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I think the author has hit the nail on the head here. Blockchains offer two useful things: * Decentralized authority * A way to make digital goods scarce To

by apozem 9y ago

I think the author has hit the nail on the head here. Blockchains offer two useful things: * Decentralized authority * A way to make digital goods scarce To my knowledge, no one has created a business that takes maximum advantage of these strengths to provide value to the user. I can't imagine what kind of business could do this. Someone who can will make a lot of money.

runeks 9y ago
What offers distributed consensus is proof-of-work, not blockchains themselves. The append-only list of blocks, that is a blockchain, is designed the way it is such that past blocks accumulate work performed on later blocks. And the only "digital good" a blockchain can make scarce is the token which exists on the blockchain itself, which is completely useless unless it's supposed to act as a store of value. And, arguably, if a blockchain token is valuable because it's scarce, it makes little sense to have an unlimited number of blockchains even if each of them only have a limited number of tokens.
- paulrd 9y ago
  Yes, but block chains are also integral to proof-of-stake or general byzantine fault-tolerant consensus algorithms. Do you mind me asking: Do you have a lot invested in Bitcoin?
  - TD-Linux 9y ago
    I don't know of any working non-proof-of-work cryptocurrencies ("byzantine fault-tolerant" sounds like a federated or centralized system to me, hardly a cryptocurrency IMO).
dismantlethesun 9y ago
How dos the block chain make digital goods scarc beyond making the currency itself scarce?
- problems 9y ago
  Look at Namecoin or Sia for example - Namecoin makes the ability to buy NS records scarce. Sia makes it possible to buy and sell digital storage. This only applies to a few things for which ownership of the content is not the content itself and for which one party has more interest than another. If I pirate a TV show, I have all the value of the content. On the other hand, if I read someone's DNS name, I do not have the value of controlling what it's set to. Similarly, if I want to buy storage, someone needs to be guaranteeing I can hold that or putting scarce resources that have value on the line if they fail.
  - acdha 9y ago
    Both of those are well-established service categories with tons of options at various levels. What exact advantages come from adding a blockchain?
    - problems 9y ago
      It differs a on a per-service basis. In the case of Sia, existing services are unable to take advantage of unused disk on other people's machines that is of little value to them, but more value to someone else - making storage extremely cheap compared to other existing services. The virtual scarcity provided by the blockchain provides a completely decentralized way to sell this storage with no 3rd party involvement. In the case of Namecoin, it removes the need for centralization of naming services and in doing so prevents external parties from interfering with naming services, the owner decides where it goes, not a registrar, not ICANN, not the US government. Generally speaking, decentralization is in one way or another the major argument for services done this way. Blockchains enable decentralization of scarce resources - but that's it. We need to stop proposing them for everything when they're really not appropriate for everything.
    - Taek 9y ago
      Speaking as a co-founder of Sia, the primary advantage of a blockchain is the inability of any third party to interfere with your infrastructure. This also means you aren't depending on anybody to have uptime. Today, when you put your data on a cloud, you select and trust a service provider. They essentially own all of your infrastructure at that point, and can easily disrupt your business or life if they decide that they don't like you. They can also do things like change price based on income level. Etc. Sia removes that uncertainty from the equation. It's based on algorithms instead of people, and there's no controlling authority. It's a free market for data infrastructure with low barrier to entry and fewer places to introduce unfair competition. But most of all, it's going to be stable in the event of political chaos. You don't have to be an aws based logistics company worrying that Amazon is moving into the logistics space and now has a conflict of interest. You don't have to be a company in Turkey worried that the US is going to apply sanctions that revoke your access to the cloud. Blockchains in general are a response to the systemic risk that we've built into the internet. I don't think that most people realize that they are useful for that (mostly because blockchains like ethereum really aren't useful for that)
paulmd 9y ago
> To my knowledge, no one has created a business that takes maximum advantage of these strengths to provide value to the user. Here it is, ladies and gentlebeans: Bitcoin, but for digital hats. I take cash or check.

by apozem 9y ago

runeks 9y ago

What offers distributed consensus is proof-of-work, not blockchains themselves. The append-only list of blocks, that is a blockchain, is designed the way it is such that past blocks accumulate work performed on later blocks. And the only "digital good" a blockchain can make scarce is the token which exists on the blockchain itself, which is completely useless unless it's supposed to act as a store of value. And, arguably, if a blockchain token is valuable because it's scarce, it makes little sense to have an unlimited number of blockchains even if each of them only have a limited number of tokens.

paulrd 9y ago
Yes, but block chains are also integral to proof-of-stake or general byzantine fault-tolerant consensus algorithms. Do you mind me asking: Do you have a lot invested in Bitcoin?
- TD-Linux 9y ago
  I don't know of any working non-proof-of-work cryptocurrencies ("byzantine fault-tolerant" sounds like a federated or centralized system to me, hardly a cryptocurrency IMO).

dismantlethesun 9y ago

How dos the block chain make digital goods scarc beyond making the currency itself scarce?

problems 9y ago
Look at Namecoin or Sia for example - Namecoin makes the ability to buy NS records scarce. Sia makes it possible to buy and sell digital storage. This only applies to a few things for which ownership of the content is not the content itself and for which one party has more interest than another. If I pirate a TV show, I have all the value of the content. On the other hand, if I read someone's DNS name, I do not have the value of controlling what it's set to. Similarly, if I want to buy storage, someone needs to be guaranteeing I can hold that or putting scarce resources that have value on the line if they fail.
- acdha 9y ago
  Both of those are well-established service categories with tons of options at various levels. What exact advantages come from adding a blockchain?
  - problems 9y ago
    It differs a on a per-service basis. In the case of Sia, existing services are unable to take advantage of unused disk on other people's machines that is of little value to them, but more value to someone else - making storage extremely cheap compared to other existing services. The virtual scarcity provided by the blockchain provides a completely decentralized way to sell this storage with no 3rd party involvement. In the case of Namecoin, it removes the need for centralization of naming services and in doing so prevents external parties from interfering with naming services, the owner decides where it goes, not a registrar, not ICANN, not the US government. Generally speaking, decentralization is in one way or another the major argument for services done this way. Blockchains enable decentralization of scarce resources - but that's it. We need to stop proposing them for everything when they're really not appropriate for everything.
  - Taek 9y ago
    Speaking as a co-founder of Sia, the primary advantage of a blockchain is the inability of any third party to interfere with your infrastructure. This also means you aren't depending on anybody to have uptime. Today, when you put your data on a cloud, you select and trust a service provider. They essentially own all of your infrastructure at that point, and can easily disrupt your business or life if they decide that they don't like you. They can also do things like change price based on income level. Etc. Sia removes that uncertainty from the equation. It's based on algorithms instead of people, and there's no controlling authority. It's a free market for data infrastructure with low barrier to entry and fewer places to introduce unfair competition. But most of all, it's going to be stable in the event of political chaos. You don't have to be an aws based logistics company worrying that Amazon is moving into the logistics space and now has a conflict of interest. You don't have to be a company in Turkey worried that the US is going to apply sanctions that revoke your access to the cloud. Blockchains in general are a response to the systemic risk that we've built into the internet. I don't think that most people realize that they are useful for that (mostly because blockchains like ethereum really aren't useful for that)

paulmd 9y ago

> To my knowledge, no one has created a business that takes maximum advantage of these strengths to provide value to the user. Here it is, ladies and gentlebeans: Bitcoin, but for digital hats. I take cash or check.