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You Probably Don't Need a Blockchain

151 points by village-idiot 9y ago

deleted 9y ago
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c-cube 9y ago
Very interesting, and mostly right imho. Still no killer app for any blockchain so far, but lots of problems already well known. I'm almost disappointed the author didn't mention the ecological disaster that goes with the energy consumption, instead of just talking about the price.
- village-idiot 9y ago
  Yeah, I totally forgot that.
  - scalablenotions 9y ago
    If you compare the energy consumption of traditional banking systems to Bitcoin, you will realise how very efficient blockchain is.
    - lalaland1125 9y ago
      Energy efficient in what sense? If you are comparing the cost per transaction or per amount of money transferred, then I don't see how Bitcoin could in any way be considered more efficient.
    - chris_wot 9y ago
      I hardly think so. Try scaling up Bitcoin to the world's current volume of transactions and you'll find it uses vastly more electricity than traditional banking systems use.
      - scalablenotions 9y ago
        We are working on it, so watch this space. The power consumption will not increase linearly, because of tier 2 & 3 solutions. The key is that blockchain is automated. With traditional centralised trust systems, you need buildings full of people running everything.
        floatboth 9y ago
        Buildings full of people are a joke compared to the massive amounts of power wasted on mining.
        village-idiot 9y ago
        You will scale the blockchain by .... not using the blockchain. Okay.
    - lz400 9y ago
      It's these deluded comparisons that make blockchain proponents look silly. The "traditional banking system" provides orders of magnitude more services than a blockchain. They are just not comparable.
    - village-idiot 9y ago
      Only because you desperately wish for this to be true, not because it is.
- dack 9y ago
  yeah proof of work is turning out to be a pretty unsustainable idea - i'm not sure if proof of stake truly can be considered the victor yet but it seems like a huge step in the right direction. (Completely agreed that there hasn't been a killer app yet in the space - but I think i'm more optimistic about the chances of that happening at some point)
scalablenotions 9y ago
It would be nice if this was called, "Why would I need a Blockchain?" or something. It's pretty clear the author hasn't gone deep enough to tell other people how relevant Blockchain might be to their lives. A change in title/tone would avoid the crimes of confidence.
- village-idiot 9y ago
  Someone didn't read all the way to the disclaimer....
  - scalablenotions 9y ago
    I read the article. The disclaimer is both inadequate and a poor substitute for a humbler article. Disclaimer: Just saying.
    - village-idiot 9y ago
      So the disclaimer and the word "probably" wasn't hedging enough for you? Maybe you just already had your own conclusions and don't like it when people disagree.
mjfl 9y ago
I got downvoted the last time I said this, but cryptocurrencies are actually pretty nice for doing exactly what their purpose is: sending money over the internet. Do you know how hard it is to get Stripe or Paypal to approve you for international credit card processing? If you're a "hacker" working out of your apartment, they automatically assume you're trying to launder money and shut you down, even if you've worked hard to provide solid documentation that you are who you say you are and you're doing what you say you're doing. Even if they do approve you it can take months to integrate into their system. And that's with Stripe and/or Paypal, without Stripe and/or Paypal it's impossible. Until crypto. With crypto you can set up a transaction system in a day, by yourself. I think that's great value.
- Felz 9y ago
  Well, of course something that skirts around regulations will require less red tape. Once the government catches up, you'll be required to do similar hoop jumping for cryptos. Exchanges suffer this problem already, don't they?
  - solotronics 9y ago
    The cat is already out of the bag its just like bittorrents of copyrighted content. Yeah It's illegal but that doesn't stop anyone. Also, with how easy it is to change one crypto for another how would you even regulate it? I am not asking that retorically and am genuinely interested in this if anyone has an idea of how cryotocurrency regulations would work.
    - lalaland1125 9y ago
      You regulate the fiat onramps and offramps which are the exchanges. Nobody uses bitcoin to actually pay for things, so once you take away the ability to exchange it for fiat, the whole scheme collapses. The US government could end most of this tomorrow by simply shutting down a handful of exchanges.
      - ghthor 9y ago
dack 9y ago
Okay, I don't want to come down too hard on this article, but I think it's nearsighted. Sure, it's true that _today's_ blockchains have many downsides the article brings up, but it's written as if those won't change or improve. It feels to me a bit like claiming in the 90's that the internet isn't the future because you can't download that much stuff at 56k speeds. They mention "immutability" being a problem - so much so that it somehow disallows typos or undos. That's just not true - you just represent the updates as changes in their own right (which better reflects reality than literally altering history). There's nothing about "the blockchain" that can't record human error or corrections. They go on to talk about how proof of stake doesn't solve all problems by mentioning, "The Bitcoin blockchain is currently 157GB in size, and that’s at a very low transaction speed. The idea of everyone mining on their phone is just laughable." Once again, they are talking about current implementations - I don't see how this is inherently a restriction in the technology, and there are (reputable) companies working on this exact thing. The amount of money I have in cryptocurrencies can basically be rounded to zero, so I don't have much skin in this game - I just think blog posts like these aren't really making compelling points other than "the current technology today has many flaws", which I think is uninteresting to most.
