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Blockchain is not only crappy technology but a bad vision for the future

98 points by alanfalcon 9y ago

platz 9y ago
> If someone comes to you with “the mango-pickers don’t like doing data entry" then “let’s create a very long sequence of small files, each one containing a hash of the previous file”, is a nonsense answer > “What if everyone keeps their records in a tamper-proof repository not owned by anyone?” Exactly, "What if everyone keeps their records in a tamper-proof repository not owned by anyone?” is a re-framing of what blockchain does in use-case terms, (as opposed to technical terms) which makes it clear if you try to apply it to real use cases, that doesn't really solve anyone's problems
arisAlexis 9y ago
there is so much hate towards this I am getting very positive.
- ThrowMeDown01 9y ago
  That's a non sequitur if I ever heard one.
jmeyer2k 9y ago
> To understand why this is the case, let’s work from the practical to the theoretical. For example, let’s consider a widely-proposed use case for blockchain: buying an e-book with a “smart” contract. The goal of the blockchain is, you don’t trust an e-book vendor and they don’t trust you (because you’re just two individuals on the internet), but, because it’s on blockchain, you’ll be able to trust the transaction. No. Nobody trusts an exchange because it's on the blockchain. The idea of a smart contract is to decentralize high-friction transactions such as insurance (which is essentially what Amazon or PayPal is providing). The whole point is to not have to trust anybody to ensure a transaction is carried out, which it does accomplish to a reasonable extent. The author also confuses peer-to-peer trustworthiness such as making a purchase, with trustworthiness that data or transaction executions will not be tampered with. The blockchain backs up the latter with mining, whereas it does not back up the former.
- barbegal 9y ago
  Smart contracts don't even work for insurance. Smart contracts require the insuring party to tie up capital to make sure they can satisfy the claim in the event that a claim is made. The problem is that each insurance smart contract may pay out large amounts but only rarely. Typical insurance policies often have maximum payouts north of $1 million. If every insurance company had to hold $1 million in smart coins for every insurance smart contract they produce, they'd quickly run out of capital. And if you allow capital to be pooled together where claims are payed out from one large pool for multiple insurance contracts (as is used in insurance today) then you have to trust that the insurer will have enough capital available when you want to make a claim. In this case the smart contract element is pretty useless because it doesn't guarantee you anything.
  - mhluongo 9y ago
    Leverage doesn't make the blockchain aspect useless- in fact, the chain means the consumer can choose their insurance provider based on backing asset characteristics and how leveraged the risk pool is. Similar to what we had before, but with more democratic capital allocation.
  - swiley 9y ago
    That's not insurance, that's just ridiculous. An insurance smart contract should require the insuring party hold some fraction of the payout based on the expected number of claims.
    - barbegal 9y ago
      That allows an unscrupulous insurer to use a sybil attack to create insurance contracts with itself that it then pays out against emptying the smart contract pot.
      - swiley 9y ago
        It's probably not possible to implement trustless insurance using smart contracts then.
joeblow9999 9y ago
Smart contracts rely on Block chain but Block chain is not smart contracts
- valuearb 9y ago
  Yes, I read the article because I always try to be a skeptic, but smart contracts is where the author goes off the rails. Then he ties in crypto currency volatility and Mt Gox as part of its “trust” failures. Being able to trust the results of a block chain does not mean that people will value any currency based at the same price from day to day, or that people who offer to trade and store that currency got you will be competent and honest.
- DonbunEf7 9y ago
  Smart contracts rely on a trusted ledger. The original smart-contract discussions in the 90s were in the context of a contract between various users in virtual open-world games, enforced by the trusted game server. This setting also meant that many of the lame parts of EVM, like the inability to represent capabilities or to protect cryptographic secrets, were supplanted by the game server's encapsulated backend logic and database. Blockchains and smart contracts don't have to be related at all.
ericb 9y ago
The impossible problem of digital scarcity is finally solved, but it will have no practical uses.
devteambravo 9y ago
The whole Blockchain debacle feels like MLM/pyramid-like to me. The interested parties are in too deep.
Slartie 9y ago
I generally agree with most of the article, but sorry, this big quote here (that the author apparently thinks of being a good punchline) is just plain wrong: > There is no single person in existence who had a problem they wanted to solve, discovered that an available blockchain solution was the best way to solve it, and therefore became a blockchain enthusiast. Anyone who was trying to buy drugs/penis-pills/whatever-other-illegal-substance online and wanted to pay in an anonymous form would disagree. Anyone who had a bit of money in a country with restrictive international money transfer laws and who wanted to get that money out of said country would disagree. For both of these groups, available blockchains provided a good solution to a real problem. And especially in the first group, which is generally underestimated in size I think, a lot of people genuinely got enthusiastic about blockchains and jumped on the cryptocurrency train relatively early - first to buy some weed or whatever, and later also to make more money out of less money. But the problem-seeking-a-solution situation was first!
- roenxi 9y ago
  The article is exaggerating, there must be someone who has problems that are solved by Bitcoin. However, one of Bitcoin's features is that it has a completely public permanent ledger showing all transactions assigned to everyone. It is a wildly inappropriate technology for doing illegal things or skirting the law (which cross-country transfers outside the system could well be). It has more downsides than cash in a duffle bag.
  - deft 9y ago
    That's exactly the issue privacy currencies like Monero and to an extent Zcash solve.
  - weego 9y ago
    I feel like we confuse bitcoin and blockchain. People's problems have been solved by a globally available currency that can handle simple transactions but that all happens incredibly inefficiently and despite of all the failings of he underlying blockchain tech.
- smokeyj 9y ago
nnq 9y ago
