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It's strange to me how there are many among the Hacker News crowd who can read an article like this and have doubts about its thesis. You lived through the 80s

by v64 9y ago

It's strange to me how there are many among the Hacker News crowd who can read an article like this and have doubts about its thesis. You lived through the 80s and 90s right? I can't count how many times in my life I was told no one would ever need a computer in their house, we've gotten along for decades just fine without them. No one will ever buy books online, that's ridiculous, you can go to the store and have one right now. The internet is just a niche chat program that will never have any use in business, etc. Our uses of cryptocurrency and blockchain technology now are similar to how we once used the power of the web to create Geocities pages with nothing more than MIDIs, scrolling text, and under construction gifs, because we didn't know what we were doing yet. But the early computer and internet pioneers were able to see past the proofs of concept and build on those ideas, to create the modern internet we have today. Bitcoin may cease to exist as a software product, but I think the innovations that it has spurred on will be with us for some time. This technology has the possibility of making business much more efficient by reducing costs that are associated with distrustful parties having to rely on (and pay money to) third party escrow/auditing services. If I want to send a large sum of money to someone else now, I have to rely on third party services such as banks or Western Union to facilitate that transfer. If you still continue to think "well that can be done with a SQL database now", you're completely missing the point. There's nothing wrong with relying on third parties, but now we have technology that allows us to choose not to if there's a need for it. In that regard, cryptography shares many of the same characteristics. We could communicate securely before public key cryptography was invented, but it broadened the scope and security of such operations, to the point where we espouse using https for all websites, not just ones requiring security. When the time comes, why would you trust a third party if you didn't have to?

