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The Blockchain Bubble Will Pop, What Next?

• 1996 8y ago
  People who create and sell puff of smoke will make some money, but may not last long. The others may be side victims when they go down. But if you can not see the potential of trustless censorship resistant value transfer and smart contract among other things, you will also be a victim. There is money to be made, without any need for shenanigans.
• deleted 8y ago
  [deleted]
• DennisP 8y ago
  I was about to make a snarky comment about sitting next to one idiot on an airplane and coming to a conclusion about a whole field. But then he sort of covered it in the last paragraph: > although the dot-com crash walked back valuations and chastened investors, a mature climate of internet businesses emerged in its wake. Today, technology firms account for 7 of the 10 largest companies in the world. The market didn’t overestimate the Internet, only the current crop of entrepreneurs.
  • aaron695 8y ago
    Yes, it's like the mostly urban legend about tulips, currently the tulip industry is worth billions. All industries will pop (I predict there will be another recession!), the only thing of value is knowing when and by how much.
    • sudoscript 8y ago
      But what about the Big Pop?
    • skgoa 8y ago
      Thing is, there was not a single speculative mania in the history of humanity that didn't crash and burn. Some of those new industries eventually outgrew expectations, but universally they achieved this long after the original speculators lost most of their investments.
• oysterfish 8y ago
  The blockchain & cryptocurrency industry is becoming too big to say the _whole thing_ will pop. If you're telling me AI + Blockchain starts-ups with windbag CEOs are a bubble that will pop, then that premise may have legs. Will that drag the _whole thing_ down with it? Most likely not. It's like saying Groupon were every to sink as a company, all coupons everywhere would vanish & lose all their value, and people would lose their money. A business managed poorly is not a reflection of the quality of the raw materials they were intending to work with, or of the rest of the industry for that matter.
• tCfD 8y ago
  The problem with blockchain is actually rooted in hazy, unexamined assumptions about the viability of 'decentralization' that are are used as if they are conclusions rather than premises for justifying the technology's utility. I think ultimately the conversation will turn to discuss the cost premium entailed by a decentralized coordination problem solving system of any kind, and whether it centralization is really a problem that needs such an redundantly-expensive solution in the first place. Also whether decentralization is really sustainable indefinitely or merely a transitional phase from one centralized regime to another one.
  • pembrook 8y ago
    People have an abstract distaste for "trusted intermediaries" because they think the intermediary just sits in between you and somebody else while collecting fees for adding no value. In many cases the fees absolutely need to be reduced through market competition. However the root of this thinking is wrong. Intermediaries do add value. Humans are inherently un-trustworthy animals, and you pay your fees to buy the valuable peace of mind the intermediary provides. So we know trust costs money. The question is whether the cost of decentralized cryptographic trust will ever be lower than centralized trust. The Rube Goldberg machine that is bitcoin has proved the answer at least for the foreseeable future (the next few decades) is...no.
    • fbonetti 8y ago
      Centralized intermediaries are only trustworthy as long as they’re incentivized to be truthful. If another party comes along and offers them a bag of cash, the intermediary might choose to betray its clients’ trust. Decentralized miners, on the other hand, are highly incentived to tell the truth, because it’s the only way they can collect fees. You’re right that you have to pay for the truth either way; the difference is that the decentralized approach gives you stronger guarantees.
    • akudha 8y ago
      Yes, intermediaries add value but in many cases they get paid disproportionately, define rules and regulations that range from one sided at best and truly evil at worst. And this has been going on for a long time and people are understandably irritated and looking for alternatives. If the system wasn't so unfair, we probably wouldn't need to look for alternatives. Fixing the current systems is impossible at this point as the intermediaries have grown too big and too strong, so people are looking for alternatives.
• m-i-l 8y ago
  I used to think that the blockchain bubble was like the dotcom bubble, in that the core technology was actually genuinely transformative, so that even after the bubble burst and all the over-valued companies went bust, the technology would remain and continue change our lives. However, I must admit I'm starting to have my doubts now. It was 10 years in to the dotcom era that the dotcom bubble burst, and by that time we'd had massive maturation of the technology and the start of mass adoption. However, we're approaching 10 years since the start of the blockchain era, and there are signs that the bubble is bursting already, but in terms of progress it is nowhere near where the dotcom era had got to by this stage, and there's not much indication of anything that appears that it will be particularly long lasting or widely adopted. Sure there's niches like settlement systems and security tokens, but not something that a member of the public is going to use on a daily basis like they do with many of the internet based companies.