Blockchain tech and the whole "trustless economy" freak me out precisely because I think they can work... The things that emerge out of this and scale long-term can have some really scary consequences: (1) a working "trustless economy" makes trust and peace no longer be requirements for a functional global economy... this opens the door to all sorts of fucked up scenarios like financing (or betting on) wars, no longer working for peace because it's not always required to make your economic schemes work, no longer caring about keeping your countries economy at least somewhat functional because you can always "pull your money out" etc. (2) a "human-less economy" enabled by smart contracts - long before autonomous "un-owned" corporations run by AIs take over the world, they will be used for all sorts of shady things, money laundering, toxic waste disposal by buying it but never paying to store it etc. I can't even imagine the creativity of the conmen and criminals that will start to play with these possibilities. "Trustless" can work... just that it doesn't seem to lead to scenarios that increase the mid term survival changes of the human race :|
- Geee 9y ago
  You don't think people already bet on wars? Why is there wars? You think that Putin invades countries just for fun? Opening the bets for everyone should make a more peaceful world, because wars don't benefit the majority.
- jMyles 9y ago
  I think your concerns are very reasonable. However, I think that thinking them all the way through is cause for more optimism than you're applying. For example, > no longer working for peace because it's not always required to make your economic schemes work Is this really a possibility? Peace is always good for bounty. Everybody everywhere wants peace. Along with justice, freedom, and love, it is one of the most unifying characteristics of the human condition. It is precisely those middlemen whom blockchain tech might undermine that have seized upon these soft parts of human kind and turned perverted them. In a world without fiat currency, I am quite confident that there will be less money for bombs and cheap plastic nonsense. This has been a critique of fiat currency for thousands of years, and only now does humanity have a tool to visualize it. And it's not hard to imagine blockchain technology replacing currency and consumerism altogether. Of course this will take a massive social movement - advances in the technology alone are perhaps necessary, but certainly not sufficient. > a "human-less economy" enabled by smart contracts - long before autonomous "un-owned" corporations run by AIs take over the world, they will be used for all sorts of shady things, money laundering, toxic waste disposal by buying it but never paying to store it etc. But again, humanity has a deep desire for the verdant. The deprecation of "easy" money, global theft, and warfare-as-the-norm - these are continuing imperatives and are good prayers for our earth. And on long time scales, it seems that blockchain tech tends toward, rather than away from, these things.
GW150914 9y ago
Smart contracts are a great example of someone from tech saying they can fix something they never understood to begin with. Theranos is another example of this effect, which is characterized by a combination of unjustified arrogance and Dunning Kruger. Automated law would be a dysfunctional nightmare, and the human touch, while decidedly imperfect is a feature and. It a bug. Unless you’re a cryptolobertarian there are similar issues with Blockchain for money. A total lack of insurance and control isn’t actually what most people want, because it predictably leads to the kind of volatility and insecurity we see in crypto markets today. People already made the choice to stop stuffing dollar bills in their mattresses.
SemiTom 9y ago
There are opportunities to be had but there is a fair amount of hype as well. https://semiengineering.com/blockchain-hype-reality-and-opportunities/ https://semiengineering.com/blockchain-hype-reality-and-oppo...
jMyles 9y ago
The criticisms of blockchain tech have become so incoherent that there may be cause for confidence again. Full circle! > There is no single person in existence who had a problem they wanted to solve, discovered that an available blockchain solution was the best way to solve it, and therefore became a blockchain enthusiast. It's amazing to me that this person finished this sentence and didn't, in the time it took to type it, realize how flatly wrong it is. Every corner of the USA, online and otherwise, has satisfied customers who were able to purchase psychoactive compounds online despite the prohibition against them. This is a wonderful application of blockchain tech and, as a solution, has produced many enthusiasts. Moreover, society benefits generally from drug prohibition being undermined, and this too has produced more indirect enthusiasts. However, this phenomenon serves to show the blockchain's fitness, not the limits of its reach. Many of us spend our days working on blockchain tech that is far more mundane and unlikely to grab headlines, but also fits more cleanly into current legal and political structures. What has the author to say of that? > The number of retailers accepting cryptocurrency as a form of payment is declining, and its biggest corporate boosters like IBM, NASDAQ, Fidelity, Swift and Walmart have gone long on press but short on actual rollout. Borrowing from the previous confused critique: are any blockchain enthusiasts (regardless of their original fount of enthusiasm) also enthusiasts for these giant, largely outdated companies? The fact that these companies have tried and failed to integrate blockchain tech is, in the minds of most enthusiasts, a positive sign, not a negative one. > Hm. Perhaps you are very skilled at writing software. When the novelist proposes the smart contract, you take an hour or two to make sure that the contract will withdraw only an amount of money equal to the agreed-upon price, and that the book — rather than some other file, or nothing at all — will actually arrive. Not a critique of blockchain tech, but of open source software generally. And a bad one. > “Keep your voting records in a tamper-proof repository not owned by anyone” sounds right — yet is your Afghan villager going to download the blockchain from a broadcast node and decrypt the Merkle root from his Linux command line to independently verify that his vote has been counted? I'll note the racist overtones here without further comment. I will, however, point out that no blockchain voting system has ever been proposed with such a UI. > These sound like stupid examples — novelists and villagers hiring e-bodyguard hackers to protect them from malicious customers and nonprofits whose clever smart-contracts might steal their money and votes?? Yes, they sound like stupid examples. They are stupid examples, designed precisely for use as a strawmen in this stupid essay. > A person who sprayed pesticides on a mango can still enter onto a blockchain system that the mangoes were organic. A corrupt government can create a blockchain system to count the votes and just allocate an extra million addresses to their cronies. An investment fund whose charter is written in software can still misallocate funds. I have no idea what point the author is making now. Can anyone clarify? > The contract still works, but the fact that the promise is written in auditable software rather than government-enforced English makes it less transparent, not more transparent. This has not been history's experience with government-enforced English. By ignoring