bigdubs 9y ago
Not sure the parallels are as strong as you're making them out to be; there are deep, deep flaws with proof of work as a concept because of the energy consumed. There will probably be a better end state for distributed trust, but we're legitimately not there yet.
- aoro 9y ago
  They already exist. Check out the stellar consensus mechanism. https://www.stellar.org/papers/stellar-consensus-protocol.pdf https://www.stellar.org/papers/stellar-consensus-protocol.pd...
  - CryptoPunk 9y ago
    Stellar is not decentralized.
- v64 9y ago
  > there are deep, deep flaws with proof of work as a concept because of the energy consumed What is the energy consumption of all the bank offices and computer systems in the world? Even without this comparison, I think the amount of energy required is not a flaw in itself, but rather an aspect of the technology we should seek to improve upon (for instance, proof of stake is an attempt at this). I don't think it's sustainable long term (2400 baud internet wasn't sustainable long term either), but that doesn't mean we don't have the kernel of a great idea today. I agree with you 100% that we're not there yet, but I disagree with those who say this road leads to nowhere.
  - Rebelgecko 9y ago
    Bitcoin mining (not even counting other cryptocurrencies) uses more electricity than most countries in the world. If you look at transactions per Watt, I would guess that the banks are doing better by multiple orders of magnitude
  - gamblor956 9y ago
    If reports are to be believed, the entire sum total of energy consumed by banks, credit card processors, their computer systems, offices, and personnel...is dwarfed by the amount of energy wasted on Bitcoin alone. Banks and credit card processors can handle billions of transactions per day. Bitcoin, ethereum, and the other cryptocurrencies struggle to handle a few thousand, and are technologically incapable of non-linear scaling.
- 9y ago
gist 9y ago
So are you saying that it's more rational to simply think 'anything is possible' even though the available evidence and information seems to point to the fact that that isn't the case? After all you don't go around thinking that a country like (insert small insignificant country) is ever going to pass the United States in ability but sure 'anything is possible'. It could happen after all the US surpased Europe in many ways and at one time that was unthinkable. Also with respect to things like 'nobody will ever need a computer in their house' or what Watson of IBM said (regarding the need for only a small amount of computers in total) you are also not looking at the times that that type of statement ('will never work and here is why' or 'not needed because xyz') was true. You are only looking at the survivor bias type of things where people were wrong. Because you don't know of or keep track of the times things didn't work out (like flying cars but there are most likely thousands of other examples out there I am sure).
- v64 9y ago
  > So are you saying that it's more rational to simply think 'anything is possible' even though the available evidence and information seems to point to the fact that that isn't the case? At what point do you believe the internet had made its case as a technology? 1975? 1985? 1995? 2005? In each of those years, you had naysayers saying the internet would never become something people use in their daily lives, but here we are. The evidence of today should not stifle the innovation of tomorrow. > Also with respect to things like 'nobody will ever need a computer in their house' or what Watson of IBM said (regarding the need for only a small amount of computers in total) you are also not looking at the times that that type of statement ('will never work and here is why' or 'not needed because xyz') was true. It's not just Watson who made that statement. Many business owners in the 90s looked at computer and internet technology and dismissed it as a fad that would cease to exist in 5 years (and after the bubble popped, they were 100% sure they were correct). I believed in computers and the internet then because they solved unsolved problems, and offered better solutions than existing ones. In the field of trustless services, I believe the blockchain will be an essential part of that. And maybe it won't exactly be the blockchain we have today, but it will either be an improvement upon it, or an alternative idea created to address the problems of the original. Regardless of how the blockchain is and will eventually be used in practice, it's a simple theoretical model that offers a proof of what's possible in this space that we didn't have before. If you don't think the blockchain is "it", then what other technology do we have today that solves the same third party trust problems as the blockchain? Or do you believe that reliance on third parties in business and finance is something we don't need to overcome?
fooblitzky 9y ago
I see one fundamental problem that needs to be solved before blockchain can become a mainstream technology platform in the same way the Internet and the WWW did. Without a centralized authority, there is no recourse in the event of theft. None. Someone stole your identity? Guess you need a new one. Building an entire life on blockchain makes the security of the private keys extremely important, and surely we have more than enough examples that any connected system cannot keep its secrets forever (or even for very long)?
api 9y ago
I lived through the 80s and early 90s. The difference is that I could do stuff with the early Internet. I could do stuff with BBSes. I could do stuff with early PCs. These things were almost immediately very useful to a lot of people. The reason I've become a bear on cryptocurrency is that I don't see the utility to justify the monstrous amounts of money pouring into it. It's almost 10 years old and today it's actually less useful than it was a few years ago due to runaway fee growth. The feedback system works in the wrong direction. Did the Internet get less useful the more people used it? That and I see a ton of scams. Almost all cryptocurrency projects seem like either scams or delusional vaporware projects akin to badly thought out Kickstarters or over-funded boil-the-ocean startups. These things rarely accomplish anything other than to blow a lot of money. Want to change my mind? Show me the cryptocurrency killer app that people are climbing over each other to use. ... and no, gambling and virtual MLM / pyramid schemes don't count. I mean utility in the real world.
- v64 9y ago
  > I lived through the 80s and early 90s. The difference is that I could do stuff with the early Internet. I could do stuff with BBSes. I could do stuff with early PCs. These things were almost immediately very useful to a lot of people. You must have hung out with a nerdier crowd than I did :) I was the only person I knew who owned a personal computer until well into the late 90s. > The reason I've become a bear on cryptocurrency is that I don't see the utility to justify the monstrous amounts of money pouring into it. It's almost 10 years old and today it's actually less useful than it was a few years ago due to runaway fee growth. So I think cryptocurrency here is getting conflated with the underlying technology, just like Geocities came to be the poster child of the early web. I agree with you that the current systems have much work to be done, and that many of them will be abandoned before they're fixed. But cryptocurrency is not the blockchain anymore than gopher was the internet. Services like Bitcoin built on blockchains may cease to exist in their current state, but just like we still have TCP/IP, I think the blockchain piece will be essential moving forward. > That and I see a ton of scams. Almost all cryptocurrency projects seem like either scams or delusional vaporware projects akin to badly thought out Kickstarters or over-funded boil-the-ocean startups. These things rarely accomplish anything other than to blow a lot of money. I get a lot of scams via postal mail, telephone, and the email, but that doesn't negate the purpose of the technology :) > Want to change my mind? Show me the cryptocurrency killer app that people are climbing over each other to use. I think you misunderstand my viewpoint. I don't think the technologies of today are the solutions anymore than Geocities was the be-all-end-all of the web. My comments are more directed toward those who believe this technology leads to a dead end and that reducing the reliance on third party trust is not a problem that needs to be worked on.