  • coralreef 8y ago
    A lot of the utility from blockchain doesn't come from being able to do "new" things. They come from being able to do old things better: cheaper, more securely, free from the interference of trusted parties / government. It remains to be seen which processes the blockchain will take over. Some are obvious, ie. prediction markets, sports gambling, money remittance. Some are more complex, and will require frameworks to work within trusted parties: ie. tokenizing physical assets or securities that exist outside the blockchain world. Identity management.
    • m-i-l 8y ago
      Maybe not government, maybe just humans in general. Decentralisation, blockchain, smart contracts, cryptocurrency, AI and IoT could really start coming into their own further into the future when we start having more autonomous agents performing those little tasks on our behalf, like a smart fridge ordering more milk and interacting with a drone to ensure payment and delivery without having to bother a human. But I'm not getting the sense that any of the huge amounts of money being invested is going into much other than feeding the crypto ecosystem at the moment. True story: VCs specialising in funding blockchain projects told a dev team "You guys are building a proper business, that's great but it means it won't 100x in a short period, so isn't really what we're after".
• raverbashing 8y ago
  Maybe the real money is coming up with some over the top idea that sounds good on paper. Actually making it work is optional.
• fivedogit 8y ago
  News flash: it already popped. 70‰ from top. ICOs dried up. Blockchain market cap is about $300 billion now. Should the next major tech wave be worth half a Facebook? IMO, yes, and more. Blockchain has already proven 2 major use cases (e-gold and ICOs) and several minor ones (unstoppable casinos, prediction markets). Doubters are in for a bunch of regret.
  • deleted 8y ago
    [deleted]
  • paulpauper 8y ago
    yeah, the market already popped as far as ICOs are concerned. many down 75-95% from highs and have no viable products
    • tluyben2 8y ago
      They deserve that drop. A lot of them were scams and a lot of them were well intentioned but badly executed. That happens with startups in the same way though: many (most?) funded startups go bust. In ICOs this is just far more public record as you can follow their demise publicly. If startups would do that in the same way, no one would be so surprised or shouting scam as much. A lot of startups I did competitor analysis on or who we talked with for acquisition or merger had nothing to do with blockchain but also got millions on vague promises and never delivered while burning through the millions. Some of them actually being obvious scams (easy to point out which ones if you are in my industry). Why would that be different for blockchain projects? Are there statistics to show fiat vc funded startups failures vs ico failures? Kickstarter etc failures vs ico failures? XXX scams vs ico scams?
  • aidanlister 8y ago
    How many people do you know with savings in physical gold? How big do you think the consumer market is for that? The major holders of gold bullion are banks and governments – they are not going to pile in to a pyramid scheme style system where by a small number of early adopters become worth the GDP of a small country.
• divan 8y ago
  I receive a salary in cryptocurrency for quite a long time, and I always try to be as objective and unbiased about articles on the future of blockchain and cryptocurrencies as much as I can. But articles like this truly disappoint me because there is no actual reasoning for such a strong and confident statement in the title. The whole article just says that a single encounter with a not-the-cool-tech-guy confirmed author's suspicions that there is no underground value in blockchain technology. Which is strange to hear from a professor in ML – the last person you would suspect to make such a generalization from the single data point. And that's not to mention that observable "blockchain boom" is, in fact, just trading on the crypto-exchanges boom, which has nothing to do with actual potential and benefits of blockchain and cryptoeconomy, which is itself a field of research even more complicated than ML world.
  • albertgoeswoof 8y ago
    getting your salary paid in crypto currency is nuts. But fair play to you. How do you pay bills? What cryptocurrency do you get? How do you / your employer handle currency fluctuations?
    • vivab0rg 8y ago
      I got my full salary payed in Bitcoin for almost a year when it was worth less than 1000 USD per coin. Only cashed what I needed. I'm very happy now.
    • fastball 8y ago
      Maybe he's getting paid in DAI[0], a decentralized stablecoin? 0: https://makerdao.com/ https://makerdao.com/
    • divan 8y ago
      To be more precise I have a choice of being paid fiat/crypto (it's ETH) in any ratio I choose. So it can be 100%/0%, 50%/50% or 0%/100%. For now I'm using 50%/50%, so I'm not completely out of the "classic" financial system :) But I know people who are.
  • p1necone 8y ago
• rpedela 8y ago
  I think blockchain will end up like PageRank. Both are amazing algorithms with very narrow use cases. And maybe a few companies can generate enormous value with blockchain like Google did with PageRank, but that will be it. That's my prediction.