- bencollier49 9y ago
  > It feels to me a bit like claiming in the 90's that the internet isn't the future because you can't download that much stuff at 56k speeds. Absolutely this. As soon as I read the article I was reminded of those 1996 "this internet stuff is a fad" pieces.
- chris_wot 9y ago
  Well, he has a point. Unless you use a cryptocurrency, I can't think of anything that needs the blockchain. I have seen plenty of people trying to shoehorn the blockchain into areas that don't need it - goods distribution, electricity supply, you name it and someone is trying to do it. Almost all of those things would actually work better with a centralised database. The Blockchain is an awesome technology for an incredibly niche market. So his article is right - in most cases, you probably don't need a blockchain.
JarlUlvi 9y ago
Blockchains are not new. https://en.wikipedia.org/wiki/Merkle_tree https://en.wikipedia.org/wiki/Merkle_tree
paulsutter 9y ago
If you’re not in an adversarial environment, you don’t need a blockchain. Sometimes you are though.
marban 9y ago
My less romantic, medium-term outlook on this is that all of these thought-police projects are trying to enforce a combination of nonstate binary answers and an (informational) monoculture to a messy capitalist world with the single technological argument of a distributed/anonymized/encrypted/irreversible database that has little relevance for the actual underlying idea. Looking at the past eight+ years, and other than opening up speculation and dubious activites for a new group of people, we have not seen a single project that would ever highlight the usual required 10x benefits, let alone the promise to change the behavior of the regular user. It's merely porting a fraction of existing stuff behind cumbersome UX — With all respect for infancy of technology but what if porting my contacts, having one single login, a distributed social network or to-do list aren't just that important as the proponents are arguing for? Obvisouly all of these attempts have already failed several times. This is not the equivalent of killing Gopher through HTTP by a new experience, making information available for the first time, introducing a new socially acceptable interaction or killing industries and middlemen by means of __raw__ technology (In each case there was always more to it). Even torrenting is already more or less dead in favor of OTT because people are lazy bastards that don't care how the content gets streamed to their TV. And what if customers actually like collecting flight miles, having someone who picks up the phone when their CC was compromised, when the taxi driver harassed them, their car title got lost or their 401k was hacked off their account? IF breaking up the power consolidation in whatever industry with blockchain tech being the primary method, the starting line is at what's already out there and then offering real advantages and incentives (other than coins) that can only be achieved through a public ledger — Obviously there are potential and often cited areas like real estate, voting and medical records but all of these seem to me as an admistrative job for a missionary movement to enforce standards and not a private startup. And yes, I get the argument for using it in adversarial areas but we're talking business here.
deleted 9y ago
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deleted 9y ago
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jotto 9y ago
A better title for the content might be: blockchain scaling issues A better case against blockchains would be exploring the reasons why we shouldn't care about trustless properties that blockchains give us.
stellarstep 9y ago
And yes, the writer probably may buy bitcoins after other people who read an article like this sold them.
- village-idiot 9y ago
  Nope. I don't do speculative bubbles.
chrisco255 9y ago
Opening this article, I was hoping to get a technical discussion as to why an application might or might not need blockchain. Unfortunately, I was met with a ranting article with a few straw man arguments about why blockchain is flawed. The first point the author makes is the disadvantage of immutability. Claims that few systems benefit from immutable transaction records. First of all, I don't think that's true. Many systems do, not just financial systems with double entry bookkeeping. Event sourcing is a well defined architecture pattern in back end systems, and it turns out that immutable event logs are actually incredibly useful. It's also pretty well known that you don't erase history in financial systems. That is one of the pillars of double entry bookkeeping. A more balanced article would point out the pros and cons of immutable systems, but to flippantly argue that immutability is useless? That's just lazy. Tracking shipment of goods on a blockchain has many advantages. Namely, you can create a shared protocol for the data of shipment tracking, and you can open that blockchain up to certain parties to sign as the good moves along the supply chain. It doesn't have to be "trustless". A particular app's blockchain might only be open to a few trusted parties to write to. Not all transactions have to be written to a single, global, immutable ledger. There are still great benefits to sharing a common blockchain among specific, trusted, cooperative entities. On POW and the electricity argument, I think