this fact, the author allows himself to indulge in arguments that don't make sense in order to make points that don't matter. Such as... > Eight hundred years ago in Europe — with weak governments unable to enforce laws and trusted counterparties few, fragile and far between — theft was rampant, safe banking was a fantasy, and personal security was at the point of the sword. This is what Somalia looks like now, and also, what it looks like to transact on the blockchain in the ideal scenario. ...and... > Silk Road, a cryptocurrency-driven online drug bazaar. The key to Silk Road wasn’t the bitcoins (that was just to evade government detection), it was the reputation scores that allowed people to trust criminals. But I think the author's most dangerous fallacy is actually his apparent fear that systems of "alternate" trust or consensus somehow threaten to push out systems in which trust is currently serving well. For example: > Projects based on the elimination of trust have failed to capture customers’ interest because trust is actually so damn valuable. A lawless and mistrustful world where self-interest is the only principle and paranoia is the only source of safety is a not a paradise but a crypto-medieval hellhole. I have met and worked with dozens of movers-and-shakers in blockchain tech, and I have never, ever met anyone who's politics are fairly characterized as advocating "A lawless and mistrustful world where self-interest is the only principle and paranoia is the only source of safety." Quite the contrary: I think that there's a realization that small batches of community cooperation work quite well, and that trustless technology has the capacity to out-compete the violent regimes that threaten it, such as drug prohibition, fiat currency, and environmental recklessness. The author concludes with the only paragraph in his essay which is sensible and sober: > As a society, and as technologists and entrepreneurs in particular, we’re going to have to get good at cooperating — at building trust, and, at being trustworthy. Instead of directing resources to the elimination of trust, we should direct our resources to the creation of trust—whether we use a long series of sequentially hashed files as our storage medium or not. On these points, we agree. However, these points are not supported by the rest of the author's essay. Clear thinking and reasonableness need to be the orders of the day. Cooperation and compassion need to be the acts of our daily drive. And, so far as I can tell - the many scams and holdovers from yesterday's economy not withstanding - blockchain tech is full of these things. We all want peace. We all want freedom. And yes, we all want trust and strong communities. The idea that blockchain tech is a threat to these things is confusion at best, fear-mongering at worst.
jwatte 9y ago
A fully public, fully transparent, immutable ledger is "useless?" Only if you don't believe in accountability and transparency. What with modern voice and face morphing technology, I'd expect major news organizations to start signing their releases onto a block chain to allow us to spot mutations. Currency is just one potential use case of block chains; there are many others.
gh1 9y ago
A lot of valid points here, but ultimately very short sighted. Firstly, the author does not mention many of the highly plausible use cases for trustless and permissionless services such as replacing rent seeking P2P marketplaces like eBay (where the advantage is cost reduction) or online Poker sites (where the advantage is manipulation resistance). He does not mention DAOS, where strangers can trustlessly enter into contractual obligation to create e.g. a crowdsourced Venture fund. He does not mention the potential to provide financial services to the 2 billion unbanked people in the world. He does not see the potential for innovative and completely new financial products coming out because of the permissionless nature of public blockchains. The use cases that he sites include buying an e-book using a smart contract or its use in the supply chain or voting. The e-book example is slightly misguided, because this is not an use case where decentralization provides much value. So the entire discussion about auditing smart contracts is rather unnecessary. But it is nonetheless an important objection that may become important in DAOs. But it's short sighted to think that this problem won't be solved. Some companies are already starting to tackle the smart contract to natural language translations (e.g. Iolite). Supply chain is yet another use case where it is unclear whether blockchains will add value. Perhaps cost saving. But note that the blockchains used in supply chains will most likely be private, therefore permissioned. It's unfair to put private and public blockchains in the same basket, because they are very different beasts. Finally the use case of voting. The author thinks that whoever is in power might distribute a few additional addresses to their cronies to manipulate the system. He is missing the point that all data is public in public blockchains. So anyone can audit the voting results later if they want and discover that those addresses do not belong to any real people (assuming there is a KYC type identification system built-in). Voting is an use case where blockchains are sorely required. All we need is for the knowledge to reach public consciousness and for the people to tell their governments that they want it.
- acdha 9y ago
  > the author does not mention many of the highly plausible use cases for trustless and permissionless services such as replacing rent seeking P2P marketplaces like eBay (where the advantage is cost reduction) or online Poker sites (where the advantage is manipulation resistance). Both of those claims are severely in need of support before you can attack the author for not mentioning them. eBay doesn’t cost what it does because there’s no other way to send money online – it’s things like discovery, fraud protection, etc. which are necessary either way. It’s similarly non-obvious how magic blockchain pixie dust could address the challenges which online gambling actually has.
dis13 9y ago
1. Your bank account balance is a number in a database. There are multiple organizations much more powerful than you that have the ability to alter that database. Your protection against them is the legal system which is adversarial between you and these giant organizations, and run by government employees. If you’re fine with that, great. If you aren’t and you want to take responsibility into your own hands, try Bitcoin. 2. Blockchain doesn’t make it easier to distribute and process information. Blockchain makes it harder and a lot harder. Blockchain makes it possible to verify a set of rules going back to the genesis block. It makes it possible for you to prove that you own the book, if someone wants to create a book ownership registry smartcontract. I don’t disagree with this element of the article, a lot of people are trying to use blockchain tech to “solve” problems where it offers nothing. But that fact that shock therapy is worse than useless doesn’t mean electricity is a bad vision for the future. To paraphrase Drake: the real will live forever, the fake will be destroyed.
