Blockchains: How They Work and Why They’ll Change the World • Hacker News Board

Re: Blockchains: How They Work and Why They’ll Change the World

#61

Post by acdha » Thu, Oct 05, 2017, 1:09 PM UTC

wildsatchmo wrote: post #53

acdha wrote: post #43

Earlier quoted context omitted.

It’s dangerously irresponsible to mislead people with statements which imply that blockchains provide anonymity because when someone’s identity is linked there’s a full, incontrovertible record of every transaction they’ve ever made which can never be removed from the public record. If someone cares about anonymity, that’s a huge gamble to make that the system will never have a design or implementation flaw (in the c…

While this is correct, for that to be true a person would need to be using the same wallet address for every transaction which is contrary to default wallet behavior / best practices. I think people conflate the side effect of KYC regulation (mass identity linking) with an inherent weakness of blockchains when it's not. I can buy BTC directly from a person to a new wallet address and it is pseudonymous at that moment…

That’s only true if you posit that people actually follow those best practices at scale (is there any reason to believe that’s not false?) and that an attacker doesn’t know how to use a database. Otherwise you’re just betting that they’ll NEVER link your wallet IDs.

That last part is guaranteed to be false. Beyond the obvious capabilities of a state-level attacker, think about why Equifax has that data in the first place. People will buy things on credit and that depends on not being anonymous – churning IDs would be like only paying cash for everything, which is known not to be viable for anyone who isn’t rich. Secondly, think about how many businesses want this data for marketing purposes: you can churn wallets all you want and it won’t help when the vendors are passing that information to companies like Acxiom, Equifax, or Google.

Re: Blockchains: How They Work and Why They’ll Change the World

#62

Post by ska » Thu, Oct 05, 2017, 1:12 PM UTC

hobozilla wrote: post #2

I had to stop reading at: "In 2009, an anonymous hacker (or group of hackers) going by the name of Satoshi Nakamoto unveiled the first entirely digital currency" In what sense was Satoshi a hacker? Even the modern use of "hacking out code" is a stretch here. Also, it clearly was not the first digital cash. e-Gold and many others predate it.

This is true to the original meaning of "hacker", and may well have been intended that way.

Re: Blockchains: How They Work and Why They’ll Change the World

#63

Post by josh2600 » Thu, Oct 05, 2017, 1:12 PM UTC

bpicolo wrote: post #59

endymi0n wrote: post #48

Earlier quoted context omitted.

Confirmation Bias at work. You're invested, so you want it to take off. Yet none of those blockchain enthusiasts could tell me a single USP that blockchains had over storage in a normal database on any concrete use case, with the sole exception of cryptocurrencies. And the reason is simple: all those applications have none of the properties and problems the blockchain solves - which is an elegant niche solution tailo…

> you want to be able to roll back transactions under certain conditions Yup, refunds are the basis of customer service.

Ok look, I have a stake here because I run a crypto fund but let's just be clear: in the beginning of money, refunds involved going to the person you wanted a refund from and demanding the return of your currency. It's not that different from how crypto works right now except that the transaction is much more provable. Over time, institutions that look a lot like banks will provide the refund abstraction on top of crypto, BUT that doesn't change the value of an immutable changelog for money.

Think of it this way, if you were building money for computers, it would have atomic transfers and a changelog. Those properties, it turns out, are very useful, mostly because people dramatically underestimate how many transactions are between semi-untrusted parties (I would argue it is the majority of transactions). Yes, right now, crypto is a step backwards for many transactions, but that's because institutions that would traditionally support currency can't properly model the risk so only the brave entrepreneurs who accept unbounded risk participate. Over time, like any technology, traditional institutions will accept it as the regulatory regime becomes more clear.

The analogy to the beginning of the internet is obvious (the only real question is whether governments decide to ban it).

Re: Blockchains: How They Work and Why They’ll Change the World

#64

Post by simias » Thu, Oct 05, 2017, 1:19 PM UTC

DennisP wrote: post #58

simias wrote: post #52

Earlier quoted context omitted.

I don't think the parent is a luddite for questioning very emphatic and rather baseless claims. The strawman you build is unwarranted IMO. Household computers were a thing in science fiction long before they were possible and I don't recall anybody doubting you could eventually transmit movies over the internet in a reasonable amount of time. Then you continue with the usual hand waving when people point out weakness…

Regarding third parties, on a blockchain you don't have to trust them to hold your money. You can set up a 2-of-3 scheme where if the two primaries agree then the third party never gets involved, and if they disagree then the third party decides where the money goes, and only then gets a cut. Advantage: in the absence of a dispute, this system is free.

