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There is some truth in the slides but it's well mixed with falsehoods and misunderstandings. * Distributed consensus schemes are not useful only for monetary a

There is some truth in the slides but it's well mixed with falsehoods and misunderstandings. * Distributed consensus schemes are not useful only for monetary applications. When they are used as such, there exist mechanisms to commit to a certain fiat price and minimize market exposure to the point where transactions are almost free, in fiat terms. * The disbursement of tokens and the distributed consensus rewards do not need to be tied together like in Bitcoin. A premined token like Stellar can offer very strong security guarantees without needing mining pools (but of course, any kind of imaginable database is vulnerable to majority attacks, so that means nothing by itself) * The limited block capacity is a Bitcoin-specific problem that incidentally motivated interesting results in off-chain transactions (Lightning). * The sorry state of the distributed financial markets says nothing about the technology and more about human greed and the slow capacity of regulators to adapt; critically, smart contracts and distributed algorithms enable control mechanism and hard guarantees that have no old world equivalent, they can eliminate counterparty risks, guarantee solvency and fair arbitration etc. That being said, 95% of the times the word "blockcahin" is uttered these days, what follows is most likely bullshit.

JumpCrisscross 9y ago
> smart contracts and distributed algorithms enable control mechanism and hard guarantees that have no old world equivalent, they can eliminate counterparty risks, guarantee solvency and fair arbitration etc. The required nexus between the blockchain and the tangible and legal worlds means every limitation that exists today will exist for a "smart contract". It's the same plumbing with a paint job.
- lojack 9y ago
  This risk can be mitigated by bridging the real world and the blockchain using oracles. This risk mitigation can be somewhat decentralized using a voting or reputation mechanism. This is by no means perfect, and I'm not aware of any trustless mechanisms for this, but its a problem people are currently working on, and I think there will eventually be a good solution. I also don't think this is a false dichotomy. Most likely we'll end up at a place with some improvement over what we have today (I'd actually argue we're currently at this point now) but not without all of the limitations.
- as300 9y ago
  I'm sort of thinking out loud here, but the nexus will have to consist of third-party auditors who operate based on reputation. Right now, we have the government operating as both the "miners" and the auditors. A middle-ground, then, might be one in which there is a general-purpose public blockchain where the government takes the role of the trusted third-party on-chain, thereby lowering the overall societal costs of things like unfulfilled contracts while still ensuring that my oil-reserves are what I say they are. From the government's perspective I see this as desirable but falling prey to the principal-agent problem. We'd need virtually no civil-court judges or attorneys to prosecute white-collar crime anymore. It'd lower costs, but in doing so unemploy many of the people in the system.
  - jayd16 9y ago
    This is called the Federal Reserve Bank and it is indeed separate from the tax and fraud portions of the federal government in the US. But the rest of your post is pretty silly. How does a secure digital exchange protect against fraud? It doesn't.
    - as300 9y ago
      Fraud can occur when a party lies about assets it owns when entering into an agreement, which would be prevented if you had to present proof of ownership for any asset you claim to own? Most ponzi schemes would never happen.
      - jayd16 9y ago
        You can own something, accept payment for it, and never actually relinquish ownership. Besides, the blockchain is only proof of ownership of things on the chain. Real world things are not covered at all.
        hndamien 9y ago
        Digital rights are real words things though. Other forms of rights that are not currently digital could be made digital too.
- deleted 9y ago
  [deleted]
- joe_the_user 9y ago
  The required nexus between the blockchain and the tangible and legal worlds means every limitation that exists today will exist for a "smart contract". It's the same plumbing with a paint job. It's that plus a whole new crop of perverse incentives which arise with any "smart contract". Especially, no smart control can reach out to the "real world" and get data, more less facts. A smart control would essentially be limited to some data-stream in on Internet. And anything like that can be subverted seven ways from Sunday. Do you really want billions riding on THAT? (and, yes, give us some Rube Goldberg scheme of averaging six different weather stations for your result. I'm sure nothing can go wrong with any of those ideas. Yeah, World finance then gets to be hoisted on the lpad petard).
  - cornholio 9y ago
