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>The biggest problem is that blockchains are inherently not scalable. Blockchains can be made extremely scalable. You can break the problem into transaction vo

>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
User adoption is the toughest nut to crack. Right now the two largest use cases of cryptocurrencies are financial speculation and illegal activity. Both are huge turn-offs for the average prospective user. What’s the value proposition for an average Joe to use bitcoin over fiat currency?
sp527 8y ago
> The thing that keeps me up at night is not scalability, it is user adoption beyond the use cases which Bitcoin already successfully fulfills. This felt like the canary in the coal mine that the anarchist crowd has wholesale ignored for years. Joe and Jane LIKE that the dollar is backed by the full faith and credit of USG. From the POV of the average person, crypto is fairy dust next to a currency endorsed by what is perceived to be the most economically stable nation on the planet. Joe and Jane don't understand nearly enough about economics or technology to really care about crypto or to ever be capable of using it securely independent of a third-party facilitator like Coinbase. They want cheap, fast transactions with guarantees, insured bank accounts, and a human being they can call for support when something goes wrong. Visa and JPM already give them that. Coinbase is a total reinvention of a system with no marginal benefit. Bitcoin doesn't solve a problem Joe and Jane will ever care about. About the only thing is does solve, at least in the short-term, is their FOMO about living analog in a world beset by runaway digital progress.
- sudoscript 8y ago
  What do Joe and Jane think about the mountain of debt they’ve had to pile up? What do they think about the bankers who decide what happens to their money, and the politicians who decided to bail them out? Do they really have abs much faith in USG as you say? By the last election, largely seen as a middle finger to governing elites, I’d say probably not. Yes, they like the convenience of the dollar but they are also suffering from the consequences of fiat money. You might say they’re too stupid to understand that, but there are many Joes and Janes who understand gold and may even want to go back to a gold standard. If they can understand gold, they can understand the value of Bitcoin.
- craigc 8y ago
  I totally agree with your sentiment, but I will say one thing. If there is some shock in the world economy crypto could be a way out. Imagine - A bank run where every bank goes under and it is not possible to easily bail them out - The government has to increase inflation and we far exceed the 2% target - The existing financial system gets hacked and records get destroyed Not saying any of this is likely, but it could happen. The US dollar has only been backed by nothing since 1971. That is a very short amount of time in the history of the world. You can see that in that same period of time debt has skyrocketed and production output vs. wages have diverged significantly. It would be somewhat presumptuous to assume that the existing system is going to last forever. That said, it doesn’t mean that crypto currencies are THE answer, but they are a possible answer. Finally “the most economically stable nation on the planet” is $21 trillion in debt. I think if something like Bitcoin does end up reaching mass adoption it won’t be because people CHOOSE to use it, it will be because they are FORCED to use it because no one wants to accept dollars anymore.

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

User adoption is the toughest nut to crack. Right now the two largest use cases of cryptocurrencies are financial speculation and illegal activity. Both are huge turn-offs for the average prospective user. What’s the value proposition for an average Joe to use bitcoin over fiat currency?

sp527 8y ago

> The thing that keeps me up at night is not scalability, it is user adoption beyond the use cases which Bitcoin already successfully fulfills. This felt like the canary in the coal mine that the anarchist crowd has wholesale ignored for years. Joe and Jane LIKE that the dollar is backed by the full faith and credit of USG. From the POV of the average person, crypto is fairy dust next to a currency endorsed by what is perceived to be the most economically stable nation on the planet. Joe and Jane don't understand nearly enough about economics or technology to really care about crypto or to ever be capable of using it securely independent of a third-party facilitator like Coinbase. They want cheap, fast transactions with guarantees, insured bank accounts, and a human being they can call for support when something goes wrong. Visa and JPM already give them that. Coinbase is a total reinvention of a system with no marginal benefit. Bitcoin doesn't solve a problem Joe and Jane will ever care about. About the only thing is does solve, at least in the short-term, is their FOMO about living analog in a world beset by runaway digital progress.

sudoscript 8y ago
What do Joe and Jane think about the mountain of debt they’ve had to pile up? What do they think about the bankers who decide what happens to their money, and the politicians who decided to bail them out? Do they really have abs much faith in USG as you say? By the last election, largely seen as a middle finger to governing elites, I’d say probably not. Yes, they like the convenience of the dollar but they are also suffering from the consequences of fiat money. You might say they’re too stupid to understand that, but there are many Joes and Janes who understand gold and may even want to go back to a gold standard. If they can understand gold, they can understand the value of Bitcoin.
craigc 8y ago
I totally agree with your sentiment, but I will say one thing. If there is some shock in the world economy crypto could be a way out. Imagine - A bank run where every bank goes under and it is not possible to easily bail them out - The government has to increase inflation and we far exceed the 2% target - The existing financial system gets hacked and records get destroyed Not saying any of this is likely, but it could happen. The US dollar has only been backed by nothing since 1971. That is a very short amount of time in the history of the world. You can see that in that same period of time debt has skyrocketed and production output vs. wages have diverged significantly. It would be somewhat presumptuous to assume that the existing system is going to last forever. That said, it doesn’t mean that crypto currencies are THE answer, but they are a possible answer. Finally “the most economically stable nation on the planet” is $21 trillion in debt. I think if something like Bitcoin does end up reaching mass adoption it won’t be because people CHOOSE to use it, it will be because they are FORCED to use it because no one wants to accept dollars anymore.