  • BenoitP 8y ago
    While I agree with you, I would not have chosen PageRank as a comparison. I cannot think of another domain where it made billions, but to me it is a pretty neat way of extracting information inside a graph. It just needs a concept that has transitive properties in order to shine. For web pages, the transitive part is that a high quality page is more likely to mention another high quality page. It uses the indifference one might have about a lower quality page, it uses the author's implicit contract with the reader that he should be showing (and linking to) high quality content. It builds on top of man.millionYears of painstaking content filtering. In a graph, you can run it about any property that has that transitivity. There is a paper running it on citations in physics papers [1], and it can identify some Nobel Prize winners, even if the paper has a low number of citations; the paper just has the important ones. I deeply believe that corporations could greatly benefit from continually asking their employees "who in your coworkers had a positive impact on your work this week?", and running PageRank on top of it. You could have natural leaders emerge out of that. [1] https://arxiv.org/pdf/physics/0604130.pdf https://arxiv.org/pdf/physics/0604130.pdf
    • empath75 8y ago
      > I deeply believe that corporations could greatly benefit from continually asking their employees "who in your coworkers had a positive impact on your work this week?", and running PageRank on top of it. You could have natural leaders emerge out of that. The second it becomes relevant to people’s paychecks, people will start gaming it and it’ll be political bullshit.
    • rpedela 8y ago
      That is precisely why I chose PageRank as a comparison. I think it is one of the most beautiful equations invented in computer science on par with some physics equations. Yes, if you can turn your problem into a graph then you can use PageRank to determine which nodes are more important relative to the others. You can answer questions like which academic paper or website is the best? Who are the influencers in a social network? What is the summary of this article (sentences are nodes)? But the domains and use cases where it is useful is still limited and so far no one has been able to use it to generate billions other than Google. In other words, an algorithm, no matter how amazing, is not a platform.
• cvaidya1986 8y ago
  Experts are right until they are wrong.
  • cycrutchfield 8y ago
    Tautologies are true until they are true.
    • cvaidya1986 8y ago
      The tautology shall set you free.
• bepotts 8y ago
  In all seriousness, what are the advantages Blockchain has over a public SQL database with limited reads and writes that also maintains a public transaction history? Cause when I hear people talk about the problems Blockchains solves (outside of cryptocurrency which is a whole other topic), I don't see what advantages Blockchain has over that. A public SQL database isn't the most "clean" solution, but it'll save everyone a bunch of time and money over the resource intensive blockchain verification process. This idea that centralization is always evil, or that public actors are inherently untrustworthy and we need some mathematical algorithm to verify all interactions between them strikes me as one of those Silicon Valley idiosyncrasies that Silicon Valley haters laugh at.
  • celticninja 8y ago
    The SQL database has to be maintained by someone and with enough political or legal pressure the maintainer can be forced to change it, not so with a blockchain.
    • milkytron 8y ago
      Not as easily.
    • wrs 8y ago
      Instead, with a blockchain such pressure results in a fork of the chain, which in some cases (notably those involving token ledgers) may be even worse.
    • giancarlostoro 8y ago
      You've never heard of a blockchain fork? Where the developers change the blockchain... It's happened before for different reasons.
    • purerandomness 8y ago
      With enough political or legal pressure, you easily deploy a "51% attack" on the chain, and fork it as you like. Just as the NSA runs almost all the Tor exit nodes nowadays, what would stop a government from running the majority of blockchain nodes and gain consensus majority?
• craigc 8y ago
  The biggest problem is that blockchains are inherently not scalable. That is more or less by design, but it limits the types of applications that can run on top of them. I think a more likely outcome is that most types of payment infrastructure and settlement/transaction layers move to blockchains and not actual applications. For example, it’s not too difficult to imagine the stock market switch to tokenized stocks to buy and trade shares of companies. Or perhaps deeds to property in the real estate world could be issued on top of a blockchain. I think the real value is removing intermediaries and allowing people to control their own finances, shares, land, etc where you can cryptographically prove that you own it. Building a decentralized Uber that is slower and more difficult to use does not make much sense to me. I think we will see these things develop. Remember TCP/IP was developed in the 1970s so it took almost twenty years before HTTP came out, and another 5-10 years before people really started using it.
  • arisAlexis 8y ago
    nobody wants to censor Uber. Think bigger. Censorship, transparency etc. Uber and Airbnb are wrong examples, they don't need those kind of things. Now think governments
    • guscost 8y ago
      That’s an interesting perspective to be sure, but let’s back up a bit. Has a blockchain proven that it can run a smaller organization yet? What happened to the DAO after all the hype and scandal? I’m not in the anti-blockchain macro-economics fiat-currency camp or anything, but is it unreasonable to say that this stuff needs a lot more time to develop? There’s no way in hell I’d go along with laws from a blockchain-government backed by SHA256 and ED25519 in 2018, would you?