- Nursie 9y ago
  Not only am I fine with that, I think it's vastly superior to a system where you can lose your entire balance by misplacing a key. Forgetting my PIN doesn't lock up my account forever, if I get scammed by a vendor I can appeal to my bank for a chargeback, and if they lose my money they are on the hook for it. "Be your own bank" sounds bootstrappy and self-reliant, but in reality it's just stupid.
  - sparkie 9y ago
    Using cryptocurrency does not forfeit the ability to have a third-party take custody of your funds for you. But because you are useless at looking after things, everybody else should forfeit their right to be custodian of their own funds? The choice should be there for anyone to make. Do I look after my own funds, knowing the risks, or do I let someone else look after them, knowing those risks? Or you know, we now have these things called multisig wallets, which mean that you can have third-parties secure your funds without actually giving them custody of the funds. You can have the best of both worlds by removing the risk of losing everything if you lose your keys, and also eliminate the possibility of a bank/government from stealing your money.
Geee 9y ago
Here's a great list of blockchain uses from Disney - most of these are NOT a bad vision for the future https://dragonchain.github.io/blockchain-use-cases https://dragonchain.github.io/blockchain-use-cases
hyprCoin 9y ago
This is a good example of why you should not start your research into a nascent space with a conclusion.
thinkloop 9y ago
Weak old arguments that are easily refutable: > Venmo is a free service to transfer dollars, and bitcoin transfers are not free. Credit cards, payment gateways et al, are not free, they just obfuscate costs that are eventually passed back to consumers - when you include fraud it is estimated that society pays a hidden 5% tax on all goods and services just for payment processing. > no single person in existence who had a problem they wanted to solve Illicit purchases at minimum? Silk Road, etc.? Whether this is good or not, no need to think of other examples, the statement is simply not true. > but once the vendor has your money they don’t have any incentive to deliver There are many interesting solutions to this like automatic escrow, reputation, mutual burn, etc. Additionally using a trust-based system for small meaningless purchases while storing and transacting your actual wealth in crypto is not incompatible with the goals and vision of the space. > Auditing software is hard! The most-heavily scrutinized smart contract in history had a small bug that nobody noticed Sure is, yet the world runs on software now, it's doable. Additionally of course the contract was the most heavily scrutinized, it was one of the first ever. > yet is your Afghan villager going to download the blockchain from a broadcast node and decrypt the Merkle root from his Linux command line to independently verify that his vote has been counted An afghan villager (or even a sophisticated engineer in the valley) isn't going to read and check every line of code of all software ever written, and will end up trusting to some degree - but that's very different than having to trust every transaction, every build, and having to ask for permission for every use of the system. I didn't check the linux code, but I still trust it much more than a closed source alternative. There are degrees of trust, nothing is absolute, and here it is minimized. And if you somehow don't trust, then you are free to verify, you have the choice. This is valuable. > These sound like stupid examples Agreed > in less than a decade, three successive top bitcoin exchanges have been hacked, another is accused of insider trading, the demonstration-project DAO smart contract got drained, crypto price swings are ten times What does insider trading have to do with blockchain technology? What do hacked exchanges have to do with blockchain? What do price swings have to do with blockchain? Bitcoin itself has never been hacked. This is fud nonsense. > A person who sprayed pesticides on a mango can still enter onto a blockchain system that the mangoes were organic. Yes and we can trace it with certainty and punish the infringer who had to sign their name - rather than have the organization invent confusion and doubt until everyone forgets and moves on. > Projects based on the elimination of trust have failed to capture customers’ interest because trust is actually so damn valuable Trust is fine to grease the wheels, maybe the last mile will be trust-related, but having the underlying final infrastructure not reliant on the good graces of others when push comes to shove is valuable.
dang 9y ago
https://news.ycombinator.com/item?id=16774293 https://news.ycombinator.com/item?id=16774293
doctorless 9y ago
What a load of crap. Normally I feel more inclined to give thoughtful dialogue in response to critique, but this article was so ill-conceived in argument that the author had to narrowly define blockchain and it’s uses to make his point, and then went as far as to claim nobody has a real use case that only blockchain can solve. How incredibly naive, and so willing to discard any potential idea (despite actual, proven use cases). His privilege shows too — to argue that a war torn region can’t use technology. Has he seen how cellphones have become the de facto credit card in parts of Africa which are too remote for banking infrastructure? Articles like these read like NoSQL naysayers when it first broke out into the developer ecosystem. It’s easy to be a critic.
- hyprCoin 9y ago
  Engineers are trained to look critically at proposed solutions. It's much harder to imagine where the future lays. I personally see crypto as just another extension of software eating the world.
laktek 9y ago
As someone born and lived in a 3rd world country for a better part of my life, I believe Blockchain solves a very real problem. That's equal participation in internet economy irrespective of someone's geographic location. It was thanks to the internet I realized I can also contribute to the world (by creating something people want & writing about something others want to learn). However, when it came to making a living out of that there weren't many options. One of the prime motives for me to move out of Sri Lanka was it will be way easier for me to accept payments online. PayPal is still not available in Sri Lanka, even after repeated attempts to convince Central Banks and governments [1]. Also, recently Stripe blocked a payment from one of my customers due to high risk profile. Reason? He used a US issued debit card from Nigeria. I reached out to the person, turns out he was a passionate young entrepreneur who was trying to build a really interesting business. But his geographic location becomes a resistance in a medium it shouldn't. For me, Blockchain( and Cryptocurrencies) is a reframing of the trust model from heuristics such as geographic location to verifiable algorithms. The Internet protocols enabled us to exchange code, art & virtual goods without geographic boundaries. Then why not money? [1] https://www.change.org/p/enable-receiving-money-to-sri-lanka-through-paypal https://www.change.org/p/enable-receiving-money-to-sri-lanka...

