24 ms·

Building for the Blockchain

470 points by vincentschen 9y ago

api 9y ago
Yet so far I still see almost nothing on the block chain (beyond its core currency use case) that is useful outside the domain of block chain stuff. The only exception is things like Sia, and that's not cost or convenience competitive with Amazon S3 or Backblaze. Where is the value here? When I visited this I was expecting to see at least something about building something useful for... something... Building what for the blockchain? Oh kitties. Yeah. I am absolutely aware of the fact that early stage tech often looks like a toy, but here's the thing. PCs were a toy but it didn't take long at all (VisiCalc, etc.) before they had actual uses. BBSes were a toy but they were immediately useful to their users for trading data and messaging. We are now about eight years into block chain and beyond its one core use cases there is almost nothing. Whatever value has been delivered seems extremely minor compared to the vast sums of money being spent, making this perhaps the worst ROI I've ever seen. Can someone provide a counter example? What are people doing in the real world with this stuff?
- goodroot 9y ago
  Hello, api. You might want to check this page out: https://www.stateofthedapps.com https://www.stateofthedapps.com There are 938 projects listed that leverage Ethereum/Solidity. One of my personal favourites is: https://colony.io https://colony.io. The whitepaper is a fun read.
  - api 9y ago
    What I'm really looking for (and I've been asking this question in a lot of places recently) is some concrete examples of real world cases where this tech is being... you know... used as something other than just novelty or tinkering. Block chain centric use cases don't count since those just reinforce my worst case hypothesis-- that cryptocurrency is a financial MMORPG and a pure value-free bubble. What's an actual case of an actual team, project, or organization using this stuff to do something... actual? I'm both a developer and a founder and am very active in tech. I have yet to encounter a single case of someone using a block chain based application in the real world with the exception of the core currency/wire transfer use case of cryptocurrency. We have used it for that ourselves, but as others have noted the appreciation in value is actually harming this use case. What I see here is heaps of money being raised and a lot of developer time being spent building things without any contact with reality whatsoever. As they say in the military: the first casualty of war is the plan. IMHO there is nearly zero chance that you are building the right thing until you have shipped and iterated a few times, especially with something complex and rather byzantine. The only exception to that might be "scratch your own itch" or "dogs making dog food" projects, but those really aren't exceptions since if you are the customer you can (to some extent and in the early days) short circuit the process by testing on yourself in your own head as you go. Colony looks like groupware on the block chain. Groupware is a very well known tar pit of death.
    - goodroot 9y ago
      You might like this example, it puts decentralized smart-contracts in a digestible context: https://germanylandofinnovation.com/2016/10/19/german-company-rwe-is-using-ethereum-to-test-blockchain-car-charging/ https://germanylandofinnovation.com/2016/10/19/german-compan... -- Under the prototype, users interact with the charging station by agreeing to a smart contract that is programmed on top of the Ethereum network. Prior to charging, the user makes a deposit on the network, which is later released after the transaction is complete. The main difference is that instead of users being billed for the amount of time that they are connected to charging station–i.e. the way most stations work today–users pay only for the amount of electricity consumed during the charging process. The hope is that both the cost of the micro-transactions, and the allocation and consumption of electricity, will be made more efficient and ultimately save money. In addition, the blockchain plus smart contracts has the potential to streamline the process of purchasing power from a charging station. In theory, this can take place directly with the machine (charging station) and not require prior contact with the providing company or a human representative.
      - api 9y ago
        How is paying for electricity with Ethereum better for me than paying with a card? I don't see the advantage. When VisiCalc was demo'ed there were people lined up literally pulling out their checkbooks and offering to pay almost limitless amounts of money for the prototype. Spreadsheets had insane value to accountants. Other than the core use case of currency that I mentioned, where are the "killer apps" for block chain? A lot of it looks like minor and dubious improvements or solutions in search of a problem. Neither of those comes close to justifying the insane amount of money and resources being poured into this area.
        davejohnclark 9y ago
        Have you come across https://www.provenance.org https://www.provenance.org? It's outside the currency/wire transfer space. Looked like an interesting application to me, but possibly too nascent to be a shining example
        9y ago
- furyofantares 9y ago
  The post does kind of explain that. In the centralized world with a thin protocol layer that captures little value and a fat application layer that captures a lot, we see far, far more development in the application layer. When you invert where the most value is captured, you invest where the most work is done. That said, all sorts of open source projects have shown that there are plenty of people willing to sacrifice their ability to capture value if it means they can produce even more value that is instead captured by users.
  - api 9y ago
    That's a nice hypothesis. We are now almost a decade into cryptocurrency. Where is the evidence that this hypothesis is true? Don't get me wrong. I want to believe. I want a decentralized trust-free ubiquitous computing future. I want an alternative to conventional VC to fund startups. I want an alternative to adware/surveillanceware to fund products and services. That's why I am saying "put up or shut up" and calling BS on this mania. It's sucking all the air out of the room and if this really is a totally vapid value-free bubble its collapse is going to be a disaster.
  - iman453 9y ago
    Isn't end user adoption driver by the application layer though. If the application layer developers aren't incentivized and don't build things on the protocol layer, what's the point of the protocol layer?
- EGreg 9y ago
  My favorite part about the blockchain is that it is a standard building block for decentralized byzantine consensus. Throw Ripple's XRP Consensus algorithm at 50-100 nodes and you know that 30% or more would have to be compromised to break the guarantees. That's really cool because I can code the rest of the interface (front end etc.) with sloppy security and then ACTUALLY BOLT ON a secure layer with guarantees at the end. Makes development much more streamlined. As the author of a huge codebase (https://qbix.com/platform https://qbix.com/platform) I worry that there are lots of security holes. With such a large attack surface, most new open source projects are swiss cheese, like early Wordpress (which is still full of holes from plugins). Here, we just build our MODEL layer with a blockchain and KNOW the rules are going to be enforced. Combine that with IPFS and a token and suddenly you don't have to pay for hosting to scale to billions of people. It's nice.
  - xchaotic 9y ago
    It's nice in an utopian kind of way, but it's actually less efficient - i.e. more costly overall. So you're talking Facebook paying for their hosting by showing ads vs you trying to charge customers real money or slow down their computers. I have a guess which one is going to prevail.
    - EGreg 9y ago
      Hmm how do you figure? Having people host with several nodes running a consensus algorithm is worse than trusting all your data to one actor in "the cloud"?
  - joosters 9y ago
    Ripple is not trustless, so the blockchain part of it is moot. Since you have to trust Ripple (because they have full control), you might as well let them store the blockchain data on their own centrally controlled database.
    - EGreg 9y ago
      What are you talking about? What exactly can Ripple do on its own network that you have to trust t not to do? And anyway it's open source software! Why don't you go download the XRP consensus protocol from their github repo and try it. Ripple's servers won't even be part of the network.
- solotronics 9y ago
  its only a matter of time before bank settlement and cross border payments are all done on blockchain. I would think that asset tracking and real esate deeds are a great application. Asking why these things aren't on the blockchain yet is like asking why businesses aren't using the internet in the 1970s.
  - api 9y ago
    That's the core use case I mentioned: currency and wire transfer. I've used it for that and the value is there. I will add though-- the major reason cryptocurrency has so much value in that space is that the alternatives (bank wire, Western Union, etc.) are so terrible from a UX perspective. If those alternatives vastly streamlined their UX I think a lot of the value in cryptocurrency in the developed world might disappear. It might still have value in countries without good and reasonably stable banking systems.
    - CPLX 9y ago
      Are you at least somewhat aware that the user experience of cryptocurrency is currently abysmal, and worsening?
  - joosters 9y ago
    Why? Putting blockchain in there just adds more FX transfers. USD<->GBP now becomes USD<->BTC<->GBP, so why would you expect that to reduce costs and improve efficiency?
- TeMPOraL 9y ago
  > Whatever value has been delivered seems extremely minor compared to the vast sums of money being spent, making this perhaps the worst ROI I've ever seen. What's even worse, from my POV, is the humongous amount of electricity that is used to support the blockchain. And to what end? Personally, I won't start believing in the blockchain until a non-wasteful alternative to the present PoW scheme gets developed and actually deployed. Right now, this looks to me like the most direct way of turning human vices into cooking us live on this planet that humanity has ever invented.
  - Fradow 9y ago
    Proof of Stake (PoS) and Proof of Capacity (PoC) exist and are actually deployed for quite a while now. They don't consume lots of electricity and can be runned on cheap hardware. I run 2 PoS wallets on one of my computers. It doesn't affect it much, though not all coins are equal (some consume more resources). It just have to stay on.
  - tikwidd 9y ago
    The 'end' is the security of the bitcoin blockchain. Defence forces consume a massive amount of energy and human resources. They are still funded because countries don't all trust each other and they want security. An alternative to Proof of Work such as Proof of Stake would be like a country having a nuclear arsenal, allowing it to cut back on military spending. The problem seems to be that the incentives are on the miners to switch to another proof system, and the existing miners wouldn't want to do that because it's their edge in the market (low electricity costs).
    - TeMPOraL 9y ago
      You're talking about the means of blockchain to self-preservation; I'm saying that we don't need blockchain, that it eats way too much for the fun it provides, so we should just kill it off and call it a day. > The 'end' is the security of the bitcoin blockchain. Defence forces consume a massive amount of energy and human resources. They are still funded because countries don't all trust each other and they want security. Yes. Wasteful as evil as the concept of a military is, countries need military forces to maintain peace, by keeping each other in check. It's an unfortunate direct consequence of the way humans organize themselves into societies. But blockchain is not a direct consequence of a fundamental issue in human organization process (if anything, it's just a direct consequence of human greed meeting 2010s tech). It's the least efficient way of doing anything, because it completely eschews the need to trust other actors. Yes, I believe trustless systems are mostly a bad thing, because trust is literally the efficiency hack that allows us to coordinate at scale. There are probably some theoretical problems where a trustless solution is perfect. But as it is today, the blockchain is trying to turn everything in the society into a Cold War-like military spending problem to avoid having to trust one another, even though trust-based systems work just fine.
- 0x4f3759df 9y ago
