally invested in their mistakes. So they try to find meaning and happiness with the peanuts that are thrown at them.

> They thought they had it so good, for so long, so now when something comes along and shows them that their jails are opened they suffer from a sort of anxiety when they're not in one

Thanks a lot for taking the time to write that. It helps me understand them better.

Like you, I have tried to understand the people who single hand reject crypto on HN.

My conclusion is that it is due in part to the golden jail (good paying job in FANG tech) + not wanting to bite the hand that feeds (corporate overlords / governmnent) + intellectual laziness coming from a mix of a golden jail + old age (most people here seem to be over 40) - but the icing on the cake is this anxiety.

I have talked with some people like arcticbull (a HN permabull on all things crypto) and he said he also has the irrational fear of being defrauded.

I think it is a manifestation of the anxiety you describe: the fear their effort were meaningless.

> lets just build it for them, but give them a key they can keep inside and use if and when they are ever ready

The airdrops were like that. I have seen myself very intelligent people sell their airdrops for a handful of dollars. In a way, this free crypto was lost on them. They got a few burgers. More patient people got at least a car.

If you have friends you want to help, don't give them crypto: they will immediately sell it, regardless of the price, because they are afraid of the variance and not very rational. They are the kind of people who would eat the seed gains instead of planting it. They are unable to think long term (maybe from growing up poor, or having to work a job to get money?)

Instead, keep the crypto for them, and bestow a part of it when the time is right, in fiat, at an amount you think adequate to their immediate needs. You can always give them more later.

Re: Why blockchain is not yet working (2018)

#257

Post by GuB-42 »

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?

That's a question I asked myself a few times.

The fundamental part of a blockchain is that each block signs the previous block, making it very difficult to rewrite history. And it is exactly what git does.

We could implement a cryptocurrency on a git repository. Just commit and push 'I am X, here is the proof, send Y gitcoins to Z' whenever you want to do that.

The only thing git is lacking compared to say, bitcoin, is a builtin way to select the "origin" repository. In most git-based projects, there is a global consensus on a central location. In bitcoin, it is automatically selected based on who wasted to most computing power on a pointless cryptography problem.

Re: Why blockchain is not yet working (2018)

#258

Post by acdha »

hanniabu wrote: post #168
m3kw9 wrote: post #97

Earlier quoted context omitted.

There was once I transferred money from Bitcoin to a Bitcoin cash address accidentally. The money was lost forever. It was a weird reason due to being syncing , but yeah you could lose money just like that while most people wouldn’t be able to explain it or understand it.

That has been solved with more user friendly wallets. If you're using a Qt wallet you'd think you knew what you were doing. The Qt wallet actually even tells you not to do anything until it's done syncing so you must have closed that overlay and ignored that warning. User error, that's your fault.

This is a great example of why Bitcoin has failed: you do not build faith in a financial system by reportedly telling people that any mistake will have no way to correct it but they will be mocked for not being perfect.

Re: Why blockchain is not yet working (2018)

#259

Post by thecupisblue »

hanniabu wrote: post #180
UncleMeat wrote: post #162

Earlier quoted context omitted.

Is it already a thing my grandmother can use? She has a working bank account but doesn't understand that minimizing gmail doesn't delete here emails.

The UX is getting better every year. It's like saying the internet was doomed to fail because your grandma couldn't use it in 1990

No it's not. The adoption rate in 2021 is way faster than in 1990. Most people weren't required to adopt a tech in 1990 to live their normal life, while in 2021 it is a norm to constantly be adapting to new tech.

Re: Why blockchain is not yet working (2018)

#260

Post by ashtonkem »

jakupovic wrote: post #238
ashtonkem wrote: post #225

Earlier quoted context omitted.

> Just because it’s not perfect at the first go, doesn’t mean it should go in the trash The converse is also true; just because it’s an improvement over past failures doesn’t mean that it’ll actually work. My issue with crypto has always been fundamental; I don’t think crypto fans really have a good grasp on what motivates the average person, because most crypto fans[0] are ideologues, and like many ideologues they s…

Is Elon Musk bitcoin fan? How about Mass Mutual? BNYM? Pretty funny the language used, fans, seriously 6th most valued currency in the world is relegated to plush babies status. At least people have stopped with the tulips and that talk. Same talk and yet bitcoin acceptance keeps growing day by day, how do you explain that? Is everyone else wrong?

> Is Elon Musk a[sic] Bitcoin fan?

Yes. He also is a Twitter shitposter who got in trouble with the SEC for promising to take Tesla private at $420 a share, a number he picked because it was funny, and was also involved in the GME nonsense a few weeks back.

If you’re pointing to men like him as serious figures pushing for bitcoin’s adoption, then it’s time to stop and rethink a lot of things.

> yet Bitcoin acceptance keeps growing say by day, how do you explain that?

Bitcoin speculation grows day by day. People want to get rich (in USD I’ll point out) with it. Actual usage of Bitcoin as a currency is not growing.

As always, gimme a call when I can buy a latte and groceries with it. I’ve seen literally one place with a “we take Bitcoin” sticker, and the receptionist had absolutely no idea why it was there or what it meant.

> Is everyone else wrong?

Why couldn’t they be?

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