The blockchain paradox: Why DLTs may do little to transform the economy • Hacker News Board

Re: The blockchain paradox: Why DLTs may do little to transform the economy

#261

Post by SkyMarshal » Wed, Jun 14, 2017, 10:16 PM UTC

sciyoshi wrote: post #201

rockmeamedee wrote: post #85

I agree with this article. Proponents of blockchain tech argue its revolutionary quality is its ability to act as a decentralized and trustless database. But I don't ever hear them sort through the issue of how to agree on the schema for this trustless database. For a group of people to use a decentralized DB, they have to agree as to what to store in it, and how to store it. They need to form consensus about how the…

This argument sums up my recent thoughts on blockchains. Proofs of their trustlessness and eventual consistency rely on explicit assumptions (no cartels with >50% computation power, bounds on network partitions), but the underlying unstated assumption is that there is consensus about the protocol and its rules to begin with. We've seen this assumption break down with the block size debate and the DAO fork. However, I…

Fwiw, two new blockchains are launching soon that include protocols for protocol changes - DFINITY & Tezos.

https://dfinity.network/

https://tezos.com/

Not endorsing, just pointing out.

Re: The blockchain paradox: Why DLTs may do little to transform the economy

#262

Post by cortesoft » Wed, Jun 14, 2017, 10:17 PM UTC

zilchers wrote: post #248

anothercomment wrote: post #239

You can begin to see the beauty of Bitcoin when you want to accept payments. All you need to do is download a wallet, generate an address and put it online. You don't need anybody's permission, as would be the case with PayPal or the likes. The risk of somebody deciding on a whim to freeze your funds is also greatly diminished (again, very different from PayPal and the likes). "Governance" and "Accountability" seem t…

I think this is the point though - for something like bitcoin, this tension is ok. It's when you start getting into things like blockchains for real estate in developing countries (I think there are a few startups working on this) when it becomes an issue. Someone still fundamentally needs to issue the blockchain deeds, or ok that you, in fact, own the property you are claiming to own. At that point, you have a centr…

It is not even ok for bitcoin if you want to use it as your primary currency, for both conducting transactions and for storing liquid wealth. It paints a nice picture to say 'the market will work it out', but as an individual, that market can wipe many people out. Sure, it might work out as a whole, but the volatility is too much for something that needs to be as stable as currency.

Re: The blockchain paradox: Why DLTs may do little to transform the economy

#263

Post by [deleted] » Wed, Jun 14, 2017, 10:17 PM UTC

someSven wrote: post #132

rhino369 wrote: post #67

Earlier quoted context omitted.

Sure. But having to convert to pay taxes and debts is huge pain point for trying to conduct all your business in a foreign currency. It also adds transaction costs. If you are a business, why would you ever try to run on bitcoin alone? There would have to be a huge advantage. And we see that in many small cottage industries where that is an advantage, like buying drugs online or illegal gambling. But without the need…

> But without the need for pseudo-anonymity why would anyone ever use it? Why would your grocery store use bitcoin over dollars? Because the want the money from people which have bitcoins? Because creditcard fees are to high? (just forget about the BTC fees or the nearly fictional double spending problem) Another reason could be that the owner has Bitcoins and wants to support them. There might be more reasons.

[deleted]

Re: The blockchain paradox: Why DLTs may do little to transform the economy

#264

Post by aaron-lebo » Wed, Jun 14, 2017, 10:25 PM UTC

zilchers wrote: post #252

anothercomment wrote: post #249

Earlier quoted context omitted.

Agreed, and it is a reason why I am holding back on Etherium so far. I don't know if they have a proposed solution to that, tbh, but it seems pretty impossible to solve. Although, to be fair, "classic" contracts also need that someone to enforce them. Maybe Etherium & the likes only replace one aspect of it, not the whole process. If company X publicly announces that they'll adhere to a certain contract in the blockc…

Haha, my issue with Ethereum has always been that, as a software engineer, I know it's impossible to write bug free code. It's a great idea to have a code driven contract utopia, but our first experiment with that model proved we still need human intervention. If it were that simple, we would just have hyper formalized real world contracts (in an almost mathematical notation) - but that obviously never happened. Fran…

Slightly pedantic, but you and your parent did this, and people do it all the time.

It's Ethereum, not Etherium.

Re: The blockchain paradox: Why DLTs may do little to transform the economy

#265

Post by aaron-lebo » Wed, Jun 14, 2017, 10:28 PM UTC

erikpukinskis wrote: post #233

root_axis wrote: post #112

Earlier quoted context omitted.

The source of the distaste is obvious: breathless hyperbole without much substance to show for it. Posts like yours are a great example of it. In this very comment you write: > leading the charge on what could be the next major technical revolution Unsubstantiated hype. Where is the revolution? A common thread among cryptocurrency enthusiasts is that the revolution is coming... except it never does. When you talk abo…

> Where is the revolution? To me, the revolution is the realization that certain softwares don't need to be built, merely described and they will bring certain things into being. If Satoshi hadn't built Bitcoin, he had simply released the paper, I think Bitcoin would still exist today. That's interesting. I don't think the same is true, if, for example Mark Zuckerberg had just described Facebook rather than writing i…

I can almost guarantee you it wouldn't be built. I think you overestimate the value of ideas without concrete implementations.