we waste electricity on lots of frivolous things. I'm willing to bet Christmas lights also consume more than the state of Delaware. However, it's not the processing of transactions that the electricity is being spent on, it's the creation of new coins. POS is a good alternative. I think many coins are starting to leverage POS. Ethereum will be switching to that soon. Still, POS vs POW has nothing to do with "why you probably don't need a blockchain". These are implementation details that vary per blockchain/coin. Scale also varies dramatically among coins. Ripple already processes 1000s of transactions / second. Lightning network on BTC is growing rapidly. Ethereum has scaling solutions in the works. Other chains have completely different properties than the top two and have different answers for the scaling issues. These issues will be solved with time. As for rants on ICOs and scams, etc. I mean, do you know how many people have been scammed from phishing e-mails? Does that mean we should not use e-mail? No. As always, caveat emptor, do your own research, and don't take unnecessary risks.
- incompatible 9y ago
  I don't think you are right that electricity is consumed only for the creation of new coins. The proof of work is done for every block of transactions, and would still be part of the system if no new coins were created.
thisisit 9y ago
With the bitcoin price drop articles like these have been popping up on HN quite frequently. previous discussion: https://news.ycombinator.com/item?id=16421383 https://news.ycombinator.com/item?id=16421383 What I feel has never been discussed is not whether blockchain or decentralization is a good idea rather how does decentralization will work? The issue is not whether immutability is bad idea rather how will it work in case of disputes? The only answer I keep hearing is - well, game theory can take care of it. This misses the point that if people are aware of the rules, they will find ways to break it. We saw a good example of how "we need 51% for manipulation" works in real life during Status ICO. F2pool which held 25% of the mining power was able to manipulate the ICO holding back ethereum transactions: https://steemit.com/ethereum/@dhumphrey/f2pool-manipulates-usd1-2-million-on-the-ethereum-blockchain-during-the-status-im-ico https://steemit.com/ethereum/@dhumphrey/f2pool-manipulates-u... It wont be long before people come to realize the rules and start exploiting it.
martind81 9y ago
At some point in the article they mention that an alternative to the proof of work could be to use the proof of stake: the oldest stake build the next block. Did I understand correctly? How can that work? Doesn't it create multiple problems to do that?
2_listerine_pls 9y ago
> Blockchains typically use the “Proof of Work” system, where multiple participants try to solve a difficult problem in order to certify a block to be valid. Apparently no one has told him that a blockchain is just a data structure and has nothing to do with proof of work. https://youtu.be/fOMVZXLjKYo?t=21m40s https://youtu.be/fOMVZXLjKYo?t=21m40s
- icebraining 9y ago
  No, that's just a hash chain, and it has existed for decades, long before the blockchain ever appeared. For example, every POS software in my country was legally required to implement that before the Bitcoin paper was published. The blockchain is a particular implementation of an hash chain, designed to work well for transactions using some sort of distributed consensus algorithm (of which proof-of-work is a category).
anonytrary 9y ago
If an author does not understand what he is talking about, then his conclusion should be ignored. This article is laughable, I would suggest doing your own research before listening to baseless prose. Below, we see why this might not be a sound article: > The first miner that solves the problem is rewarded with a few Bitcoins, hence the unkind comparisons to Ponzi or MLM schemes. Author clearly does not understand what MLM and Ponzi schemes are, likely throwing them out as buzzwords to associate mining with scams. > Actually trying to make computers in general reflect the real world is a very hard task, and the blockchain does nothing to solve this issue. Black and white statements are a red flag; it's likely this guy does not know much and was hired to "write posts about bitcoin". Blockchains and other emergent structures may trigger tons of research into automata theory. Blockchains do get us one step closer to representing globally unique objects. Seems like the author didn't ponder at all. > One of the most common proposed usages of blockchain is to track the shipment of real world goods, including everything from food to diamonds. On the surface this sounds great, you could easily and trustlessly prove that the shiny rock in your beloved’s ring wasn’t mined by children in a war torn region, fantastic! The author's sarcasm here is very telling of his lack of imagination. To swiftly denounce technology that doesn't exist in its full form yet is incredibly presumptuous. > Ebay purchaser did not deliver? Tough. Someone held you hostage until you sent them bitcoin? Tough. Private key hacked, or hard drive destroyed? That’s unfortunate for you. As if these problems are not applicable to fiat currency... > The only way to recover bad bitcoin transactions is to convince everyone to do a hard fork This is possible with smart insurance contracts with two user segments: insurance providers, and insurance seekers. > [Refunds due to faulty transactions] would rapidly clutter up the chain full of “oops” transactions, which would pretty quickly make you wonder why you’re bothering at all. Did this guy just forget that faulty transactions make up almost no relative volume? This is a moot point. Even if every single transaction was faulty, it'd only be a factor two more in size according to the