Since when is the blockchain free? You still have to pay a transaction fee.

And with your scheme there's still the problem of how do you scale it? Even if you hope that you'll be able to settle the transaction without disagreement you still have to select a third party "just in case". I can't see working at scale unless you have "professional" third parties with good reputation who will be able to oversee a big number of transactions without being tempted to cheat the system. Why would these third party accept to work for free?

Maybe those parties would accept to be paid only in case of dispute but in this case (if the number of disputes is a very small proportion of all transactions) they'll probably ask for a significant amount of money to break even. You want this third party to be very reputable and hard to corrupt after all, that means that they must have a significant amount of money at stake. You don't want some dude doing it as his weekend project in his basement.

Furthermore the one contesting the transaction will have to be the one who pays the company because how could they force the other one to give money? In turns that means that this neutral third-party becomes biased, it has an incentive to side with whoever paid them to weigh in on the transaction since they've effectively become their customer.

That's kind of my problem with this entire blockchain thing, people are reinventing the wheel, telling everybody they're going to "kill the banks!" but they never stop to wonder why our current system works the way it does. I'm not saying that things are perfect as they are but if you don't learn from past mistakes you're doomed to reproduce them.

Re: Blockchains: How They Work and Why They’ll Change the World

#65

Post by chrisco255 » Thu, Oct 05, 2017, 1:29 PM UTC

josh2600 wrote: post #63

bpicolo wrote: post #59

Earlier quoted context omitted.

> you want to be able to roll back transactions under certain conditions Yup, refunds are the basis of customer service.

Ok look, I have a stake here because I run a crypto fund but let's just be clear: in the beginning of money, refunds involved going to the person you wanted a refund from and demanding the return of your currency. It's not that different from how crypto works right now except that the transaction is much more provable. Over time, institutions that look a lot like banks will provide the refund abstraction on top of cr…

Refunds not a big deal and no different than paying cash. Online stores have a reputation and reviews so if there's retailers out there scamming people the internet will find out quickly.

Re: Blockchains: How They Work and Why They’ll Change the World

#66

Post by chrisco255 » Thu, Oct 05, 2017, 1:34 PM UTC

notahacker wrote: post #33

Iv wrote: post #10

Earlier quoted context omitted.

This is the whole misguided overenthusiasm we have seen with BTC as well. Blockchains do change something fundamental: the ability to provide for the aforementioned services in case: - You want to stay anonymous - You can't trust a third party I would argue that a functional society would not need any blockchain services as it would provide the necessary privacy defenses to do anonymous transactions and the means to…

Even in a world in which taxis and other institutions are corrupt, it stretches credulity that my real concern when getting a late night taxi is that the merchant service might run away with my $25 and my credit card company might not refund me. I've been in countries where there are major trust issues with taxis, and the very worst case I could imagine would be a service which signals to anyone watching that I'm on…

Trustless doesn't mean reputationless. A blockchain based Uber-like service would function similarly with reviews by former passengers for individual drivers.

Re: Blockchains: How They Work and Why They’ll Change the World

#67

Post by markkat » Thu, Oct 05, 2017, 1:34 PM UTC

wildsatchmo wrote: post #44

TheReveller wrote: post #5

From the article: Can a blockchain find people offering rides, link them up with people who are trying to go somewhere, and give the two parties a transparent platform for payment? Can a blockchain act as a repository and a replay platform for TV shows, movies, and other digital media while keeping track of royalties and paying content creators? Can a blockchain check the status of airline flights and pay travelers a…

Looking at all these pessimistic comments I can't help but wonder if this is what the op eds in the newspaper looked like while the internet was being built. "its too slow, and even with our best compression transferring a movie would take a month. Not gonna happen. Computers are too expensive for most households." etc. If you want to keep middle men in between most things that we could potentially do programmaticall…

I feel the same. I can't fathom the lack of imagination, and IMHO that's what it is. I've loaded Lemonade Stand on an audio cassette, and with the same fingers, I now type this on a black wafer on a plane.

Re: Blockchains: How They Work and Why They’ll Change the World

#68

Post by teknico » Thu, Oct 05, 2017, 1:39 PM UTC

simias wrote: post #52

wildsatchmo wrote: post #44

Earlier quoted context omitted.

Looking at all these pessimistic comments I can't help but wonder if this is what the op eds in the newspaper looked like while the internet was being built. "its too slow, and even with our best compression transferring a movie would take a month. Not gonna happen. Computers are too expensive for most households." etc. If you want to keep middle men in between most things that we could potentially do programmaticall…

I don't think the parent is a luddite for questioning very emphatic and rather baseless claims. The strawman you build is unwarranted IMO. Household computers were a thing in science fiction long before they were possible and I don't recall anybody doubting you could eventually transmit movies over the internet in a reasonable amount of time. Then you continue with the usual hand waving when people point out weakness…

> Has any serious blockchain successfully implemented PoS at this point?