    Something equivalent to LIBOR rates could in principle be made to run on distributed markets with a great deal of transparency and little possibility for manipulation. They are a standard feature of many contracts. Whole central banks could be automated. Something like "next year's tomato quality" will obviously need a physical world mediator, but that's hardly surprising. When the great recession started, it was not caused by an external shock, rather by the viral mistrust that the underwriters of the bad loans were solvent. A financial fragility problem that the blockchain can work to address.
dozzie 9y ago
> * Distributed consensus schemes are not useful only for monetary applications. OK, but blockchain is not a distributed consensus protocol. It's a document timestamping protocol.
- kthejoker2 9y ago
  Can you explain? My understanding is we're all working on the same hard math problem, once a certain number of us have verified the answer (ie distributed consensus) one of us is given a reward to encourage further problem solving.
  - dozzie 9y ago
    This is very much not what distributed consensus is. You don't "work on the same hard math problem" and you don't get "a reward to encourage further problem solving". Consensus is agreeing on a value among (almost) all protocol participants, and "distributed consensus" is proper technical term, not a vague definition by hand waving like "object oriented programming". Read about Byzantine Generals problem first.
    - ilovecars2 9y ago
      Could one look at it more like viewstamped replication rather than traditional consensus?
    - kthejoker2 9y ago
      Thanks for everything except the condescension!
      - dozzie 9y ago
        Dude, you come to a discussion without knowing the basic concepts. What exactly did you expect?
  - sp332 9y ago
    Nope, any bitcoin client can verify any transaction very easily. (Bootstrapping by verifying every transaction in the blockchain does take a while though.) Proof of work is only to prevent a 51% attack where someone spins up enough bots to hijack "consensus" and rewrite transaction history. That's why the difficulty can be dialed up or down - most of the work in mining is not related to verifying the transactions.
euske 9y ago
If something is 95% of the times X, can't we just label the whole thing as X? Just making life simpler. (Actually, my threshold goes even as low as 50% for the case of BS.)
- deleted 9y ago
  [deleted]
jwilliams 9y ago
> That being said, 95% of the times the word "blockcahin" is uttered these days, what follows is most likely bullshit. This is true -- it's also true the 5% is pretty damn interesting. There are plenty of interesting tokens out there. Some of them are tackling real problems. That's pretty exciting. I don't begrudge someone who's trying to solve something. The historical analogs are lazy in my view. The financial and political system we operate in today has done plenty of damage. Indeed, some of the key examples listed on the slide. The last global financial crisis wasn't that long ago (and wasn't that "reversible", certain people may recall). You could spin every one of those dot-points as commentary on our existing financial systems. Doesn't mean blockchain is going to fix it. In fact, I have many doubts and concerns. There is so much to do. However, I really like that people are trying.
- jmeyer2k 9y ago
  One of the coolest things about cryptocurrency right now is the insane amount of money being invested in decentralization. With all of the Facebook privacy issues in the news right now, decentralization offers an interesting alternative where users control their data.
  - adventured 9y ago
    Recording something permanently into a blockchain is the opposite of users having control over their data. Blockchain does not appear to be the best way to build a decentralized system for user controlled data (such as a decentralized social network). We already figured that system out: local software, local storage, open source, local permissions & controls. Billions of people have personal computing devices now. No blockchain is needed at all, that just adds entirely unnecessary bloat. You shift the point of control back to the local device and away from the network. It is that simple, and it's how we largely used to control user data.
    - gjmacd 9y ago
      Except you wouldn't use the blockchain to have control over their data", you'd use it for identity and verification. Facebook' #1 issue is fake news and Bot's. You can eliminate those problems entirely with a blockchain and smart contract that requires identity and proof of such.
thisisit 9y ago
>The sorry state of the distributed financial markets says nothing about the technology and more about human greed and the slow capacity of regulators to adapt; I agree that human greed and corruption is a big problem. It is a problem for any system out there. But, blockchain was supposed to solve this by introducing trustless and decentralized applications. If there is now a need for regulators, how is blockchain supposed to solve other problems? The world is already complex, we don't need another layer.
lamontcg 9y ago
So far I've found that if anyone is making claims about "blockchain" which don't just boil down to "basically git", then what follows is entirely bullshit. People that use the word "fiat" are also entirely ignorable.