starlust2 9y ago
The point isn't that existing technology can already do what new technology provides. There has to be some increased value from using the new technology. E-commerce took over because it's more convenient and offers a wider selection of products. The end user doesn't care what database you're using. They care about utility.
- v64 9y ago
  > The end user doesn't care what database you're using. They care about utility. I agree, but this isn't just about the end user. Many businesses incur costs to third parties that could be reduced or eliminated by trustless systems whose validity of data can be verified mathematically without an auditing team. The blockchain of today can't do that yet, just like the internet of 1985 didn't allow you to buy books, but I think we're headed in the direction of progress.
  - jhwang5 9y ago
    "Trustless" systems require you to trust miners. I think miners are pretty much the last people you would want to trust.
    - v64 9y ago
      I agree that the current system involving miners is fraught with political implications. But that doesn't mean the system is broken, it just means it needs to be improved (proof of stake, for instance).
    - hndamien 9y ago
      You don't have to trust the miners. They act as randomly selected notaries to the chain that have provably fronted considerable resources to accurately notarise the transactions in exchange for being paid handsomely (in specie). If they want to lie when they finally have the opportunity to get paid, and subsequently be caught lying because they don't have enough resources to rewrite the chain then they can, but this would be a pretty foolish errand which would still result in the fact you don't have to trust them.
tway9595 9y ago
>You lived through the 80s and 90s right? I can't count how many times in my life I was told no one would ever need a computer in their house, we've gotten along for decades just fine without them. No one will ever buy books online, that's ridiculous, you can go to the store and have one right now. The internet is just a niche chat program that will never have any use in business, etc. Why do you assume that Bitcoin is one of these few winners, rather than the multitude of losers? The default position should be "failure"; it's not irrational.
- v64 9y ago
  > Why do you assume that Bitcoin is one of these few winners, rather than the multitude of losers? I didn't state that Bitcoin would be a winner, and in fact stated in my comment that Bitcoin may cease to exist as a software product. My criticism is more directed toward those who don't believe the blockchain is a useful data construct and that the research taking place today into blockchains and cryptocurrencies are a dead end.
- deleted 9y ago
  [deleted]
iamwil 9y ago
It's just really hard for people to see beyond the present. Innovators in one cycle are often blind to the opportunities in the next. I see it in a couple of my successful friends that built their own companies on the web and mobile when it comes to crypto. I'm reminded of the quote about the radio: “The wireless music box has no imaginable commercial value. Who would pay for a message sent to no one in particular?” — Associates of David Sarnoff responding to the latter’s call for investment in the radio in 1921. And then a couple of years later, for someone that made their stake in radio: “While theoretically and technically television may be feasible, commercially and financially it is an impossibility, a development of which we need waste little time dreaming.” — Lee DeForest, American radio pioneer and inventor of the vacuum tube, 1926 And remember TV didn't really come into its own until decades after 1926. --- Yesterday, I was reading about past objections (circa 2007) to using Git vs CVS or SVN, and most of the objections were things that turned out to be unimportant. The objections focused on how their team doesn't have a decentralized workflow that the Linux Kernel does, so they don't need git. Or that the interface sucked, so they don't need git. Turns out everyone mostly uses git in a centralized way (via Github), to coordinate, but the decentralized design reveals secondary affordances that are really useful in practice. The decentralized design allows you to work and commit offline--great as laptops became more pervasive and more people worked on them. (You use to have to be online to commit, and can sometimes take minutes) The decentralized design also used content hashing with parent chains, which allows for inherent self-checking--no object modification can escape detection. Git's data structure makes commits fast, which in practice makes fine-grained commits possible. And the decentralized design gives everyone a backup of the repo, so the central repo getting nuked by the intern doesn't take down the org. Nowadays, in saying these things, I'm preaching to the choir. But back then, it was completely non-obvious. The only people that got it right back then are the ones that dug into the technical details, and then actually tried it out. Notably, the guy at X.org. https://keithp.com/blog/Repository_Formats_Matter/ https://keithp.com/blog/Repository_Formats_Matter/ And I think it's a similar thing with cryptocurrencies, in the way that the fundamental different design and architecture of blockchains allows for secondary effects that are harder to see (until you've actually used or programmed in it) that aren't available to you at all otherwise. The trap most people fall into is that they compare the new X with what the old Y does very well. But they never consider that if it's actually got a new underlying concept, it might suck at what the old Y has had time to get good at, but it allows for some other thing that we just couldn't do at all before.
DenisM 9y ago
So the logic of the first part of your post boils down to this: There were people in the past skeptical of an outlandish claim who turned out to be wrong as that thing became something great, therefore people who are skeptical of another outlandish claim today are also wrong. Did I get that right?
- v64 9y ago
  No, you didn't get that right at all. Doubt and skepticism are inherent parts of creating new ideas, and at no point did I express that the people who are skeptical are wrong. Rather, I am surprised to see comments on a technical website like Hacker News that are treating the long, drawn out development of cryptocurrencies and blockchains as something that is completely different than the long, drawn out development of the personal computer and the internet. It took the Internet more than 10 years to be useful, and so I think saying "shut it down, this is going nowhere" about Bitcoin today is not a useful viewpoint to take. Even if you doubt the technology itself, there is no reason to stifle its continued research and development.
  - jhwang5 9y ago
    Yes, except, personal computers didn't have negative side effects like raising funds illegally outside of investor production regulations (icos) or facilitating dark web trade.
    - v64 9y ago
      > Yes, except, personal computers didn't have negative side effects I disagree with this sentiment. In the early days, the dissemination of information like pornography and texts like the Anarchist Cookbook, which had instructions on how to create bombs and other weapons, were two examples of why the internet was a bad thing. Using a computer was considered by many to be antisocial due to the perception of people staring at screens 12 hours a day without talking to others in person. Even today, we have those arguing that the proliferation of computer technology has been detrimental to societal interactions.
    - 9y ago
replicatorblog 9y ago