Author. The author thinks that a factor of two is a worthy point here. I am really starting to question the validity of these points. > It turns out, that there’s very few systems that truly benefit from an inability to amend or update transactions. Okay, I can say that too. Where's the source? > The idea of everyone mining on their phone is just laughable. The idea of everyone carrying around a device that computes faster than the supercomputers Feynman was playing on is just laughable. > On top of that, as best I can tell a large percentage of Ethereum contracts are literal Ponzi schemes and ICO tokens So, you can't tell very well? AFAIK the logic here is also flawed; even if most of the ICOs were scams, it says more about the people doing ICOs than it does about the concept of the ICO itself. Again folks, this article contains a lot of misinformation. I highly suggest doing your own research before making decisions.
laci27 9y ago
Distributed systems are ideal for many applications. Distributed systems verified by many 'miners' is even better, but at some point, we have to admit that the technology is flawed in key points: - power consumption, considering global warming, is a huge waste; - the speed all nodes communicate between each other (not even counting the great firewall of China) can't be improved after some point (BTC lightning network is NOT a real solution - read an article about how exactly it works) Proof of stake is a VERY BAD idea that creates more problems than it solves. All I have to do to take over the chain is buy 1 coin more than anyone else on the chain.. All other problems could be solved in the future (reversible transactions, regulation/privacy etc), but with these 2 major drawbacks, blockchains are not feasible, in my opinion.
erikb 9y ago
while I agree with most points I don't see what new value this blog article provides. There is no indepth analysis, only opinion. And not even new ideas. This is exactly what we criticise about most blockchain lovers.
- village-idiot 9y ago
  The same could be said of your comment.
  - erikb 9y ago
    In case you are new here: The polite parts of the HN community consider it best practice to explain why they flagged or downvoted something so that the corresponding content provider has an opportunity to improve their results if they choose to do so.
    - deleted 9y ago
      [deleted]
    - village-idiot 9y ago
      I disagree with your analysis and find it rude and pointless. Good day.
emptybits 9y ago
> On smart contracts: "Of course, writing programs that produce permanent financial consequences gives me some pretty serious anxiety, and I would hope that most senior engineers would feel the same." I don't believe most senior engineers would feel the same. It's hard to imagine our world today without programs that produce permanent financial consequences. They are everywhere.
- ainiriand 9y ago
  Even a stupid bug in the alarm clocks of mobile phones can be a hit in the economy. It happened before and it will happen again.
- village-idiot 9y ago
  Okay, go write a "smart" mortgage and put all your money into it. Let me know how you feel about this. Of course every bug has financial effects, software is designed to make money in the vast majority of cases. But to write software that can literally drain every single last dollar from your clients or yourself in an unrecoverable fashion just because _any_ programming error is insanity to me.
alendit 9y ago
The growth of the blockchains will slow drastically, as the flaw in 'Metcalfe's law' - which states that the number of potential connections in a network is proportional to the square of the number of participants-becomes apparent: most people have nothing to sign for each other! By 2020 or so, it will become clear that the blockchains' impact on the economy has been no greater than the fax machine's.
wonton2 9y ago
I think the focus in the article and in the comments is all wrong. The benefit of blockchains is on the businesslevel. If you have several manufacturers, of course you can integrate with all their databases, but that requires an enourmous amount of managements and hours in meetings and implementation. The next step, which i guess some banks have done is to cooporate on a common solution which is operated and run by a commonly owned entity. This also requires tons of management and a whole new organization which eventually becomes its own business area. A third option is like uber for transporting goods, a huge independent third party which is efficient, but eventually gets too powerful, so people revert to one of the other solutions. Blockchains on the other hand has a model for distributing trust and operations. It provides a more general solution to a mexican standoff than months of meetings and long contracts. Your contract is embedded in the blockchain. Of course the blockchain needs to be updated and maintained, so i think the real issue with blockchains would be that people cannot agree to using a single one for a specific purpose. But then it is much easier to agree to using a blockchain than to use solution x provided by company y because of all the organizational overhead it could abstract away.
- atomical 9y ago
  Most companies will adopt permissioned blockchains if they decide to use blockchain technology. It's just not common to expose your data and logic to people outside your organization even if encryption is involved. Right or wrong it's a culture thing. Because of that it's just another technology option like an API server backed by a relational database. Blockchains and smart contracts are complicated. There have already been a large number of security issues. There is also a lot of research into making the technology performant. Picking a centralized authority is much less risky because the organization is betting on proven technology.

