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The skepticism of blockchain technology is borne out of a lack of specific problems it solves. Which happens to also be the bedrock of the conventional startup

The skepticism of blockchain technology is borne out of a lack of specific problems it solves. Which happens to also be the bedrock of the conventional startup wisdom -- value derived from solving a problem or exploiting an opportunity. So much of the blockchain hype is focused purely on the technology and the valuation of the tokens / coins. Not the problem it solves. It's distributed trust. That's the problem it solves. It's incredibly cool technology. That solves a specific problem. The analogy to the early internet is not a good one. The internet solved a huge number of problems -- of distribution, of speed to deliver value to the customer, of freedom of information, of transparency, of fidelity of communication, and more. That's why it's changed society. I would love to know which societal problems can be reduced to a distributed trust problem. That would convince me that I'm wrong about blockchain technology.

jhoechtl 8y ago
> Which happens to also be the bedrock of the conventional startup wisdom -- value derived from solving a problem or exploiting an opportunity. It's often generating an artificial need where no need has been before.
baxtr 8y ago
Great points. I’d love to know what Steve would have done with Blockchain (or when). Well...
kirbypineapple 8y ago
I would argue there's value beyond distributed trust: smart contracts (though you could argue that this is merely an application built upon the concept of distributed trust), the tokenization of physical assets (think real estate, oil and gas exploration/drilling/royalties, etc.), and more generally the ability for money to become a "product". These are all domains that blockchain is enabling, though it remains to be seen whether these problems/opportunities are solved via blockchain or not.
- JumpCrisscross 8y ago
  > These are all domains that blockchain is enabling It is reasonable to be sceptical when someone proposes a new domain that doesn’t solve any problems.
- madeofpalk 8y ago
  Again, what problems are being solved? Real estate, oil and gas exploration/drilling/royalties are all things that have existed without problem for many decades. Saying "real estate, but with blockchain" doesn't actually say what problem you're solving.
  - elyobo 8y ago
    I think I'd have to argue that real estate has existed for much, much longer than a few decades :D I'm a pretty big sceptic on all of this crypto BS, but the ownership of real estate assets seems like a pretty archaic system of not easily inspected pieces of paper. Having a public, provable system for recording this information (and possibly other related info, e.g. liens) seems like it would be of some use. The system we have works, but it could work better.
    - angryasian 8y ago
      I thought real estate was already in the public domain.
    - w4 8y ago
      > the ownership of real estate assets seems like a pretty archaic system of not easily inspected pieces of paper. Having a public, provable system for recording this information (and possibly other related info, e.g. liens) seems like it would be of some use. The system we have works, but it could work better. This already exists in many states. It's a political problem (whether or not to use of tax money to pay for the digitization of old records), not a technical one: https://www.uslandrecords.com/uslr/UslrApp/index.jsp https://www.uslandrecords.com/uslr/UslrApp/index.jsp Related information, like liens, is available via those public records as well.
slg 8y ago
It is just the next round of the "Uber for X". Little attention is paid specifically to what that technology and business model provide. We end up getting hundreds of startups that use the buzzword to secure funding but quickly flame out when they realize that the advantages don't really matter to their specific market. However that doesn't mean there are not viable "Uber for X" or blockain business ideas out there.
- endlessvoid94 8y ago
  Totally fair point. It's especially great for the investment world -- especially VC, which only needs one billion-dollar exit to make a return. So this makes sense!
  - slg 8y ago
    Which basically sums up my problem with it. It is sad that the primary angle anyone looks at this from is as an investor or even a VC. That results in lots of wasted time, money, and specifically for most blockchain businesses wasted carbon ouput.
    - endlessvoid94 8y ago
      If the only problem is that we've wasted a lot of time, and in the end one company builds one product that changes the world, then maybe it's worth it.
      - slg 8y ago
        The existence of a positive net result is not sufficient justification for a poor, inefficient, or wasteful process that led to that result.
        workinthehead 8y ago
        It is if you're a utilitarian.
madeofpalk 8y ago
> It's distributed trust. That's the problem it solves. It's incredibly cool technology. That solves a specific problem. That's still not it. "Distributed Trust" isn't a problem, its a trait. What actual problem is solved by distributed trust?
- endlessvoid94 8y ago
  You're right, I pointed to the solution instead of the problem. I'm still an engineer at heart, it seems! What should I have said instead? Centralization of data? Unreliability of single-points-of-failure?
  - deleted 8y ago
    [deleted]
  - caust1c 8y ago
    It provides distributed trust for the class of problems wherein you have multiple competitive parties trying to achieve consensus on a sequence of transactions (or contracts, if you will). I believe a massive number of social and societal problems are solved by distributed trust models in the same ways free market economies generally lead to more equality and democracy leads to more freedoms.
    - endlessvoid94 8y ago
      Can you give me an example?
      - mhluongo 8y ago
        Anything involving a clearing house.
        madeofpalk 8y ago
        What about all the existing clearing houses we have today? How have they managed to survive without Blockchain? Again. What specific problem does Blockchain solve?
pjc50 8y ago
The only one I've seen that might go somewhere is filecoin. However, I think people are underestimating how the market for ""enterprise private blockchain"" will play out. The same organisations that spent money on X509 PKI non-solutions will pay millions for blockchain. At this level, nobody likes talking about the problem solved. It's solutions all the way, especially enterprise solutions.