      • arisAlexis 8y ago
        what do you mean a "blockchain government"? yes I would love all the laws of my country and everything else to be on a transparent unforgeable ledger for sure.
• smsm42 8y ago
  I just have been at OSCON, and they were talking about blockchain all the time, blockchain this, blockchain that, private blockchain, enterprise blockchain, blockchain plus this thing and blockchain on top of that thing. But still I couldn't figure out or find any explanation how anything of it would be useful for the member of the public, and indeed how it can work sustainably without the hype that would drive the cost sky high and makes people invest into mining hoping to cash out one day. And all hype ends eventually...
  • mortdeus 8y ago
    blockchain is useful outside the context of cryptocurrencies because it represents a verifiable chain of custody. For example, imagine how blockchain could solve the problem of a patient who has control of their health records. In the current system we have an issue where anytime you move somewhere away from your doctor, the new doctor you see has to retrieve records directly from your doctor because there is no way to verify that the records you would present to the new doctor are the most up to date records. If your doctor gave you your records from before your last visit, and say during your last visit he wrote into your files that you no longer needed opiates for pain management, but you are addicted and want the pills still. Well if you have outdated records and take them to a new doctor you might be able to still receive the drugs, despite the fact that the doctor that initially diagnosed you took you off them. This is why most states require by law that they obtain records directly from the source. To avoid being able to scam the system. Now imagine what happens if your doctor dies, his practice is shut down for whatever reason, or for some other reason your records become virtually unobtainable. What do you do then? Go through the entire process of trying to get a doctor to re-diagnose you for an ailment that has already seen years of therapy and might no longer be as obviously in need of say pain therapy? It's a problem. And something that blockchain could fix better than just having some federally regulated centralized medical record repository that in it's very nature allows the government or any bad actor a straightforward method to hack into and invade your privacy. Blockchain allows you to maintain personal and private control of your records, while allowing a doctor to consult the blockchain network of doctors, to verify that the chain of custody of your medical history is up to date.
    • 8y ago
• albertgoeswoof 8y ago
  The bit I would like to know, is how the CEO of this company is making lots of money? I mean who is seriously paying for “AI on the blockchain”? Sure if it’s possible to run some of the most computationally intensive processing we know of on the one of the slowest platform architectures available, I would certainly pay for that. Denying the laws of thermodynamics would be one hell of a breakthrough though.
  • rspeer 8y ago
    I'm sure the CEO in question is spending money that came from investors, not from customers.
  • robjan 8y ago
    The usual way is to release a white paper about your hypothetical product and then create a token and launch an ICO.
• reilly3000 8y ago
  Anonymous blockchain sounds like fertile soil for the emergence of simple, autonomous AI. Howard Bloom's cosmology centers around Replication Strategy and Iteration. The medium of blockchain provides convenient and abundant opportunity for both. Imagine a smart contract that could sort of recursively fuel itself with prediction market earnings, and clone itself programmatically. A relatively simple 'mother' script could run generate contracts that have the ability to make predictions and bet a small sum towards that prediction. Outcomes and learnings get shared back a sidechain that is used to help generate more effective offspring. Like a live evolutionary/genetic algorithm playing with real money. Then, if you give those contracts a sort of failover mechanism to spawn a new mother script if communication with the original is lost, you could have a petri dish for a form of digital life beyond simulation. I realize I probably may have just made an ass of myself as the article suggested is happening. That said, it seems within reason to be able to implement something along those lines given enough time and resources. The article seems to suggest that blockchain has had minimal impact, and its inevitable financial crash and inability to scale to facilitate mass adoption of digital currency makes it worthy of ridicule. I posit that general immutability and autonomous financial entities will come to define our times- and that any assumption that blockchain isn't significant because it doesn't replace your debit card in 2018 misses the bigger picture entirely.
  • gibsons 8y ago
    You get it man. Autonomous agents that want to exchange value for services or with each other would be better off using a blockchain than traditional fiat.
  • rspeer 8y ago
    If you had these amazing sci-fi genetic algorithms that constantly make money, why would you run them on the world's most inefficient form of computation? Why wouldn't you pay for normal, efficient computers, and keep much more of the money they make?
  • sadgit 8y ago
    Blockchains will allow people to collaborate on training a shared model. At somepoint it’ll be able to predict what it should learn next better than the people training it.
• jl2718 8y ago
  I just want all the investors to disappear so we can get to work.