151 points by village-idiot 9y ago

deleted 9y ago

[deleted]

Very interesting, and mostly right imho. Still no killer app for any blockchain so far, but lots of problems already well known. I'm almost disappointed the author didn't mention the ecological disaster that goes with the energy consumption, instead of just talking about the price.

village-idiot 9y ago
Yeah, I totally forgot that.
- scalablenotions 9y ago
  If you compare the energy consumption of traditional banking systems to Bitcoin, you will realise how very efficient blockchain is.
  - lalaland1125 9y ago
    Energy efficient in what sense? If you are comparing the cost per transaction or per amount of money transferred, then I don't see how Bitcoin could in any way be considered more efficient.
  - chris_wot 9y ago
    I hardly think so. Try scaling up Bitcoin to the world's current volume of transactions and you'll find it uses vastly more electricity than traditional banking systems use.
    - scalablenotions 9y ago
      We are working on it, so watch this space. The power consumption will not increase linearly, because of tier 2 & 3 solutions. The key is that blockchain is automated. With traditional centralised trust systems, you need buildings full of people running everything.
      - floatboth 9y ago
        Buildings full of people are a joke compared to the massive amounts of power wasted on mining.
      - village-idiot 9y ago
        You will scale the blockchain by .... not using the blockchain. Okay.
  - lz400 9y ago
    It's these deluded comparisons that make blockchain proponents look silly. The "traditional banking system" provides orders of magnitude more services than a blockchain. They are just not comparable.
  - village-idiot 9y ago
    Only because you desperately wish for this to be true, not because it is.
dack 9y ago
yeah proof of work is turning out to be a pretty unsustainable idea - i'm not sure if proof of stake truly can be considered the victor yet but it seems like a huge step in the right direction. (Completely agreed that there hasn't been a killer app yet in the space - but I think i'm more optimistic about the chances of that happening at some point)

scalablenotions 9y ago

It would be nice if this was called, "Why would I need a Blockchain?" or something. It's pretty clear the author hasn't gone deep enough to tell other people how relevant Blockchain might be to their lives. A change in title/tone would avoid the crimes of confidence.

village-idiot 9y ago
Someone didn't read all the way to the disclaimer....
- scalablenotions 9y ago
  I read the article. The disclaimer is both inadequate and a poor substitute for a humbler article. Disclaimer: Just saying.
  - village-idiot 9y ago
    So the disclaimer and the word "probably" wasn't hedging enough for you? Maybe you just already had your own conclusions and don't like it when people disagree.

mjfl 9y ago

I got downvoted the last time I said this, but cryptocurrencies are actually pretty nice for doing exactly what their purpose is: sending money over the internet. Do you know how hard it is to get Stripe or Paypal to approve you for international credit card processing? If you're a "hacker" working out of your apartment, they automatically assume you're trying to launder money and shut you down, even if you've worked hard to provide solid documentation that you are who you say you are and you're doing what you say you're doing. Even if they do approve you it can take months to integrate into their system. And that's with Stripe and/or Paypal, without Stripe and/or Paypal it's impossible. Until crypto. With crypto you can set up a transaction system in a day, by yourself. I think that's great value.

Felz 9y ago
Well, of course something that skirts around regulations will require less red tape. Once the government catches up, you'll be required to do similar hoop jumping for cryptos. Exchanges suffer this problem already, don't they?
- solotronics 9y ago
  The cat is already out of the bag its just like bittorrents of copyrighted content. Yeah It's illegal but that doesn't stop anyone. Also, with how easy it is to change one crypto for another how would you even regulate it? I am not asking that retorically and am genuinely interested in this if anyone has an idea of how cryotocurrency regulations would work.
  - lalaland1125 9y ago
    You regulate the fiat onramps and offramps which are the exchanges. Nobody uses bitcoin to actually pay for things, so once you take away the ability to exchange it for fiat, the whole scheme collapses. The US government could end most of this tomorrow by simply shutting down a handful of exchanges.
    - ghthor 9y ago

dack 9y ago

Okay, I don't want to come down too hard on this article, but I think it's nearsighted. Sure, it's true that _today's_ blockchains have many downsides the article brings up, but it's written as if those won't change or improve. It feels to me a bit like claiming in the 90's that the internet isn't the future because you can't download that much stuff at 56k speeds. They mention "immutability" being a problem - so much so that it somehow disallows typos or undos. That's just not true - you just represent the updates as changes in their own right (which better reflects reality than literally altering history). There's nothing about "the blockchain" that can't record human error or corrections. They go on to talk about how proof of stake doesn't solve all problems by mentioning, "The Bitcoin blockchain is currently 157GB in size, and that’s at a very low transaction speed. The idea of everyone mining on their phone is just laughable." Once again, they are talking about current implementations - I don't see how this is inherently a restriction in the technology, and there are (reputable) companies working on this exact thing. The amount of money I have in cryptocurrencies can basically be rounded to zero, so I don't have much skin in this game - I just think blog posts like these aren't really making compelling points other than "the current technology today has many flaws", which I think is uninteresting to most.