- brian-armstrong 8y ago
  Great. Let’s all get rich writing a bunch of do-nothing software that will get thrown out in 5 years.
  - deleted 8y ago
    [deleted]
miguelrochefort 8y ago
Distributed trust is the solution to the world's most important meta-problem: coordination.
deleted 8y ago
[deleted]
al_ 8y ago
Money
Jonovono 8y ago
I don't think it's too hard to find potential problems it can solve, but it's not necessarily needed to solve it. 1. Imagine you use FB. Instead of FB having all of your data, it's stored on the blockchain (encrypted). The problem we have now is if a new social network comes along if you create an account you lose all of your previous data (which may or may not be what you want). This would let you easily bring in any old data that you want. 2. I want to transfer funds/ownership or whatever to someone in X number of years. Instead of going through a lawyer, paying money, I make this a smart contract. 3. Right now most payment processors do not work with adult industries and the ones that do charge exorbitant fees. Blockchain can bring those fees down a lot and let performers keep a lot more of their money. 4. We rely on sites like stackoverflow and what not. If those sites were to go down we would lose all of that information (if it wasn't archived). If that was run on the blockchain as long as a few people were still using the site it could stay running. 5. It's also just a solution to the problem of "send money to someone". That was solved by banks and cash, but blockchain can be another solution that doesn't require an insane amount of infrastructure, employees, call centers, etc to run. Ya, it creates its own set of problems (no chargebacks, still may need escrow services, etc) but maybe those can be run more efficiently than our current system. 6. I think voting is something that could happen on the blockchain. Boom, now anyone can verify the results of the election. People can't as easily scream election fraud.
- HenryTheHorse 8y ago
  > 2. Instead of going through a lawyer, paying money, I make this a smart contract. What is a "smart contract" and how would this contract be aware of legal requirements?
  - Jonovono 8y ago
    Sure, I suppose it couldn't replace every payment like this from needing to go through a lawyer. I suppose if you wanted to send 10 billion over seas to someone in 20 years, you might want to seek some legal input. But say for the simplest case I just wanna set something up that sends some money to my child on his 18th birthday I could use a smart contract like: https://www.reddit.com/r/ethereum/comments/4ww0sr/need_a_contract_developed_to_release_funds_after/d6adul7/ https://www.reddit.com/r/ethereum/comments/4ww0sr/need_a_con....
ajcodez 8y ago
Individuals invested in crypto currency are excited about hard currency outside of the control of government policy. See “End The Fed” by Ron Paul.
bitL 8y ago
Blockchain probabilistically solves Byzantine generals problem. That's pretty awesome result with significant business consequences once people start applying it everywhere where they need to trust somebody in trustless environment. If its devs manage to address scaling issues, it could be one of the backbones of Internet, e-commerce, sharing economy etc. It can be also misused to cement certain societal divisions.
raverbashing 8y ago
> It's distributed trust. That's the problem it solves. As someone else has pointed out, trust is still not distributed. You still have to trust whoever created the rules and wrote the code (from maliciousness and errors). Especially when that distributed trust is paid/earned with CPU cycles. The incentive is not clear besides periodic speculatory bursts.
- kirillseva 8y ago
  > You still have to trust whoever created the rules and wrote the code (from maliciousness and errors). 100% agree with you. Seems like a bunch of people are neglecting this factor or misunderstanding what they are buying into. Blockchain is not 'distributed trust'. In practice, blockchain centralizes trust. You trust your bitcoin wallet to correctly send money to the addresses that you supply, and correctly generate receiving addresses. There is only one thing to audit/trust now - the bitcoin protocol and its implementation - instead of studying how modern banking and legal systems work. You trust one thing instead of trusting dozens of middlemen. While this sounds like a non-issue to those who live in "first world" countries like USA and only transact internally, it is a big deal for international transactions and some of the less developed economies.
  - raverbashing 8y ago
    You still have to trust who's getting money into and out of the system. And they're usually related to banks and legal systems. Most fraud doesn't happen "behind the counter of the bank", but before the money gets there.
dsco 8y ago
I think you're doing blockchain and human ingenuity a disservice by framing the question that way. Many corporations haven't revolved around "solving a problem", but instead making existing solutions more efficient. There were people letting out apartments before AirBnb, and there were taxi cars before Uber - yet we feel that these companies are making our lives easier. Also your question is very much centered around your own world view. What about the Venezuelans who are mining bitcoin becauause theyir own currency is at an all time high inflation rate? Isn't that example enough to at least partially answer your question about how blockchain addresses societal problems? https://www.economist.com/the-economist-explains/2018/04/03/why-are-venezuelans-mining-so-much-bitcoin https://www.economist.com/the-economist-explains/2018/04/03/...
- endlessvoid94 8y ago
  Sure. Bitcoin in Venezuela is solving the problem of their existing currency imploding. Anything that performs a function inefficiently can be a problem waiting to be solved. What I’m asking for is a concrete example of a societal problem (something inefficient, costly, painful, or impossible) that blockchain addresses.
  - vntok 8y ago