Without Satoshi actually building it, the barrier for his idea being seen as success would be to build the entire system. Much easier to just mock it and ignore it. With it being built, all someone has to do to test the system is do a little mining or send a transaction.

Re: The blockchain paradox: Why DLTs may do little to transform the economy

#266

Post by aaron-lebo » Wed, Jun 14, 2017, 10:29 PM UTC

maxthegeek1 wrote: post #220

nradov wrote: post #188

Earlier quoted context omitted.

Seriously? All that work just to save possibly 15%? And in reality the savings would be much less because someone has to pay to develop and support the app. You're going to have to come up with more realistic and compelling examples. It also doesn't address compliance with laws on payments and money transfers. Regardless of what the anarchists might want, those rules aren't going away and will be enforced vigorously…

15% is a lot.

Yeah, and people would rather give Steam a 30% cut than use their own distribution channels. Convenience and stability really, really matter.

Re: The blockchain paradox: Why DLTs may do little to transform the economy

#267

Post by rosser » Wed, Jun 14, 2017, 10:53 PM UTC

anothercomment wrote: post #250

SkyMarshal wrote: post #243

Earlier quoted context omitted.

>But it is also not true that it would be a huge problem if there were forks. Why would it be? People will simply use what works best for them, controlled by market forces (they need other people to use the same fork). It's a problem for any tech that aspires to go mainstream and thus must contend with the already high cognitive loads on the majority of people who don't follow the tech in detail, don't know what a ha…

Maybe true, but in a way, classical investments are even more complicated. Some of them are even deliberately complicated to obfuscate their risky nature to naive investors.

I don't think the predatory complexities found in some shady securities are a very prudent way of "excusing" the technical complexities and consequences of BTC, or any other cryptocurrency.

"Not as bad as" is broadly fallacious, anyway.

Re: The blockchain paradox: Why DLTs may do little to transform the economy

#268

Post by zilchers » Wed, Jun 14, 2017, 11:22 PM UTC

cortesoft wrote: post #260

anothercomment wrote: post #239

You can begin to see the beauty of Bitcoin when you want to accept payments. All you need to do is download a wallet, generate an address and put it online. You don't need anybody's permission, as would be the case with PayPal or the likes. The risk of somebody deciding on a whim to freeze your funds is also greatly diminished (again, very different from PayPal and the likes). "Governance" and "Accountability" seem t…

Your dismissal of the problem with forks is missing a big danger to users. You say that market forces will control it, and people should just use what works best for them. The problem is that you might guess wrong; you might look at the two forks, make your best guess as to which side is going to win out via the network effect, and put your money there. If you are wrong, and your fork dies out, there goes all your mo…

Ya, I was going to point out there's a lot of faith with normal currency too - I think bitcoin still is a grand experiment. So far, when there have been forks, a winner has emerged very quickly (see Ethereum), but the UASF is going to be an interesting test of this. I think it's in everyone's interest for the decision to happen quickly and stay sticky though, so it's hard to imagine a drawn out fork battle, but could be interesting. Also interesting, I suppose we're incentivized to get in before any forks, wonder if any of the run lately could be attributed to that.

Re: The blockchain paradox: Why DLTs may do little to transform the economy

#269

Post by gorthol » Wed, Jun 14, 2017, 11:24 PM UTC

root_axis wrote: post #118

corv wrote: post #116

Earlier quoted context omitted.

ICO's are clearly enjoying a use. Largest crowdfunding in history can't be ignored - whether it ends in tears for most investors is another matter entirely.

I asked for a practical example. Just because a bunch of people decided to spend their money on internet tokens does not mean it is useful. How is it useful ?

For example you could implement a credit system where anyone could be a creditor and vote (with their digital signature) what requests get approved. Then, once the money changes hands, the smart contract would automatically deduce que periodic payments, including the interests, and distribute it to the lenders in the correct proportions. If a payment is missed, a penalization or increased interest could be implemented.

I don't know if this would be currently possible with Ethereum because I haven't looked very deep into its technology, but if not I'm pretty sure some blockchain will allow this kind of interactions.

For more examples, check: https://www.ethereum.org/token

Re: The blockchain paradox: Why DLTs may do little to transform the economy

#270

Post by Laforet » Wed, Jun 14, 2017, 11:27 PM UTC

firethief wrote: post #216

nradov wrote: post #106

Earlier quoted context omitted.

Bitcoin is mostly popular in Eastern Europe and Asia for transfer payments, fiat currency conversion, money laundering, and evading capital controls (getting money out of China). In the US if you're doing legitimate business with other US entities then there's really no need for such a thing. I can write a check or send a credit card payment or wire transfer to another US bank with a reasonably high level of trust th…

As a freelancer in the US with local and international clients who are often small businesses or individuals, this has not been my experience at all. I have never found a way of accepting fiat payments that isn't some form of scam. Wire transfers are ok in theory (the $20-$45+ fees are unreasonable but tolerable), but falls apart when the client's way of sending an international wire transfer is through some 3rd part…

>when the client's way of sending an international wire transfer is through some 3rd party service that's capable of holding the payment in limbo indefinitely (and they do)

In that case your client is essentially messing with you.

Also, irriversible payments without a chargeback mechanism may be a feature to you and many, however more people see it as a bug.