bencollier49 9y ago
> It feels to me a bit like claiming in the 90's that the internet isn't the future because you can't download that much stuff at 56k speeds. Absolutely this. As soon as I read the article I was reminded of those 1996 "this internet stuff is a fad" pieces.
chris_wot 9y ago
Well, he has a point. Unless you use a cryptocurrency, I can't think of anything that needs the blockchain. I have seen plenty of people trying to shoehorn the blockchain into areas that don't need it - goods distribution, electricity supply, you name it and someone is trying to do it. Almost all of those things would actually work better with a centralised database. The Blockchain is an awesome technology for an incredibly niche market. So his article is right - in most cases, you probably don't need a blockchain.

JarlUlvi 9y ago

Blockchains are not new. https://en.wikipedia.org/wiki/Merkle_tree https://en.wikipedia.org/wiki/Merkle_tree

paulsutter 9y ago

If you’re not in an adversarial environment, you don’t need a blockchain. Sometimes you are though.

marban 9y ago

My less romantic, medium-term outlook on this is that all of these thought-police projects are trying to enforce a combination of nonstate binary answers and an (informational) monoculture to a messy capitalist world with the single technological argument of a distributed/anonymized/encrypted/irreversible database that has little relevance for the actual underlying idea. Looking at the past eight+ years, and other than opening up speculation and dubious activites for a new group of people, we have not seen a single project that would ever highlight the usual required 10x benefits, let alone the promise to change the behavior of the regular user. It's merely porting a fraction of existing stuff behind cumbersome UX — With all respect for infancy of technology but what if porting my contacts, having one single login, a distributed social network or to-do list aren't just that important as the proponents are arguing for? Obvisouly all of these attempts have already failed several times. This is not the equivalent of killing Gopher through HTTP by a new experience, making information available for the first time, introducing a new socially acceptable interaction or killing industries and middlemen by means of __raw__ technology (In each case there was always more to it). Even torrenting is already more or less dead in favor of OTT because people are lazy bastards that don't care how the content gets streamed to their TV. And what if customers actually like collecting flight miles, having someone who picks up the phone when their CC was compromised, when the taxi driver harassed them, their car title got lost or their 401k was hacked off their account? IF breaking up the power consolidation in whatever industry with blockchain tech being the primary method, the starting line is at what's already out there and then offering real advantages and incentives (other than coins) that can only be achieved through a public ledger — Obviously there are potential and often cited areas like real estate, voting and medical records but all of these seem to me as an admistrative job for a missionary movement to enforce standards and not a private startup. And yes, I get the argument for using it in adversarial areas but we're talking business here.

deleted 9y ago

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jotto 9y ago

A better title for the content might be: blockchain scaling issues A better case against blockchains would be exploring the reasons why we shouldn't care about trustless properties that blockchains give us.

stellarstep 9y ago

And yes, the writer probably may buy bitcoins after other people who read an article like this sold them.

village-idiot 9y ago
Nope. I don't do speculative bubbles.

chrisco255 9y ago

Opening this article, I was hoping to get a technical discussion as to why an application might or might not need blockchain. Unfortunately, I was met with a ranting article with a few straw man arguments about why blockchain is flawed. The first point the author makes is the disadvantage of immutability. Claims that few systems benefit from immutable transaction records. First of all, I don't think that's true. Many systems do, not just financial systems with double entry bookkeeping. Event sourcing is a well defined architecture pattern in back end systems, and it turns out that immutable event logs are actually incredibly useful. It's also pretty well known that you don't erase history in financial systems. That is one of the pillars of double entry bookkeeping. A more balanced article would point out the pros and cons of immutable systems, but to flippantly argue that immutability is useless? That's just lazy. Tracking shipment of goods on a blockchain has many advantages. Namely, you can create a shared protocol for the data of shipment tracking, and you can open that blockchain up to certain parties to sign as the good moves along the supply chain. It doesn't have to be "trustless". A particular app's blockchain might only be open to a few trusted parties to write to. Not all transactions have to be written to a single, global, immutable ledger. There are still great benefits to sharing a common blockchain among specific, trusted, cooperative entities. On POW and the electricity argument, I think we waste electricity on lots of frivolous things. I'm willing to bet Christmas lights also consume more than the state of Delaware. However, it's not the processing of transactions that the electricity is being spent on, it's the creation of new coins. POS is a good alternative. I think many coins are starting to leverage POS. Ethereum will be switching to that soon. Still, POS vs POW has nothing to do with "why you probably don't need a blockchain". These are implementation details that vary per blockchain/coin. Scale also varies dramatically among coins. Ripple already processes 1000s of transactions / second. Lightning network on BTC is growing rapidly. Ethereum has scaling solutions in the works. Other chains have completely different properties than the top two and have different answers for the scaling issues. These issues will be solved with time. As for rants on ICOs and scams, etc. I mean, do you know how many people have been scammed from phishing e-mails? Does that mean we should not use e-mail? No. As always, caveat emptor, do your own research, and don't take unnecessary risks.