  Why use a blockchain instead of a database? Because multiple organizations are involved and each wants to control the database. If a thing moves across multiple organizations then you can make a case for a blockchain application, logistics is an obvious example, but there are others like asset (expensive paintings / vintage wine) provenance. https://techcrunch.com/2017/12/15/ups-bets-on-blockchain-as-the-future-of-the-trillion-dollar-shipping-industry/ https://techcrunch.com/2017/12/15/ups-bets-on-blockchain-as-...
  - CPLX 9y ago
    Sure. But this has been going on for awhile, what's the example of someone actually doing any of these things in a way that creates real efficiency?
    - 0x4f3759df 9y ago
      I feel like you are moving the goalpost. edit: If UPS doesn't count then nothing is going to count.
      - CPLX 9y ago
        The guy said it seems interesting in theory but asked where the actual value was. You replied with some theoretical examples. Lots of things are interesting in theory. Bitcoin is about to end its first decade though. Asking where the actual value comes from seems on topic to me.
        ruiquelhas 9y ago
        I don't know about so called blockchain projects like ethereum, but bitcoin has value because it has inelastic demand. There are a lot of underserved people out there that need bitcoin, regardless of its value, in their daily lives because they can't use fiat currency for things like buying quality drugs online, getting rid of ransomware, laundering money, etc. Hell, if these don't pass the ideological test, just ask someone from Venezuela why do they need bitcoin.
- bitoneill 9y ago
  Ten years in, nobody has come up with a use for blockchain https://hackernoon.com/ten-years-in-nobody-has-come-up-with-a-use-case-for-blockchain-ee98c180100 https://hackernoon.com/ten-years-in-nobody-has-come-up-with-...
  - rrecuero 9y ago
    Fundraising: Ethereum ICOs Store of Value: Bitcoin Loans: SALT .... This is just the beginning
    - bitoneill 9y ago
      I found a non-coin blockchain example: Big Pharma Seeks DLT Solution for Drug Costs https://www.coindesk.com/blockchain-day-big-pharma-seeks-dlt-solution-drug-costs/ https://www.coindesk.com/blockchain-day-big-pharma-seeks-dlt...
      - elhudy 9y ago
        Are there any companies in particular that specialize in the implementation of such blockchain use cases?
- rrecuero 9y ago
  Scalability and adoption are moving targets. People were saying the same thing of the internet in the early days. Check SALT, millions in loans already distributed https://www.saltlending.com/ https://www.saltlending.com/
- felipeccastro 9y ago
  For example, steemit.com: a social network where you get paid (in tokens) for producing/curating content. As the network grows, the token gets more valuable, so there's a strong incentive for early users to join it. I'm not sure yet steemit will end up being a winner in this field, but I find this a very smart approach for challenging the network effect of big competitors.
  - joosters 9y ago
    There's nothing there that is impossible without a blockchain. The steemit website might as well issue its tokens using a simple database. Running it on a blockchain adds nothing except a 'shiny new technology' feel.
    - ruiquelhas 9y ago
      And why would I need the tokens in the first place? Hell, why would I need to pay at all, given that there are free alternatives like Medium?
      - felipeccastro 9y ago
        You don't pay, you gain money. Unless, of course, you're a company that wants to buy advertising space. As a user (writer/curator), you earn tokens for doing what you already do for free in reddit or facebook. The tokens you earn are like altcoins, you can trade them for whatever you like.
    - felipeccastro 9y ago
      The tokens here are essentially altcoins, like ether or bitcoin. How would that be done with a simple, private database?
      - joosters 9y ago
        The steemit coins, as I understand it, have little to no other use (unless 'speculation/gambling' is a use case) so they don't need to be crypto coins at all. Instead they could be magic internet points that are all accounted for and transferable on steemit's website, with options there to buy more or to sell them for cash.
- wepple 9y ago
  I opened this link thinking “finally, someone will explain why blockchains are great, with some solid practical examples: ycombinator themselves” Nope. Still hype and noise.
goodroot 9y ago
> For one, Ethereum is unable to access real time data from outside the blockchain. Developers need to rely on trusted third party data providers, called oracles, to provide smart contracts with outside information like weather, random numbers, or currency values. I feel like this is more of a feature than a bug. If you're weaving applications into the blockchain, would it really be wise to have that chain communicate with abstract data off of the chain itself? Seems an unnecessary burden for the chain to bare! Great article. I've recently gotten into Ethereum Dev and Solidity. It's really fun, fun stuff. This isn't directly addressed in the Ethereum portion of the article, but it's good to keep in mind that these things are all works in progress. Limitations today are non-such tomorrow; we don't quite know where the train is headed. You, Developer, can help it get to wherever you feel it needs to go. Remember that before deciding not to contribute. :)
- sf_rob 9y ago
  I took this as a point of explaining what Oracles are/do. Too often Ethereum proponents skip talking about Oracles when it comes to discussing attack vectors on Eth smart contracts.
- Jasper_ 9y ago
  What I don't understand is how Ethereum can describe their dapps as "trustless" when all the trust is still centralized in an oracle. This can even happen accidentally, such as with the Mayweather/McGregor smart contract breakage. [0] But now imagine if BoxRec had intentionally reported false results from their website in order to make a lot of money on the bet. People would lose their money, and there would be no recourse. [0] https://www.reddit.com/r/ethtrader/comments/6w5wcn/important_update_mayweathermcgregor_smart_contract/ https://www.reddit.com/r/ethtrader/comments/6w5wcn/important...
  - albertgoeswoof 9y ago
    You can solve this by using multiple oracles and a stake-based consensus algorithm to de-incentivize malicious reporting.
CiPHPerCoder 9y ago
People are trying to solve a lot of interesting problems with blockchain, but I fear it's become the ultimate shoehorn solution for the modern era. See also: https://tonyarcieri.com/on-the-dangers-of-a-blockchain-monoculture https://tonyarcieri.com/on-the-dangers-of-a-blockchain-monoc... I've had meetings with prospective clients that opened with, "We have $problem, can we use blockchain to solve it?" where anything that doesn't qualify as a blockchain is cast to the wayside because it doesn't scratch that buzzword itch. (Amusingly, I've witnessed one pitch where the person called it "bitchain" and it sounded like "ba-ching!" and I was waiting for the follow-up to what I thought was onomatopoeia for a cash register sound. I've since learned to not abbreviate cryptography as "crypto" lest I attract sketchy prospects.) A lot of the problems that you might want to solve with a blockchain probably doesn't need a blockchain. A distributed, append-only cryptographic ledger will suffice. To wit: https://paragonie.com/blog/2017/07/chronicle-will-make-you-question-need-for-blockchain-technology https://paragonie.com/blog/2017/07/chronicle-will-make-you-q...
- arkona 9y ago
  > A distributed, append-only cryptographic ledger Pardon my ignorance, but isn’t that what a blockchain is?
  - CiPHPerCoder 9y ago
    A distributed ledger doesn't necessarily mean a decentralized one. This is a handy reference to decide if you're building a cryptographic ledger or a blockchain: https://gist.github.com/joepie91/e49d2bdc9dfec4adc9da8a8434fd029b https://gist.github.com/joepie91/e49d2bdc9dfec4adc9da8a8434f...
    - hiq 9y ago
      I think the confusion stems from permissioned vs permissionless blockchain, and the comment you replied assumed you were talking about one instead of the other. I find the plain term "blockchain" rather vague in that regard. In addition to this github gist, I like http://doyouneedablockchain.com/ http://doyouneedablockchain.com/ .
jaequery 9y ago
Where I can see blockchain being more 'actually' useful is in simple things, like verifying the integrity of the app (or anything really), ala checksum hashes. It makes a lot of sense for us to store them on the blockchain rather than hosting it on a webpage.
- nileshtrivedi 9y ago
  You need blockchain only when you want to prevent double spending of _something_. A linked list where only one node can have a valid pointer to the previous node. For checksum hashes, unless double spending is a problem, IPFS will suffoce.
  - patrickaljord 9y ago
    You don't need a blockchain to prevent double spending. You only need a blockchain if you want the double spending prevention to happen between trustless distributed peers.
    - jhwang5 9y ago
      You are right, and I think this aptly captures just how misunderstood Blockchain is even on this forum.
      - nileshtrivedi 9y ago
        I used "only when". It's a necessary, but not sufficient, condition. https://en.wikipedia.org/wiki/Principle_of_charity https://en.wikipedia.org/wiki/Principle_of_charity
- sly010 9y ago
  We have been doing that without blockchains with PKI for a long time.
nickporter 9y ago
Bitcoin whitepaper url is broken.
thisisit 9y ago
I stopped after reading this: > “Historically the only way to make money from a protocol was to create software that implemented it and then try to sell this software (or more recently to host it)… With [cryptographic] tokens, however, the creators of a protocol can ‘monetize’ it directly and will in fact benefit more as others build businesses on top of that protocol.” And what was wrong with developers finding a market, developing a software and then monetizing it? I have tons of ideas each day, some of them blockchain related too but it seems unethical to use other people's money to test my hypothesis.
- ArchReaper 9y ago
  They didn't say anything was wrong with that, they said it used to be the only option. Now there's other options.
- rrecuero 9y ago
  We were talking specifically about protocols like TCP, IP, DNS or even P2P. It was nearly impossible to monetize protocol level work before cryptocurrencies
deleted 9y ago
[deleted]
decorator 9y ago
Ethereum isn't decentralised to a large degree (see the DOA). Given such a thing, one may as well use a standard web stack. Also, that makes any guides written for devs on the subject of negative utility. It wastes their time; since the premise, that the new paradigm derives its value from censorship resistance, is breached. It takes some serious non-thinking to support Ethereum. The price is high, the value is low.
45h34jh53k4j 9y ago
Ethereum isn't useful for smart contracts; they are too expensive to call methods on chain and EVM is too inflexible and bug prone. The only use for ethereum is shittokens, and you could practically coingen these for free, and trade forever. No load on the shared commons, isolate activity to the specific coin. The only advantage is the ECR20 standard that aids exchange integration. SV is all a blaze about Ethereum, but I tell you, this too shall pass. Long on other smart contract platforms, but not ETH.
- taternuts 9y ago
  What other smart contract platforms are worth following?
  - Geee 9y ago
    Cardano.
- CryptoPunk 9y ago
  >>SV is all a blaze about Ethereum, but I tell you, this too shall pass. Doesn't look like this is fading away: https://etherscan.io/chart/tx https://etherscan.io/chart/tx >>The only advantage is the ECR20 standard that aids exchange integration. That's a massive advantage. Several decentralized exchange protocols are being developed, and a decentralized exchange, EtherDelta, is the most utilized DApp on Ethereum: https://ethgasstation.info/gasguzzlers.php https://ethgasstation.info/gasguzzlers.php Ethereum's network effect in crypto-assets is growing stronger every day, with 91 of the top 100 tokens now ERC20 tokens: https://coinmarketcap.com/tokens/ https://coinmarketcap.com/tokens/
EricDeb 9y ago
So far the main benefit is democratizing investment, as has been stated here before. I love that I can get in on early stage projects without being a well-connected angel investor. Coins are like new, sexier penny stocks.
- m1sta_ 9y ago
  The only reason this wasn’t possible in the past was because too many people got ripped off.
  - EricDeb 9y ago
    Undoubtedly that will happen again, but maybe this time third party validation systems will improve?
blockgeeks 9y ago
Thanks for the article and the shoutout to blockgeeks!!
- vincentschen 9y ago
  thanks for the resource!
geraldbauer 9y ago
FYI: To learn about blockchains - why not build your own blockchains from scratch (zero)? At the Awesome Blockchains [1] page I collect starter blockchains (in JavaScript, Python, Ruby, etc.) and articles plus fun blockchains (such as CryptoKitties and CryptoCopycats) [2]. [1]: https://github.com/openblockchains/awesome-blockchains https://github.com/openblockchains/awesome-blockchains [2]: https://github.com/openblockchains/awesome-cryptokitties https://github.com/openblockchains/awesome-cryptokitties