• nostrademons 8y ago
  My thinking about the blockchain/cryptocurrency space shifted significantly when I changed my perspective from thinking about technology to thinking about problems. The web caught on because in the late 80s, the biggest problem in the world was that we were starved for information. We didn't know it yet, because we'd never lived in any other world, but once we could fire up Netscape and view homepages from people who lived across the world, or talk in real-time on AIM with people half a world away, or ask any question of Google and get answers, or find whole communities of people who were interested in that incredibly niche interest that we'd despaired of ever meeting someone else to share it with, or view the satellite & street view images of any address on earth, or order any product off Amazon and have it delivered tomorrow to our front door, it was apparent what we were missing out on. And that has spawned multiple trillion-$ companies. The biggest problem in the world today is lack of trust and the failure of institutions. (Which, ironically, may have been been caused by the web and the huge amount of information it made available.) And blockchains address this. They don't solve it - actually, my biggest resistance to Bitcoin & blockchain hype earlier, and my biggest risk factor now, is that Bitcoin doesn't actually solve the problem it's purporting to solve. People still get screwed when transacting in Bitcoin, they just get screwed by scammers & hackers rather than the government & big corporations. But the problem still exists, and people are aware of it now. Satoshi's greatest contribution was to create something that could semi-plausibly fix it and then release it into the world, which generates all sorts of attention from other entrepreneurs. Just like Tim Berners-Lee's original WWW browser was pretty clunky by modern standards, Bitcoin is pretty clunky by modern standards. But it's attracted a lot of minds into refining & replacing it, and as long as there's a problem, there's a market, and there's a good chance that eventually somebody will figure it out. (Or not. Who knows, in the 60s everyone was sure there was a market for flying cars and robot vacuum cleaners. We did eventually get both flying cars and robot vacuum cleaners, but so far the market for them is much smaller than anticipated.)
  • castlecrasher2 8y ago
    >The biggest problem in the world today is lack of trust and the failure of institutions. That's a pretty strong statement, one that I would disagree with, mostly because it's so vague. How did you come to that conclusion?
• bariswheel 8y ago
  If you want some good Sunday reading from people who actually know what they are talking about, I would recommend reading essays and papers from people like John Pfeffer, Bharath Ramsundar, and Vijay Boyapati. 'Bitcoin is worse is better'is also a fun read.
  • sadgit 8y ago
    Some links?
• mar77i 8y ago
  Can we live with real things again and not clickbait each other into conflating issues and harming third parties with oversimplified, inaccurate models of reality?
• jostmey 8y ago
  I don't think many people understand but the block chain has become. It is gambling. That is it's allure. It will remain in existence so long as there are people willing to gamble money
• deleted 8y ago
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• arisAlexis 8y ago
  funny how cocky these articles are. Perfect material for posts like {title} (2018) in a few years
• apo 8y ago
  Chatting between sips of stale coffee, I collected enough data points to discover he too had no great expertise in cryptography or fintech more broadly. I've run into way too many people like this to count. Fortunately, they're easy to spot and I'm sure someone has even created a taxonomy. All of them, without exception, have already launched or plan to launch a token on Ethereum. That's red flag #1. Ask them why their product/service needs a token. 9/10 can't even answer the question. Red flag #2. The few who can mutter something about decoupling the value of their utility token from ether. You may be able to have an interesting conversation from there, but it's more likely the answer is nothing more than a highbrow version of "because money is flowing through the rivers and we aim to grab some of it." Red flag #3.
• lvs 8y ago
  Not pretending to favor one buzzword bubble over another, but the author seems to think that it's particularly blockchain technology that's being irrationally pursued, not AI. No doubt, blockchains are being completely inappropriately sold to investors to perform all sorts of miracles that truly require nothing more than a database, but the very same is true of AI. This is an obvious case of the old adage, "When you have a hammer, everything looks like a nail." In particular, I fear a future where too many rational algorithms have been supplanted with their irrational AI counterparts. The latter cannot be debugged, and analyzing the mechanisms of trained networks will become increasingly opaque with increasing complexity. Since we're comparing these buzzwords, blockchain is, at the end of the day, just another algorithm that can be debugged by reason and logic. It's behavior is definite and provable. In terms of thinking of the brittleness of complex systems, I much prefer ones where all the parts can be analyzed by reasoning.
• deleted 8y ago
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• justinzollars 8y ago
  I hope not, we are getting some really great GPUs for AI. Its is the silver lining of the crypto boom!
• corv 8y ago
  Yes, there are lots of charlatans in the blockchain space (and startups in general). Figuring this out now, half a year after market participants noted a bear market isn’t worth much however.
