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And still, even on HN, the discussion of cryptocurrency is oscillating between totally different axioms? Some of us speak as prophetic market analysts and brin

And still, even on HN, the discussion of cryptocurrency is oscillating between totally different axioms? Some of us speak as prophetic market analysts and bring up "nails in coffins" and other crystal ball bull shit, and some of us wonder about the technology itself and understand that the price against the dollar only matters to gamblers.

na85 8y ago
Has anyone come up with a use case for blockchains yet, that isn't buying illegal drugs or money laundering? I keep seeing pie in the sky hypotheticals like "supply chain trust" from people who think farmers are etching their cucumbers with serial numbers, but I've yet to see any use case presented for a blockchain that has real utility and isn't better solved by existing processes or systems.
- mruts 8y ago
  stablecoins seem like a good idea. But, besides, isn’t buying drugs a pretty good application of crypto? I know I have derived value from that.
  - acdha 8y ago
    Ignoring the question of legality for the moment, it sharply limits the potential size and increases the costs. Legitimate businesses are going to be less likely to use a service which is strongly associated with criminal activity, exchanging for useful currency is going to be riskier and more expensive, and transactions are going to be easier to monitor with lower transaction volumes. All of those world-changing pitches are a lot harder to sustain when the volume is that much smaller and most of the players have a strong incentive not to talk about it.
- wgerard 8y ago
  Personally, and by no means am I a bitcoin-enthusiast, there's a lot of value to be had by something that allows relatively frictionless international money transfer. I realize that's not necessarily a feature of blockchains, though it is a feature of cryptocurrencies (for now, at least). We had a friend who lives in a commonwealth country working for us as a contractor, and figuring out how to pay them was a pretty big PITA. I was really close to just paying them in bitcoin, because it was that much of a hassle. Ultimately I was too afraid of any potential tax/legal implications to follow through on that, and we ended up just using TransferWise instead. Still, it was that much of a pain.
  - throwbacktictac 8y ago
    Tranferwise makes me cringe. I fell for the hype. I failed to do research and fell into the same tarpit that even a cursory glance would have revealed. They withdrew my funds. Promised a transfer date by the following date. Three days pass and the suddenly lock me out of my account and asked for a bunch of documents to complete the transfer.
    - wgerard 8y ago
      I can say from the sender side, it was fairly straight-forward and great to use. Sorry to hear about it being a pain from the recipient side.
    - Symbiote 8y ago
      For most people making normal-person-sized transactions, TransferWise is fine, and doesn't need lots of documentation. For example, paying rent on a holiday home, or sending money to a son or daughter studying abroad. Larger sums, or transfers involving Americans, are more likely to need the additional identity checks. (Source: my usage, and feedback from people I've recommended the service to.)
- alanfalcon 8y ago
  True ownership of scarce digital assets is something that blockchains excel at, particularly decentralized blockchains (because true ownership means no individuals have the power to control your asset) - there are still endless questions about what this means and how this plays out in practice, but it’s a real use case with a fascinating future that will live independently of the get rich quick fantasies of most blockchain proponents.
  - ForHackernews 8y ago
    What "scarce digital assets" exist other than blockchain-backed cryptocurrencies? You've invented a problem for your solution.
    - andrewla 8y ago
      There are plenty of scarce assets defined by no utility except for their scarcity; we call those assets money. That said, even before Bitcoin arose, most real-world (fiat) currencies were handled primarily through electronic transfers. There, the double-spend and scarcity-preservation was largely maintained through a combination of accounting convention, interbank agreements, audits, regulations, and occasional criminal prosecution (for things like counterfeiting). So "scarce digital assets" in the form of entries on the Fed's (or the ECB's) balance sheet existed before and continue to exist after the emergence of blockchain-backed cryptocurrencies. Gold-backed ETFs represent another form of "scarce digital asset", but more of a hybrid asset since they only arose and kept their value stable after creation/redemption mechanisms were formalized, and continue to maintain counterparty trust through auditing. But they do provide a liquid means of owning electronic gold; gold being the traditional scarcity-based asset.
      - mgolawala 8y ago
        >> There are plenty of scarce assets defined by no utility except for their scarcity; we call those assets money. Money doesn't hold value because of its scarcity. Money holds value because of the faith and credit of the entity that backs it. If a person issued a single unit of currency tomorrow and promptly died, it wouldn't suddenly hold any value simply because it is scarce and guaranteed to remain so. To put it another way, money's value lies in the fact that it is "legal tender". That status is backed by a powerful organization and people have to trust that organization. When the trust is gone, the value is gone, regardless of how scarce or plentiful the units of money.
- bhaak 8y ago
  They aren't cucumbers but over here in Europe, eggs do have a serial number. Making an analog asset machine readable and tied to a trackable digital asset is certainly an entertaining thought. Especially for an industry like the food industry where currently we have to trust that the state is controlling them correctly or even that they are controlling them themselves (which several food scandals showed that this isn't working very well). But we're still early days in that regard. None of the existing crypto coins could handle the necessary transaction volume.