98 points by alanfalcon 9y ago

> If someone comes to you with “the mango-pickers don’t like doing data entry" then “let’s create a very long sequence of small files, each one containing a hash of the previous file”, is a nonsense answer > “What if everyone keeps their records in a tamper-proof repository not owned by anyone?” Exactly, "What if everyone keeps their records in a tamper-proof repository not owned by anyone?” is a re-framing of what blockchain does in use-case terms, (as opposed to technical terms) which makes it clear if you try to apply it to real use cases, that doesn't really solve anyone's problems

arisAlexis 9y ago

there is so much hate towards this I am getting very positive.

ThrowMeDown01 9y ago
That's a non sequitur if I ever heard one.

jmeyer2k 9y ago

> To understand why this is the case, let’s work from the practical to the theoretical. For example, let’s consider a widely-proposed use case for blockchain: buying an e-book with a “smart” contract. The goal of the blockchain is, you don’t trust an e-book vendor and they don’t trust you (because you’re just two individuals on the internet), but, because it’s on blockchain, you’ll be able to trust the transaction. No. Nobody trusts an exchange because it's on the blockchain. The idea of a smart contract is to decentralize high-friction transactions such as insurance (which is essentially what Amazon or PayPal is providing). The whole point is to not have to trust anybody to ensure a transaction is carried out, which it does accomplish to a reasonable extent. The author also confuses peer-to-peer trustworthiness such as making a purchase, with trustworthiness that data or transaction executions will not be tampered with. The blockchain backs up the latter with mining, whereas it does not back up the former.

barbegal 9y ago
Smart contracts don't even work for insurance. Smart contracts require the insuring party to tie up capital to make sure they can satisfy the claim in the event that a claim is made. The problem is that each insurance smart contract may pay out large amounts but only rarely. Typical insurance policies often have maximum payouts north of $1 million. If every insurance company had to hold $1 million in smart coins for every insurance smart contract they produce, they'd quickly run out of capital. And if you allow capital to be pooled together where claims are payed out from one large pool for multiple insurance contracts (as is used in insurance today) then you have to trust that the insurer will have enough capital available when you want to make a claim. In this case the smart contract element is pretty useless because it doesn't guarantee you anything.
- mhluongo 9y ago
  Leverage doesn't make the blockchain aspect useless- in fact, the chain means the consumer can choose their insurance provider based on backing asset characteristics and how leveraged the risk pool is. Similar to what we had before, but with more democratic capital allocation.
- swiley 9y ago
  That's not insurance, that's just ridiculous. An insurance smart contract should require the insuring party hold some fraction of the payout based on the expected number of claims.
  - barbegal 9y ago
    That allows an unscrupulous insurer to use a sybil attack to create insurance contracts with itself that it then pays out against emptying the smart contract pot.
    - swiley 9y ago
      It's probably not possible to implement trustless insurance using smart contracts then.

joeblow9999 9y ago

Smart contracts rely on Block chain but Block chain is not smart contracts

valuearb 9y ago
Yes, I read the article because I always try to be a skeptic, but smart contracts is where the author goes off the rails. Then he ties in crypto currency volatility and Mt Gox as part of its “trust” failures. Being able to trust the results of a block chain does not mean that people will value any currency based at the same price from day to day, or that people who offer to trade and store that currency got you will be competent and honest.
DonbunEf7 9y ago
Smart contracts rely on a trusted ledger. The original smart-contract discussions in the 90s were in the context of a contract between various users in virtual open-world games, enforced by the trusted game server. This setting also meant that many of the lame parts of EVM, like the inability to represent capabilities or to protect cryptographic secrets, were supplanted by the game server's encapsulated backend logic and database. Blockchains and smart contracts don't have to be related at all.

ericb 9y ago

The impossible problem of digital scarcity is finally solved, but it will have no practical uses.

devteambravo 9y ago

The whole Blockchain debacle feels like MLM/pyramid-like to me. The interested parties are in too deep.

Slartie 9y ago

I generally agree with most of the article, but sorry, this big quote here (that the author apparently thinks of being a good punchline) is just plain wrong: > There is no single person in existence who had a problem they wanted to solve, discovered that an available blockchain solution was the best way to solve it, and therefore became a blockchain enthusiast. Anyone who was trying to buy drugs/penis-pills/whatever-other-illegal-substance online and wanted to pay in an anonymous form would disagree. Anyone who had a bit of money in a country with restrictive international money transfer laws and who wanted to get that money out of said country would disagree. For both of these groups, available blockchains provided a good solution to a real problem. And especially in the first group, which is generally underestimated in size I think, a lot of people genuinely got enthusiastic about blockchains and jumped on the cryptocurrency train relatively early - first to buy some weed or whatever, and later also to make more money out of less money. But the problem-seeking-a-solution situation was first!

roenxi 9y ago
The article is exaggerating, there must be someone who has problems that are solved by Bitcoin. However, one of Bitcoin's features is that it has a completely public permanent ledger showing all transactions assigned to everyone. It is a wildly inappropriate technology for doing illegal things or skirting the law (which cross-country transfers outside the system could well be). It has more downsides than cash in a duffle bag.
- deft 9y ago
  That's exactly the issue privacy currencies like Monero and to an extent Zcash solve.
- weego 9y ago
  I feel like we confuse bitcoin and blockchain. People's problems have been solved by a globally available currency that can handle simple transactions but that all happens incredibly inefficiently and despite of all the failings of he underlying blockchain tech.
smokeyj 9y ago

nnq 9y ago

Blockchain tech and the whole "trustless economy" freak me out precisely because I think they can work... The things that emerge out of this and scale long-term can have some really scary consequences: (1) a working "trustless economy" makes trust and peace no longer be requirements for a functional global economy... this opens the door to all sorts of fucked up scenarios like financing (or betting on) wars, no longer working for peace because it's not always required to make your economic schemes work, no longer caring about keeping your countries economy at least somewhat functional because you can always "pull your money out" etc. (2) a "human-less economy" enabled by smart contracts - long before autonomous "un-owned" corporations run by AIs take over the world, they will be used for all sorts of shady things, money laundering, toxic waste disposal by buying it but never paying to store it etc. I can't even imagine the creativity of the conmen and criminals that will start to play with these possibilities. "Trustless" can work... just that it doesn't seem to lead to scenarios that increase the mid term survival changes of the human race :|