incompatible 9y ago
I don't think you are right that electricity is consumed only for the creation of new coins. The proof of work is done for every block of transactions, and would still be part of the system if no new coins were created.

thisisit 9y ago

With the bitcoin price drop articles like these have been popping up on HN quite frequently. previous discussion: https://news.ycombinator.com/item?id=16421383 https://news.ycombinator.com/item?id=16421383 What I feel has never been discussed is not whether blockchain or decentralization is a good idea rather how does decentralization will work? The issue is not whether immutability is bad idea rather how will it work in case of disputes? The only answer I keep hearing is - well, game theory can take care of it. This misses the point that if people are aware of the rules, they will find ways to break it. We saw a good example of how "we need 51% for manipulation" works in real life during Status ICO. F2pool which held 25% of the mining power was able to manipulate the ICO holding back ethereum transactions: https://steemit.com/ethereum/@dhumphrey/f2pool-manipulates-usd1-2-million-on-the-ethereum-blockchain-during-the-status-im-ico https://steemit.com/ethereum/@dhumphrey/f2pool-manipulates-u... It wont be long before people come to realize the rules and start exploiting it.

martind81 9y ago

At some point in the article they mention that an alternative to the proof of work could be to use the proof of stake: the oldest stake build the next block. Did I understand correctly? How can that work? Doesn't it create multiple problems to do that?

2_listerine_pls 9y ago

> Blockchains typically use the “Proof of Work” system, where multiple participants try to solve a difficult problem in order to certify a block to be valid. Apparently no one has told him that a blockchain is just a data structure and has nothing to do with proof of work. https://youtu.be/fOMVZXLjKYo?t=21m40s https://youtu.be/fOMVZXLjKYo?t=21m40s

icebraining 9y ago
No, that's just a hash chain, and it has existed for decades, long before the blockchain ever appeared. For example, every POS software in my country was legally required to implement that before the Bitcoin paper was published. The blockchain is a particular implementation of an hash chain, designed to work well for transactions using some sort of distributed consensus algorithm (of which proof-of-work is a category).

anonytrary 9y ago

If an author does not understand what he is talking about, then his conclusion should be ignored. This article is laughable, I would suggest doing your own research before listening to baseless prose. Below, we see why this might not be a sound article: > The first miner that solves the problem is rewarded with a few Bitcoins, hence the unkind comparisons to Ponzi or MLM schemes. Author clearly does not understand what MLM and Ponzi schemes are, likely throwing them out as buzzwords to associate mining with scams. > Actually trying to make computers in general reflect the real world is a very hard task, and the blockchain does nothing to solve this issue. Black and white statements are a red flag; it's likely this guy does not know much and was hired to "write posts about bitcoin". Blockchains and other emergent structures may trigger tons of research into automata theory. Blockchains do get us one step closer to representing globally unique objects. Seems like the author didn't ponder at all. > One of the most common proposed usages of blockchain is to track the shipment of real world goods, including everything from food to diamonds. On the surface this sounds great, you could easily and trustlessly prove that the shiny rock in your beloved’s ring wasn’t mined by children in a war torn region, fantastic! The author's sarcasm here is very telling of his lack of imagination. To swiftly denounce technology that doesn't exist in its full form yet is incredibly presumptuous. > Ebay purchaser did not deliver? Tough. Someone held you hostage until you sent them bitcoin? Tough. Private key hacked, or hard drive destroyed? That’s unfortunate for you. As if these problems are not applicable to fiat currency... > The only way to recover bad bitcoin transactions is to convince everyone to do a hard fork This is possible with smart insurance contracts with two user segments: insurance providers, and insurance seekers. > [Refunds due to faulty transactions] would rapidly clutter up the chain full of “oops” transactions, which would pretty quickly make you wonder why you’re bothering at all. Did this guy just forget that faulty transactions make up almost no relative volume? This is a moot point. Even if every single transaction was faulty, it'd only be a factor two more in size according to the Author. The author thinks that a factor of two is a worthy point here. I am really starting to question the validity of these points. > It turns out, that there’s very few systems that truly benefit from an inability to amend or update transactions. Okay, I can say that too. Where's the source? > The idea of everyone mining on their phone is just laughable. The idea of everyone carrying around a device that computes faster than the supercomputers Feynman was playing on is just laughable. > On top of that, as best I can tell a large percentage of Ethereum contracts are literal Ponzi schemes and ICO tokens So, you can't tell very well? AFAIK the logic here is also flawed; even if most of the ICOs were scams, it says more about the people doing ICOs than it does about the concept of the ICO itself. Again folks, this article contains a lot of misinformation. I highly suggest doing your own research before making decisions.