JumpCrisscross 9y ago

> smart contracts and distributed algorithms enable control mechanism and hard guarantees that have no old world equivalent, they can eliminate counterparty risks, guarantee solvency and fair arbitration etc. The required nexus between the blockchain and the tangible and legal worlds means every limitation that exists today will exist for a "smart contract". It's the same plumbing with a paint job.

lojack 9y ago
This risk can be mitigated by bridging the real world and the blockchain using oracles. This risk mitigation can be somewhat decentralized using a voting or reputation mechanism. This is by no means perfect, and I'm not aware of any trustless mechanisms for this, but its a problem people are currently working on, and I think there will eventually be a good solution. I also don't think this is a false dichotomy. Most likely we'll end up at a place with some improvement over what we have today (I'd actually argue we're currently at this point now) but not without all of the limitations.
as300 9y ago
I'm sort of thinking out loud here, but the nexus will have to consist of third-party auditors who operate based on reputation. Right now, we have the government operating as both the "miners" and the auditors. A middle-ground, then, might be one in which there is a general-purpose public blockchain where the government takes the role of the trusted third-party on-chain, thereby lowering the overall societal costs of things like unfulfilled contracts while still ensuring that my oil-reserves are what I say they are. From the government's perspective I see this as desirable but falling prey to the principal-agent problem. We'd need virtually no civil-court judges or attorneys to prosecute white-collar crime anymore. It'd lower costs, but in doing so unemploy many of the people in the system.
- jayd16 9y ago
  This is called the Federal Reserve Bank and it is indeed separate from the tax and fraud portions of the federal government in the US. But the rest of your post is pretty silly. How does a secure digital exchange protect against fraud? It doesn't.
  - as300 9y ago
    Fraud can occur when a party lies about assets it owns when entering into an agreement, which would be prevented if you had to present proof of ownership for any asset you claim to own? Most ponzi schemes would never happen.
    - jayd16 9y ago
      You can own something, accept payment for it, and never actually relinquish ownership. Besides, the blockchain is only proof of ownership of things on the chain. Real world things are not covered at all.
      - hndamien 9y ago
        Digital rights are real words things though. Other forms of rights that are not currently digital could be made digital too.
deleted 9y ago
[deleted]
joe_the_user 9y ago
The required nexus between the blockchain and the tangible and legal worlds means every limitation that exists today will exist for a "smart contract". It's the same plumbing with a paint job. It's that plus a whole new crop of perverse incentives which arise with any "smart contract". Especially, no smart control can reach out to the "real world" and get data, more less facts. A smart control would essentially be limited to some data-stream in on Internet. And anything like that can be subverted seven ways from Sunday. Do you really want billions riding on THAT? (and, yes, give us some Rube Goldberg scheme of averaging six different weather stations for your result. I'm sure nothing can go wrong with any of those ideas. Yeah, World finance then gets to be hoisted on the lpad petard).
- cornholio 9y ago
  Something equivalent to LIBOR rates could in principle be made to run on distributed markets with a great deal of transparency and little possibility for manipulation. They are a standard feature of many contracts. Whole central banks could be automated. Something like "next year's tomato quality" will obviously need a physical world mediator, but that's hardly surprising. When the great recession started, it was not caused by an external shock, rather by the viral mistrust that the underwriters of the bad loans were solvent. A financial fragility problem that the blockchain can work to address.