    Any industry or operations where intermediaries are needed becauses of a lack of trust between first parties can be desintermediated by a distributed trust network: - Art transactions: registry of origin and property transfers for any object (with authenticated certificate), currently done by lawyers & auction houses (costly, inefficient, painful, near-impossible in some cases) - International shipping: INCOTERMS, currently handled through various specialized intermediaries (costly, inefficient, painful) - Registry of operations over the life of a company (creation/address change/acquisitions/foreclosure), currently done by national commerce courts & accredited local newspapers (costly, inefficient, painful) - Wills: self-authentication of one's will preventing repudiation attempts by third parties, currently done by lawyers and witnesses (costly, inefficient, painful) - Escrow accounts for service providers (ex freelancers) through multisig wallets (inefficient)
leppr 8y ago
Actually, "Distributed trust", if the distribution is wide enough, enables "Trustless transfer of value and information". For me that's a clearer way to think about its potential. Number one problem it solves is obviously money. With an algorithmic stabilization mechanism, you can now have a fair and unmanipulated currency. (Basecoin, MakerDAO, Havven, ...) From there, you can have programmatic incentivization. This allows you to solve a huge variety of problems that the internet only began to solve. For instance : You can now scale privacy networks like Tor that, in its current state, requires benevolent node operators (of which there are too few), and thus take private communications to the mainstream. (Orchid, Mainframe, ...) In a similar vein, you can make mesh networks like Firebase actually global by incentivizing the node operators. Bye bye ISP monopolies. (Open garden, Rightmesh, ...) If you add an identity system (say your government supplies its citizens with a blockchain ID), technologies such as zero-knowledge proofs could allow you to vote on various issues from your home, anonymously and un-censorably. Hello Democracy. (Sovrin, ...) And if you really want to make your imagination run wild, checkout projects like nCent or Fetch.ai, which propose visions that totally redefine how society, as a network of humans, could function.
maxerickson 8y ago
The whole reason Bitcoin uses a hilarious amount of energy is that it barely uses trust (you have to trust the core maintainers and big miners not to screw themselves...). Distributed trust is the little cash box by a vegetable stand on the side of the road.
jancsika 8y ago
I'm not sure you've framed the problem and solution correctly, but here is one obvious societal problem solved by Bitcoin: How does Scihub receive funding to support the service it provides? If you tried to fund it using Paypal, Visa/Mastercard, etc., it's quite likely that those payment systems would have already blocked the payments from reaching the service providers. Because it is substantially more difficult to prevent Bitcoin transactions from being added to the blockchain, you can move "payment system" further down the list of "things to attack." Now you've got DNS and some others at the bottom of the list. Furthermore, Bitcoins can be used to pay directly for things like VPS and other tech. I see over 92 Btc received at the address that pops up on Scihub's website, so this is a pretty big deal. (over half a million $ at today's going rate.) So whatever the downfall of Scihub will be, it is very unlikely to be due to an attack (even a coordinated one) against the Bitcoin payment system. That is the most obvious extant application of blockchain technology that provides a benefit to society: * mostly publicly funded research locked away in proprietary databases * illicit public database digitally publishing that publicly funded research * Bitcoin used to pay to run the service that makes the public research available to the public I don't think that is at all worth all the hype, energy, and money being thrown at blockchain technology. Nevertheless it is a real answer to a real question.
- endlessvoid94 8y ago
  This is an excellent example. Thank you!
- krrrh 8y ago
  It’s an interesting debate whether facilitating illegal (but society-enabling and productive) projects like sci-hub and the drug parts of silkroad will have been worth facilitating illegal (but society-harming) projects such as ransomware, assassination, money laundering, etc. People will disagree about what goes in the categories of illegal-good and illegal-bad.
CobrastanJorji 8y ago
> I would love to know which societal problems can be reduced to a distributed trust problem. Election fraud.
- xmly 8y ago
  How? Blockchain can not verify the truth of the input unless it generates the data by itself.
deegles 8y ago
Ok, well now the question becomes “what problems can only be solved with distributed trust?” I think most people don’t trust most (other) people, so few practical applications will arise.
dfox 8y ago
The problem that blockchain solves is trusted timestamping and in that realm exactly same mechanism was used for a long time before it was called that. Various proof-of-something mechanisms layered on top of that solve the "distributed" part of the problem with varying degrees of trust and efficiency.
siavosh 8y ago
I’ve been trying to answer this question for myself for a few months now. Reading the different VC, academic, and tech’s writings, I’ve come up with a longer list than I thought—some more compelling than others. One of them that I find really interesting is the ability of people to create these autonomous organizations. An entity separate from governments or existing forms of business with programmable incentives that are highly durable. They can exist as long as there’s one node still running somewhere in the world. As for its applications besides being potential investment vehicles, I’ve been curious if they provide the missing implementation piece for grander visions of old alternative economic theories of coordination and ownership like worker coops or some topics in the works of Posner & Weyl (Radical Markets).
rushabh 8y ago
The problems of trust that blockchain aims to solve are currently solved by the banks, the state and legal systems. Our society is built on this enormous system of trust that is backed by hard power (threat to hardship, violence and coercion) and if these systems collapse, then blockchains will suddenly be extremely valuable. Blockchains in theory are much more efficient and than governments, so this is what people are betting on, without putting it in so many words. If you think of it, governance is one the biggest monopolies out there and some competition might not be a bad idea for people with large amount of assets.
optimuspaul 8y ago
