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We've been automating middlemen away for years, don't see whats different here? Blockchain lets us do some stuff now that was impossible before (single ownersh

We've been automating middlemen away for years, don't see whats different here? Blockchain lets us do some stuff now that was impossible before (single ownership of digital assets jumps out), but a big chunk of the economic benefit is going to come from reduced transaction costs.

conanbatt 9y ago
The author makes the point that the proof-of-work is expensive enough to have the transaction costs still too high to compete with the current financial environment. I do not send money to my wife on bitcoin, I use venmo or bank accounts and it is free and immediate.
dtech 9y ago
Bitcoin, the only "proven" crypto coin thus far, totally failed as a usable currency because of the high transaction costs. Other cryptocoins including BTC, Ethereum, Litecoin or whatever do not have lower transaction cost than traditional currency. In fact I would argue that since public blockchain require mining transaction costs can never be that much lower than traditional currency.
Asdfbla 9y ago
And blockchains achieve that at an immense cost, which is the point of the discussion. Decentralised systems are less efficient (orders of magnitude less for proof of work) and it's debatable whether that is necessary in the real world, where trust exists for the majority of applications.
IkmoIkmo 9y ago
We've been reducing middlemen to few, not to zero. e.g. Amazon, Whatsapp, Facebook, Airbnb etc. Hell, even peer-to-peer systems have some kind of middlemen. If that middleman is in a big enough market with low barriers to entry and lots of competition, and is able to drive cost down with smart tech, it doesn't really matter to most users whether he exists or not. Decentralised systems never promised low transaction costs. A private party running a database can do it cheaper and faster than a set of decentralised actors working for some incentive to establish the same database. That seems pretty much inevitable. They did promise something else. Trustless-systems. But it hasn't been shown yet that consumers value this. (e.g. see our most valued companies like Facebook to which we routinely trust data (from secrets to nudes) we'd never, ever share with anyone else) Blockchain's value proposition, as I've always interpreted it, isn't 'material' in the sense that transaction costs or speed are, but more based on the culture and the relationships of the 'value network'. i.e., the relationships aren't based on trust+laws, but on code+math. And it doesn't appear to me that the market values these relationships/culture, but it seems that the market does value the material aspects. hence there being no real blockchain users of blockchain applications. (except for the whole store of value thing, which drives basically all the price changes, but nobody envisioned the blockchain to solely be digital gold and nothing else).
jayd16 9y ago
Bitcoin has simply anonymized the middle man. You're still expected to pay a transaction fee to miners. It'll never be cheaper than a centralized solution so there will never be a cost reduction.

conanbatt 9y ago

The author makes the point that the proof-of-work is expensive enough to have the transaction costs still too high to compete with the current financial environment. I do not send money to my wife on bitcoin, I use venmo or bank accounts and it is free and immediate.

dtech 9y ago

Bitcoin, the only "proven" crypto coin thus far, totally failed as a usable currency because of the high transaction costs. Other cryptocoins including BTC, Ethereum, Litecoin or whatever do not have lower transaction cost than traditional currency. In fact I would argue that since public blockchain require mining transaction costs can never be that much lower than traditional currency.

Asdfbla 9y ago

And blockchains achieve that at an immense cost, which is the point of the discussion. Decentralised systems are less efficient (orders of magnitude less for proof of work) and it's debatable whether that is necessary in the real world, where trust exists for the majority of applications.

IkmoIkmo 9y ago

We've been reducing middlemen to few, not to zero. e.g. Amazon, Whatsapp, Facebook, Airbnb etc. Hell, even peer-to-peer systems have some kind of middlemen. If that middleman is in a big enough market with low barriers to entry and lots of competition, and is able to drive cost down with smart tech, it doesn't really matter to most users whether he exists or not. Decentralised systems never promised low transaction costs. A private party running a database can do it cheaper and faster than a set of decentralised actors working for some incentive to establish the same database. That seems pretty much inevitable. They did promise something else. Trustless-systems. But it hasn't been shown yet that consumers value this. (e.g. see our most valued companies like Facebook to which we routinely trust data (from secrets to nudes) we'd never, ever share with anyone else) Blockchain's value proposition, as I've always interpreted it, isn't 'material' in the sense that transaction costs or speed are, but more based on the culture and the relationships of the 'value network'. i.e., the relationships aren't based on trust+laws, but on code+math. And it doesn't appear to me that the market values these relationships/culture, but it seems that the market does value the material aspects. hence there being no real blockchain users of blockchain applications. (except for the whole store of value thing, which drives basically all the price changes, but nobody envisioned the blockchain to solely be digital gold and nothing else).

jayd16 9y ago

Bitcoin has simply anonymized the middle man. You're still expected to pay a transaction fee to miners. It'll never be cheaper than a centralized solution so there will never be a cost reduction.