snitko 9y ago
It's all the same thing every year on HN. People trying to find all sorts of excuses for Bitcoin existence - blockchains, smart contracts, ICOs - as long as they don't have to accept that Bitcoin's main purpose is and always was to have an alternative to the financial system, crippling regulations, government control and taxes. In other words, everything people hate about libertarians, they try to ignore in Bitcoin. Because they can't just ignore Bitcoin - it's not going away for some reason. And it's not going away because there's a demand for Bitcoin. Why? Not because blockchain is some sort of an innovation. It's because people want a currency not controlled by any state institution. It's because people want freedom. Deny that all you want, it's not going away.
- xchaotic 9y ago
  it's a very noble approach, but the facts are not in your favour. The 'people' that keep bitcoin valuation high are: early adopters (including ones who lost access to their wallets), HODLers and speculators and perhaps a few casual drug buyers. As a mainstream currency, BTC is pretty useless at world scale.
  - m1sta_ 9y ago
    You forgot a big one that’s not going away quickly: money launderers.
    - matte_black 9y ago
      Serious launderers launder money through cash only businesses.
- iraklism 9y ago
  There is definitely a portion of people that this applies to. However, I’d wager that the majority of the Cryptocurrency market capitalisation is from people that really want to become millionaires really fast.
- Kiro 9y ago
  You're just speculating and I personally think you're wrong.
kang 9y ago
Naval does a much better job of explaining what the tech is about : https://startupboy.com/2014/04/01/the-fifth-protocol/ https://startupboy.com/2014/04/01/the-fifth-protocol/ However, OP nor Naval, really understand the protocol, or wouldn't be supporting non-blockchain things like ethereum (there is nothing that you can do with ethereum but not with git). >One of these developers, Vitalik Buterin, was frustrated by Bitcoin’s immobilism I am amazed at how HN is selling a promo story invented for media by ethereum as a company. Digging IRC logs would reveal how Vitalik convoluted each aspect of the tech(and was often wrong)to the point that the devs stopped caring and let him be. Even technically, I have answered this on HN and other places numerous times - tell me one thing you can build with ethereum but not with bitcoin? (On the opposite, ethereum can't do money - mutable chain).
- ShabbosGoy 9y ago
  Bitcoin is slow as hell. So you can do an order of magnitude more with Ethereum than Bitcoin.
  - kang 9y ago
    Technically, decentralized system will be always slower than centralized one. Its a good thing its slow. 1 hour blocks are even safer (and effectively we do convert blocktime to an hour by waiting for 6 confirmations). So no, you can't "do" more, only be more noisy.
    - cturner 9y ago
      > Technically, decentralized system will be > always slower than centralized one. This is not a reasonable response to the parent: bitcoin is significantly slower than other systems of its class. Ethereum is an equivalent system and faster. (Others are much faster still) There are application where speed matters. For example, to sort things out while all the lawyers are in a room.
      - kang 9y ago
        I am not saying that speed doesn't matter; trade-off though is security. If there are lawyers to sort thing out, then you don't need crypto. >bitcoin is significantly slower than other systems of its class that class being decentralised proof-of-work, it is no slower than it is more secure than those class-members. (And among class members of equal 'speed' it is most secure)
epberry 9y ago
So this is exactly how I got started on a silly Ethereum side project over the holiday. Truffle, solidity docs, and reading the crypto kiddies code is all you need. I'm mostly interested in how Ethereum and other blockchain technologies work - there's no denying that building a dapp is just a fundamentally different experience from building a web app today and that in itself is exciting. I'm mostly not interested in anything financial. Decentralization, immutability, and a built-in way to pay for usage are the main features of Ethereum (possibly combined with IPFS) that get me going.
rsp1984 9y ago
Monegro believes that this paradigm shift affects the way that developers should think about their applications: “The combination of shared open data with an incentive system that prevents “winner-take-all” markets changes the game at the application layer and creates an entire new category of companies with fundamentally different business models at the protocol layer.” Ok, thin protocols + fat apps --> fat protocols + thin apps. Neat theory. But this is putting the cart before the horse. Please can someone ELI5 to me: * What problem does the fat-protocol, thin-app paradigm solve? * Why would anyone be interested in developing a thin app for my fat protocol any more than anyone is interested today in developing a thin protocol that I can put my fat app on top of? * Why is thin-protocol, fat-app considered to be in need of fixing in the first place? I consider the fact that apps capture more value than protocols to be a direct consequence of the free market. Apps capture business value because they solve actual user problems. Protocols define ways to build apps. But frankly I don't see a great demand for new protocols, and I consider that reason enough for the fact that protocols can't capture much value. To say that that would change with the blockchain is IMO equivalent to saying the market has it all wrong. What am I not seeing?
- adamnemecek 9y ago
  It raises the low level of your app from request handling to dealing with users and their interaction.
- keithwhor 9y ago
  You’re seeing everything just fine. Imagine you’ve spent your whole life investing millions of dollars in entrepreneurs. Building models and testing hypotheses with no real agency: you can’t control what the CEO does or the product the engineering team builds or the way they market the product. Your job is to provide returns for your LPs. That’s it. Now imagine, instead of spending thousands of hours interacting with and managing people, their problems, watching painfully as they try to figure out the market they specialize in, I tell you that you can invest in something else. That thing, we’ll call it a token. This token does work. It can be used to compute something. Or helps make something easier. I’m not clear on the specifics, but I can tell you one thing: if you buy it, and if you tell other people about it, merely the act of owning it increases its value. I have just given you something you don’t get a lot of in your career, true, direct self agency. You are unequivocally sure that you are creating value because it’s you who is selling the value! You bought, the price rose, you know if other people get excited the price will rise again. It’s exciting, you don’t have to deal with people mucking about directly, and you’re doing your job: generating returns. The house of cards here is the assumption that these tokens can be used for something, anything beyond a store of value. Because if that’s true, it’s not really speculation. You’re an early adopter of a paradigm-changing protocol. The default assumption here is that engineers are like ants: we build for the sake of building. Give us a canvas and we will build dApps (or what-have-you) just for the sake of building them. The truth is, engineers are not ants. We build things to make our lives easier or more fulfilling. I started programming, for example, to build video games. Many people build things to automate their homes. When you build for an employer, the end goal is always to do something for the customer. The draw of Ethereum, seems to me, to be that eventually somebody will have to build something insanely valuable, right? Statistically, it’s gotta happen. I think that’s a ridiculous premise: if centralized tools are always faster with more mature ecosystems, engineers will always go there to solve their daily problems. The question to me really seems to be, “do we need truly immutable ledgers and transaction histories? Do we need 100.0% reliability in transaction history at the cost of orders of magnitude more energy expenditure, or is 99.9999999% okay?” As a cute anecdote, Life has been remarkably successful with a 10^-7 error rate in DNA polymerase. I have a feeling most industries will be fine without, and it’s actually probably cheaper to have a reasonable facsimile (or statistically insignificant approximation) of immutability (human intervention and accountants included) than a guarantee. Especially if, in order to be guaranteed, it needs to be public. So, what you’re seeing is speculation that engineers could build something one day using an application development paradigm that’s not actually clearly or obviously more powerful. It’s worse speculation than betting on startups with teams of people who reliably execute, masked by the illusion of self agency as an owner and promoter of a token. tl;dr: Somebody remind me of this post in a decade and we’ll see where it all ends up. The technology will grow and evolve. I’m not sold on any of this, and investors who aren’t building anything but themselves are holding tokens telling people to go experiment and build things isn’t an attractive signal. (It seems like VC flipped on its head and the incentives are poor for engineers - so, for now, let these investors play hot potato with each other for a while. I’ve seen a few of Vitalik’s tweets and it seems even he’s concerned about these incentives.)
krisives 9y ago
You can write Solidity in the browser now using their Remix IDE: https://remix.ethereum.org/#optimize=false&version=soljson-v0.4.19+commit.c4cbbb05.js https://remix.ethereum.org/#optimize=false&version=soljson-v...
cturner 9y ago
It is misleading to describe etheteum as Turing-complete. If it were, an infinite while loop would soon crash the network. (As mentioned in the article, the processing of Ethereum contracts is powered/funded by a finite valuable currency called gas) A novelty of the unfolding blockchain revolution is the realisation that there is a world of interesting non-turing-complete things to be built. We all assumed that anything non-turing-complete a waste of time. Surprise! What you want to say here is that ethereum takes a large step towards creating a flexible development platform. EVM function like an instruction-set for this distributed computer. This may be close to the way forward. But solidity is not. A quick port of JavaScript, it is still in the old software mindset. Ethereum has problems ahead of it. Just as C has an endless capacity to create memory leak bugs, Solidity offers opportunity for contracts that will drain people's accounts. Each time it happens, it will be reputational damage for the community. If you wanted to learn Ethereum, it might make more sense to start with raw EVM than Solidity. Play at writing a macro assembler. Once you were tooled up, you might try your hand at becoming the Brendan Eich of the blockchain. Until you do, we are stuck with Brendan Eich. If we do not find such an expression, general-purpose, public-access blockchain will gain permanent mistrust, and fail. Message-driven concurrency is here to stay though. I am building a concurrency language centred around message-driven consensus-engines. (github.com/solent-eng/solent) It is designed to be host-distributed, but operated by a single party and not multi-party.
alexpetralia 9y ago
'Albert Wagner' should be 'Albert Wenger'
m3kw9 9y ago
Inevitably because of the ICO component, there will be a lot of applications that tries to use block chain to search for a problem to solve more inefficiently than not using block chain. With the main idea so they can get the ICO to work for them.
natural219 9y ago
> Alternatively, the distribution of value in the blockchain paradigm can be described with fat protocols and a thin application layer. This paradigm shift is possible due to the innovation of cryptographic tokens. As a long-time decentralization activist, this sentiment makes me want to tear my eyeballs out. Why are cryptographic tokens necessary to implement fat protocols? Why does "standardizing communication across applications" now also have to mean "implementing a global, secure financial market" in the process?!? This is maddening to me and nobody has explained to me why blockchains are a requirement to do this.
- CryptoPunk 9y ago