> It's distributed trust. That's the problem it solves I don't know that to be true exactly. I don't think that distributed trust is a problem really. I also don't think that blockchain itself actually solves for it. From what I can tell, and I may be naive here, with bitcoin for example two people enter into an agreement and a transaction is made and I guess the blockchain agrees to it and commits it to the chain through magic (hashing). But the trust is put in the wrong place I think, should the network have trusted the transaction was correct? I suppose bitcoin has keys that attempt to ensure ownership of the coins, but I don't think that is a blockchain thing precisely. I'm just rambling... I'd like to hear more about why you think blockchains solve for distributed trust.. also why is distributed trust a problem to begin with.
blotter_paper 8y ago
>> I would love to know which societal problems can be reduced to a distributed trust problem. That would convince me that I'm wrong about blockchain technology. I feel like Namecoin, the first Bitcoin fork, is ready to replace our current DNS system. The transaction fee for registering domains is comparable to current prices, and it gets us out of this horrible situation where we trust companies and governments not to abuse their power and sign new certificates (this is not just a theoretical issue). The problem of associating signing keys with domains is about as basic as you can get with distributed trust systems. Are you unconvinced by this use case?
- meh2frdf 8y ago
  So what would that transition look like, how would you phase the roll out? Practically how would this work and would the result be worth the effort to each individual involved or would it be a utopian ideal for ‘the greater good’?
  - blotter_paper 8y ago
    Firefox and Chrome extensions that resolve .bit domains already exist, the relevant companies just need to audit them or write their own solutions and then bake them into their browsers. Nowadays, most users don't even know when their browser updates. Once every major browser resolves .bit addresses, the battle over secure DNS will be practically won. Hold-outs are okay, I feel no need to force people to use more secure systems. The result would allow us to avoid situations arising from incompetent or malicious signing authorities, like DigiCert Sdn Bhd or Diginator. The problems addressed are not delusional dystopian fantasies, but rather the security of the internet. Malicious signing happens, just read the news. All non-malicious entities using https should be overjoyed by the availability of a more secure system. The only problem I see for adoption is network effects.
koonsolo 8y ago
What problem did email solve? 1. I can send a letter to anyone, because anyone has an address. Not everyone has an email address. Plus I can add small physical things, and it's more personal with handwriting and a little perfume ;). 2. If I need quick communication, I just call them. A lot of arguments that are anti-blockchain and anti-cryptocurrency (based on other tech besides blockchain) can be used in the same way with email. I can give you pretty convincing arguments why email will fail because we already have traditional snail mail (which can do a lot more), and phone (which is faster and more direct). Fact is that cryptocurrencies, smart contracts and other blockchain applications live 100% on the internet, which means it's faster, cheaper, simpler, global (= not tied to countries and specific companies)
- marklgr 8y ago
  Emails are cheap, quick and asynchronous (contrary to phone), there's a log of the conversation which can be forwarded if need be, and you can attach data to it (document, video etc.). You can sort your mailbox according to your needs, which gains time and save space compared to, say, hanging folders.
  - samat 8y ago
    Should note that email got all that nice features long after it was invented.
    - wernsey 8y ago
      Well, email was immediately useful, being like normal mail, only better.
      - koonsolo 8y ago
        Everyone had an address, almost everyone had a phone, almost nobody had an email address. Not very useful. How did you send pictures over email? I know what you are thinking, but no, you didn't take digital pictures. If you wanted to send one of your pictures over email, you needed to have an expensive scanner. And if you did, the pixel quality would be terrible. Not very useful. Technologies like email need things around it to evolve, both technical and social. And the same is true for blockchain and cryptocurrencies. I'm not claiming that either of them are guaranteed to be successful, but I'm claiming that a lot of arguments against it don't make much sense. Because those same arguments could just as easily be applied to email.
asdf_asdf_889 8y ago
If blockchain (not Bitcoin necessarily) adds "cheaper" to any of its use cases then it's just as legitimate as most Silicon Valley startups. Uber is cheaper taxis. AirBnB is cheaper hotel rooms. Are these ponzi schemes? Maybe, but they create jobs and benefit the consumer at the expense of entrenched institutional players, which I would say is a good thing. Payments is a huge one. Bitcoin didn't solve it because it's slow. There's a new generation of chains (mostly PoS, not PoW) that may solve it. Maybe it's gen 4 or 5. Eventually the technology will catch up. What about PayPal that's trustless? Millions (billions?) of people rely on PayPal to take payments and there are plenty of stories where those people have lost their money without recourse. An on-chain PayPal would be game changing and a lot more fair than the alternatives. What about voting that can't be tampered with? Yeah, that's not game changing. /s Blockchain is a promising but immature technology. Like all technologies when they start. The tech world, despite all of its benefits, is doing a fantastic (in a bad way) job of consolidating power towards the top. Time and time again we see that there are really no benevolent dictators (remember when everyone trusted Google and Facebook?). Blockchain has the potential to balance that out. What I really like about blockchain is it's going to progress regardless of what you think about. It simply does not care that you don't think it's a good idea. It doesn't care if it threatens banks or governments. It progresses by everyone acting in their own self interest. But the end result has the potential to deconsolidate power. When has that ever been the case in human history? Most of the people I encounter who don't like crypto are the ones who are angry that they didn't buy BTC back in the day. Well, guess what? You didn't miss anything. Things are just getting started. Do your research and find something you think may be promising (or enable promising tech) and invest in it.

