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the problem many praising blockchain minus bitcoin people forget, is that blockchain strength (distributed reconciliation) is possible only because of incentive

by rdslw 9y ago

the problem many praising blockchain minus bitcoin people forget, is that blockchain strength (distributed reconciliation) is possible only because of incentive (sth you get in exchange for doing all the etahashes per second). The moment you take incentive (bitcoin) out of the equation, whole blockchain will lose its strenght. You can not take out greed^H^H^Hincentive out of the picture. p.s. this is black and white written in bitcoin whitepaper.

nettdata 9y ago
Then how do you explain the Maersk blockchain-based insurance trial that they found very successful? Bitcoin is not the only incentive that can be had in implementing blockchain technology. There are a number of very promising use cases for blockchain, in education, healthcare, energy... none of which involve bitcoin at all.
- kirykl 9y ago
  Hype, Consultants, Buzzwords baffling executives
- ambicapter 9y ago
  Were any of these trials interesting enough to be attacked?
- nordsieck 9y ago
  All "block chain" is is a Merkle tree. You can do all sorts of productive, interesting stuff with Merkle trees. If you want to do interesting things with a trust-less, decentralized system, you need the mining and mining rewards.
  - Franciscouzo 9y ago
    It's more of a linked-list of Merkle trees.
  - Retric 9y ago
    There are a few file sharing applications that do interesting things with trust-less, decentralized systems, without any sort of mining or mining rewards. Mining allows for high value transactions in a low trust environment, but lower value transactions are very possible without that. IMO Tit for Tat is a much more interesting form of consensus building as it can be very low resource. But it's really all about the goals not the protocol.
- retox 9y ago
  >education, healthcare, energy I'm not asking for dissertations but could someone briefly explain how any of these problems/industries will be effected by blockchain.
ambicapter 9y ago
My roommate gave me a book to read about blockchain yesterday, and that was my thought exactly. A lot of 'advocates' like to tout the decentralized consensus as useful for all kinds of application, but imo they constantly overlook the -financial- incentive that supports the bitcoin network (you could attack the network with a bunch of hashpower...but it would be more profitable for you to mine).
- Lordarminius 9y ago
  What was the name of the book ?
baby 9y ago
Do you mean that if the value of bitcoin goes too low, nobody is going to mine because it won't be worth it vis a vis of the difficulty? If fees are too high nobody will use the system as well. But then the value would go low enough that the fees wouldn't be that bad and miners would probably still get their worth from it. It would be a strange blockchain though :/
zby 9y ago
That is true for one meaning of blockchain - what I observe is that blockchain became a great case of a https://en.wikipedia.org/wiki/Floating_signifier https://en.wikipedia.org/wiki/Floating_signifier In particular most of the 'serious' business people don't really mean a distributed system that anyone can join at any time - but rather a closed system, a permissioned blockchain, basically a database with authoritative local copies.
grandalf 9y ago
> The moment you take incentive (bitcoin) out of the equation, whole blockchain will lose its strength. This assumes that the compute power of the miners who are left after the incentive is gone will not be sufficient to prevent attacks. It also assumes that the miners who quit, whose hardware would seemingly be ripe for use in attacks, would have no other purpose to use it for, such as another cryptocurrency. FWIW I'd also point out that I would not be surprised if a fork were to occur that prolonged the incentive. Consider the finite incentive something that was necessary to create the initial coordination among participants in Bitcoin, but once it reaches sufficient scale if continuing to have an incentive benefits the ecosystem then surely it will (by then).
basseq 9y ago
The need for incentives is true, but the community has—erroneously, in my opinion—conflated 'incentive' with 'currency'. Follow this: - The core technology here is a crypto-backed distributed ledger. We call this the 'blockchain'. - You need a unit of trust to enable the blockchain to work. We call this unit of trust a 'bitcoin', or to be more precise, the smallest divisible unit thereof. (1 Satoshi = 0.00000001 BTC) - These units of trust have value, which also gives you incentive to create ('mine') them. If we stop here, that's all well and good. The problem with 'bitcoin' and the currency argument is that we're basically going back to the barter system. Instead of gold or foodstuffs, we're trading one good (a unit of trust) for another (whatever you're buying with BTC). Then, on top of that (and as a result), we've created a speculative commodities market in BTC. There's no true scarcity here. This is why the arguments get so confusing. I could transfer any currency on the blockchain and get the so-called benefits of bitcoin: immutable transactions, low transaction costs, etc. ----- Then you also get gems like this, from the article: A more radical idea is to use digital currency, issued and supervised by the central bank, at the retail level to replace physical cash. What percentage of retail transactions today are in physical cash? What percentage of USD holdings (bank deposits, etc.) can be backed up with physical notes and coins? (Hint: not 100%). USD is already a digital currency.
- jstanley 9y ago
  > This is why the arguments get so confusing. I could transfer any currency on the blockchain and get the so-called benefits of bitcoin: immutable transactions, low transaction costs, etc. If you really think that, you don't understand bitcoin. How do you load your USD on to this hypothetical block chain? How do you prove you destroyed the physical notes? Is there a mechanism to turn it back into physical notes? How do you hand out a block reward without creating counterfeit USD? For bitcoin to work, it needs to be its own currency.
  - basseq 9y ago
    (Point of pedantic clarification: I'm really using lowercase-B 'blockchain' to really mean 'distributed ledger', of which the capital-B 'Blockchain' is a form. Distributed ledgers that do not rely on mining or 'coins' have been proposed, but obviously haven't been implemented broadly. So let's limit this to the Bitcoin/Blockchain archetype.) So to answer your question, a couple points: 0. You can use the blockchain without bitcoin as the token of choice. You create your own limited tokens and go from there. This has already happened with various altcoins. 1. You can create private chains. Bitcoin mining and the associated value (currency) therein is one way to create a (public) ledger, but not the only way. 2. You don't 'load your USD' onto the blockchain. That ignores the point of a distributed ledger. Emphasis on that last word, because what we're talking about here is a trusted record of transactions. That's why the blockchain isn't just about currency, and gives participants a way to immutably record all kinds of things.