  It explains in the two subsequent paragraphs: >>“Historically the only way to make money from a protocol was to create software that implemented it and then try to sell this software (or more recently to host it)… With [cryptographic] tokens, however, the creators of a protocol can ‘monetize’ it directly and will in fact benefit more as others build businesses on top of that protocol.” >>Previously, the creators of open communication protocols for the Internet, largely DARPA researchers and non-profit contributors, could not align financial incentives with protocol development. In contrast, protocol creators today can issue “tokens”, like Bitcoin and Ethereum, that represent the value of their decentralized protocols. The key is that it can "align financial incentives with protocol development".
davesque 9y ago
A blockchain ensures that some sequence of agreements was made in a way that everyone can trust. If everyone keeps their secret keys secure and solely in their possession, then no activity can be forged on the network by any significant likelihood. Anywhere this concept has value, a blockchain has value. That's all there is to it. The rest is fairy dust and noise. I don't really follow a lot of the discussion in this article. As I see it, most of the buzz around blockchains is just wild speculation and fantasy. For example, why would be want a "fat" protocol? In any other context in technology, "fat" anything is considered bad. Technologies are supposed to be "thin", simple, efficient, and composable. So why would the opposite be praised in this case? Furthermore, the characterization of existing foundational internet protocols as "thin" and blockchain protocols as "fat" seems like an inversion of truths. By my understanding, it would take as long or much longer to become well versed in all the nitty-gritty details of TCP/IP, DNS, etc. than it would to gain a solid understanding of Ethereum. Also, where is the need for software ecosystem micro-economies? None of this makes any logical sense to me. It seems people have gotten it in their heads that the simple technological innovations of hash trees and distributed consensus protocols are going to somehow make them rich. And they're finding weird ways of justifying this.
- meri_dian 9y ago
  Well said. Wealth is built through control, while a distributed ledger rejects control by design. Now distributed ledgers have utility, but that does not necessarily mean they will create business value for entrepreneurs and investors. It's almost like how regulation has value in society, but regulation is decidedly not profitable and businesses usually reject it.
  - platz 9y ago
    > distributed ledger rejects control by design Assuming you convince 1) 100,000 miners your blockchain has value, such that 2) the distribution of control is spread out among those miners uniformly. Both of which is a pretty big assumptions.
    - 9y ago
evanvanness 9y ago
Lots of smart people in this space disagree with "fat protocols." I'll immodestly list my own first: https://www.evanvanness.com/post/166666272011/theres-no-such-thing-as-fat-protocols https://www.evanvanness.com/post/166666272011/theres-no-such... See also CoinFund's Jake Brukhman: https://blog.coinfund.io/fat-protocols-are-not-an-investment-thesis-17c8837c2734 https://blog.coinfund.io/fat-protocols-are-not-an-investment... And Zeppelin's Teemu Paivinen: https://blog.zeppelin.solutions/thin-protocols-cc872258379f https://blog.zeppelin.solutions/thin-protocols-cc872258379f I hear that even Joel doesn't agree with how his piece has been interpreted.
jhwang5 9y ago
In general, it's a red flag to see people promoting some technology or idea without concrete, end to end examples, and circular logic. It's okay for the authors to make speculations, but I am disappointed at their excessive handwaiving in answering just two simple questions. a) Do "dapps" really to use their own tokens instead of USD or even ETH to function? b) How are closed ecosystems that utilize "utility tokens" benefitting customers? How are closed ecosystems better than open systems, open protocols?
- felipeccastro 9y ago
  a) they could use ETH, but if you launch your own token you get two advantages: - funding (ICO) - an economic incentive for attracting early users (give tokens for using your app in the promise that they will be worth more in the future) b) if a user earns tokens that value over time, that's a huge win: imagine if all the time you spend on apps today, generating valuable data to a few companies, would generate in turn some of these tokens back to you? Besides, what do you mean by "closed" exactly? The data being on the public blockchain should actually encourage integration by default. For example, several new dapps are being built on top of IPFS for data, using uPort for identity, Aragon for governance, etc.
  - jhwang5 9y ago
    a) Or... wait for it... they could ask for payment in crypto, fiat, whatever, rather than printing their own chuck-e-cheese tokens. Yes, we get it, ICO allows the DAPP to fund itself, and it's a great value prop for the founders, because they can raise capital on the strength of a 15 page paper, as opposed to having real users. b) "closed" means literally useless outside. Can you use your Cobinhood tokens at any other exchange? No, it's because Cobinhood tokens are only good for consuming the features of Cobinhood.
    - mrcn 9y ago
      did anyone mention "These tokens serve as scarce resources that can be regulated and governed to more closely align with the functionality of a dapp" ?
ThomPete 9y ago
The negativity in this thread reminds me of the internet in the early nineties. If someone had said that one day there will be a company that does billions by allowing people to fundamentally share their cat pictures and send each other happy birthday messages people would have laughed their asses off. The blockchain can be seen as a giant immutable feed. Make of that what you will.
- brandonmenc 9y ago
  It reminds me more of the P2P mania of the early 2000s - P2P was going to decentralize and revolutionize absolutely everything, and well, it didn't. It stayed in its narrow lane, providing benefits where it made sense.
  - ThomPete 9y ago
    Narrow lane? I think that's a matter of definition.
- briatx 9y ago
  That's strange. The blockchain hype reminds me instead of the late 90s dotcom bubble, and CryptoKitties reminds me instead of the Beanie Baby Mania of the same era. I don't remember any of the early internet negativity that Bitcoin supporters do.
  - ThomPete 9y ago
    I do.
Toine 9y ago
Contrarian approach to this article : is there a way to short Bitcoin, and other "cryptocurrencies" ?
- elmar 9y ago
  yes, just borrow Bitcoin and sell it for fiat and when the repayment is due just buy Bitcoin again, you are basically "short selling" it.
ThomPete 9y ago
ICO's are the equivalent of getting funding. I think that the first successful blockchain based company won't be doing an ICO but just launch it's token/coin because it has utility in itself.
polkapolka 9y ago
Articles like these should come with a disclosure: "the authors own bitcoin and augur" or something to that effect.
Crye 9y ago
Here's my two cents. Is it a fad and a bubble? Most likely. But do not discount value that the token creates as a network effect. Think of the currency as an investment vehicle to reward people who jump on to the network first. Consider Facebook, the first hundred customers are billions of times more valuable then the last hundred. Once this fad dies, people should start joining the networks they plan to use, and early adopters will be rewarded for helping creating the network. On top of that, it decentralizes the control of the network but temporarily provides capital for it's creators. It does not ensure that their system will belong to them in purpituity. Which is a good thing!
makomk 9y ago
Anyone thinking of building anything on Ethereum should probably read and comprehend this recent blog post from the folks at BitGo: https://medium.com/@lopp/the-challenges-of-building-ethereum-infrastructure-87e443e47a4b https://medium.com/@lopp/the-challenges-of-building-ethereum... There are many nasty subtleties and hidden traps they learned the hard way that aren't obvious.
vasilipupkin 9y ago
I've wondered about the fat protocol concept. At the root of it, the token that allows the developers to monetize their fat protocol has to make sense as an investment. In other words, what are the investors getting when they buy this token? why should they expect a return? this, I don't understand very well.
johnnyzhao 9y ago
Vincent, could I translate this great article into Chinese?
tramGG 9y ago
If you're interested in the intersection of blockchain and AI/ML check out the decentralized AI summit coming up on Feb 1st. https://decentralized-ai.com/ https://decentralized-ai.com/ there are going to be a ton of good speakers and people into crypto/blockchain + IoT, Robotics, Autonomous Vehicles, etc -- it's like the world's faire of the future.
siavosh 9y ago
Blockchains, in part, provide the following value proposition: Provable [X] without a central authority. [X] can be the following: Ex. Currency - Bitcoin Computation - Ethereum Anonymous currency - ZCash Storage - Filecoin etc. Most of us would agree that central authority is too strong in many aspects of the economy and technology. The key question is for what values of [X] does the value proposition make sense? The core technology is less than 10 years old, anyone being too confidant in where this road goes should put it in a larger timeline. Besides not losing your money, as hackers we can only explore what may be possible.
- Goladus 9y ago
  Provable [X] without a central authority. Under a limited set of conditions, with some cost [Y] to keep the system running. The bitcoin network is extremely expensive, for example. The key question is for what values of [X] does the value proposition make sense? The key question is for what values of [X] - [Y] does the value proposition make sense. And, what contextual conditions must be maintained to preserve the decentralization advantages of [X]? In other words, the transactions could be decentralized and anonymous but if you have to sign up for a centralized exchange to participate, those benefits might be moot for you.
mbrock 9y ago
People are so upset about blockchain being useless. Meanwhile I use it regularly to do business transactions from the command line and shell scripts, which appeals to me greatly as a hacker who does business. Open source finance! It's the future, guys. Sorry about the speculative bubble. It's not really my fault though. Traders and investors are a bit crazy.
- banachtarski 9y ago
  You don't need a blockchain to "do business transactions from the command line and shell scripts" so I don't find your personal counterexample particularly compelling
  - mbrock 9y ago
    Which alternative are you referring to?
    - banachtarski 9y ago
      Any of the available stock, forex, merchant, payment APIs anywhere. You have zillions of options (stripe, etrade, paypal, a bunch of banks have APIs, soon you'll have a Venmo API, other payment applications are coming up). The notion of a scriptable transaction has literally nothing to do with a blockchain.
      - mbrock 9y ago
        Those aren't as convenient for me as blockchain, and of course they all involve centralized counterparties with proprietary APIs. As far as I know there is no bank in my country with a usable API. Blockchain is just a nice and easy open source solution that works great worldwide.
decentralised 9y ago
Every time I see a Ycombinator article on Blockchain, I can't stop but feel a bitterness from the years of nasty comments I got here when advocating for Bitcoin, Ethereum and Blockchain technology here.
tobiaslins 9y ago
Lisk is a JavaScript based platform that allows developers to deploy and develop their own custom blockchain, and decentralized applications. It uses sidechains in the near future to fix the problems ethereum has at the moment https://github.com/LiskHQ/lisk https://github.com/LiskHQ/lisk
ersiees 9y ago
What about the problem of competitors copying your contract? Since all blockchain code is open. Isn't that a real problem developing Dapps?
noellar 9y ago
Hey,I would probably say the white paper for BitCoin is a good place to understand what a blockchain does, I find the yellow paper for Ethereum more useful for development. You probably want to run a private nodes for ethereum, & a dev node for bitcoin, cheaper & no issues of space to experiment on both. Genesis file for bitcoin is quite interesting for a soft fork. I've tried to used both React & Meteor as webframeworks for a possible dapp..had more luck with Meteor-:) Tried to connect heroku to a private chain as well..Got distracted but it seemed feasible -:) Lots & lots of solidity code on github by Ethereum developers & & even an open source framework to do static code analysis for security -:) Lots of stuff on developers on bitcoin.org. Ethereum has diff versions, so you want to look at the documentation for the latest version byzatine, i think & it was also quite interesting thar they have multiple clients in diff langs, i just started with one & got used to that -;) Information from previous versions is also useful. Lots of altcoins are also opensource so Good Luck building -:)

