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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

by 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.
    - guscost 8y ago
      The point is that let's see a "blockchain organization" (like the DAO or something) succeed first before scaling it up, you know?
Xixi 8y ago
If ownership of a house is decided by contracts, written by lawyers, then adding a blockchain will only add issues, since it can get out of sync with reality. And if the blockchain is the source of truth, it means that stealing your house-token will result in you losing your house. Do you use an intel processor vulnerable to Meltdown/Spectre, or with a vulnerable IME? Do the people you know and love know and understand about these? What if you lose your token? You can't sell your house anymore? Custody of crypto-currencies is a giant headache. It feels like moving away from bank accounts and payment cards and going back to gold coins and bearer bonds. Great for people in the business of selling vaults, sucks for everyone else.
- craigc 8y ago
  I didn’t say that all the problems have been figured out, but I feel like you are being a little close minded with regards to the idea. Maybe properties would use some form of multi signature transactions so a single person hacking it would not be able to take over ownership. Perhaps there would still be some sort of intermediary. I am not saying just add a blockchain on top of the existing infrastructure. That does not make much sense. I’m saying replace the existing infrastructure completely. Ten years ago people didn’t think solving the double spending problem was possible. It’s silly to try to imagine the future of blockchain innovation when thinking about it only how it exists today. That’s like in 1995 saying that no one would ever want to watch videos on the internet because the download speeds and quality would be so poor.
- mike_hearn 8y ago
  One end goal of blockchains is indeed that they become the system of record, and that legal agreements are English translations of what the code says rather than the other way around. That might sound scary, but I'd point out a few things: 1. That future is still a long time away. The legal system is very conservative. 2. These systems don't have to be perfect, just better than what we have today. Yes, I certainly wouldn't trust ownership of my house to a general purpose laptop or smartphone on which I install lots of other apps and which are optimised for high performance and low cost. I wouldn't trust ownership of my house to any computer today. But the idea that bank-run paper based systems are 100% secure is not true - they routinely go wrong just through basic mistakes and screwups, let alone actual fraud. Consider all the cases of ID theft in America. There's a specific kind of ID fraud where someone literally steals your house: https://www.lifelock.com/education/deed-fraud-losing-your-home-with-the-stroke-of-a-pen/ https://www.lifelock.com/education/deed-fraud-losing-your-ho... Or how about this case where convicted murderers learned how to forge their own release paperwork whilst inside the prison, and then successfully got themselves released: https://www.cnn.com/2013/11/06/justice/florida-inmates-mistakenly-freed/index.html https://www.cnn.com/2013/11/06/justice/florida-inmates-mista... Possible because the only thing authenticating prisoner release orders was easily duplicated patterns on a piece of paper.
EthanHeilman 8y ago
>The biggest problem is that blockchains are inherently not scalable. Blockchains can be made extremely scalable. You can break the problem into transaction volume (how many transactions can be processed on average per sec) and transaction velocity (how fast a particular transaction can be approved). Transaction volume scalability results almost entirely from checking that the rules of the system have been followed i.e. that each block in the chain is valid. We now have very fast systems for recursively proving the validity of blockchains. For instance coda [0] requires very little space or computation (constant in the number of transactions) for a party to be convinced the blockchain is valid. Under such a system you could increase transaction volume by orders of magnitude. Layer two protocols, such as the lightning network [1], offer near instant transaction velocity. We can solve the scalability problems of blockchain. The thing that keeps me up at night is not scalability, it is user adoption beyond the use cases which Bitcoin already successfully fulfills. [0]: https://codaprotocol.com/ https://codaprotocol.com/ [1]: https://lightning.network/ https://lightning.network/
- craigc 8y ago
  > We can solve the scalability problems of blockchain. The thing that keeps me up at night is not scalability, it is user adoption beyond the use cases which Bitcoin already successfully fulfills. Fair point. But none of the biggest chains right now are nearly as scalable as using something like AWS or Azure or Google Cloud. Unless they are able to handle the same amount of traffic, there is no reason for someone to use them for typical applications. On the development side it will be more cumbersome to develop for, and on the user side it will be slower and/or more costly to use.
  - EthanHeilman 8y ago
    >But none of the biggest chains right now are nearly as scalable as using something like AWS or Azure or Google Cloud. I agree, just because we can scale them doesn't mean we will invest the time and energy to do it. Lots of solvable problems in cryptography but very few people working on them.
- cycrutchfield 8y ago
acdha 8y ago
> 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. There were significant barriers to entry – network connections were slow and enormously expensive into the 90s – but TCP already had significant value by the 80s (see e.g. FTP). Within a few years of the web arriving in the 90s, there were businesses using it for revenue-positive activity. In contrast, blockchains were available to everyone on the Internet very early on and have yet to find a single case where they’re cost effective despite the barriers to entry being orders of magnitude lower.
- ghthor 8y ago
  IMO one of the best use cases is DNS records. Using a p2p blockchain means I don't need to make any external network calls to lookup addresses. It also means, that if I trust my local client hasn't been compromised then all address mappings are valid, as they required hard cryptography to set via a signed transaction that was accepted by the network.
  - acdha 8y ago
    DNS records change rather frequently. Wouldn’t this grow rather quickly, creating the same problems which lead to replacing /etc/hosts with the decentralized DNS model?
malloryerik 8y ago
As we speed toward the era of deep fakes and extreme forgery of media, I wonder if blockchains might play some crucial social role as sources of truth and proof.
- nradov 8y ago
  How specifically would you use a blockchain as a source of truth and proof for media, and how exactly would that be superior to digital signatures applied using tamper-resistant hardward embedded in recording devices?
- rspeer 8y ago
  So... uh... why wouldn't someone just fake a photo and not use your blockchain?
nradov 8y ago
There is zero need for blockchains in real estate registries. Real estate property rights are enforced by the government, ultimately through threat of official violence. So the government might as well maintain a centralized real estate registry since we're effectively forced to trust them anyway.
- naveen99 8y ago
  It would be useful in places with corruption. Would make it harder for clerks to retroactively change things. Of course it makes bribes easier also.