laci27 9y ago

Distributed systems are ideal for many applications. Distributed systems verified by many 'miners' is even better, but at some point, we have to admit that the technology is flawed in key points: - power consumption, considering global warming, is a huge waste; - the speed all nodes communicate between each other (not even counting the great firewall of China) can't be improved after some point (BTC lightning network is NOT a real solution - read an article about how exactly it works) Proof of stake is a VERY BAD idea that creates more problems than it solves. All I have to do to take over the chain is buy 1 coin more than anyone else on the chain.. All other problems could be solved in the future (reversible transactions, regulation/privacy etc), but with these 2 major drawbacks, blockchains are not feasible, in my opinion.

erikb 9y ago

while I agree with most points I don't see what new value this blog article provides. There is no indepth analysis, only opinion. And not even new ideas. This is exactly what we criticise about most blockchain lovers.

village-idiot 9y ago
The same could be said of your comment.
- erikb 9y ago
  In case you are new here: The polite parts of the HN community consider it best practice to explain why they flagged or downvoted something so that the corresponding content provider has an opportunity to improve their results if they choose to do so.
  - deleted 9y ago
    [deleted]
  - village-idiot 9y ago
    I disagree with your analysis and find it rude and pointless. Good day.

emptybits 9y ago

> On smart contracts: "Of course, writing programs that produce permanent financial consequences gives me some pretty serious anxiety, and I would hope that most senior engineers would feel the same." I don't believe most senior engineers would feel the same. It's hard to imagine our world today without programs that produce permanent financial consequences. They are everywhere.

ainiriand 9y ago
Even a stupid bug in the alarm clocks of mobile phones can be a hit in the economy. It happened before and it will happen again.
village-idiot 9y ago
Okay, go write a "smart" mortgage and put all your money into it. Let me know how you feel about this. Of course every bug has financial effects, software is designed to make money in the vast majority of cases. But to write software that can literally drain every single last dollar from your clients or yourself in an unrecoverable fashion just because _any_ programming error is insanity to me.

alendit 9y ago

The growth of the blockchains will slow drastically, as the flaw in 'Metcalfe's law' - which states that the number of potential connections in a network is proportional to the square of the number of participants-becomes apparent: most people have nothing to sign for each other! By 2020 or so, it will become clear that the blockchains' impact on the economy has been no greater than the fax machine's.

wonton2 9y ago

I think the focus in the article and in the comments is all wrong. The benefit of blockchains is on the businesslevel. If you have several manufacturers, of course you can integrate with all their databases, but that requires an enourmous amount of managements and hours in meetings and implementation. The next step, which i guess some banks have done is to cooporate on a common solution which is operated and run by a commonly owned entity. This also requires tons of management and a whole new organization which eventually becomes its own business area. A third option is like uber for transporting goods, a huge independent third party which is efficient, but eventually gets too powerful, so people revert to one of the other solutions. Blockchains on the other hand has a model for distributing trust and operations. It provides a more general solution to a mexican standoff than months of meetings and long contracts. Your contract is embedded in the blockchain. Of course the blockchain needs to be updated and maintained, so i think the real issue with blockchains would be that people cannot agree to using a single one for a specific purpose. But then it is much easier to agree to using a blockchain than to use solution x provided by company y because of all the organizational overhead it could abstract away.

atomical 9y ago
Most companies will adopt permissioned blockchains if they decide to use blockchain technology. It's just not common to expose your data and logic to people outside your organization even if encryption is involved. Right or wrong it's a culture thing. Because of that it's just another technology option like an API server backed by a relational database. Blockchains and smart contracts are complicated. There have already been a large number of security issues. There is also a lot of research into making the technology performant. Picking a centralized authority is much less risky because the organization is betting on proven technology.