Geee 9y ago
You don't think people already bet on wars? Why is there wars? You think that Putin invades countries just for fun? Opening the bets for everyone should make a more peaceful world, because wars don't benefit the majority.
jMyles 9y ago
I think your concerns are very reasonable. However, I think that thinking them all the way through is cause for more optimism than you're applying. For example, > no longer working for peace because it's not always required to make your economic schemes work Is this really a possibility? Peace is always good for bounty. Everybody everywhere wants peace. Along with justice, freedom, and love, it is one of the most unifying characteristics of the human condition. It is precisely those middlemen whom blockchain tech might undermine that have seized upon these soft parts of human kind and turned perverted them. In a world without fiat currency, I am quite confident that there will be less money for bombs and cheap plastic nonsense. This has been a critique of fiat currency for thousands of years, and only now does humanity have a tool to visualize it. And it's not hard to imagine blockchain technology replacing currency and consumerism altogether. Of course this will take a massive social movement - advances in the technology alone are perhaps necessary, but certainly not sufficient. > a "human-less economy" enabled by smart contracts - long before autonomous "un-owned" corporations run by AIs take over the world, they will be used for all sorts of shady things, money laundering, toxic waste disposal by buying it but never paying to store it etc. But again, humanity has a deep desire for the verdant. The deprecation of "easy" money, global theft, and warfare-as-the-norm - these are continuing imperatives and are good prayers for our earth. And on long time scales, it seems that blockchain tech tends toward, rather than away from, these things.

GW150914 9y ago

Smart contracts are a great example of someone from tech saying they can fix something they never understood to begin with. Theranos is another example of this effect, which is characterized by a combination of unjustified arrogance and Dunning Kruger. Automated law would be a dysfunctional nightmare, and the human touch, while decidedly imperfect is a feature and. It a bug. Unless you’re a cryptolobertarian there are similar issues with Blockchain for money. A total lack of insurance and control isn’t actually what most people want, because it predictably leads to the kind of volatility and insecurity we see in crypto markets today. People already made the choice to stop stuffing dollar bills in their mattresses.

SemiTom 9y ago

There are opportunities to be had but there is a fair amount of hype as well. https://semiengineering.com/blockchain-hype-reality-and-opportunities/ https://semiengineering.com/blockchain-hype-reality-and-oppo...

jMyles 9y ago

The criticisms of blockchain tech have become so incoherent that there may be cause for confidence again. Full circle! > There is no single person in existence who had a problem they wanted to solve, discovered that an available blockchain solution was the best way to solve it, and therefore became a blockchain enthusiast. It's amazing to me that this person finished this sentence and didn't, in the time it took to type it, realize how flatly wrong it is. Every corner of the USA, online and otherwise, has satisfied customers who were able to purchase psychoactive compounds online despite the prohibition against them. This is a wonderful application of blockchain tech and, as a solution, has produced many enthusiasts. Moreover, society benefits generally from drug prohibition being undermined, and this too has produced more indirect enthusiasts. However, this phenomenon serves to show the blockchain's fitness, not the limits of its reach. Many of us spend our days working on blockchain tech that is far more mundane and unlikely to grab headlines, but also fits more cleanly into current legal and political structures. What has the author to say of that? > The number of retailers accepting cryptocurrency as a form of payment is declining, and its biggest corporate boosters like IBM, NASDAQ, Fidelity, Swift and Walmart have gone long on press but short on actual rollout. Borrowing from the previous confused critique: are any blockchain enthusiasts (regardless of their original fount of enthusiasm) also enthusiasts for these giant, largely outdated companies? The fact that these companies have tried and failed to integrate blockchain tech is, in the minds of most enthusiasts, a positive sign, not a negative one. > Hm. Perhaps you are very skilled at writing software. When the novelist proposes the smart contract, you take an hour or two to make sure that the contract will withdraw only an amount of money equal to the agreed-upon price, and that the book — rather than some other file, or nothing at all — will actually arrive. Not a critique of blockchain tech, but of open source software generally. And a bad one. > “Keep your voting records in a tamper-proof repository not owned by anyone” sounds right — yet is your Afghan villager going to download the blockchain from a broadcast node and decrypt the Merkle root from his Linux command line to independently verify that his vote has been counted? I'll note the racist overtones here without further comment. I will, however, point out that no blockchain voting system has ever been proposed with such a UI. > These sound like stupid examples — novelists and villagers hiring e-bodyguard hackers to protect them from malicious customers and nonprofits whose clever smart-contracts might steal their money and votes?? Yes, they sound like stupid examples. They are stupid examples, designed precisely for use as a strawmen in this stupid essay. > A person who sprayed pesticides on a mango can still enter onto a blockchain system that the mangoes were organic. A corrupt government can create a blockchain system to count the votes and just allocate an extra million addresses to their cronies. An investment fund whose charter is written in software can still misallocate funds. I have no idea what point the author is making now. Can anyone clarify? > The contract still works, but the fact that the promise is written in auditable software rather than government-enforced English makes it less transparent, not more transparent. This has not been history's experience with government-enforced English. By ignoring this fact, the author allows himself to indulge in arguments that don't make sense in order to make points that don't matter. Such as... > Eight hundred years ago in Europe — with weak governments unable to enforce laws and trusted counterparties few, fragile and far between — theft was rampant, safe banking was a fantasy, and personal security was at the point of the sword. This is what Somalia looks like now, and also, what it looks like to transact on the blockchain in the ideal scenario. ...and... > Silk Road, a cryptocurrency-driven online drug bazaar. The key to Silk Road wasn’t the bitcoins (that was just to evade government detection), it was the reputation scores that allowed people to trust criminals. But I think the author's most dangerous fallacy is actually his apparent fear that systems of "alternate" trust or consensus somehow threaten to push out systems in which trust is currently serving well. For example: > Projects based on the elimination of trust have failed to capture customers’ interest because trust is actually so damn valuable. A lawless and mistrustful world where self-interest is the only principle and paranoia is the only source of safety is a not a paradise but a crypto-medieval hellhole. I have met and worked with dozens of movers-and-shakers in blockchain tech, and I have never, ever met anyone who's politics are fairly characterized as advocating "A lawless and mistrustful world where self-interest is the only principle and paranoia is the only source of safety." Quite the contrary: I think that there's a realization that small batches of community cooperation work quite well, and that trustless technology has the capacity to out-compete the violent regimes that threaten it, such as drug prohibition, fiat currency, and environmental recklessness. The author concludes with the only paragraph in his essay which is sensible and sober: > As a society, and as technologists and entrepreneurs in particular, we’re going to have to get good at cooperating — at building trust, and, at being trustworthy. Instead of directing resources to the elimination of trust, we should direct our resources to the creation of trust—whether we use a long series of sequentially hashed files as our storage medium or not. On these points, we agree. However, these points are not supported by the rest of the author's essay. Clear thinking and reasonableness need to be the orders of the day. Cooperation and compassion need to be the acts of our daily drive. And, so far as I can tell - the many scams and holdovers from yesterday's economy not withstanding - blockchain tech is full of these things. We all want peace. We all want freedom. And yes, we all want trust and strong communities. The idea that blockchain tech is a threat to these things is confusion at best, fear-mongering at worst.

