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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

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.
    - pishpash 9y ago
      Abstractly, I do not see how, economically, devolving trust can reduce cost. You pay for trust either to a third party as now or you pay it to the network verifiers. Somewhere there is a cost. Now, keeping all records digitally and openly accessible, and having automated processes to replace human processes, that can certainly reduce cost, but it's a business process change and orthogonal to the blockchain.
    - DenisM 9y ago
      I know you're no partial to this line of reasoning, but please humor me... Could we achieve the same end by creating a big Git repository under control of the SEC? Anyone can make a clone, SEC will approve pull requests as needed. Or would you argue that this effectively becomes a blockchain as soon as we use start using hashes? I think it's useful to have a paper-trail of hashed blocks/files, gives you a simple mental model to reason about immutability. I just don't quite understand the need for the decentralized commit protocol. For any legitimate (legal) purpose one could rely on a large central entity yielding much higher speed and lower expense/complexity.
      - v64 9y ago
        I don't think you can underestimate how important immutability and trustlessness are in cases like these. Don't get me wrong, your setup would be an improvement over many manually curated processes (and in my own business, I use ledger-cli.org with the files under version control), but the lack of the two aforementioned attributes makes it a technological change that doesn't change the underlying politics. In the end, you're just moving the third party elsewhere, and you'd still need staff to verify that people are committing their finances regularly and aren't trying to sneak in retroactive changes in large commits. If someone ever decides to try to get away with rewriting their git history and arguing that the SEC accepted an erroneous pull request that contains the wrong history, that would need to be audited/litigated out to resolve whose tree was correct (just because the SEC owns the master repo doesn't necessarily mean that their custodians of it haven't rewritten history themselves). Also, the fact that the "authority" repo is centralized means you may have issues if for some reason it's inaccessible (these issues arise in reality when GitHub goes down).
- thatthatis 9y ago
  While an excellent use case, how big on an overall economic level is this? $20 billion? The big four accounting firms bring in about $40 billion in revenue each. Thus $160 billion would seem to me to be a reasonable order of magnitude estimate for the max value audit-free fin-tech can create. Is there a better estimate of total value this can create?
  - v64 9y ago
    > Is there a better estimate of total value this can create? I don't think there'll be a way to realistically estimate this for at least another decade. That would be like asking what the effect of TCP/IP will be on eCommerce in 1980. What I've laid out is very, very high level, while the technology is still in what could be considered pre-alpha stages.
miscreanity 9y ago
For fintech, v64 has made the case very well. In another reply, I explained the use case for government is control and tracking via blockchain. From the consumer perspective, the benefit will be convenience. We have car find that automatically open doors. Automation of the world around us will increase significantly, and instead of having a key fob for each item it will be a single device registered on a blockchain which everything else is registered as well. Permission can be automatically granted by machine to machine communication. Why not a normal database? Maintenance, trust and universal accessibility.

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.
  - pishpash 9y ago
    Abstractly, I do not see how, economically, devolving trust can reduce cost. You pay for trust either to a third party as now or you pay it to the network verifiers. Somewhere there is a cost. Now, keeping all records digitally and openly accessible, and having automated processes to replace human processes, that can certainly reduce cost, but it's a business process change and orthogonal to the blockchain.
  - DenisM 9y ago
    I know you're no partial to this line of reasoning, but please humor me... Could we achieve the same end by creating a big Git repository under control of the SEC? Anyone can make a clone, SEC will approve pull requests as needed. Or would you argue that this effectively becomes a blockchain as soon as we use start using hashes? I think it's useful to have a paper-trail of hashed blocks/files, gives you a simple mental model to reason about immutability. I just don't quite understand the need for the decentralized commit protocol. For any legitimate (legal) purpose one could rely on a large central entity yielding much higher speed and lower expense/complexity.
    - v64 9y ago
      I don't think you can underestimate how important immutability and trustlessness are in cases like these. Don't get me wrong, your setup would be an improvement over many manually curated processes (and in my own business, I use ledger-cli.org with the files under version control), but the lack of the two aforementioned attributes makes it a technological change that doesn't change the underlying politics. In the end, you're just moving the third party elsewhere, and you'd still need staff to verify that people are committing their finances regularly and aren't trying to sneak in retroactive changes in large commits. If someone ever decides to try to get away with rewriting their git history and arguing that the SEC accepted an erroneous pull request that contains the wrong history, that would need to be audited/litigated out to resolve whose tree was correct (just because the SEC owns the master repo doesn't necessarily mean that their custodians of it haven't rewritten history themselves). Also, the fact that the "authority" repo is centralized means you may have issues if for some reason it's inaccessible (these issues arise in reality when GitHub goes down).
thatthatis 9y ago
While an excellent use case, how big on an overall economic level is this? $20 billion? The big four accounting firms bring in about $40 billion in revenue each. Thus $160 billion would seem to me to be a reasonable order of magnitude estimate for the max value audit-free fin-tech can create. Is there a better estimate of total value this can create?
- v64 9y ago
  > Is there a better estimate of total value this can create? I don't think there'll be a way to realistically estimate this for at least another decade. That would be like asking what the effect of TCP/IP will be on eCommerce in 1980. What I've laid out is very, very high level, while the technology is still in what could be considered pre-alpha stages.

miscreanity 9y ago

For fintech, v64 has made the case very well. In another reply, I explained the use case for government is control and tracking via blockchain. From the consumer perspective, the benefit will be convenience. We have car find that automatically open doors. Automation of the world around us will increase significantly, and instead of having a key fob for each item it will be a single device registered on a blockchain which everything else is registered as well. Permission can be automatically granted by machine to machine communication. Why not a normal database? Maintenance, trust and universal accessibility.