  • tluyben2 8y ago
    Exactly; besides far more public visibility (well with notable exceptions like Theranos lately), how is it different than vc backed startups? Bubble already popped and will rise and pop again, yes there are scams like there are everywhere; that is no news, nothing to see here.
• hacknat 8y ago
  I don’t buy the hype of the blockchain as much as the average hacker news user, but this article lacks anything but anecdotal data. A bubble needs two things: 1. Misallocated hype 2. Real money As far as I can tell no one has done much digging on how much money blockchain ventures represent in terms of real world investment dollars. Can you call something a bubble if there isn’t much “real” money in it? If all the blockchain related companies died tomorrow how many people would be out of a job, and how much money would be “lost”? As far as I can tell most investors, even the ones bullish on the future of blockchain, are suspicious of new blockchain ventures. This isn’t how bubbles work, unless I am massively misinformed about the amount of money in this area.
  • amarant 8y ago
    I mean, it's a billion-dollar industry, by any estimates I've seen at least. I don't know about you but I would classify that as "a lot" of money. this estimate for example says $1.3B was invested in 2018 alone! https://techcrunch.com/2018/05/20/with-at-least-1-3-billion-invested-globally-in-2018-vc-funding-for-blockchain-blows-past-2017-totals/ https://techcrunch.com/2018/05/20/with-at-least-1-3-billion-... this one is on a similar track: https://www.idc.com/getdoc.jsp?containerId=prUS43526618 https://www.idc.com/getdoc.jsp?containerId=prUS43526618 plenty of cash to be lost!
    • hacknat 8y ago
      Nah. 1 billion dollars is 1/13000th of the American economy.
    • ericb 8y ago
      > this estimate for example says $1.3B was invested in 2018 alone! That's like 1/50th of an Enron (which had a 70 Billion dollar value and went to 0). Enron in itself wasn't a bubble.
• skewart 8y ago
  Here's the big reason I've gotten skeptical about blockchain: it seems like very few people are excited about actually using it. Almost everyone talking about it is excited about getting rich from trading currencies or starting a blockchain-based company. And plenty of people are excited about a grand vision for how it might transform society one day, or how it might solve problems they think other people might have. But it seems like almost nobody is genuinely excited to use any blockchain product themselves purely because it does something useful or fun or cool, and with no monetary interest in the tech taking off. This is all in stark contrast to the 90s internet boom when, sure, there were lots of speculators and lots of get-rich-quick dreamers, but there were also tons of random people genuinely excited about using the internet who never stood to make a dime from it. A lot of the grand visions behind blockchain mania are indeed compelling, and I suspect something blockchain-ish will take off at some point in the future. But it will probably be a distant descendant of anything that exists today. Am I wrong about this? Are there blockchain-based products that have lots of users who are using them because they like using the product and not just because they're hoping to get rich off the hype?
  • sixstringtheory 8y ago
    To extend your analogy to the internet, just consider that ARPANET was being developed decades before the dotcom boom. And it didn’t look anything like the AOLs/Compuserves through which I first experienced the internet. I agree that if blockchain takes off like that, it’ll probably be in a form we can’t yet imagine.
    • Nursie 8y ago
      But what makes you think it's an arpanet? Even then there were exciting, compelling use-cases.
  • jaequery 8y ago
    I just think of what it'd be like - once companies actually starts utilizing "blockchain" with real purpose.