470 points by vincentschen 9y ago

api 9y ago

Yet so far I still see almost nothing on the block chain (beyond its core currency use case) that is useful outside the domain of block chain stuff. The only exception is things like Sia, and that's not cost or convenience competitive with Amazon S3 or Backblaze. Where is the value here? When I visited this I was expecting to see at least something about building something useful for... something... Building what for the blockchain? Oh kitties. Yeah. I am absolutely aware of the fact that early stage tech often looks like a toy, but here's the thing. PCs were a toy but it didn't take long at all (VisiCalc, etc.) before they had actual uses. BBSes were a toy but they were immediately useful to their users for trading data and messaging. We are now about eight years into block chain and beyond its one core use cases there is almost nothing. Whatever value has been delivered seems extremely minor compared to the vast sums of money being spent, making this perhaps the worst ROI I've ever seen. Can someone provide a counter example? What are people doing in the real world with this stuff?

goodroot 9y ago
Hello, api. You might want to check this page out: https://www.stateofthedapps.com https://www.stateofthedapps.com There are 938 projects listed that leverage Ethereum/Solidity. One of my personal favourites is: https://colony.io https://colony.io. The whitepaper is a fun read.
- api 9y ago
  What I'm really looking for (and I've been asking this question in a lot of places recently) is some concrete examples of real world cases where this tech is being... you know... used as something other than just novelty or tinkering. Block chain centric use cases don't count since those just reinforce my worst case hypothesis-- that cryptocurrency is a financial MMORPG and a pure value-free bubble. What's an actual case of an actual team, project, or organization using this stuff to do something... actual? I'm both a developer and a founder and am very active in tech. I have yet to encounter a single case of someone using a block chain based application in the real world with the exception of the core currency/wire transfer use case of cryptocurrency. We have used it for that ourselves, but as others have noted the appreciation in value is actually harming this use case. What I see here is heaps of money being raised and a lot of developer time being spent building things without any contact with reality whatsoever. As they say in the military: the first casualty of war is the plan. IMHO there is nearly zero chance that you are building the right thing until you have shipped and iterated a few times, especially with something complex and rather byzantine. The only exception to that might be "scratch your own itch" or "dogs making dog food" projects, but those really aren't exceptions since if you are the customer you can (to some extent and in the early days) short circuit the process by testing on yourself in your own head as you go. Colony looks like groupware on the block chain. Groupware is a very well known tar pit of death.
  - goodroot 9y ago
    You might like this example, it puts decentralized smart-contracts in a digestible context: https://germanylandofinnovation.com/2016/10/19/german-company-rwe-is-using-ethereum-to-test-blockchain-car-charging/ https://germanylandofinnovation.com/2016/10/19/german-compan... -- Under the prototype, users interact with the charging station by agreeing to a smart contract that is programmed on top of the Ethereum network. Prior to charging, the user makes a deposit on the network, which is later released after the transaction is complete. The main difference is that instead of users being billed for the amount of time that they are connected to charging station–i.e. the way most stations work today–users pay only for the amount of electricity consumed during the charging process. The hope is that both the cost of the micro-transactions, and the allocation and consumption of electricity, will be made more efficient and ultimately save money. In addition, the blockchain plus smart contracts has the potential to streamline the process of purchasing power from a charging station. In theory, this can take place directly with the machine (charging station) and not require prior contact with the providing company or a human representative.
    - api 9y ago
      How is paying for electricity with Ethereum better for me than paying with a card? I don't see the advantage. When VisiCalc was demo'ed there were people lined up literally pulling out their checkbooks and offering to pay almost limitless amounts of money for the prototype. Spreadsheets had insane value to accountants. Other than the core use case of currency that I mentioned, where are the "killer apps" for block chain? A lot of it looks like minor and dubious improvements or solutions in search of a problem. Neither of those comes close to justifying the insane amount of money and resources being poured into this area.
      - davejohnclark 9y ago
        Have you come across https://www.provenance.org https://www.provenance.org? It's outside the currency/wire transfer space. Looked like an interesting application to me, but possibly too nascent to be a shining example
      - 9y ago
furyofantares 9y ago
The post does kind of explain that. In the centralized world with a thin protocol layer that captures little value and a fat application layer that captures a lot, we see far, far more development in the application layer. When you invert where the most value is captured, you invest where the most work is done. That said, all sorts of open source projects have shown that there are plenty of people willing to sacrifice their ability to capture value if it means they can produce even more value that is instead captured by users.
- api 9y ago
  That's a nice hypothesis. We are now almost a decade into cryptocurrency. Where is the evidence that this hypothesis is true? Don't get me wrong. I want to believe. I want a decentralized trust-free ubiquitous computing future. I want an alternative to conventional VC to fund startups. I want an alternative to adware/surveillanceware to fund products and services. That's why I am saying "put up or shut up" and calling BS on this mania. It's sucking all the air out of the room and if this really is a totally vapid value-free bubble its collapse is going to be a disaster.
- iman453 9y ago
  Isn't end user adoption driver by the application layer though. If the application layer developers aren't incentivized and don't build things on the protocol layer, what's the point of the protocol layer?
EGreg 9y ago
My favorite part about the blockchain is that it is a standard building block for decentralized byzantine consensus. Throw Ripple's XRP Consensus algorithm at 50-100 nodes and you know that 30% or more would have to be compromised to break the guarantees. That's really cool because I can code the rest of the interface (front end etc.) with sloppy security and then ACTUALLY BOLT ON a secure layer with guarantees at the end. Makes development much more streamlined. As the author of a huge codebase (https://qbix.com/platform https://qbix.com/platform) I worry that there are lots of security holes. With such a large attack surface, most new open source projects are swiss cheese, like early Wordpress (which is still full of holes from plugins). Here, we just build our MODEL layer with a blockchain and KNOW the rules are going to be enforced. Combine that with IPFS and a token and suddenly you don't have to pay for hosting to scale to billions of people. It's nice.
- xchaotic 9y ago
  It's nice in an utopian kind of way, but it's actually less efficient - i.e. more costly overall. So you're talking Facebook paying for their hosting by showing ads vs you trying to charge customers real money or slow down their computers. I have a guess which one is going to prevail.
  - EGreg 9y ago
    Hmm how do you figure? Having people host with several nodes running a consensus algorithm is worse than trusting all your data to one actor in "the cloud"?
- joosters 9y ago
  Ripple is not trustless, so the blockchain part of it is moot. Since you have to trust Ripple (because they have full control), you might as well let them store the blockchain data on their own centrally controlled database.
  - EGreg 9y ago
    What are you talking about? What exactly can Ripple do on its own network that you have to trust t not to do? And anyway it's open source software! Why don't you go download the XRP consensus protocol from their github repo and try it. Ripple's servers won't even be part of the network.
solotronics 9y ago
its only a matter of time before bank settlement and cross border payments are all done on blockchain. I would think that asset tracking and real esate deeds are a great application. Asking why these things aren't on the blockchain yet is like asking why businesses aren't using the internet in the 1970s.
- api 9y ago
  That's the core use case I mentioned: currency and wire transfer. I've used it for that and the value is there. I will add though-- the major reason cryptocurrency has so much value in that space is that the alternatives (bank wire, Western Union, etc.) are so terrible from a UX perspective. If those alternatives vastly streamlined their UX I think a lot of the value in cryptocurrency in the developed world might disappear. It might still have value in countries without good and reasonably stable banking systems.
  - CPLX 9y ago
    Are you at least somewhat aware that the user experience of cryptocurrency is currently abysmal, and worsening?
- joosters 9y ago
  Why? Putting blockchain in there just adds more FX transfers. USD<->GBP now becomes USD<->BTC<->GBP, so why would you expect that to reduce costs and improve efficiency?
TeMPOraL 9y ago
> Whatever value has been delivered seems extremely minor compared to the vast sums of money being spent, making this perhaps the worst ROI I've ever seen. What's even worse, from my POV, is the humongous amount of electricity that is used to support the blockchain. And to what end? Personally, I won't start believing in the blockchain until a non-wasteful alternative to the present PoW scheme gets developed and actually deployed. Right now, this looks to me like the most direct way of turning human vices into cooking us live on this planet that humanity has ever invented.
- Fradow 9y ago
  Proof of Stake (PoS) and Proof of Capacity (PoC) exist and are actually deployed for quite a while now. They don't consume lots of electricity and can be runned on cheap hardware. I run 2 PoS wallets on one of my computers. It doesn't affect it much, though not all coins are equal (some consume more resources). It just have to stay on.
- tikwidd 9y ago
  The 'end' is the security of the bitcoin blockchain. Defence forces consume a massive amount of energy and human resources. They are still funded because countries don't all trust each other and they want security. An alternative to Proof of Work such as Proof of Stake would be like a country having a nuclear arsenal, allowing it to cut back on military spending. The problem seems to be that the incentives are on the miners to switch to another proof system, and the existing miners wouldn't want to do that because it's their edge in the market (low electricity costs).
  - TeMPOraL 9y ago
    You're talking about the means of blockchain to self-preservation; I'm saying that we don't need blockchain, that it eats way too much for the fun it provides, so we should just kill it off and call it a day. > The 'end' is the security of the bitcoin blockchain. Defence forces consume a massive amount of energy and human resources. They are still funded because countries don't all trust each other and they want security. Yes. Wasteful as evil as the concept of a military is, countries need military forces to maintain peace, by keeping each other in check. It's an unfortunate direct consequence of the way humans organize themselves into societies. But blockchain is not a direct consequence of a fundamental issue in human organization process (if anything, it's just a direct consequence of human greed meeting 2010s tech). It's the least efficient way of doing anything, because it completely eschews the need to trust other actors. Yes, I believe trustless systems are mostly a bad thing, because trust is literally the efficiency hack that allows us to coordinate at scale. There are probably some theoretical problems where a trustless solution is perfect. But as it is today, the blockchain is trying to turn everything in the society into a Cold War-like military spending problem to avoid having to trust one another, even though trust-based systems work just fine.
0x4f3759df 9y ago
Why use a blockchain instead of a database? Because multiple organizations are involved and each wants to control the database. If a thing moves across multiple organizations then you can make a case for a blockchain application, logistics is an obvious example, but there are others like asset (expensive paintings / vintage wine) provenance. https://techcrunch.com/2017/12/15/ups-bets-on-blockchain-as-the-future-of-the-trillion-dollar-shipping-industry/ https://techcrunch.com/2017/12/15/ups-bets-on-blockchain-as-...
- CPLX 9y ago
  Sure. But this has been going on for awhile, what's the example of someone actually doing any of these things in a way that creates real efficiency?
  - 0x4f3759df 9y ago
    I feel like you are moving the goalpost. edit: If UPS doesn't count then nothing is going to count.
    - CPLX 9y ago
      The guy said it seems interesting in theory but asked where the actual value was. You replied with some theoretical examples. Lots of things are interesting in theory. Bitcoin is about to end its first decade though. Asking where the actual value comes from seems on topic to me.
      - ruiquelhas 9y ago
        I don't know about so called blockchain projects like ethereum, but bitcoin has value because it has inelastic demand. There are a lot of underserved people out there that need bitcoin, regardless of its value, in their daily lives because they can't use fiat currency for things like buying quality drugs online, getting rid of ransomware, laundering money, etc. Hell, if these don't pass the ideological test, just ask someone from Venezuela why do they need bitcoin.
bitoneill 9y ago
Ten years in, nobody has come up with a use for blockchain https://hackernoon.com/ten-years-in-nobody-has-come-up-with-a-use-case-for-blockchain-ee98c180100 https://hackernoon.com/ten-years-in-nobody-has-come-up-with-...
- rrecuero 9y ago
  Fundraising: Ethereum ICOs Store of Value: Bitcoin Loans: SALT .... This is just the beginning
  - bitoneill 9y ago
    I found a non-coin blockchain example: Big Pharma Seeks DLT Solution for Drug Costs https://www.coindesk.com/blockchain-day-big-pharma-seeks-dlt-solution-drug-costs/ https://www.coindesk.com/blockchain-day-big-pharma-seeks-dlt...
    - elhudy 9y ago
      Are there any companies in particular that specialize in the implementation of such blockchain use cases?
rrecuero 9y ago
Scalability and adoption are moving targets. People were saying the same thing of the internet in the early days. Check SALT, millions in loans already distributed https://www.saltlending.com/ https://www.saltlending.com/
felipeccastro 9y ago
For example, steemit.com: a social network where you get paid (in tokens) for producing/curating content. As the network grows, the token gets more valuable, so there's a strong incentive for early users to join it. I'm not sure yet steemit will end up being a winner in this field, but I find this a very smart approach for challenging the network effect of big competitors.
- joosters 9y ago
  There's nothing there that is impossible without a blockchain. The steemit website might as well issue its tokens using a simple database. Running it on a blockchain adds nothing except a 'shiny new technology' feel.
  - ruiquelhas 9y ago
    And why would I need the tokens in the first place? Hell, why would I need to pay at all, given that there are free alternatives like Medium?
    - felipeccastro 9y ago
      You don't pay, you gain money. Unless, of course, you're a company that wants to buy advertising space. As a user (writer/curator), you earn tokens for doing what you already do for free in reddit or facebook. The tokens you earn are like altcoins, you can trade them for whatever you like.
  - felipeccastro 9y ago
    The tokens here are essentially altcoins, like ether or bitcoin. How would that be done with a simple, private database?
    - joosters 9y ago
      The steemit coins, as I understand it, have little to no other use (unless 'speculation/gambling' is a use case) so they don't need to be crypto coins at all. Instead they could be magic internet points that are all accounted for and transferable on steemit's website, with options there to buy more or to sell them for cash.
wepple 9y ago
I opened this link thinking “finally, someone will explain why blockchains are great, with some solid practical examples: ycombinator themselves” Nope. Still hype and noise.