dozzie 9y ago

> * Distributed consensus schemes are not useful only for monetary applications. OK, but blockchain is not a distributed consensus protocol. It's a document timestamping protocol.

kthejoker2 9y ago
Can you explain? My understanding is we're all working on the same hard math problem, once a certain number of us have verified the answer (ie distributed consensus) one of us is given a reward to encourage further problem solving.
- dozzie 9y ago
  This is very much not what distributed consensus is. You don't "work on the same hard math problem" and you don't get "a reward to encourage further problem solving". Consensus is agreeing on a value among (almost) all protocol participants, and "distributed consensus" is proper technical term, not a vague definition by hand waving like "object oriented programming". Read about Byzantine Generals problem first.
  - ilovecars2 9y ago
    Could one look at it more like viewstamped replication rather than traditional consensus?
  - kthejoker2 9y ago
    Thanks for everything except the condescension!
    - dozzie 9y ago
      Dude, you come to a discussion without knowing the basic concepts. What exactly did you expect?
- sp332 9y ago
  Nope, any bitcoin client can verify any transaction very easily. (Bootstrapping by verifying every transaction in the blockchain does take a while though.) Proof of work is only to prevent a 51% attack where someone spins up enough bots to hijack "consensus" and rewrite transaction history. That's why the difficulty can be dialed up or down - most of the work in mining is not related to verifying the transactions.

euske 9y ago

If something is 95% of the times X, can't we just label the whole thing as X? Just making life simpler. (Actually, my threshold goes even as low as 50% for the case of BS.)

deleted 9y ago
[deleted]

jwilliams 9y ago

> That being said, 95% of the times the word "blockcahin" is uttered these days, what follows is most likely bullshit. This is true -- it's also true the 5% is pretty damn interesting. There are plenty of interesting tokens out there. Some of them are tackling real problems. That's pretty exciting. I don't begrudge someone who's trying to solve something. The historical analogs are lazy in my view. The financial and political system we operate in today has done plenty of damage. Indeed, some of the key examples listed on the slide. The last global financial crisis wasn't that long ago (and wasn't that "reversible", certain people may recall). You could spin every one of those dot-points as commentary on our existing financial systems. Doesn't mean blockchain is going to fix it. In fact, I have many doubts and concerns. There is so much to do. However, I really like that people are trying.

jmeyer2k 9y ago
One of the coolest things about cryptocurrency right now is the insane amount of money being invested in decentralization. With all of the Facebook privacy issues in the news right now, decentralization offers an interesting alternative where users control their data.
- adventured 9y ago
  Recording something permanently into a blockchain is the opposite of users having control over their data. Blockchain does not appear to be the best way to build a decentralized system for user controlled data (such as a decentralized social network). We already figured that system out: local software, local storage, open source, local permissions & controls. Billions of people have personal computing devices now. No blockchain is needed at all, that just adds entirely unnecessary bloat. You shift the point of control back to the local device and away from the network. It is that simple, and it's how we largely used to control user data.
  - gjmacd 9y ago
    Except you wouldn't use the blockchain to have control over their data", you'd use it for identity and verification. Facebook' #1 issue is fake news and Bot's. You can eliminate those problems entirely with a blockchain and smart contract that requires identity and proof of such.

thisisit 9y ago

>The sorry state of the distributed financial markets says nothing about the technology and more about human greed and the slow capacity of regulators to adapt; I agree that human greed and corruption is a big problem. It is a problem for any system out there. But, blockchain was supposed to solve this by introducing trustless and decentralized applications. If there is now a need for regulators, how is blockchain supposed to solve other problems? The world is already complex, we don't need another layer.

lamontcg 9y ago

So far I've found that if anyone is making claims about "blockchain" which don't just boil down to "basically git", then what follows is entirely bullshit. People that use the word "fiat" are also entirely ignorable.