My main issue with the blockchain hype is the inability of its proponents to explain what the future landscape will look like. Twenty years from now, what will the top three benefits of widespread blockchain adoption be? It shouldn't be that hard to offer concrete descriptions: In 1984, middle managers at Sears and AT&T were able to accurately predict how we'd use the internet in 2014. In 1999 a now-defunct ISP explained how Netflix streaming would work. https://hackernoon.com/what-14-tv-commercials-from-the-dot-com-era-tell-us-about-tech-866c7cec88b0 https://hackernoon.com/what-14-tv-commercials-from-the-dot-c... When I talk to crypto folks, I rarely get any predictions to this level of fidelity. There's a lot of talk about "Sovereign Individuals" and the decline of the US dollar as global reserve currency, but very little in the way of intermediate steps. How about this as a starter: Which will be the first public tech company to cite a blockchain project as the reason for a missed quarterly profit target? Is it Filecoin pinching Amazon? If not, who? I don't doubt that I'm missing something, but it seems like many are overly-concerned about joining the litany of Luddites: "Everything that can be invented, has been invented!" "There's a world market for five computers!" "Apple's not just gonna walk into the phone market!" That they've checked their critical thinking faculties.
- v64 9y ago
  From a fintech perspective, I'll make a thirty year prediction that blockchains will be used to reduce costs associated with third party clearinghouses and auditing firms by strengthening assurances that data hasn't been manipulated while reducing the amount of staff necessary to carry out the required verifications.
  - DenisM 9y ago
    Do you know much about those things? It'd be great if you could elaborate.
    - v64 9y ago
      Many financial transactions take place between parties who don't necessarily trust that the other side isn't fudging their numbers in order to get a better deal for themselves or to conceal information. Auditing firms exist to pour through the financial books of both sides to say, with our due diligence, we've confirmed that the financial statements both parties are claiming are supported by evidence. This is a time consuming process that involves dozens to hundreds of staff, depending on the size of the transaction. If all of the transactions of a company existed on a blockchain system, this would greatly simplify the auditing process. In order to have access to this system, your financial institution or business would run a node on the network, spreading out the overall cost of using the system. Because of cryptographic assurances, you can guarantee that past data hasn't been manipulated. Using smart contracts, you can also guarantee that every transaction follows certain conditions, making it impossible to do trickery like backdating documents. Security additions (like zkSNARKs today) would enable concealing specific aspects of transactions while allowing third parties to verify their validity. Long term, you could theoretically have an entire exchange that runs on a blockchain, with asset transfers mediated via smart contracts. The clearinghouses that exist to verify the assets of those who buy and sell, and complete the paperwork to document such transfers, could be largely automated. All of this can be achieved today with third parties, but you pay a lot for that trust. Once the technology has matured to a point where it's deployed widely and these types of transactions can be automated, I expect the associated costs of that trust to be reduced.
benashford 9y ago
Pretty much everything successful now was ridiculed or dismissed in the past, but that doesn't mean everything that was ridiculed or dismissed became successful. And even those things that became successful did so in a form that the contemporaneous positive predictions did not expect. The 1990's predictions of the Internet was of decentralised power and freedom of information, what actually happened? There was a land-grab, and a new generation of billion-dollar corporations have become established. Where once there was Blockbuster, now there is Netflix... My prediction is the same will happen with cryptocurrency and blockchain applications. The technology will live-on, mostly in non-currency applications (e.g. behind the scenes settlement rather than day-to-day transactions); most of the "land grab" phase will die off though. Then, one day, ten or twenty years from now, we'll realise that "fiat" currencies have been blockchain based since some un-trumpeted central bank upgrade eighteen-months prior. But no-one will have noticed, as they still spend "dollars" on a credit card... same as they always did.
- v64 9y ago
  > Then, one day, ten or twenty years from now, we'll realise that "fiat" currencies have been blockchain based since some un-trumpeted central bank upgrade eighteen-months prior. Tom, Dick, and Jane may not notice, but I would hope that those investing in that space, and those building out the technology, would :) The general public may not have an appreciation for the complexity behind it, but I assume many of Hacker News's readers, now and in the future, will be working on the forefront of developing this new technology.
- koonsolo 9y ago
  Which central bank will create the world currency that everyone in the world can easily use?
perseusprime11 9y ago
Two points: 1. Just because something is true in the past does not make everything else true in the future. 2. Just because something works does not mean it should be overvalued.
prepend 9y ago
You have a really good point. My issue is that the speculation is tied so closely with cryptocurrency. The future will definitely have cryptocurrency used in ways we can’t even imagine. Digital cash will be huge. That I believe. That any of the current currencies warrant any value at all much less the speculation, I’m iffy on. Both statements “the future is crypto” and “current crypto is a bubble and all are worthless” can both be true. The main use case of crypto currency, digital cash for digital transaction, does not require a bitcoin worth $1M. Successful cash doesn’t mean massive increases in crypto portfolios. So the article doesn’t seem in conflict with my HN reading, 80s/90s surviving self any more than me thinking AOL and Broadcast.com sucked back then even though I bet my whole career on the Internet.
- v64 9y ago
  > So the article doesn’t seem in conflict with my HN reading, 80s/90s surviving self any more than me thinking AOL and Broadcast.com sucked back then even though I bet my whole career on the Internet. I think we agree and I haven't made my point clear. To use your analogy, my criticism was more directed toward those who think AOL = the Internet. I'm not cheering for Bitcoin per se, but I'm cheering for the development of the technology underlying it, and disagree with those here in the comments who are saying we don't need blockchains because we already have relational databases.
- test6554 9y ago
  My main concern are the transaction fees. The software needs to let me set whatever fee I want to pay, knowing that I might be totally fine waiting a month for the transaction to go through.
bitCromwell 9y ago
this community has been reactionary to bitcoin since day 1. crypto is a generational shift, more so than web 2.0 and the glory days of hacker news. the audience here is predominantly the pre-crypto generation, much like slashdot is the voice of the dot com generation. we all need skepticism in our arsenal and that is what you can expect here, brilliant at times but hn is simply not the voice of this moment. you will be frustrated if you forget this rather than accepting it.
- v64 9y ago
  Thanks for your observation. I was an old /. user who eventually found his way here and have always felt to be in likeminded company, but I understand that technology often outpaces culture, even among the tech vanguard. I hope that people remain openminded despite their criticism, and are willing to reevaluate cryptocurrencies and blockchains as the technology matures and becomes more widespread.

