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

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

#291

Post by Terr_ »

scient wrote: post #228
ckastner wrote: post #144

Earlier quoted context omitted.

> bitcoin remains difficult and relatively unsafe to use (for the non-technical masses) Even assuming it were trivially easy and perfectly safe to use, there are numerous other risks currently associated with it. Just look at its recent volatility, for example.

People who claim BTC is the next mainstream currency are delusional. Its an investment commodity right now, and its way too volatile, way too little regulated and capped too low to be a serious currency contender. Seriously, the real world does not work that way, and thats not necessarily a bad thing. This goes especially for the whole decentralized and uncontrolled/unregulated part - I see it as bad thing, a lot of…

Right, and the problem (too much speculation, not enough actual economic liquidity) isn't even just a quirk of human behavior: Deflation is baked into the design.

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

#292

Post by RexetBlell »

zilchers wrote: post #287
RexetBlell wrote: post #259

Earlier quoted context omitted.

I think it makes a lot of sense to build a DNS system using contacts. Names can be auctioned off and given automatically to the highest bidder. It is also possible to set up a contract where you could trustlessly sell names. "Send $200 to an address and you will get the name". This solves the prisoners dilemma that is mentioned in the video at least for your dns addresses. There is an auction like this in progress al…

Ya, that's not a bad point, I guess really any completely virtual item that distributes on a first come, first serve basis could work. That's sort of a generalization of bitcoin itself (if you think of the proof of work is a first come claim on the new bitcoins).

You could do even more interesting things than that trustlessly. For example say, you own a valuable domain. You could borrow money and use the domain as collateral. If you do pay back, or stop making monthly payments the domain is automatically and trustlessly transferred to the lender. Or it can be put up for a trustless public auction with the proceeds going to lender to repay the loan and the rest to you, the ex-owner of the domain who failed to pay back his loan.

The cool thing is that it's possible to build all of this today and people are working on it right now.

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

#293

Post by matthewowen »

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…

I don't find this a wholly satisfying position (and I say this even as someone who's generally a blockchain skeptic).

Concretely, this argument conflates agreeing on a set of rules with agreeing on an arbiter to determine the application of those rules. Those aren't the same thing, because only one of them centralizes power.

> At this point they already have a consensus, they trust each other, they might as well just set up a centralized database run by a 3rd party that manages the system

This is the critical point where I don't think the argument works. Firstly: they don't necessarily trust each other. They trust the system to work within the rules they have established. It simply doesn't follow from that that they should therefore be willing to trust a 3rd party.

For what it's worth, this is why I'm interested to see how the block size situation in Bitcoin resolves itself. If it happens relatively smoothly, it's a strong point for the ability of consensus to respond to pressing needs. If it doesn't... well, I might have to reconsider my position.

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

#294

Post by cnnsucks »

yoz-y wrote: post #103
criddell wrote: post #84

Earlier quoted context omitted.

There's plenty of hot air and wishes behind regular currency as well. I have a plan to double the US GDP in one year: 1. I'll pay you $1 million to sing a song for me. 2. You pay somebody else $1 million to sing a song for you. 3. Continue doing this for n turns. 4. The last person pays me $1 million to sing them a song. The US GDP is around $20 trillion. That means we only need to set n to 20 million and we now have…

Wouldn't somebody somewhere in this kind of transaction have to pay the VAT, thus rendering this impossible?

The premise itself is fiction. The P in GDP doesn't stand for exchange or transaction. It stands for "Product." It measures the net amount of new wealth, not how many times existing wealth is transferred among parties. If I sing you a song and you pay me $1 million dollars and this process continues back and forth, the net amount of value when we stop is still $1 million and the net change to GDP is zero.

People indulge a lot of strange and wrong ideas about economics and, not surprisingly, those bad ideas are typically well aligned with their preferred world views.

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

#295

Post by contingencies »

nullstyle wrote: post #289
contingencies wrote: post #272

Earlier quoted context omitted.

Didn't read the paper (got crypto burnout after 4 years at Kraken) but it occurs to me that the problem with explicit trust is that it is usually a one size fits all approach or someone has to tediously specify it in specific terms, neither of which work well at scale in the real world.

There's no reason that I can see why we can't automate the tedious bits. I can see someone creating some sort of a digital assistant program that applies trust policies to digital identities on behalf of a user. think for example something that applies a digital encoding of "I trust everyone whom I've paid to advertise their specials to me" or "I trust people who prove they live within 5 miles of my home address to s…

Right. I had some ideas around this previously when thinking around http://www.ifex-project.org/our-proposals/ifex/2012-04-11-pa...

In short each node would have its own risk management profile. Entering a transaction using any settlement path or asset type (even multi-hop transactions involving multiple paths or assets) is the explicit decision of the actor in question, against that risk profile, available information, and its own priorities (eg. must complete by X date, prefer to avoid Y actor/system/asset, etc.)

Because the properties of each settlement network, asset type or actor are able to be formally defined, cross-system automation is possible and new systems with interesting properties are able to present themselves on a fair and equal footing.