  • cachvico 8y ago
• deleted 8y ago
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• b1daly 8y ago
  I feel like I'm missing something. The innovation of Bitcoin, which I grant is interesting, was in solving the game theoretical aspects of maintaining a trust-less distributed public ledger. It could be relied upon and used by anyone, and was under the control of no individual or group of entities. The core of the game theoretical solution was the creation of a digital token which (miraculously) was purported to be useful as a general purpose currency. (i.e. it could at least theoretically have value, and built in scarcity.) To take control of the distributed ledger would require the expenditure of significant resources, and the ultimate result would be the attacker would gain some control over the ledger. If the attack was successful enough to do this, the assumption is it would destroy the value of the currency, which the attacker needs to stay high to realize any return on the attack. Somehow Satoshi and early adopters bootstrapped this system early enough, and did enough social engineering, for it to take off. It's not clear that the value of the tokens needs to stay high to provide incentives to the miners to continue mining. A catastrophic loss in the value of bitcoin would cause the shakeout of many miners. But the system might remain as secure as before. Meaning, I don't understand if the incentive system works to maintain proof of work method for maintaining the integrity of the ledger, if a token does not have significant value, in another realm. The problem I see with other blockchain systems, is that the bizarre economic speculation we see happening in the crypto currency space needs to happen to boost the price enough to make it worth mining. I could see a privately used blockchain being used between largish entities that are "frenemies." For example financial institutions the don't fully trust each other creating a pool of entities that incentivizes the members to act collectively to prevent cheating. In that case, it's using the cryptographically secured ledger as the "truth." Kind of like using a permanent escrow service. I have no idea whether this is an efficient way to solve this problem. Do banks really have disputes about the actual value of accounts relative to each other that they currently have no simple way to resolve? This case would not need the tokens, and would not need miners. It would be a way of distributing the trust aspects to a wider group, but not to the public. In the wider world my intuition is that a successful, trust-less, distributed ledger requires the kind of current fantastic waste of the who crypto-coin proof of work system. If a given crypto currency project can't get their public blockchain to be secured in a pretty damn close to trust-less manner, the vexing problems of trust, when it comes to keeping track of debts and assets on distributed system, are not solved. To see the problem with Bitcoin, think about the actual cost per transaction, if you include mining costs. I remember seeing estimates of $30-$50 per transaction. That is horrifying, because the majority of that cost is wasted electricity. Currently, the majority of the cost of a bitcoin transaction is being borne by either the miners, or the speculators who are required to keep new money coming in to the system. (Otherwise, miners selling their block rewards could crash the price.) So, I think there is a great confusion in "marketplace of hype". The hype, the "sizzle" comes from the dramatic climb in price of Bitcoin and cousins. Since it became clear to the hypesters that Bitcoin had virtually no utility as a currency, they decided to extract the "blockchain" element to carry the expectations of investors. Bitcoin and the like do have real utility as an almost perfect vehicle for pure speculation, for which there is perennial human demand. I would love to hear if someone can point out something I'm missing here!
• jasonwen 8y ago
  There are two use cases at the moment that I can think off: 1. Proving origin and authenticity of a product through the supply chain (car parts, branded bags, wine). In China for example wine companies lose billions because of counterfeit wines. 2. Alternative currency for unstable countries - like Venezuela where everyone lost confidence in Bolivars due to massive inflation. Current valuations are hugely inflated and doens't make sense. However, most people are there to earn a quick buck. They don't care about working products. There are many coins that do nothing and are outright scams but are worth billions just because everyone is willing to speculate. I also feel a lot of people came from Forex trading where trading with leverage is normal. With the volatility of crypto's, leverage is not necessary anymore so that you can't get margin called.
  • aiCeivi9 8y ago
    > Proving origin and authenticity of a product through the supply chain How exactly is that supposed to work. For example I checked http://www.blockverify.io/ http://www.blockverify.io/ and it looks like it relies more on impossible to copy tag than on blockchain.
• yc-kraln 8y ago
  I see a lot of comments concluding that the value of blockchains is trust, or truth, or decentralization. Very few seem to realize that the trust is just moved from the people running the systems, to the people programming them (either the chain developers, or the dapps, or the contracts). There's still a hefty amount of trust involved, and I still haven't seen any successful project, or one with huge goalposts which isn't trying for a moonshot of changing consumer behavior. Sure the technology is neat--SQL spawned Oracle and SAP--but it's not trillions of dollars neat.
• curyous 8y ago
  Generic blockchains may not have any use, but Bitcoin Cash (BCH) is money at the speed of the internet: global, instant & free. It's like email vs snail mail.
• HNNewer 8y ago
  The bubble is about to pop because we're seeing only examples which are still far away from reality and that until now are useless.
• w1nt3rmu4e 8y ago
  I'm not sure why blockchain has become a perennial 'love to hate' favorite on a forum dedicated to 'disruptive' startups. The cynic in me would say the people complaining are the ones who sold their bitcoin for $100 back in the day and cannot stand the fact that they're out millions for not being forward-looking enough. If that describes you, go invest in a new blockchain tech. There aren't actually that many -- most of the ICOs of the last year were for stuff built on the Ethereum network. Sort through that a bit and you'll find companies building entirely new blockchains, some of them incorporating very good, forward looking ideas. Blockchain is still very young. You haven't missed out on anything. Do some homework. Invest. But nothing useful has been built on a blockchain! Go make something. You're smart. In the best traditions of the software industry it's almost entirely FOSS. Absolutely nothing stopping you from building something useful. And there's lots of funding available for those that do. Saying blockchain is worthless is like saying public key cryptography is worthless. Before e-commerce it was sort of a novelty (the need for security was always there, sure). Now it's ubiquitous, as is e-commerce. The latter would not be possible without the former. Even if the development is / remains purely driven by greed, the introduction of new financial markets and new investment vehicles means it's here to stay. There is zero chance this genie is going back in the bottle. Every day there are announcements about uptake by the finance industry and by governments. But that's a shallow view of the possibilities. How about tamper-proof voting for governments? Nearly fee-less remittances? Un-censorable communication? Completely transparent non-profits? Trust-less provenance / chain of custody? Let's be real. Humans are terrible to each other. Being to able to fight greed and corruption with a little math -- in a trust-less, incorruptible, self-sustaining way -- is potentially history changing.