by v64 9y ago

bigdubs 9y ago

Not sure the parallels are as strong as you're making them out to be; there are deep, deep flaws with proof of work as a concept because of the energy consumed. There will probably be a better end state for distributed trust, but we're legitimately not there yet.

aoro 9y ago
They already exist. Check out the stellar consensus mechanism. https://www.stellar.org/papers/stellar-consensus-protocol.pdf https://www.stellar.org/papers/stellar-consensus-protocol.pd...
- CryptoPunk 9y ago
  Stellar is not decentralized.
v64 9y ago
> there are deep, deep flaws with proof of work as a concept because of the energy consumed What is the energy consumption of all the bank offices and computer systems in the world? Even without this comparison, I think the amount of energy required is not a flaw in itself, but rather an aspect of the technology we should seek to improve upon (for instance, proof of stake is an attempt at this). I don't think it's sustainable long term (2400 baud internet wasn't sustainable long term either), but that doesn't mean we don't have the kernel of a great idea today. I agree with you 100% that we're not there yet, but I disagree with those who say this road leads to nowhere.
- Rebelgecko 9y ago
  Bitcoin mining (not even counting other cryptocurrencies) uses more electricity than most countries in the world. If you look at transactions per Watt, I would guess that the banks are doing better by multiple orders of magnitude
- gamblor956 9y ago
  If reports are to be believed, the entire sum total of energy consumed by banks, credit card processors, their computer systems, offices, and personnel...is dwarfed by the amount of energy wasted on Bitcoin alone. Banks and credit card processors can handle billions of transactions per day. Bitcoin, ethereum, and the other cryptocurrencies struggle to handle a few thousand, and are technologically incapable of non-linear scaling.
9y ago

gist 9y ago

So are you saying that it's more rational to simply think 'anything is possible' even though the available evidence and information seems to point to the fact that that isn't the case? After all you don't go around thinking that a country like (insert small insignificant country) is ever going to pass the United States in ability but sure 'anything is possible'. It could happen after all the US surpased Europe in many ways and at one time that was unthinkable. Also with respect to things like 'nobody will ever need a computer in their house' or what Watson of IBM said (regarding the need for only a small amount of computers in total) you are also not looking at the times that that type of statement ('will never work and here is why' or 'not needed because xyz') was true. You are only looking at the survivor bias type of things where people were wrong. Because you don't know of or keep track of the times things didn't work out (like flying cars but there are most likely thousands of other examples out there I am sure).

v64 9y ago
> So are you saying that it's more rational to simply think 'anything is possible' even though the available evidence and information seems to point to the fact that that isn't the case? At what point do you believe the internet had made its case as a technology? 1975? 1985? 1995? 2005? In each of those years, you had naysayers saying the internet would never become something people use in their daily lives, but here we are. The evidence of today should not stifle the innovation of tomorrow. > Also with respect to things like 'nobody will ever need a computer in their house' or what Watson of IBM said (regarding the need for only a small amount of computers in total) you are also not looking at the times that that type of statement ('will never work and here is why' or 'not needed because xyz') was true. It's not just Watson who made that statement. Many business owners in the 90s looked at computer and internet technology and dismissed it as a fad that would cease to exist in 5 years (and after the bubble popped, they were 100% sure they were correct). I believed in computers and the internet then because they solved unsolved problems, and offered better solutions than existing ones. In the field of trustless services, I believe the blockchain will be an essential part of that. And maybe it won't exactly be the blockchain we have today, but it will either be an improvement upon it, or an alternative idea created to address the problems of the original. Regardless of how the blockchain is and will eventually be used in practice, it's a simple theoretical model that offers a proof of what's possible in this space that we didn't have before. If you don't think the blockchain is "it", then what other technology do we have today that solves the same third party trust problems as the blockchain? Or do you believe that reliance on third parties in business and finance is something we don't need to overcome?

fooblitzky 9y ago

I see one fundamental problem that needs to be solved before blockchain can become a mainstream technology platform in the same way the Internet and the WWW did. Without a centralized authority, there is no recourse in the event of theft. None. Someone stole your identity? Guess you need a new one. Building an entire life on blockchain makes the security of the private keys extremely important, and surely we have more than enough examples that any connected system cannot keep its secrets forever (or even for very long)?