jwatte 9y ago

A fully public, fully transparent, immutable ledger is "useless?" Only if you don't believe in accountability and transparency. What with modern voice and face morphing technology, I'd expect major news organizations to start signing their releases onto a block chain to allow us to spot mutations. Currency is just one potential use case of block chains; there are many others.

gh1 9y ago

A lot of valid points here, but ultimately very short sighted. Firstly, the author does not mention many of the highly plausible use cases for trustless and permissionless services such as replacing rent seeking P2P marketplaces like eBay (where the advantage is cost reduction) or online Poker sites (where the advantage is manipulation resistance). He does not mention DAOS, where strangers can trustlessly enter into contractual obligation to create e.g. a crowdsourced Venture fund. He does not mention the potential to provide financial services to the 2 billion unbanked people in the world. He does not see the potential for innovative and completely new financial products coming out because of the permissionless nature of public blockchains. The use cases that he sites include buying an e-book using a smart contract or its use in the supply chain or voting. The e-book example is slightly misguided, because this is not an use case where decentralization provides much value. So the entire discussion about auditing smart contracts is rather unnecessary. But it is nonetheless an important objection that may become important in DAOs. But it's short sighted to think that this problem won't be solved. Some companies are already starting to tackle the smart contract to natural language translations (e.g. Iolite). Supply chain is yet another use case where it is unclear whether blockchains will add value. Perhaps cost saving. But note that the blockchains used in supply chains will most likely be private, therefore permissioned. It's unfair to put private and public blockchains in the same basket, because they are very different beasts. Finally the use case of voting. The author thinks that whoever is in power might distribute a few additional addresses to their cronies to manipulate the system. He is missing the point that all data is public in public blockchains. So anyone can audit the voting results later if they want and discover that those addresses do not belong to any real people (assuming there is a KYC type identification system built-in). Voting is an use case where blockchains are sorely required. All we need is for the knowledge to reach public consciousness and for the people to tell their governments that they want it.

acdha 9y ago
> the author does not mention many of the highly plausible use cases for trustless and permissionless services such as replacing rent seeking P2P marketplaces like eBay (where the advantage is cost reduction) or online Poker sites (where the advantage is manipulation resistance). Both of those claims are severely in need of support before you can attack the author for not mentioning them. eBay doesn’t cost what it does because there’s no other way to send money online – it’s things like discovery, fraud protection, etc. which are necessary either way. It’s similarly non-obvious how magic blockchain pixie dust could address the challenges which online gambling actually has.

dis13 9y ago

1. Your bank account balance is a number in a database. There are multiple organizations much more powerful than you that have the ability to alter that database. Your protection against them is the legal system which is adversarial between you and these giant organizations, and run by government employees. If you’re fine with that, great. If you aren’t and you want to take responsibility into your own hands, try Bitcoin. 2. Blockchain doesn’t make it easier to distribute and process information. Blockchain makes it harder and a lot harder. Blockchain makes it possible to verify a set of rules going back to the genesis block. It makes it possible for you to prove that you own the book, if someone wants to create a book ownership registry smartcontract. I don’t disagree with this element of the article, a lot of people are trying to use blockchain tech to “solve” problems where it offers nothing. But that fact that shock therapy is worse than useless doesn’t mean electricity is a bad vision for the future. To paraphrase Drake: the real will live forever, the fake will be destroyed.