jhoechtl 8y ago

> Which happens to also be the bedrock of the conventional startup wisdom -- value derived from solving a problem or exploiting an opportunity. It's often generating an artificial need where no need has been before.

baxtr 8y ago

Great points. I’d love to know what Steve would have done with Blockchain (or when). Well...

kirbypineapple 8y ago

I would argue there's value beyond distributed trust: smart contracts (though you could argue that this is merely an application built upon the concept of distributed trust), the tokenization of physical assets (think real estate, oil and gas exploration/drilling/royalties, etc.), and more generally the ability for money to become a "product". These are all domains that blockchain is enabling, though it remains to be seen whether these problems/opportunities are solved via blockchain or not.

JumpCrisscross 8y ago
> These are all domains that blockchain is enabling It is reasonable to be sceptical when someone proposes a new domain that doesn’t solve any problems.
madeofpalk 8y ago
Again, what problems are being solved? Real estate, oil and gas exploration/drilling/royalties are all things that have existed without problem for many decades. Saying "real estate, but with blockchain" doesn't actually say what problem you're solving.
- elyobo 8y ago
  I think I'd have to argue that real estate has existed for much, much longer than a few decades :D I'm a pretty big sceptic on all of this crypto BS, but the ownership of real estate assets seems like a pretty archaic system of not easily inspected pieces of paper. Having a public, provable system for recording this information (and possibly other related info, e.g. liens) seems like it would be of some use. The system we have works, but it could work better.
  - angryasian 8y ago
    I thought real estate was already in the public domain.
  - w4 8y ago
    > the ownership of real estate assets seems like a pretty archaic system of not easily inspected pieces of paper. Having a public, provable system for recording this information (and possibly other related info, e.g. liens) seems like it would be of some use. The system we have works, but it could work better. This already exists in many states. It's a political problem (whether or not to use of tax money to pay for the digitization of old records), not a technical one: https://www.uslandrecords.com/uslr/UslrApp/index.jsp https://www.uslandrecords.com/uslr/UslrApp/index.jsp Related information, like liens, is available via those public records as well.

slg 8y ago

It is just the next round of the "Uber for X". Little attention is paid specifically to what that technology and business model provide. We end up getting hundreds of startups that use the buzzword to secure funding but quickly flame out when they realize that the advantages don't really matter to their specific market. However that doesn't mean there are not viable "Uber for X" or blockain business ideas out there.

endlessvoid94 8y ago
Totally fair point. It's especially great for the investment world -- especially VC, which only needs one billion-dollar exit to make a return. So this makes sense!
- slg 8y ago
  Which basically sums up my problem with it. It is sad that the primary angle anyone looks at this from is as an investor or even a VC. That results in lots of wasted time, money, and specifically for most blockchain businesses wasted carbon ouput.
  - endlessvoid94 8y ago
    If the only problem is that we've wasted a lot of time, and in the end one company builds one product that changes the world, then maybe it's worth it.
    - slg 8y ago
      The existence of a positive net result is not sufficient justification for a poor, inefficient, or wasteful process that led to that result.
      - workinthehead 8y ago
        It is if you're a utilitarian.

madeofpalk 8y ago

> It's distributed trust. That's the problem it solves. It's incredibly cool technology. That solves a specific problem. That's still not it. "Distributed Trust" isn't a problem, its a trait. What actual problem is solved by distributed trust?

endlessvoid94 8y ago
You're right, I pointed to the solution instead of the problem. I'm still an engineer at heart, it seems! What should I have said instead? Centralization of data? Unreliability of single-points-of-failure?
- deleted 8y ago
  [deleted]
- caust1c 8y ago
  It provides distributed trust for the class of problems wherein you have multiple competitive parties trying to achieve consensus on a sequence of transactions (or contracts, if you will). I believe a massive number of social and societal problems are solved by distributed trust models in the same ways free market economies generally lead to more equality and democracy leads to more freedoms.
  - endlessvoid94 8y ago
    Can you give me an example?
    - mhluongo 8y ago
      Anything involving a clearing house.
      - madeofpalk 8y ago
        What about all the existing clearing houses we have today? How have they managed to survive without Blockchain? Again. What specific problem does Blockchain solve?

pjc50 8y ago

The only one I've seen that might go somewhere is filecoin. However, I think people are underestimating how the market for ""enterprise private blockchain"" will play out. The same organisations that spent money on X509 PKI non-solutions will pay millions for blockchain. At this level, nobody likes talking about the problem solved. It's solutions all the way, especially enterprise solutions.

brian-armstrong 8y ago
Great. Let’s all get rich writing a bunch of do-nothing software that will get thrown out in 5 years.
- deleted 8y ago
  [deleted]

miguelrochefort 8y ago

Distributed trust is the solution to the world's most important meta-problem: coordination.