api 9y ago

I lived through the 80s and early 90s. The difference is that I could do stuff with the early Internet. I could do stuff with BBSes. I could do stuff with early PCs. These things were almost immediately very useful to a lot of people. The reason I've become a bear on cryptocurrency is that I don't see the utility to justify the monstrous amounts of money pouring into it. It's almost 10 years old and today it's actually less useful than it was a few years ago due to runaway fee growth. The feedback system works in the wrong direction. Did the Internet get less useful the more people used it? That and I see a ton of scams. Almost all cryptocurrency projects seem like either scams or delusional vaporware projects akin to badly thought out Kickstarters or over-funded boil-the-ocean startups. These things rarely accomplish anything other than to blow a lot of money. Want to change my mind? Show me the cryptocurrency killer app that people are climbing over each other to use. ... and no, gambling and virtual MLM / pyramid schemes don't count. I mean utility in the real world.

v64 9y ago
> I lived through the 80s and early 90s. The difference is that I could do stuff with the early Internet. I could do stuff with BBSes. I could do stuff with early PCs. These things were almost immediately very useful to a lot of people. You must have hung out with a nerdier crowd than I did :) I was the only person I knew who owned a personal computer until well into the late 90s. > The reason I've become a bear on cryptocurrency is that I don't see the utility to justify the monstrous amounts of money pouring into it. It's almost 10 years old and today it's actually less useful than it was a few years ago due to runaway fee growth. So I think cryptocurrency here is getting conflated with the underlying technology, just like Geocities came to be the poster child of the early web. I agree with you that the current systems have much work to be done, and that many of them will be abandoned before they're fixed. But cryptocurrency is not the blockchain anymore than gopher was the internet. Services like Bitcoin built on blockchains may cease to exist in their current state, but just like we still have TCP/IP, I think the blockchain piece will be essential moving forward. > That and I see a ton of scams. Almost all cryptocurrency projects seem like either scams or delusional vaporware projects akin to badly thought out Kickstarters or over-funded boil-the-ocean startups. These things rarely accomplish anything other than to blow a lot of money. I get a lot of scams via postal mail, telephone, and the email, but that doesn't negate the purpose of the technology :) > Want to change my mind? Show me the cryptocurrency killer app that people are climbing over each other to use. I think you misunderstand my viewpoint. I don't think the technologies of today are the solutions anymore than Geocities was the be-all-end-all of the web. My comments are more directed toward those who believe this technology leads to a dead end and that reducing the reliance on third party trust is not a problem that needs to be worked on.

starlust2 9y ago

The point isn't that existing technology can already do what new technology provides. There has to be some increased value from using the new technology. E-commerce took over because it's more convenient and offers a wider selection of products. The end user doesn't care what database you're using. They care about utility.

v64 9y ago
> The end user doesn't care what database you're using. They care about utility. I agree, but this isn't just about the end user. Many businesses incur costs to third parties that could be reduced or eliminated by trustless systems whose validity of data can be verified mathematically without an auditing team. The blockchain of today can't do that yet, just like the internet of 1985 didn't allow you to buy books, but I think we're headed in the direction of progress.
- jhwang5 9y ago
  "Trustless" systems require you to trust miners. I think miners are pretty much the last people you would want to trust.
  - v64 9y ago
    I agree that the current system involving miners is fraught with political implications. But that doesn't mean the system is broken, it just means it needs to be improved (proof of stake, for instance).
  - hndamien 9y ago
    You don't have to trust the miners. They act as randomly selected notaries to the chain that have provably fronted considerable resources to accurately notarise the transactions in exchange for being paid handsomely (in specie). If they want to lie when they finally have the opportunity to get paid, and subsequently be caught lying because they don't have enough resources to rewrite the chain then they can, but this would be a pretty foolish errand which would still result in the fact you don't have to trust them.

tway9595 9y ago

>You lived through the 80s and 90s right? I can't count how many times in my life I was told no one would ever need a computer in their house, we've gotten along for decades just fine without them. No one will ever buy books online, that's ridiculous, you can go to the store and have one right now. The internet is just a niche chat program that will never have any use in business, etc. Why do you assume that Bitcoin is one of these few winners, rather than the multitude of losers? The default position should be "failure"; it's not irrational.

v64 9y ago
> Why do you assume that Bitcoin is one of these few winners, rather than the multitude of losers? I didn't state that Bitcoin would be a winner, and in fact stated in my comment that Bitcoin may cease to exist as a software product. My criticism is more directed toward those who don't believe the blockchain is a useful data construct and that the research taking place today into blockchains and cryptocurrencies are a dead end.
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iamwil 9y ago