by rdslw 9y ago

nettdata 9y ago

Then how do you explain the Maersk blockchain-based insurance trial that they found very successful? Bitcoin is not the only incentive that can be had in implementing blockchain technology. There are a number of very promising use cases for blockchain, in education, healthcare, energy... none of which involve bitcoin at all.

kirykl 9y ago
Hype, Consultants, Buzzwords baffling executives
ambicapter 9y ago
Were any of these trials interesting enough to be attacked?
nordsieck 9y ago
All "block chain" is is a Merkle tree. You can do all sorts of productive, interesting stuff with Merkle trees. If you want to do interesting things with a trust-less, decentralized system, you need the mining and mining rewards.
- Franciscouzo 9y ago
  It's more of a linked-list of Merkle trees.
- Retric 9y ago
  There are a few file sharing applications that do interesting things with trust-less, decentralized systems, without any sort of mining or mining rewards. Mining allows for high value transactions in a low trust environment, but lower value transactions are very possible without that. IMO Tit for Tat is a much more interesting form of consensus building as it can be very low resource. But it's really all about the goals not the protocol.
retox 9y ago
>education, healthcare, energy I'm not asking for dissertations but could someone briefly explain how any of these problems/industries will be effected by blockchain.

ambicapter 9y ago

My roommate gave me a book to read about blockchain yesterday, and that was my thought exactly. A lot of 'advocates' like to tout the decentralized consensus as useful for all kinds of application, but imo they constantly overlook the -financial- incentive that supports the bitcoin network (you could attack the network with a bunch of hashpower...but it would be more profitable for you to mine).