goodroot 9y ago

> For one, Ethereum is unable to access real time data from outside the blockchain. Developers need to rely on trusted third party data providers, called oracles, to provide smart contracts with outside information like weather, random numbers, or currency values. I feel like this is more of a feature than a bug. If you're weaving applications into the blockchain, would it really be wise to have that chain communicate with abstract data off of the chain itself? Seems an unnecessary burden for the chain to bare! Great article. I've recently gotten into Ethereum Dev and Solidity. It's really fun, fun stuff. This isn't directly addressed in the Ethereum portion of the article, but it's good to keep in mind that these things are all works in progress. Limitations today are non-such tomorrow; we don't quite know where the train is headed. You, Developer, can help it get to wherever you feel it needs to go. Remember that before deciding not to contribute. :)

sf_rob 9y ago
I took this as a point of explaining what Oracles are/do. Too often Ethereum proponents skip talking about Oracles when it comes to discussing attack vectors on Eth smart contracts.
Jasper_ 9y ago
What I don't understand is how Ethereum can describe their dapps as "trustless" when all the trust is still centralized in an oracle. This can even happen accidentally, such as with the Mayweather/McGregor smart contract breakage. [0] But now imagine if BoxRec had intentionally reported false results from their website in order to make a lot of money on the bet. People would lose their money, and there would be no recourse. [0] https://www.reddit.com/r/ethtrader/comments/6w5wcn/important_update_mayweathermcgregor_smart_contract/ https://www.reddit.com/r/ethtrader/comments/6w5wcn/important...
- albertgoeswoof 9y ago
  You can solve this by using multiple oracles and a stake-based consensus algorithm to de-incentivize malicious reporting.

CiPHPerCoder 9y ago

People are trying to solve a lot of interesting problems with blockchain, but I fear it's become the ultimate shoehorn solution for the modern era. See also: https://tonyarcieri.com/on-the-dangers-of-a-blockchain-monoculture https://tonyarcieri.com/on-the-dangers-of-a-blockchain-monoc... I've had meetings with prospective clients that opened with, "We have $problem, can we use blockchain to solve it?" where anything that doesn't qualify as a blockchain is cast to the wayside because it doesn't scratch that buzzword itch. (Amusingly, I've witnessed one pitch where the person called it "bitchain" and it sounded like "ba-ching!" and I was waiting for the follow-up to what I thought was onomatopoeia for a cash register sound. I've since learned to not abbreviate cryptography as "crypto" lest I attract sketchy prospects.) A lot of the problems that you might want to solve with a blockchain probably doesn't need a blockchain. A distributed, append-only cryptographic ledger will suffice. To wit: https://paragonie.com/blog/2017/07/chronicle-will-make-you-question-need-for-blockchain-technology https://paragonie.com/blog/2017/07/chronicle-will-make-you-q...

arkona 9y ago
> A distributed, append-only cryptographic ledger Pardon my ignorance, but isn’t that what a blockchain is?
- CiPHPerCoder 9y ago
  A distributed ledger doesn't necessarily mean a decentralized one. This is a handy reference to decide if you're building a cryptographic ledger or a blockchain: https://gist.github.com/joepie91/e49d2bdc9dfec4adc9da8a8434fd029b https://gist.github.com/joepie91/e49d2bdc9dfec4adc9da8a8434f...
  - hiq 9y ago
    I think the confusion stems from permissioned vs permissionless blockchain, and the comment you replied assumed you were talking about one instead of the other. I find the plain term "blockchain" rather vague in that regard. In addition to this github gist, I like http://doyouneedablockchain.com/ http://doyouneedablockchain.com/ .

jaequery 9y ago

Where I can see blockchain being more 'actually' useful is in simple things, like verifying the integrity of the app (or anything really), ala checksum hashes. It makes a lot of sense for us to store them on the blockchain rather than hosting it on a webpage.

nileshtrivedi 9y ago
You need blockchain only when you want to prevent double spending of _something_. A linked list where only one node can have a valid pointer to the previous node. For checksum hashes, unless double spending is a problem, IPFS will suffoce.
- patrickaljord 9y ago
  You don't need a blockchain to prevent double spending. You only need a blockchain if you want the double spending prevention to happen between trustless distributed peers.
  - jhwang5 9y ago
    You are right, and I think this aptly captures just how misunderstood Blockchain is even on this forum.
    - nileshtrivedi 9y ago
      I used "only when". It's a necessary, but not sufficient, condition. https://en.wikipedia.org/wiki/Principle_of_charity https://en.wikipedia.org/wiki/Principle_of_charity
sly010 9y ago
We have been doing that without blockchains with PKI for a long time.

nickporter 9y ago

Bitcoin whitepaper url is broken.

thisisit 9y ago

I stopped after reading this: > “Historically the only way to make money from a protocol was to create software that implemented it and then try to sell this software (or more recently to host it)… With [cryptographic] tokens, however, the creators of a protocol can ‘monetize’ it directly and will in fact benefit more as others build businesses on top of that protocol.” And what was wrong with developers finding a market, developing a software and then monetizing it? I have tons of ideas each day, some of them blockchain related too but it seems unethical to use other people's money to test my hypothesis.

ArchReaper 9y ago
They didn't say anything was wrong with that, they said it used to be the only option. Now there's other options.
rrecuero 9y ago
We were talking specifically about protocols like TCP, IP, DNS or even P2P. It was nearly impossible to monetize protocol level work before cryptocurrencies

deleted 9y ago

[deleted]

decorator 9y ago

Ethereum isn't decentralised to a large degree (see the DOA). Given such a thing, one may as well use a standard web stack. Also, that makes any guides written for devs on the subject of negative utility. It wastes their time; since the premise, that the new paradigm derives its value from censorship resistance, is breached. It takes some serious non-thinking to support Ethereum. The price is high, the value is low.

45h34jh53k4j 9y ago

Ethereum isn't useful for smart contracts; they are too expensive to call methods on chain and EVM is too inflexible and bug prone. The only use for ethereum is shittokens, and you could practically coingen these for free, and trade forever. No load on the shared commons, isolate activity to the specific coin. The only advantage is the ECR20 standard that aids exchange integration. SV is all a blaze about Ethereum, but I tell you, this too shall pass. Long on other smart contract platforms, but not ETH.

taternuts 9y ago
What other smart contract platforms are worth following?
- Geee 9y ago
  Cardano.
CryptoPunk 9y ago
>>SV is all a blaze about Ethereum, but I tell you, this too shall pass. Doesn't look like this is fading away: https://etherscan.io/chart/tx https://etherscan.io/chart/tx >>The only advantage is the ECR20 standard that aids exchange integration. That's a massive advantage. Several decentralized exchange protocols are being developed, and a decentralized exchange, EtherDelta, is the most utilized DApp on Ethereum: https://ethgasstation.info/gasguzzlers.php https://ethgasstation.info/gasguzzlers.php Ethereum's network effect in crypto-assets is growing stronger every day, with 91 of the top 100 tokens now ERC20 tokens: https://coinmarketcap.com/tokens/ https://coinmarketcap.com/tokens/

EricDeb 9y ago

So far the main benefit is democratizing investment, as has been stated here before. I love that I can get in on early stage projects without being a well-connected angel investor. Coins are like new, sexier penny stocks.

m1sta_ 9y ago
The only reason this wasn’t possible in the past was because too many people got ripped off.
- EricDeb 9y ago
  Undoubtedly that will happen again, but maybe this time third party validation systems will improve?

blockgeeks 9y ago

Thanks for the article and the shoutout to blockgeeks!!

vincentschen 9y ago
thanks for the resource!

