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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-co

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.
- krrrh 9y ago
  > Many businesses incur costs to third parties that could be reduced or eliminated by trustless systems The way you phrase this it sounds like a marginal reduction of costs, and maybe a marginal reduction in the auditor workforce. That’s great, and it will bring about some efficiency in the businesses it applies to, but it doesn’t sound like a story of transformational change and an unlocking of new value. Even in the worst case scenario, how big are auditing costs to a business?
  - thatthatis 9y ago
    moving electronic payment cost from 3% to 1% is a marginal reduction, but if we get that reduction across a few trillion in transactions it becomes real money. Unfortunately, a lot of the cost of the 3% is providing fraud and chargeback protection that lets customers be comfortable paying online. So, while it's conceivable that a stable block chain based payment method could revolutionize ecommerce payments, the present incarnations have trust math (before we even begin to discuss volatility's effect on suitability of a medium of exchange)
    - krrrh 9y ago
      GP was talking about auditing costs at financial institutions which is a different issue than credit card transactions (I think). Another portion of that 3% cost is marketing in the form of cashback and rewards points which can be eliminated if the market or regulators demand it. In Australia they capped credit card fees to around 0.5% on the basis that the fees were a market distortion. They review them regularly and have suggested that lower fees are appropriate [1]. It doesn’t actually cost Visa that much to handle transactions, and there are proven solutions to fixing credit card fees if that is what is desired. [1] search document for “cap” http://www.rba.gov.au/payments-and-infrastructure/review-of-card-payments-regulation/conclusions-paper-may2016/interchange-fees-and-transparency-of-card-payments.html http://www.rba.gov.au/payments-and-infrastructure/review-of-...

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.
krrrh 9y ago
> Many businesses incur costs to third parties that could be reduced or eliminated by trustless systems The way you phrase this it sounds like a marginal reduction of costs, and maybe a marginal reduction in the auditor workforce. That’s great, and it will bring about some efficiency in the businesses it applies to, but it doesn’t sound like a story of transformational change and an unlocking of new value. Even in the worst case scenario, how big are auditing costs to a business?
- thatthatis 9y ago
  moving electronic payment cost from 3% to 1% is a marginal reduction, but if we get that reduction across a few trillion in transactions it becomes real money. Unfortunately, a lot of the cost of the 3% is providing fraud and chargeback protection that lets customers be comfortable paying online. So, while it's conceivable that a stable block chain based payment method could revolutionize ecommerce payments, the present incarnations have trust math (before we even begin to discuss volatility's effect on suitability of a medium of exchange)
  - krrrh 9y ago
    GP was talking about auditing costs at financial institutions which is a different issue than credit card transactions (I think). Another portion of that 3% cost is marketing in the form of cashback and rewards points which can be eliminated if the market or regulators demand it. In Australia they capped credit card fees to around 0.5% on the basis that the fees were a market distortion. They review them regularly and have suggested that lower fees are appropriate [1]. It doesn’t actually cost Visa that much to handle transactions, and there are proven solutions to fixing credit card fees if that is what is desired. [1] search document for “cap” http://www.rba.gov.au/payments-and-infrastructure/review-of-card-payments-regulation/conclusions-paper-may2016/interchange-fees-and-transparency-of-card-payments.html http://www.rba.gov.au/payments-and-infrastructure/review-of-...