Lordarminius 9y ago
What was the name of the book ?

baby 9y ago

Do you mean that if the value of bitcoin goes too low, nobody is going to mine because it won't be worth it vis a vis of the difficulty? If fees are too high nobody will use the system as well. But then the value would go low enough that the fees wouldn't be that bad and miners would probably still get their worth from it. It would be a strange blockchain though :/

zby 9y ago

That is true for one meaning of blockchain - what I observe is that blockchain became a great case of a https://en.wikipedia.org/wiki/Floating_signifier https://en.wikipedia.org/wiki/Floating_signifier In particular most of the 'serious' business people don't really mean a distributed system that anyone can join at any time - but rather a closed system, a permissioned blockchain, basically a database with authoritative local copies.

grandalf 9y ago

> The moment you take incentive (bitcoin) out of the equation, whole blockchain will lose its strength. This assumes that the compute power of the miners who are left after the incentive is gone will not be sufficient to prevent attacks. It also assumes that the miners who quit, whose hardware would seemingly be ripe for use in attacks, would have no other purpose to use it for, such as another cryptocurrency. FWIW I'd also point out that I would not be surprised if a fork were to occur that prolonged the incentive. Consider the finite incentive something that was necessary to create the initial coordination among participants in Bitcoin, but once it reaches sufficient scale if continuing to have an incentive benefits the ecosystem then surely it will (by then).

basseq 9y ago

The need for incentives is true, but the community has—erroneously, in my opinion—conflated 'incentive' with 'currency'. Follow this: - The core technology here is a crypto-backed distributed ledger. We call this the 'blockchain'. - You need a unit of trust to enable the blockchain to work. We call this unit of trust a 'bitcoin', or to be more precise, the smallest divisible unit thereof. (1 Satoshi = 0.00000001 BTC) - These units of trust have value, which also gives you incentive to create ('mine') them. If we stop here, that's all well and good. The problem with 'bitcoin' and the currency argument is that we're basically going back to the barter system. Instead of gold or foodstuffs, we're trading one good (a unit of trust) for another (whatever you're buying with BTC). Then, on top of that (and as a result), we've created a speculative commodities market in BTC. There's no true scarcity here. This is why the arguments get so confusing. I could transfer any currency on the blockchain and get the so-called benefits of bitcoin: immutable transactions, low transaction costs, etc. ----- Then you also get gems like this, from the article: A more radical idea is to use digital currency, issued and supervised by the central bank, at the retail level to replace physical cash. What percentage of retail transactions today are in physical cash? What percentage of USD holdings (bank deposits, etc.) can be backed up with physical notes and coins? (Hint: not 100%). USD is already a digital currency.

jstanley 9y ago
> This is why the arguments get so confusing. I could transfer any currency on the blockchain and get the so-called benefits of bitcoin: immutable transactions, low transaction costs, etc. If you really think that, you don't understand bitcoin. How do you load your USD on to this hypothetical block chain? How do you prove you destroyed the physical notes? Is there a mechanism to turn it back into physical notes? How do you hand out a block reward without creating counterfeit USD? For bitcoin to work, it needs to be its own currency.
- basseq 9y ago
  (Point of pedantic clarification: I'm really using lowercase-B 'blockchain' to really mean 'distributed ledger', of which the capital-B 'Blockchain' is a form. Distributed ledgers that do not rely on mining or 'coins' have been proposed, but obviously haven't been implemented broadly. So let's limit this to the Bitcoin/Blockchain archetype.) So to answer your question, a couple points: 0. You can use the blockchain without bitcoin as the token of choice. You create your own limited tokens and go from there. This has already happened with various altcoins. 1. You can create private chains. Bitcoin mining and the associated value (currency) therein is one way to create a (public) ledger, but not the only way. 2. You don't 'load your USD' onto the blockchain. That ignores the point of a distributed ledger. Emphasis on that last word, because what we're talking about here is a trusted record of transactions. That's why the blockchain isn't just about currency, and gives participants a way to immutably record all kinds of things.