geraldbauer 9y ago

FYI: To learn about blockchains - why not build your own blockchains from scratch (zero)? At the Awesome Blockchains [1] page I collect starter blockchains (in JavaScript, Python, Ruby, etc.) and articles plus fun blockchains (such as CryptoKitties and CryptoCopycats) [2]. [1]: https://github.com/openblockchains/awesome-blockchains https://github.com/openblockchains/awesome-blockchains [2]: https://github.com/openblockchains/awesome-cryptokitties https://github.com/openblockchains/awesome-cryptokitties

snitko 9y ago

It's all the same thing every year on HN. People trying to find all sorts of excuses for Bitcoin existence - blockchains, smart contracts, ICOs - as long as they don't have to accept that Bitcoin's main purpose is and always was to have an alternative to the financial system, crippling regulations, government control and taxes. In other words, everything people hate about libertarians, they try to ignore in Bitcoin. Because they can't just ignore Bitcoin - it's not going away for some reason. And it's not going away because there's a demand for Bitcoin. Why? Not because blockchain is some sort of an innovation. It's because people want a currency not controlled by any state institution. It's because people want freedom. Deny that all you want, it's not going away.

xchaotic 9y ago
it's a very noble approach, but the facts are not in your favour. The 'people' that keep bitcoin valuation high are: early adopters (including ones who lost access to their wallets), HODLers and speculators and perhaps a few casual drug buyers. As a mainstream currency, BTC is pretty useless at world scale.
- m1sta_ 9y ago
  You forgot a big one that’s not going away quickly: money launderers.
  - matte_black 9y ago
    Serious launderers launder money through cash only businesses.
iraklism 9y ago
There is definitely a portion of people that this applies to. However, I’d wager that the majority of the Cryptocurrency market capitalisation is from people that really want to become millionaires really fast.
Kiro 9y ago
You're just speculating and I personally think you're wrong.

kang 9y ago

Naval does a much better job of explaining what the tech is about : https://startupboy.com/2014/04/01/the-fifth-protocol/ https://startupboy.com/2014/04/01/the-fifth-protocol/ However, OP nor Naval, really understand the protocol, or wouldn't be supporting non-blockchain things like ethereum (there is nothing that you can do with ethereum but not with git). >One of these developers, Vitalik Buterin, was frustrated by Bitcoin’s immobilism I am amazed at how HN is selling a promo story invented for media by ethereum as a company. Digging IRC logs would reveal how Vitalik convoluted each aspect of the tech(and was often wrong)to the point that the devs stopped caring and let him be. Even technically, I have answered this on HN and other places numerous times - tell me one thing you can build with ethereum but not with bitcoin? (On the opposite, ethereum can't do money - mutable chain).

ShabbosGoy 9y ago
Bitcoin is slow as hell. So you can do an order of magnitude more with Ethereum than Bitcoin.
- kang 9y ago
  Technically, decentralized system will be always slower than centralized one. Its a good thing its slow. 1 hour blocks are even safer (and effectively we do convert blocktime to an hour by waiting for 6 confirmations). So no, you can't "do" more, only be more noisy.
  - cturner 9y ago
    > Technically, decentralized system will be > always slower than centralized one. This is not a reasonable response to the parent: bitcoin is significantly slower than other systems of its class. Ethereum is an equivalent system and faster. (Others are much faster still) There are application where speed matters. For example, to sort things out while all the lawyers are in a room.
    - kang 9y ago
      I am not saying that speed doesn't matter; trade-off though is security. If there are lawyers to sort thing out, then you don't need crypto. >bitcoin is significantly slower than other systems of its class that class being decentralised proof-of-work, it is no slower than it is more secure than those class-members. (And among class members of equal 'speed' it is most secure)

epberry 9y ago

So this is exactly how I got started on a silly Ethereum side project over the holiday. Truffle, solidity docs, and reading the crypto kiddies code is all you need. I'm mostly interested in how Ethereum and other blockchain technologies work - there's no denying that building a dapp is just a fundamentally different experience from building a web app today and that in itself is exciting. I'm mostly not interested in anything financial. Decentralization, immutability, and a built-in way to pay for usage are the main features of Ethereum (possibly combined with IPFS) that get me going.

rsp1984 9y ago

Monegro believes that this paradigm shift affects the way that developers should think about their applications: “The combination of shared open data with an incentive system that prevents “winner-take-all” markets changes the game at the application layer and creates an entire new category of companies with fundamentally different business models at the protocol layer.” Ok, thin protocols + fat apps --> fat protocols + thin apps. Neat theory. But this is putting the cart before the horse. Please can someone ELI5 to me: * What problem does the fat-protocol, thin-app paradigm solve? * Why would anyone be interested in developing a thin app for my fat protocol any more than anyone is interested today in developing a thin protocol that I can put my fat app on top of? * Why is thin-protocol, fat-app considered to be in need of fixing in the first place? I consider the fact that apps capture more value than protocols to be a direct consequence of the free market. Apps capture business value because they solve actual user problems. Protocols define ways to build apps. But frankly I don't see a great demand for new protocols, and I consider that reason enough for the fact that protocols can't capture much value. To say that that would change with the blockchain is IMO equivalent to saying the market has it all wrong. What am I not seeing?

adamnemecek 9y ago
It raises the low level of your app from request handling to dealing with users and their interaction.
keithwhor 9y ago
You’re seeing everything just fine. Imagine you’ve spent your whole life investing millions of dollars in entrepreneurs. Building models and testing hypotheses with no real agency: you can’t control what the CEO does or the product the engineering team builds or the way they market the product. Your job is to provide returns for your LPs. That’s it. Now imagine, instead of spending thousands of hours interacting with and managing people, their problems, watching painfully as they try to figure out the market they specialize in, I tell you that you can invest in something else. That thing, we’ll call it a token. This token does work. It can be used to compute something. Or helps make something easier. I’m not clear on the specifics, but I can tell you one thing: if you buy it, and if you tell other people about it, merely the act of owning it increases its value. I have just given you something you don’t get a lot of in your career, true, direct self agency. You are unequivocally sure that you are creating value because it’s you who is selling the value! You bought, the price rose, you know if other people get excited the price will rise again. It’s exciting, you don’t have to deal with people mucking about directly, and you’re doing your job: generating returns. The house of cards here is the assumption that these tokens can be used for something, anything beyond a store of value. Because if that’s true, it’s not really speculation. You’re an early adopter of a paradigm-changing protocol. The default assumption here is that engineers are like ants: we build for the sake of building. Give us a canvas and we will build dApps (or what-have-you) just for the sake of building them. The truth is, engineers are not ants. We build things to make our lives easier or more fulfilling. I started programming, for example, to build video games. Many people build things to automate their homes. When you build for an employer, the end goal is always to do something for the customer. The draw of Ethereum, seems to me, to be that eventually somebody will have to build something insanely valuable, right? Statistically, it’s gotta happen. I think that’s a ridiculous premise: if centralized tools are always faster with more mature ecosystems, engineers will always go there to solve their daily problems. The question to me really seems to be, “do we need truly immutable ledgers and transaction histories? Do we need 100.0% reliability in transaction history at the cost of orders of magnitude more energy expenditure, or is 99.9999999% okay?” As a cute anecdote, Life has been remarkably successful with a 10^-7 error rate in DNA polymerase. I have a feeling most industries will be fine without, and it’s actually probably cheaper to have a reasonable facsimile (or statistically insignificant approximation) of immutability (human intervention and accountants included) than a guarantee. Especially if, in order to be guaranteed, it needs to be public. So, what you’re seeing is speculation that engineers could build something one day using an application development paradigm that’s not actually clearly or obviously more powerful. It’s worse speculation than betting on startups with teams of people who reliably execute, masked by the illusion of self agency as an owner and promoter of a token. tl;dr: Somebody remind me of this post in a decade and we’ll see where it all ends up. The technology will grow and evolve. I’m not sold on any of this, and investors who aren’t building anything but themselves are holding tokens telling people to go experiment and build things isn’t an attractive signal. (It seems like VC flipped on its head and the incentives are poor for engineers - so, for now, let these investors play hot potato with each other for a while. I’ve seen a few of Vitalik’s tweets and it seems even he’s concerned about these incentives.)

krisives 9y ago

You can write Solidity in the browser now using their Remix IDE: https://remix.ethereum.org/#optimize=false&version=soljson-v0.4.19+commit.c4cbbb05.js https://remix.ethereum.org/#optimize=false&version=soljson-v...

cturner 9y ago

It is misleading to describe etheteum as Turing-complete. If it were, an infinite while loop would soon crash the network. (As mentioned in the article, the processing of Ethereum contracts is powered/funded by a finite valuable currency called gas) A novelty of the unfolding blockchain revolution is the realisation that there is a world of interesting non-turing-complete things to be built. We all assumed that anything non-turing-complete a waste of time. Surprise! What you want to say here is that ethereum takes a large step towards creating a flexible development platform. EVM function like an instruction-set for this distributed computer. This may be close to the way forward. But solidity is not. A quick port of JavaScript, it is still in the old software mindset. Ethereum has problems ahead of it. Just as C has an endless capacity to create memory leak bugs, Solidity offers opportunity for contracts that will drain people's accounts. Each time it happens, it will be reputational damage for the community. If you wanted to learn Ethereum, it might make more sense to start with raw EVM than Solidity. Play at writing a macro assembler. Once you were tooled up, you might try your hand at becoming the Brendan Eich of the blockchain. Until you do, we are stuck with Brendan Eich. If we do not find such an expression, general-purpose, public-access blockchain will gain permanent mistrust, and fail. Message-driven concurrency is here to stay though. I am building a concurrency language centred around message-driven consensus-engines. (github.com/solent-eng/solent) It is designed to be host-distributed, but operated by a single party and not multi-party.

alexpetralia 9y ago

'Albert Wagner' should be 'Albert Wenger'

m3kw9 9y ago

Inevitably because of the ICO component, there will be a lot of applications that tries to use block chain to search for a problem to solve more inefficiently than not using block chain. With the main idea so they can get the ICO to work for them.

natural219 9y ago

> Alternatively, the distribution of value in the blockchain paradigm can be described with fat protocols and a thin application layer. This paradigm shift is possible due to the innovation of cryptographic tokens. As a long-time decentralization activist, this sentiment makes me want to tear my eyeballs out. Why are cryptographic tokens necessary to implement fat protocols? Why does "standardizing communication across applications" now also have to mean "implementing a global, secure financial market" in the process?!? This is maddening to me and nobody has explained to me why blockchains are a requirement to do this.