Nursie 9y ago
Not only am I fine with that, I think it's vastly superior to a system where you can lose your entire balance by misplacing a key. Forgetting my PIN doesn't lock up my account forever, if I get scammed by a vendor I can appeal to my bank for a chargeback, and if they lose my money they are on the hook for it. "Be your own bank" sounds bootstrappy and self-reliant, but in reality it's just stupid.
- sparkie 9y ago
  Using cryptocurrency does not forfeit the ability to have a third-party take custody of your funds for you. But because you are useless at looking after things, everybody else should forfeit their right to be custodian of their own funds? The choice should be there for anyone to make. Do I look after my own funds, knowing the risks, or do I let someone else look after them, knowing those risks? Or you know, we now have these things called multisig wallets, which mean that you can have third-parties secure your funds without actually giving them custody of the funds. You can have the best of both worlds by removing the risk of losing everything if you lose your keys, and also eliminate the possibility of a bank/government from stealing your money.

Geee 9y ago

Here's a great list of blockchain uses from Disney - most of these are NOT a bad vision for the future https://dragonchain.github.io/blockchain-use-cases https://dragonchain.github.io/blockchain-use-cases

hyprCoin 9y ago

This is a good example of why you should not start your research into a nascent space with a conclusion.

thinkloop 9y ago

Weak old arguments that are easily refutable: > Venmo is a free service to transfer dollars, and bitcoin transfers are not free. Credit cards, payment gateways et al, are not free, they just obfuscate costs that are eventually passed back to consumers - when you include fraud it is estimated that society pays a hidden 5% tax on all goods and services just for payment processing. > no single person in existence who had a problem they wanted to solve Illicit purchases at minimum? Silk Road, etc.? Whether this is good or not, no need to think of other examples, the statement is simply not true. > but once the vendor has your money they don’t have any incentive to deliver There are many interesting solutions to this like automatic escrow, reputation, mutual burn, etc. Additionally using a trust-based system for small meaningless purchases while storing and transacting your actual wealth in crypto is not incompatible with the goals and vision of the space. > Auditing software is hard! The most-heavily scrutinized smart contract in history had a small bug that nobody noticed Sure is, yet the world runs on software now, it's doable. Additionally of course the contract was the most heavily scrutinized, it was one of the first ever. > yet is your Afghan villager going to download the blockchain from a broadcast node and decrypt the Merkle root from his Linux command line to independently verify that his vote has been counted An afghan villager (or even a sophisticated engineer in the valley) isn't going to read and check every line of code of all software ever written, and will end up trusting to some degree - but that's very different than having to trust every transaction, every build, and having to ask for permission for every use of the system. I didn't check the linux code, but I still trust it much more than a closed source alternative. There are degrees of trust, nothing is absolute, and here it is minimized. And if you somehow don't trust, then you are free to verify, you have the choice. This is valuable. > These sound like stupid examples Agreed > in less than a decade, three successive top bitcoin exchanges have been hacked, another is accused of insider trading, the demonstration-project DAO smart contract got drained, crypto price swings are ten times What does insider trading have to do with blockchain technology? What do hacked exchanges have to do with blockchain? What do price swings have to do with blockchain? Bitcoin itself has never been hacked. This is fud nonsense. > A person who sprayed pesticides on a mango can still enter onto a blockchain system that the mangoes were organic. Yes and we can trace it with certainty and punish the infringer who had to sign their name - rather than have the organization invent confusion and doubt until everyone forgets and moves on. > Projects based on the elimination of trust have failed to capture customers’ interest because trust is actually so damn valuable Trust is fine to grease the wheels, maybe the last mile will be trust-related, but having the underlying final infrastructure not reliant on the good graces of others when push comes to shove is valuable.

dang 9y ago

https://news.ycombinator.com/item?id=16774293 https://news.ycombinator.com/item?id=16774293

doctorless 9y ago

What a load of crap. Normally I feel more inclined to give thoughtful dialogue in response to critique, but this article was so ill-conceived in argument that the author had to narrowly define blockchain and it’s uses to make his point, and then went as far as to claim nobody has a real use case that only blockchain can solve. How incredibly naive, and so willing to discard any potential idea (despite actual, proven use cases). His privilege shows too — to argue that a war torn region can’t use technology. Has he seen how cellphones have become the de facto credit card in parts of Africa which are too remote for banking infrastructure? Articles like these read like NoSQL naysayers when it first broke out into the developer ecosystem. It’s easy to be a critic.

hyprCoin 9y ago
Engineers are trained to look critically at proposed solutions. It's much harder to imagine where the future lays. I personally see crypto as just another extension of software eating the world.

laktek 9y ago

As someone born and lived in a 3rd world country for a better part of my life, I believe Blockchain solves a very real problem. That's equal participation in internet economy irrespective of someone's geographic location. It was thanks to the internet I realized I can also contribute to the world (by creating something people want & writing about something others want to learn). However, when it came to making a living out of that there weren't many options. One of the prime motives for me to move out of Sri Lanka was it will be way easier for me to accept payments online. PayPal is still not available in Sri Lanka, even after repeated attempts to convince Central Banks and governments [1]. Also, recently Stripe blocked a payment from one of my customers due to high risk profile. Reason? He used a US issued debit card from Nigeria. I reached out to the person, turns out he was a passionate young entrepreneur who was trying to build a really interesting business. But his geographic location becomes a resistance in a medium it shouldn't. For me, Blockchain( and Cryptocurrencies) is a reframing of the trust model from heuristics such as geographic location to verifiable algorithms. The Internet protocols enabled us to exchange code, art & virtual goods without geographic boundaries. Then why not money? [1] https://www.change.org/p/enable-receiving-money-to-sri-lanka-through-paypal https://www.change.org/p/enable-receiving-money-to-sri-lanka...