Decred has, in production for months: " rel="nofollow">https://docs.decred.org/mining/proof-of-stake/>.

True, it's a hybrid Pow/PoS system, not a pure PoS one, which is indeed probably not workable: " rel="nofollow">https://docs.decred.org/research/hybrid-design/>.

Re: Blockchains: How They Work and Why They’ll Change the World

#69

Post by sergiosgc » Thu, Oct 05, 2017, 1:40 PM UTC

endymi0n wrote: post #48

zilian wrote: post #45

Earlier quoted context omitted.

Thank you for your comment. Looking at all the doubt and hate about blockchain & cryptocurrencies on HN lately, I personally can't help but wonder where have all innovators gone.

Confirmation Bias at work. You're invested, so you want it to take off. Yet none of those blockchain enthusiasts could tell me a single USP that blockchains had over storage in a normal database on any concrete use case, with the sole exception of cryptocurrencies. And the reason is simple: all those applications have none of the properties and problems the blockchain solves - which is an elegant niche solution tailo…

> Yet none of those blockchain enthusiasts could tell me a single USP that blockchains had over storage in a normal database on any concrete use case, with the sole exception of cryptocurrencies.

> And the reason is simple: all those applications have none of the properties and problems the blockchain solves - which is an elegant niche solution tailor made for mutually mistrusting entities working together on a distributed ledger. That barely exists in real life.

> Centralized systems are what you want in 99% of cases. They're more reliable, better controlled, have infinitely more throughput and usually, you want to be able to roll back transactions under certain conditions (fraud, mistakes, etc.)

While we're high on the hype cycle for blockchains and crypto currencies, it's easy to find actors that do not understand the limitations of the technology. It has heavy drawbacks when compared to centralized systems. That is true, I agree with that part of your comment.

What your position misses, are the huge unrealized upsides of blockchain tech. It's natural, because they are potential, unrealized and, as such, difficult to defend. Let me try my hand at it anyway, as high level as possible so we don't get lost in use case minutiae.

Blockchain allows you to eschew the need for a single central trusted party. This allows for fluid ecosystems, removing the need for a monopoly/oligopoly in scenarios that today require one. This removal of a market deficiency is known to increase innovation, through competition.

If you find it difficult to imagine use scenarios for blockchain, look for deficient markets caused by the need for centralized trust: monopolies and oligopolies. In each, you'll find an opportunity to create a more competitive market through blockchain.

Re: Blockchains: How They Work and Why They’ll Change the World

#70

Post by acdha » Thu, Oct 05, 2017, 1:46 PM UTC

wildsatchmo wrote: post #44

TheReveller wrote: post #5

From the article: Can a blockchain find people offering rides, link them up with people who are trying to go somewhere, and give the two parties a transparent platform for payment? Can a blockchain act as a repository and a replay platform for TV shows, movies, and other digital media while keeping track of royalties and paying content creators? Can a blockchain check the status of airline flights and pay travelers a…

Looking at all these pessimistic comments I can't help but wonder if this is what the op eds in the newspaper looked like while the internet was being built. "its too slow, and even with our best compression transferring a movie would take a month. Not gonna happen. Computers are too expensive for most households." etc. If you want to keep middle men in between most things that we could potentially do programmaticall…

> I'm on the hype train

That’s the intellectual blind spot which is making this so hard to understand: you’re invested in the technology and want to see it succeed, which means you’re inclined to minimize every downside and boost every possible use without asking whether something is better in addition to being possible.

Being old enough to remember when the internet was starting to go mainstream, there were op-eds like that but they got plenty of pushback because there were so many new things which you could do on the internet which were either impossible, unaffordable, or too cumbersome before. Yes, a modem connection was too slow to play a movie but you could read newspapers around the world, send email to anyone and have it arrive in seconds, download software or photos instead of having to drive to the store, research and trade stocks, chat, etc. and there was a clear path for technological improvements making that experience better over time. The average person could easily see things they’d like to do and the costs were getting more approachable every year.

In contrast, we have a ton of blockchain hype without a single legal use which solves a problem normal people care about better than existing, well-tested technology. There’s a lot of “that’ll change once these fundamental design flaws are solved in a way we don’t yet know how to do” hype being peddled by people who stand to profit if everyone buys in but, as during the dotcom bubble, that should inspire more rather than less skepticism.