deleted 8y ago

[deleted]

al_ 8y ago

Money

Jonovono 8y ago

I don't think it's too hard to find potential problems it can solve, but it's not necessarily needed to solve it. 1. Imagine you use FB. Instead of FB having all of your data, it's stored on the blockchain (encrypted). The problem we have now is if a new social network comes along if you create an account you lose all of your previous data (which may or may not be what you want). This would let you easily bring in any old data that you want. 2. I want to transfer funds/ownership or whatever to someone in X number of years. Instead of going through a lawyer, paying money, I make this a smart contract. 3. Right now most payment processors do not work with adult industries and the ones that do charge exorbitant fees. Blockchain can bring those fees down a lot and let performers keep a lot more of their money. 4. We rely on sites like stackoverflow and what not. If those sites were to go down we would lose all of that information (if it wasn't archived). If that was run on the blockchain as long as a few people were still using the site it could stay running. 5. It's also just a solution to the problem of "send money to someone". That was solved by banks and cash, but blockchain can be another solution that doesn't require an insane amount of infrastructure, employees, call centers, etc to run. Ya, it creates its own set of problems (no chargebacks, still may need escrow services, etc) but maybe those can be run more efficiently than our current system. 6. I think voting is something that could happen on the blockchain. Boom, now anyone can verify the results of the election. People can't as easily scream election fraud.

HenryTheHorse 8y ago
> 2. Instead of going through a lawyer, paying money, I make this a smart contract. What is a "smart contract" and how would this contract be aware of legal requirements?
- Jonovono 8y ago
  Sure, I suppose it couldn't replace every payment like this from needing to go through a lawyer. I suppose if you wanted to send 10 billion over seas to someone in 20 years, you might want to seek some legal input. But say for the simplest case I just wanna set something up that sends some money to my child on his 18th birthday I could use a smart contract like: https://www.reddit.com/r/ethereum/comments/4ww0sr/need_a_contract_developed_to_release_funds_after/d6adul7/ https://www.reddit.com/r/ethereum/comments/4ww0sr/need_a_con....

ajcodez 8y ago

Individuals invested in crypto currency are excited about hard currency outside of the control of government policy. See “End The Fed” by Ron Paul.

bitL 8y ago

Blockchain probabilistically solves Byzantine generals problem. That's pretty awesome result with significant business consequences once people start applying it everywhere where they need to trust somebody in trustless environment. If its devs manage to address scaling issues, it could be one of the backbones of Internet, e-commerce, sharing economy etc. It can be also misused to cement certain societal divisions.

raverbashing 8y ago

> It's distributed trust. That's the problem it solves. As someone else has pointed out, trust is still not distributed. You still have to trust whoever created the rules and wrote the code (from maliciousness and errors). Especially when that distributed trust is paid/earned with CPU cycles. The incentive is not clear besides periodic speculatory bursts.

kirillseva 8y ago
> You still have to trust whoever created the rules and wrote the code (from maliciousness and errors). 100% agree with you. Seems like a bunch of people are neglecting this factor or misunderstanding what they are buying into. Blockchain is not 'distributed trust'. In practice, blockchain centralizes trust. You trust your bitcoin wallet to correctly send money to the addresses that you supply, and correctly generate receiving addresses. There is only one thing to audit/trust now - the bitcoin protocol and its implementation - instead of studying how modern banking and legal systems work. You trust one thing instead of trusting dozens of middlemen. While this sounds like a non-issue to those who live in "first world" countries like USA and only transact internally, it is a big deal for international transactions and some of the less developed economies.
- raverbashing 8y ago
  You still have to trust who's getting money into and out of the system. And they're usually related to banks and legal systems. Most fraud doesn't happen "behind the counter of the bank", but before the money gets there.

dsco 8y ago

I think you're doing blockchain and human ingenuity a disservice by framing the question that way. Many corporations haven't revolved around "solving a problem", but instead making existing solutions more efficient. There were people letting out apartments before AirBnb, and there were taxi cars before Uber - yet we feel that these companies are making our lives easier. Also your question is very much centered around your own world view. What about the Venezuelans who are mining bitcoin becauause theyir own currency is at an all time high inflation rate? Isn't that example enough to at least partially answer your question about how blockchain addresses societal problems? https://www.economist.com/the-economist-explains/2018/04/03/why-are-venezuelans-mining-so-much-bitcoin https://www.economist.com/the-economist-explains/2018/04/03/...