  • Nursie 8y ago
    Blockchain tech has yet to deliver on any of these promises. Instead we have a mass of people speculating that it might, someday, in future, do a load of stuff that will make it more valuable than it is today. It's only like saying "cryptography is worthless" if it turns out actually to have worth in the long term. It could be a lot like saying the Sinclair C5 is worthless. I don't see that the introduction of new financial products based purely on artificial scarcity does mean that it's here to stay. There are indeed announcements quite frequently - most of them turn out to be pretty meaningless, often overhyped by parties with a vested interest. > How about tamper-proof voting for governments? Any scheme that allows votes to be verified, allows people to subvert the process by demanding verification. > Nearly fee-less remittances? We have those. Cryptocurrencies make these worse, irreversible, uninsured etc. I'm not going to address everything point by point, but your post exemplifies the hype perfectly - it's a big cry to imagine possibilities, but unable to point to any real success
• enterx 8y ago
  I bet on the blockchain. More and more people will eventually realise, as we can now witness by the facebook's revenue drop, that the fraudulent behaviour of the ad networks combined with the echo chamber does not bring them prosperity. Which in the end would decrease trust of the consumer. And bet who do we have there to trust? Well lets see... the blockchain? BINGO! I would rather believe a friend of mine or a relative(related trust party) than corrupted ad network. Now lets explain the corrupted. If i pay more for the ad, my product will be advertised more, without the actual benefit for the consumer? That is corruption. So i would place my bet on the trust in the future.
  • enterx 8y ago
    Lol. a minus in a minute. <3 hey, ad selling trolls... when will the layoffs? :D
• dalf 8y ago
  Using smart contracts, who does "apt upgrade" ? Where does the data come from ?
• deleted 8y ago
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• rargulati 8y ago
  I’m really surprised at the limited scope through which the hacker news crowd is looking. Good news: your centralized pie where you’ve put in tons of time, and built up a huge amount of credibility is safe! Cryptocurrencies/blockchain shouldn’t, and likely can’t, “disrupt” most of those industries. A glance through some of the industry reports in the comments shows an immense amount of work done in these respective industries. The value is in the edges. The important thing to think through, critically, is how we’ve organized ourselves as a species, and how that orientation has changed over time. Do cryptocurrencies / blockchain offer a superior way for individuals to organize themselves around a specific network? There are some interesting questions there, and I think if we can answer those questions, the interesting applications will emerge. Right now we’re thinking of how to slap Web 2.0 onto blockchains, which, though interesting, isn’t going to bode well for anyone. Because the status-quo is superior (from performance and pricing perspective), and works well for most. Store of Value, currencies, and financial instruments are appealing; those are applications in which humans have to orient themselves around a centralized power structure and believe. Switching the focal point of trust from a large institution (or government) to a decentralized network is an interesting thought exercise. Also think DRM. Folks are comparing things to the 90s, but that’s a tired dog. You’ve really gotta look before that. We’re still in the installation phase, and I don’t think we’ve quite gotten to the dot com phase of this journey. That level of frenzy is yet to come.
• TheGrassyKnoll 8y ago
  "...the marriage of excitement and ignorance..." I guess I'm a polygamist.
• sobani 8y ago
  How is this not an article about the AI bubble about to pop? From what I read, the entrepreneur is trying to have machine learning interpret a written contract into a digital form, which the author of the article considers to be (close to) impossible. To me it seems AI is a profitable buzzword for the entrepreneur, without it having any practical use for their company. If blockchain is a bubble, because the entrepreneur uses it as a buzzword, then AI must be in bubble, because the entrepreneur uses it as a buzzword.
  • zzzcpan 8y ago
    Maybe because you can't profit speculating about AI bubble as it's not actually tradeable and barely anyone invests in it.
    • sobani 8y ago
      But isn't the tradability of a technology orthogonal to whether it's a bubble? Maybe I should've called it "signs the second AI winter" is coming?