Of course, with such lofty goals, it was never finished (I was keen but asked to direct attentions to urgent areas elsewhere), but recently I have begun to revisit it owing to my study of physical logistics networks and scheduling algorithms for my current startup http://8-food.com/

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

#296

Post by criddell »

cnnsucks wrote: post #294
yoz-y wrote: post #103

Earlier quoted context omitted.

Wouldn't somebody somewhere in this kind of transaction have to pay the VAT, thus rendering this impossible?

The premise itself is fiction. The P in GDP doesn't stand for exchange or transaction. It stands for "Product." It measures the net amount of new wealth, not how many times existing wealth is transferred among parties. If I sing you a song and you pay me $1 million dollars and this process continues back and forth, the net amount of value when we stop is still $1 million and the net change to GDP is zero. People indu…

Services are also part of GDP. If I pay you to sing, that's part of GDP.

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

#297

Post by PKop »

ffwd wrote: post #141
PKop wrote: post #79

Earlier quoted context omitted.

You've identified who suffers and who benefits from the reversing of value positions caused by deflation vs inflation. But you haven't explained why its "worse"? So borrowers are disadvantaged compared to lenders (savers). And wage earners are in a better position relative to wage payers.. ? That's what I take away from your statement. But, one's ability to buy things seems to be improved... Should we want an inflati…

> But, one's ability to buy things seems to be improved... It's only improved if there is a lot of investment and new / more products coming out. deflationary currency promotes holding on to your money so that it goes up in value, but if everyone does that there will be less products / services and the value of the currency will ultimately go down. If currency has some inflation, then it's used as a transaction curre…

Won't interest rates be low if everyone is saving?

Won't there be more investible cash because a lower percentage of one's wages is devoted to commodities, and essentials? As well, there is less of an incentive to stockpile or "get ahead" of future price increases.

So.. more left over to invest?

Does expectation of future flat or lower prices give you confidence to plan a vacation, invest extra money, etc.. or would you prefer to worry about food, gas, and other prices going up in the future? (along with your sticky wages making your real wage go down)

In fact, I 100% agree that savings and investment are key to future growth, technology and the whole enchilada. Which is why I don't support stealth tax of inflation, or of governments debasing the currency and stealing wealth from citizens.

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

#298

Post by cnnsucks »

criddell wrote: post #296
cnnsucks wrote: post #294

Earlier quoted context omitted.

The premise itself is fiction. The P in GDP doesn't stand for exchange or transaction. It stands for "Product." It measures the net amount of new wealth, not how many times existing wealth is transferred among parties. If I sing you a song and you pay me $1 million dollars and this process continues back and forth, the net amount of value when we stop is still $1 million and the net change to GDP is zero. People indu…

Services are also part of GDP. If I pay you to sing, that's part of GDP.

That's true, but it doesn't salvage your argument. Your accounting fiction isn't a 'service' for the purposes of GDP.

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

#299

Post by nullstyle »

contingencies wrote: post #295
nullstyle wrote: post #289

Earlier quoted context omitted.

There's no reason that I can see why we can't automate the tedious bits. I can see someone creating some sort of a digital assistant program that applies trust policies to digital identities on behalf of a user. think for example something that applies a digital encoding of "I trust everyone whom I've paid to advertise their specials to me" or "I trust people who prove they live within 5 miles of my home address to s…

Right. I had some ideas around this previously when thinking around http://www.ifex-project.org/our-proposals/ifex/2012-04-11-pa... In short each node would have its own risk management profile. Entering a transaction using any settlement path or asset type (even multi-hop transactions involving multiple paths or assets) is the explicit decision of the actor in question, against that risk profile, available informati…

Thanks for the link! I'll check it out. I agree such a system is quite lofty at this point. I can start to see a feasible system in my mind, but IMO we're still just so far away from it working in reality and in practice.

I'm still on the horse for now... sorry to hear you got burnt out at kraken.

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

#300

Post by lawrenceyan »

MarkPNeyer wrote: post #244
lawrenceyan wrote: post #165

Earlier quoted context omitted.

They all say that they'll never roll back or retroactively make any changes. But inevitably, they always do. I thought Ethereum might have been different, but of course I had to be disappointed. The problem with blockchains is that they still fundamentally fail to solve the problem of mob rule, though, I suppose you could argue that's one thing you'll never fully get rid while the human element is still involved. Rob…

Here is a proposed solution to mob rule: https://github.com/neyer/dewdrop With a much simpler version of the same concept here https://github.com/neyer/respect I think it's doable.

Interesting. So reputation would act as a mediator for decision making then? Those with greater reputation would have more influence, and theoretically this should work because reputation would be gained only when other people notice that the person has done something beneficial/helpful in their eyes. Overall that should result in high reputation values being directly correlated to those who are altruistic and good.

It's definitely a cool concept. The main problem being I think is incentive to adopt. Without the weight of reputation having meaning behind it, no one will care and thus the intended effect disappears.

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