CryptoPunk 9y ago
It explains in the two subsequent paragraphs: >>“Historically the only way to make money from a protocol was to create software that implemented it and then try to sell this software (or more recently to host it)… With [cryptographic] tokens, however, the creators of a protocol can ‘monetize’ it directly and will in fact benefit more as others build businesses on top of that protocol.” >>Previously, the creators of open communication protocols for the Internet, largely DARPA researchers and non-profit contributors, could not align financial incentives with protocol development. In contrast, protocol creators today can issue “tokens”, like Bitcoin and Ethereum, that represent the value of their decentralized protocols. The key is that it can "align financial incentives with protocol development".

davesque 9y ago

A blockchain ensures that some sequence of agreements was made in a way that everyone can trust. If everyone keeps their secret keys secure and solely in their possession, then no activity can be forged on the network by any significant likelihood. Anywhere this concept has value, a blockchain has value. That's all there is to it. The rest is fairy dust and noise. I don't really follow a lot of the discussion in this article. As I see it, most of the buzz around blockchains is just wild speculation and fantasy. For example, why would be want a "fat" protocol? In any other context in technology, "fat" anything is considered bad. Technologies are supposed to be "thin", simple, efficient, and composable. So why would the opposite be praised in this case? Furthermore, the characterization of existing foundational internet protocols as "thin" and blockchain protocols as "fat" seems like an inversion of truths. By my understanding, it would take as long or much longer to become well versed in all the nitty-gritty details of TCP/IP, DNS, etc. than it would to gain a solid understanding of Ethereum. Also, where is the need for software ecosystem micro-economies? None of this makes any logical sense to me. It seems people have gotten it in their heads that the simple technological innovations of hash trees and distributed consensus protocols are going to somehow make them rich. And they're finding weird ways of justifying this.

meri_dian 9y ago
Well said. Wealth is built through control, while a distributed ledger rejects control by design. Now distributed ledgers have utility, but that does not necessarily mean they will create business value for entrepreneurs and investors. It's almost like how regulation has value in society, but regulation is decidedly not profitable and businesses usually reject it.
- platz 9y ago
  > distributed ledger rejects control by design Assuming you convince 1) 100,000 miners your blockchain has value, such that 2) the distribution of control is spread out among those miners uniformly. Both of which is a pretty big assumptions.
  - 9y ago

evanvanness 9y ago

Lots of smart people in this space disagree with "fat protocols." I'll immodestly list my own first: https://www.evanvanness.com/post/166666272011/theres-no-such-thing-as-fat-protocols https://www.evanvanness.com/post/166666272011/theres-no-such... See also CoinFund's Jake Brukhman: https://blog.coinfund.io/fat-protocols-are-not-an-investment-thesis-17c8837c2734 https://blog.coinfund.io/fat-protocols-are-not-an-investment... And Zeppelin's Teemu Paivinen: https://blog.zeppelin.solutions/thin-protocols-cc872258379f https://blog.zeppelin.solutions/thin-protocols-cc872258379f I hear that even Joel doesn't agree with how his piece has been interpreted.

jhwang5 9y ago

In general, it's a red flag to see people promoting some technology or idea without concrete, end to end examples, and circular logic. It's okay for the authors to make speculations, but I am disappointed at their excessive handwaiving in answering just two simple questions. a) Do "dapps" really to use their own tokens instead of USD or even ETH to function? b) How are closed ecosystems that utilize "utility tokens" benefitting customers? How are closed ecosystems better than open systems, open protocols?

felipeccastro 9y ago
a) they could use ETH, but if you launch your own token you get two advantages: - funding (ICO) - an economic incentive for attracting early users (give tokens for using your app in the promise that they will be worth more in the future) b) if a user earns tokens that value over time, that's a huge win: imagine if all the time you spend on apps today, generating valuable data to a few companies, would generate in turn some of these tokens back to you? Besides, what do you mean by "closed" exactly? The data being on the public blockchain should actually encourage integration by default. For example, several new dapps are being built on top of IPFS for data, using uPort for identity, Aragon for governance, etc.
- jhwang5 9y ago
  a) Or... wait for it... they could ask for payment in crypto, fiat, whatever, rather than printing their own chuck-e-cheese tokens. Yes, we get it, ICO allows the DAPP to fund itself, and it's a great value prop for the founders, because they can raise capital on the strength of a 15 page paper, as opposed to having real users. b) "closed" means literally useless outside. Can you use your Cobinhood tokens at any other exchange? No, it's because Cobinhood tokens are only good for consuming the features of Cobinhood.
  - mrcn 9y ago
    did anyone mention "These tokens serve as scarce resources that can be regulated and governed to more closely align with the functionality of a dapp" ?

ThomPete 9y ago

The negativity in this thread reminds me of the internet in the early nineties. If someone had said that one day there will be a company that does billions by allowing people to fundamentally share their cat pictures and send each other happy birthday messages people would have laughed their asses off. The blockchain can be seen as a giant immutable feed. Make of that what you will.

brandonmenc 9y ago
It reminds me more of the P2P mania of the early 2000s - P2P was going to decentralize and revolutionize absolutely everything, and well, it didn't. It stayed in its narrow lane, providing benefits where it made sense.
- ThomPete 9y ago
  Narrow lane? I think that's a matter of definition.
briatx 9y ago
That's strange. The blockchain hype reminds me instead of the late 90s dotcom bubble, and CryptoKitties reminds me instead of the Beanie Baby Mania of the same era. I don't remember any of the early internet negativity that Bitcoin supporters do.
- ThomPete 9y ago
  I do.

Toine 9y ago

Contrarian approach to this article : is there a way to short Bitcoin, and other "cryptocurrencies" ?

elmar 9y ago
yes, just borrow Bitcoin and sell it for fiat and when the repayment is due just buy Bitcoin again, you are basically "short selling" it.

ThomPete 9y ago

ICO's are the equivalent of getting funding. I think that the first successful blockchain based company won't be doing an ICO but just launch it's token/coin because it has utility in itself.

polkapolka 9y ago

Articles like these should come with a disclosure: "the authors own bitcoin and augur" or something to that effect.

Crye 9y ago

Here's my two cents. Is it a fad and a bubble? Most likely. But do not discount value that the token creates as a network effect. Think of the currency as an investment vehicle to reward people who jump on to the network first. Consider Facebook, the first hundred customers are billions of times more valuable then the last hundred. Once this fad dies, people should start joining the networks they plan to use, and early adopters will be rewarded for helping creating the network. On top of that, it decentralizes the control of the network but temporarily provides capital for it's creators. It does not ensure that their system will belong to them in purpituity. Which is a good thing!

makomk 9y ago

Anyone thinking of building anything on Ethereum should probably read and comprehend this recent blog post from the folks at BitGo: https://medium.com/@lopp/the-challenges-of-building-ethereum-infrastructure-87e443e47a4b https://medium.com/@lopp/the-challenges-of-building-ethereum... There are many nasty subtleties and hidden traps they learned the hard way that aren't obvious.

vasilipupkin 9y ago

I've wondered about the fat protocol concept. At the root of it, the token that allows the developers to monetize their fat protocol has to make sense as an investment. In other words, what are the investors getting when they buy this token? why should they expect a return? this, I don't understand very well.

johnnyzhao 9y ago

Vincent, could I translate this great article into Chinese?

tramGG 9y ago

If you're interested in the intersection of blockchain and AI/ML check out the decentralized AI summit coming up on Feb 1st. https://decentralized-ai.com/ https://decentralized-ai.com/ there are going to be a ton of good speakers and people into crypto/blockchain + IoT, Robotics, Autonomous Vehicles, etc -- it's like the world's faire of the future.

siavosh 9y ago

Blockchains, in part, provide the following value proposition: Provable [X] without a central authority. [X] can be the following: Ex. Currency - Bitcoin Computation - Ethereum Anonymous currency - ZCash Storage - Filecoin etc. Most of us would agree that central authority is too strong in many aspects of the economy and technology. The key question is for what values of [X] does the value proposition make sense? The core technology is less than 10 years old, anyone being too confidant in where this road goes should put it in a larger timeline. Besides not losing your money, as hackers we can only explore what may be possible.

Goladus 9y ago
Provable [X] without a central authority. Under a limited set of conditions, with some cost [Y] to keep the system running. The bitcoin network is extremely expensive, for example. The key question is for what values of [X] does the value proposition make sense? The key question is for what values of [X] - [Y] does the value proposition make sense. And, what contextual conditions must be maintained to preserve the decentralization advantages of [X]? In other words, the transactions could be decentralized and anonymous but if you have to sign up for a centralized exchange to participate, those benefits might be moot for you.

mbrock 9y ago

People are so upset about blockchain being useless. Meanwhile I use it regularly to do business transactions from the command line and shell scripts, which appeals to me greatly as a hacker who does business. Open source finance! It's the future, guys. Sorry about the speculative bubble. It's not really my fault though. Traders and investors are a bit crazy.

banachtarski 9y ago
You don't need a blockchain to "do business transactions from the command line and shell scripts" so I don't find your personal counterexample particularly compelling
- mbrock 9y ago
  Which alternative are you referring to?
  - banachtarski 9y ago
    Any of the available stock, forex, merchant, payment APIs anywhere. You have zillions of options (stripe, etrade, paypal, a bunch of banks have APIs, soon you'll have a Venmo API, other payment applications are coming up). The notion of a scriptable transaction has literally nothing to do with a blockchain.
    - mbrock 9y ago
      Those aren't as convenient for me as blockchain, and of course they all involve centralized counterparties with proprietary APIs. As far as I know there is no bank in my country with a usable API. Blockchain is just a nice and easy open source solution that works great worldwide.

decentralised 9y ago

Every time I see a Ycombinator article on Blockchain, I can't stop but feel a bitterness from the years of nasty comments I got here when advocating for Bitcoin, Ethereum and Blockchain technology here.

tobiaslins 9y ago

Lisk is a JavaScript based platform that allows developers to deploy and develop their own custom blockchain, and decentralized applications. It uses sidechains in the near future to fix the problems ethereum has at the moment https://github.com/LiskHQ/lisk https://github.com/LiskHQ/lisk

ersiees 9y ago

What about the problem of competitors copying your contract? Since all blockchain code is open. Isn't that a real problem developing Dapps?

noellar 9y ago

Hey,I would probably say the white paper for BitCoin is a good place to understand what a blockchain does, I find the yellow paper for Ethereum more useful for development. You probably want to run a private nodes for ethereum, & a dev node for bitcoin, cheaper & no issues of space to experiment on both. Genesis file for bitcoin is quite interesting for a soft fork. I've tried to used both React & Meteor as webframeworks for a possible dapp..had more luck with Meteor-:) Tried to connect heroku to a private chain as well..Got distracted but it seemed feasible -:) Lots & lots of solidity code on github by Ethereum developers & & even an open source framework to do static code analysis for security -:) Lots of stuff on developers on bitcoin.org. Ethereum has diff versions, so you want to look at the documentation for the latest version byzatine, i think & it was also quite interesting thar they have multiple clients in diff langs, i just started with one & got used to that -;) Information from previous versions is also useful. Lots of altcoins are also opensource so Good Luck building -:)