It's just really hard for people to see beyond the present. Innovators in one cycle are often blind to the opportunities in the next. I see it in a couple of my successful friends that built their own companies on the web and mobile when it comes to crypto. I'm reminded of the quote about the radio: “The wireless music box has no imaginable commercial value. Who would pay for a message sent to no one in particular?” — Associates of David Sarnoff responding to the latter’s call for investment in the radio in 1921. And then a couple of years later, for someone that made their stake in radio: “While theoretically and technically television may be feasible, commercially and financially it is an impossibility, a development of which we need waste little time dreaming.” — Lee DeForest, American radio pioneer and inventor of the vacuum tube, 1926 And remember TV didn't really come into its own until decades after 1926. --- Yesterday, I was reading about past objections (circa 2007) to using Git vs CVS or SVN, and most of the objections were things that turned out to be unimportant. The objections focused on how their team doesn't have a decentralized workflow that the Linux Kernel does, so they don't need git. Or that the interface sucked, so they don't need git. Turns out everyone mostly uses git in a centralized way (via Github), to coordinate, but the decentralized design reveals secondary affordances that are really useful in practice. The decentralized design allows you to work and commit offline--great as laptops became more pervasive and more people worked on them. (You use to have to be online to commit, and can sometimes take minutes) The decentralized design also used content hashing with parent chains, which allows for inherent self-checking--no object modification can escape detection. Git's data structure makes commits fast, which in practice makes fine-grained commits possible. And the decentralized design gives everyone a backup of the repo, so the central repo getting nuked by the intern doesn't take down the org. Nowadays, in saying these things, I'm preaching to the choir. But back then, it was completely non-obvious. The only people that got it right back then are the ones that dug into the technical details, and then actually tried it out. Notably, the guy at X.org. https://keithp.com/blog/Repository_Formats_Matter/ https://keithp.com/blog/Repository_Formats_Matter/ And I think it's a similar thing with cryptocurrencies, in the way that the fundamental different design and architecture of blockchains allows for secondary effects that are harder to see (until you've actually used or programmed in it) that aren't available to you at all otherwise. The trap most people fall into is that they compare the new X with what the old Y does very well. But they never consider that if it's actually got a new underlying concept, it might suck at what the old Y has had time to get good at, but it allows for some other thing that we just couldn't do at all before.

DenisM 9y ago

So the logic of the first part of your post boils down to this: There were people in the past skeptical of an outlandish claim who turned out to be wrong as that thing became something great, therefore people who are skeptical of another outlandish claim today are also wrong. Did I get that right?

v64 9y ago
No, you didn't get that right at all. Doubt and skepticism are inherent parts of creating new ideas, and at no point did I express that the people who are skeptical are wrong. Rather, I am surprised to see comments on a technical website like Hacker News that are treating the long, drawn out development of cryptocurrencies and blockchains as something that is completely different than the long, drawn out development of the personal computer and the internet. It took the Internet more than 10 years to be useful, and so I think saying "shut it down, this is going nowhere" about Bitcoin today is not a useful viewpoint to take. Even if you doubt the technology itself, there is no reason to stifle its continued research and development.
- jhwang5 9y ago
  Yes, except, personal computers didn't have negative side effects like raising funds illegally outside of investor production regulations (icos) or facilitating dark web trade.
  - v64 9y ago
    > Yes, except, personal computers didn't have negative side effects I disagree with this sentiment. In the early days, the dissemination of information like pornography and texts like the Anarchist Cookbook, which had instructions on how to create bombs and other weapons, were two examples of why the internet was a bad thing. Using a computer was considered by many to be antisocial due to the perception of people staring at screens 12 hours a day without talking to others in person. Even today, we have those arguing that the proliferation of computer technology has been detrimental to societal interactions.
  - 9y ago

replicatorblog 9y ago

My main issue with the blockchain hype is the inability of its proponents to explain what the future landscape will look like. Twenty years from now, what will the top three benefits of widespread blockchain adoption be? It shouldn't be that hard to offer concrete descriptions: In 1984, middle managers at Sears and AT&T were able to accurately predict how we'd use the internet in 2014. In 1999 a now-defunct ISP explained how Netflix streaming would work. https://hackernoon.com/what-14-tv-commercials-from-the-dot-com-era-tell-us-about-tech-866c7cec88b0 https://hackernoon.com/what-14-tv-commercials-from-the-dot-c... When I talk to crypto folks, I rarely get any predictions to this level of fidelity. There's a lot of talk about "Sovereign Individuals" and the decline of the US dollar as global reserve currency, but very little in the way of intermediate steps. How about this as a starter: Which will be the first public tech company to cite a blockchain project as the reason for a missed quarterly profit target? Is it Filecoin pinching Amazon? If not, who? I don't doubt that I'm missing something, but it seems like many are overly-concerned about joining the litany of Luddites: "Everything that can be invented, has been invented!" "There's a world market for five computers!" "Apple's not just gonna walk into the phone market!" That they've checked their critical thinking faculties.