by craigc 8y ago

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.
  - guscost 8y ago
    The point is that let's see a "blockchain organization" (like the DAO or something) succeed first before scaling it up, you know?

Xixi 8y ago

If ownership of a house is decided by contracts, written by lawyers, then adding a blockchain will only add issues, since it can get out of sync with reality. And if the blockchain is the source of truth, it means that stealing your house-token will result in you losing your house. Do you use an intel processor vulnerable to Meltdown/Spectre, or with a vulnerable IME? Do the people you know and love know and understand about these? What if you lose your token? You can't sell your house anymore? Custody of crypto-currencies is a giant headache. It feels like moving away from bank accounts and payment cards and going back to gold coins and bearer bonds. Great for people in the business of selling vaults, sucks for everyone else.

craigc 8y ago
I didn’t say that all the problems have been figured out, but I feel like you are being a little close minded with regards to the idea. Maybe properties would use some form of multi signature transactions so a single person hacking it would not be able to take over ownership. Perhaps there would still be some sort of intermediary. I am not saying just add a blockchain on top of the existing infrastructure. That does not make much sense. I’m saying replace the existing infrastructure completely. Ten years ago people didn’t think solving the double spending problem was possible. It’s silly to try to imagine the future of blockchain innovation when thinking about it only how it exists today. That’s like in 1995 saying that no one would ever want to watch videos on the internet because the download speeds and quality would be so poor.
mike_hearn 8y ago
One end goal of blockchains is indeed that they become the system of record, and that legal agreements are English translations of what the code says rather than the other way around. That might sound scary, but I'd point out a few things: 1. That future is still a long time away. The legal system is very conservative. 2. These systems don't have to be perfect, just better than what we have today. Yes, I certainly wouldn't trust ownership of my house to a general purpose laptop or smartphone on which I install lots of other apps and which are optimised for high performance and low cost. I wouldn't trust ownership of my house to any computer today. But the idea that bank-run paper based systems are 100% secure is not true - they routinely go wrong just through basic mistakes and screwups, let alone actual fraud. Consider all the cases of ID theft in America. There's a specific kind of ID fraud where someone literally steals your house: https://www.lifelock.com/education/deed-fraud-losing-your-home-with-the-stroke-of-a-pen/ https://www.lifelock.com/education/deed-fraud-losing-your-ho... Or how about this case where convicted murderers learned how to forge their own release paperwork whilst inside the prison, and then successfully got themselves released: https://www.cnn.com/2013/11/06/justice/florida-inmates-mistakenly-freed/index.html https://www.cnn.com/2013/11/06/justice/florida-inmates-mista... Possible because the only thing authenticating prisoner release orders was easily duplicated patterns on a piece of paper.