endlessvoid94 8y ago
Sure. Bitcoin in Venezuela is solving the problem of their existing currency imploding. Anything that performs a function inefficiently can be a problem waiting to be solved. What I’m asking for is a concrete example of a societal problem (something inefficient, costly, painful, or impossible) that blockchain addresses.
- vntok 8y ago
  Any industry or operations where intermediaries are needed becauses of a lack of trust between first parties can be desintermediated by a distributed trust network: - Art transactions: registry of origin and property transfers for any object (with authenticated certificate), currently done by lawyers & auction houses (costly, inefficient, painful, near-impossible in some cases) - International shipping: INCOTERMS, currently handled through various specialized intermediaries (costly, inefficient, painful) - Registry of operations over the life of a company (creation/address change/acquisitions/foreclosure), currently done by national commerce courts & accredited local newspapers (costly, inefficient, painful) - Wills: self-authentication of one's will preventing repudiation attempts by third parties, currently done by lawyers and witnesses (costly, inefficient, painful) - Escrow accounts for service providers (ex freelancers) through multisig wallets (inefficient)

leppr 8y ago

Actually, "Distributed trust", if the distribution is wide enough, enables "Trustless transfer of value and information". For me that's a clearer way to think about its potential. Number one problem it solves is obviously money. With an algorithmic stabilization mechanism, you can now have a fair and unmanipulated currency. (Basecoin, MakerDAO, Havven, ...) From there, you can have programmatic incentivization. This allows you to solve a huge variety of problems that the internet only began to solve. For instance : You can now scale privacy networks like Tor that, in its current state, requires benevolent node operators (of which there are too few), and thus take private communications to the mainstream. (Orchid, Mainframe, ...) In a similar vein, you can make mesh networks like Firebase actually global by incentivizing the node operators. Bye bye ISP monopolies. (Open garden, Rightmesh, ...) If you add an identity system (say your government supplies its citizens with a blockchain ID), technologies such as zero-knowledge proofs could allow you to vote on various issues from your home, anonymously and un-censorably. Hello Democracy. (Sovrin, ...) And if you really want to make your imagination run wild, checkout projects like nCent or Fetch.ai, which propose visions that totally redefine how society, as a network of humans, could function.

maxerickson 8y ago

The whole reason Bitcoin uses a hilarious amount of energy is that it barely uses trust (you have to trust the core maintainers and big miners not to screw themselves...). Distributed trust is the little cash box by a vegetable stand on the side of the road.

jancsika 8y ago

I'm not sure you've framed the problem and solution correctly, but here is one obvious societal problem solved by Bitcoin: How does Scihub receive funding to support the service it provides? If you tried to fund it using Paypal, Visa/Mastercard, etc., it's quite likely that those payment systems would have already blocked the payments from reaching the service providers. Because it is substantially more difficult to prevent Bitcoin transactions from being added to the blockchain, you can move "payment system" further down the list of "things to attack." Now you've got DNS and some others at the bottom of the list. Furthermore, Bitcoins can be used to pay directly for things like VPS and other tech. I see over 92 Btc received at the address that pops up on Scihub's website, so this is a pretty big deal. (over half a million $ at today's going rate.) So whatever the downfall of Scihub will be, it is very unlikely to be due to an attack (even a coordinated one) against the Bitcoin payment system. That is the most obvious extant application of blockchain technology that provides a benefit to society: * mostly publicly funded research locked away in proprietary databases * illicit public database digitally publishing that publicly funded research * Bitcoin used to pay to run the service that makes the public research available to the public I don't think that is at all worth all the hype, energy, and money being thrown at blockchain technology. Nevertheless it is a real answer to a real question.

endlessvoid94 8y ago
This is an excellent example. Thank you!
krrrh 8y ago
It’s an interesting debate whether facilitating illegal (but society-enabling and productive) projects like sci-hub and the drug parts of silkroad will have been worth facilitating illegal (but society-harming) projects such as ransomware, assassination, money laundering, etc. People will disagree about what goes in the categories of illegal-good and illegal-bad.

CobrastanJorji 8y ago

> I would love to know which societal problems can be reduced to a distributed trust problem. Election fraud.

xmly 8y ago
How? Blockchain can not verify the truth of the input unless it generates the data by itself.

deegles 8y ago

Ok, well now the question becomes “what problems can only be solved with distributed trust?” I think most people don’t trust most (other) people, so few practical applications will arise.

dfox 8y ago

The problem that blockchain solves is trusted timestamping and in that realm exactly same mechanism was used for a long time before it was called that. Various proof-of-something mechanisms layered on top of that solve the "distributed" part of the problem with varying degrees of trust and efficiency.

siavosh 8y ago

I’ve been trying to answer this question for myself for a few months now. Reading the different VC, academic, and tech’s writings, I’ve come up with a longer list than I thought—some more compelling than others. One of them that I find really interesting is the ability of people to create these autonomous organizations. An entity separate from governments or existing forms of business with programmable incentives that are highly durable. They can exist as long as there’s one node still running somewhere in the world. As for its applications besides being potential investment vehicles, I’ve been curious if they provide the missing implementation piece for grander visions of old alternative economic theories of coordination and ownership like worker coops or some topics in the works of Posner & Weyl (Radical Markets).

rushabh 8y ago

The problems of trust that blockchain aims to solve are currently solved by the banks, the state and legal systems. Our society is built on this enormous system of trust that is backed by hard power (threat to hardship, violence and coercion) and if these systems collapse, then blockchains will suddenly be extremely valuable. Blockchains in theory are much more efficient and than governments, so this is what people are betting on, without putting it in so many words. If you think of it, governance is one the biggest monopolies out there and some competition might not be a bad idea for people with large amount of assets.