v64 9y ago
From a fintech perspective, I'll make a thirty year prediction that blockchains will be used to reduce costs associated with third party clearinghouses and auditing firms by strengthening assurances that data hasn't been manipulated while reducing the amount of staff necessary to carry out the required verifications.
- DenisM 9y ago
  Do you know much about those things? It'd be great if you could elaborate.
  - v64 9y ago
    Many financial transactions take place between parties who don't necessarily trust that the other side isn't fudging their numbers in order to get a better deal for themselves or to conceal information. Auditing firms exist to pour through the financial books of both sides to say, with our due diligence, we've confirmed that the financial statements both parties are claiming are supported by evidence. This is a time consuming process that involves dozens to hundreds of staff, depending on the size of the transaction. If all of the transactions of a company existed on a blockchain system, this would greatly simplify the auditing process. In order to have access to this system, your financial institution or business would run a node on the network, spreading out the overall cost of using the system. Because of cryptographic assurances, you can guarantee that past data hasn't been manipulated. Using smart contracts, you can also guarantee that every transaction follows certain conditions, making it impossible to do trickery like backdating documents. Security additions (like zkSNARKs today) would enable concealing specific aspects of transactions while allowing third parties to verify their validity. Long term, you could theoretically have an entire exchange that runs on a blockchain, with asset transfers mediated via smart contracts. The clearinghouses that exist to verify the assets of those who buy and sell, and complete the paperwork to document such transfers, could be largely automated. All of this can be achieved today with third parties, but you pay a lot for that trust. Once the technology has matured to a point where it's deployed widely and these types of transactions can be automated, I expect the associated costs of that trust to be reduced.

benashford 9y ago

Pretty much everything successful now was ridiculed or dismissed in the past, but that doesn't mean everything that was ridiculed or dismissed became successful. And even those things that became successful did so in a form that the contemporaneous positive predictions did not expect. The 1990's predictions of the Internet was of decentralised power and freedom of information, what actually happened? There was a land-grab, and a new generation of billion-dollar corporations have become established. Where once there was Blockbuster, now there is Netflix... My prediction is the same will happen with cryptocurrency and blockchain applications. The technology will live-on, mostly in non-currency applications (e.g. behind the scenes settlement rather than day-to-day transactions); most of the "land grab" phase will die off though. Then, one day, ten or twenty years from now, we'll realise that "fiat" currencies have been blockchain based since some un-trumpeted central bank upgrade eighteen-months prior. But no-one will have noticed, as they still spend "dollars" on a credit card... same as they always did.

v64 9y ago
> Then, one day, ten or twenty years from now, we'll realise that "fiat" currencies have been blockchain based since some un-trumpeted central bank upgrade eighteen-months prior. Tom, Dick, and Jane may not notice, but I would hope that those investing in that space, and those building out the technology, would :) The general public may not have an appreciation for the complexity behind it, but I assume many of Hacker News's readers, now and in the future, will be working on the forefront of developing this new technology.
koonsolo 9y ago
Which central bank will create the world currency that everyone in the world can easily use?

perseusprime11 9y ago

Two points: 1. Just because something is true in the past does not make everything else true in the future. 2. Just because something works does not mean it should be overvalued.

prepend 9y ago

You have a really good point. My issue is that the speculation is tied so closely with cryptocurrency. The future will definitely have cryptocurrency used in ways we can’t even imagine. Digital cash will be huge. That I believe. That any of the current currencies warrant any value at all much less the speculation, I’m iffy on. Both statements “the future is crypto” and “current crypto is a bubble and all are worthless” can both be true. The main use case of crypto currency, digital cash for digital transaction, does not require a bitcoin worth $1M. Successful cash doesn’t mean massive increases in crypto portfolios. So the article doesn’t seem in conflict with my HN reading, 80s/90s surviving self any more than me thinking AOL and Broadcast.com sucked back then even though I bet my whole career on the Internet.

v64 9y ago
> So the article doesn’t seem in conflict with my HN reading, 80s/90s surviving self any more than me thinking AOL and Broadcast.com sucked back then even though I bet my whole career on the Internet. I think we agree and I haven't made my point clear. To use your analogy, my criticism was more directed toward those who think AOL = the Internet. I'm not cheering for Bitcoin per se, but I'm cheering for the development of the technology underlying it, and disagree with those here in the comments who are saying we don't need blockchains because we already have relational databases.
test6554 9y ago
My main concern are the transaction fees. The software needs to let me set whatever fee I want to pay, knowing that I might be totally fine waiting a month for the transaction to go through.

bitCromwell 9y ago

this community has been reactionary to bitcoin since day 1. crypto is a generational shift, more so than web 2.0 and the glory days of hacker news. the audience here is predominantly the pre-crypto generation, much like slashdot is the voice of the dot com generation. we all need skepticism in our arsenal and that is what you can expect here, brilliant at times but hn is simply not the voice of this moment. you will be frustrated if you forget this rather than accepting it.

v64 9y ago
Thanks for your observation. I was an old /. user who eventually found his way here and have always felt to be in likeminded company, but I understand that technology often outpaces culture, even among the tech vanguard. I hope that people remain openminded despite their criticism, and are willing to reevaluate cryptocurrencies and blockchains as the technology matures and becomes more widespread.