EthanHeilman 8y ago

>The biggest problem is that blockchains are inherently not scalable. Blockchains can be made extremely scalable. You can break the problem into transaction volume (how many transactions can be processed on average per sec) and transaction velocity (how fast a particular transaction can be approved). Transaction volume scalability results almost entirely from checking that the rules of the system have been followed i.e. that each block in the chain is valid. We now have very fast systems for recursively proving the validity of blockchains. For instance coda [0] requires very little space or computation (constant in the number of transactions) for a party to be convinced the blockchain is valid. Under such a system you could increase transaction volume by orders of magnitude. Layer two protocols, such as the lightning network [1], offer near instant transaction velocity. We can solve the scalability problems of blockchain. The thing that keeps me up at night is not scalability, it is user adoption beyond the use cases which Bitcoin already successfully fulfills. [0]: https://codaprotocol.com/ https://codaprotocol.com/ [1]: https://lightning.network/ https://lightning.network/

craigc 8y ago
> We can solve the scalability problems of blockchain. The thing that keeps me up at night is not scalability, it is user adoption beyond the use cases which Bitcoin already successfully fulfills. Fair point. But none of the biggest chains right now are nearly as scalable as using something like AWS or Azure or Google Cloud. Unless they are able to handle the same amount of traffic, there is no reason for someone to use them for typical applications. On the development side it will be more cumbersome to develop for, and on the user side it will be slower and/or more costly to use.
- EthanHeilman 8y ago
  >But none of the biggest chains right now are nearly as scalable as using something like AWS or Azure or Google Cloud. I agree, just because we can scale them doesn't mean we will invest the time and energy to do it. Lots of solvable problems in cryptography but very few people working on them.
cycrutchfield 8y ago

acdha 8y ago

> 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. There were significant barriers to entry – network connections were slow and enormously expensive into the 90s – but TCP already had significant value by the 80s (see e.g. FTP). Within a few years of the web arriving in the 90s, there were businesses using it for revenue-positive activity. In contrast, blockchains were available to everyone on the Internet very early on and have yet to find a single case where they’re cost effective despite the barriers to entry being orders of magnitude lower.

ghthor 8y ago
IMO one of the best use cases is DNS records. Using a p2p blockchain means I don't need to make any external network calls to lookup addresses. It also means, that if I trust my local client hasn't been compromised then all address mappings are valid, as they required hard cryptography to set via a signed transaction that was accepted by the network.
- acdha 8y ago
  DNS records change rather frequently. Wouldn’t this grow rather quickly, creating the same problems which lead to replacing /etc/hosts with the decentralized DNS model?

malloryerik 8y ago

As we speed toward the era of deep fakes and extreme forgery of media, I wonder if blockchains might play some crucial social role as sources of truth and proof.

nradov 8y ago
How specifically would you use a blockchain as a source of truth and proof for media, and how exactly would that be superior to digital signatures applied using tamper-resistant hardward embedded in recording devices?
rspeer 8y ago
So... uh... why wouldn't someone just fake a photo and not use your blockchain?

nradov 8y ago

There is zero need for blockchains in real estate registries. Real estate property rights are enforced by the government, ultimately through threat of official violence. So the government might as well maintain a centralized real estate registry since we're effectively forced to trust them anyway.

naveen99 8y ago
It would be useful in places with corruption. Would make it harder for clerks to retroactively change things. Of course it makes bribes easier also.