optimuspaul 8y ago

> It's distributed trust. That's the problem it solves I don't know that to be true exactly. I don't think that distributed trust is a problem really. I also don't think that blockchain itself actually solves for it. From what I can tell, and I may be naive here, with bitcoin for example two people enter into an agreement and a transaction is made and I guess the blockchain agrees to it and commits it to the chain through magic (hashing). But the trust is put in the wrong place I think, should the network have trusted the transaction was correct? I suppose bitcoin has keys that attempt to ensure ownership of the coins, but I don't think that is a blockchain thing precisely. I'm just rambling... I'd like to hear more about why you think blockchains solve for distributed trust.. also why is distributed trust a problem to begin with.

blotter_paper 8y ago

>> I would love to know which societal problems can be reduced to a distributed trust problem. That would convince me that I'm wrong about blockchain technology. I feel like Namecoin, the first Bitcoin fork, is ready to replace our current DNS system. The transaction fee for registering domains is comparable to current prices, and it gets us out of this horrible situation where we trust companies and governments not to abuse their power and sign new certificates (this is not just a theoretical issue). The problem of associating signing keys with domains is about as basic as you can get with distributed trust systems. Are you unconvinced by this use case?

meh2frdf 8y ago
So what would that transition look like, how would you phase the roll out? Practically how would this work and would the result be worth the effort to each individual involved or would it be a utopian ideal for ‘the greater good’?
- blotter_paper 8y ago
  Firefox and Chrome extensions that resolve .bit domains already exist, the relevant companies just need to audit them or write their own solutions and then bake them into their browsers. Nowadays, most users don't even know when their browser updates. Once every major browser resolves .bit addresses, the battle over secure DNS will be practically won. Hold-outs are okay, I feel no need to force people to use more secure systems. The result would allow us to avoid situations arising from incompetent or malicious signing authorities, like DigiCert Sdn Bhd or Diginator. The problems addressed are not delusional dystopian fantasies, but rather the security of the internet. Malicious signing happens, just read the news. All non-malicious entities using https should be overjoyed by the availability of a more secure system. The only problem I see for adoption is network effects.

koonsolo 8y ago

What problem did email solve? 1. I can send a letter to anyone, because anyone has an address. Not everyone has an email address. Plus I can add small physical things, and it's more personal with handwriting and a little perfume ;). 2. If I need quick communication, I just call them. A lot of arguments that are anti-blockchain and anti-cryptocurrency (based on other tech besides blockchain) can be used in the same way with email. I can give you pretty convincing arguments why email will fail because we already have traditional snail mail (which can do a lot more), and phone (which is faster and more direct). Fact is that cryptocurrencies, smart contracts and other blockchain applications live 100% on the internet, which means it's faster, cheaper, simpler, global (= not tied to countries and specific companies)

marklgr 8y ago
Emails are cheap, quick and asynchronous (contrary to phone), there's a log of the conversation which can be forwarded if need be, and you can attach data to it (document, video etc.). You can sort your mailbox according to your needs, which gains time and save space compared to, say, hanging folders.
- samat 8y ago
  Should note that email got all that nice features long after it was invented.
  - wernsey 8y ago
    Well, email was immediately useful, being like normal mail, only better.
    - koonsolo 8y ago
      Everyone had an address, almost everyone had a phone, almost nobody had an email address. Not very useful. How did you send pictures over email? I know what you are thinking, but no, you didn't take digital pictures. If you wanted to send one of your pictures over email, you needed to have an expensive scanner. And if you did, the pixel quality would be terrible. Not very useful. Technologies like email need things around it to evolve, both technical and social. And the same is true for blockchain and cryptocurrencies. I'm not claiming that either of them are guaranteed to be successful, but I'm claiming that a lot of arguments against it don't make much sense. Because those same arguments could just as easily be applied to email.

asdf_asdf_889 8y ago

If blockchain (not Bitcoin necessarily) adds "cheaper" to any of its use cases then it's just as legitimate as most Silicon Valley startups. Uber is cheaper taxis. AirBnB is cheaper hotel rooms. Are these ponzi schemes? Maybe, but they create jobs and benefit the consumer at the expense of entrenched institutional players, which I would say is a good thing. Payments is a huge one. Bitcoin didn't solve it because it's slow. There's a new generation of chains (mostly PoS, not PoW) that may solve it. Maybe it's gen 4 or 5. Eventually the technology will catch up. What about PayPal that's trustless? Millions (billions?) of people rely on PayPal to take payments and there are plenty of stories where those people have lost their money without recourse. An on-chain PayPal would be game changing and a lot more fair than the alternatives. What about voting that can't be tampered with? Yeah, that's not game changing. /s Blockchain is a promising but immature technology. Like all technologies when they start. The tech world, despite all of its benefits, is doing a fantastic (in a bad way) job of consolidating power towards the top. Time and time again we see that there are really no benevolent dictators (remember when everyone trusted Google and Facebook?). Blockchain has the potential to balance that out. What I really like about blockchain is it's going to progress regardless of what you think about. It simply does not care that you don't think it's a good idea. It doesn't care if it threatens banks or governments. It progresses by everyone acting in their own self interest. But the end result has the potential to deconsolidate power. When has that ever been the case in human history? Most of the people I encounter who don't like crypto are the ones who are angry that they didn't buy BTC back in the day. Well, guess what? You didn't miss anything. Things are just getting started. Do your research and find something you think may be promising (or enable promising tech) and invest in it.