  - nsomaru 8y ago
    do you have a counter argument for: "you still need to trust the devices that write to the blockchain" -- so ultimately you would be trusting the supplier.
    - bhaak 8y ago
      But that is much less of a problem than other similar constraints. You can use any computer, wipe it and use something like Tails to access the blockchain. There is not a centralized supplier of blockchain manipulation devices.
    - hanniabu 8y ago
      In order to write to chain you need a key. If malicious activity is found, these keys can be banned from the network along with any products that they verify. It's not that the system can't be exploited, it's introducing incentives to make it economically unviable to do so.
  - ghthor 8y ago
    And also making it very difficult to post a story and change it later. This is why I'm skeptical about needing higher transaction volume to support supply chain use cases. The supply records a record, immutable(like a git commit log), and posts the resulting hash every hour-is to the public chain. The information recorded remains confidential, but the posted public hash can be used to prove during an audit that the log didn't change. The confidential log can have extremely high transaction volumes, because its internal.
- canadaduane 8y ago
  I think the next big breakthrough enabled by blockchain is going to be self-sovereign identity--the ability to represent yourself online, without a centralized intermediary/point of failure. Several companies and foundations are trying to do it--Sovrin, Evernym, uPort, Jolocom, Iden3, and others.
- andrewla 8y ago
  I'll go out on a limb and say that if we expand "buying illegal drugs" to "buying anything", or more accurately, "sending money securely, reliably over the internet in a censorship-resistant fashion" then that seems like a sufficiently interesting use case. Even treating Bitcoin as a settlement layer, and saying that we have "an electronic bearer currency that is deterministically produced and cannot be forged" is pretty powerful as a use case. I'm a huge skeptic on the remaining uses of "blockchain" such as it is. If we define "blockchain" as a one-sided Merkle tree, then we have things like git that qualify, that are very useful in their own right. Similarly log-based database updates are also chains of blocks that are used to represent immutable updates that can be combined into a mutable view of the present, and those are also useful in databases and filesystems. But a bitcoin-like blockchain is not novel or interesting in this regard.
  - habitue 8y ago
    There's this big wall between "buying illegally" and "buying anything". The only reason people are using it to buy things illegally is because they can't use normal methods like credit cards. It's strictly more annoying and higher friction to use than a credit card for non-illegal purposes. It's kind of like those free speech platforms. If you're a free speech anything goes platform, but everyone who isn't saying terrible things isn't encountering any problems on Twitter, then you end up with only people saying terrible things on the free speech platform even if that wasn't the original purpose. All this is to say, I think for Bitcoin or crypto to overtake credit cards, it has to provide massive benefits above and beyond credit cards to get people who have no problems with credit cards to switch to it. Right now, that's not the case.
    - andrewla 8y ago
      I don't see it being higher friction per se; spending Bitcoin and most other cryptos is actually pretty easy (modulo fees, which I'll grant is a not great area right now). If you look at Bitcoin more as a cash replacement than a credit card replacement, then it works better, and there really is no "cash" alternative in online systems, which is fine, mostly, for consumers, but not great, mostly, for vendors. Credit cards are convenient because there are so many protections for consumers in terms of fraud, but that is an increasing burden on the consumer, as credit cards get rejected because of "unusual spending patterns", and dealing with credit card theft and arranging a replacement card, and having to answer questions like "did you spend $7.23 at MTG ENT LLC last Thursday". Consumers get the benefits of reward systems and deferred payment (which is a blessing and a curse for many consumers). For vendors the advantage is clear (except for the problems involved in storing bitcoin); in a hypothetical world where bitcoin's value is stable, they could offer substantial discounts for purchases made with bitcoin instead of credit cards, because of the diminished counterparty risk. All of that said, there's no reason that credit cards can't be offered for cryptocurrencies as the settlement currency, and offer many of the same benefits of existing credit cards; this more goes to the notion of Bitcoin as a settlement system. The biggest problem with adoption of Bitcoin as a spending platform is price volatility, which is a chicken-and-egg problem; if the supply chain is denominated in bitcoin, then that will make the price stable, but nobody will denominate their supply chain in bitcoin unless the price is stable. I've expressed the idea before that power companies in particular could charge for electricity in bitcoin very easily, because the conversion is pretty direct -- the price of electricity is the number of bitcoins you could mine for that amount of electricity, and the electric companies have a built-in solution if demand falls too low -- they can just mine bitcoin with the "unused" power. This is a little pie in the sky, though.
- lawn 8y ago
  Some use cases for digital p2p cash : * Porn * Donations to wikileaks * Pot * Sending money to Venezuela * Leaving Venezuela with your wealth intact * Payments without giving all transaction info third parties (PayPal, VISA, etc). Look into Monero for untraceable transactions. * Digital payments for the unbanked These are all served better by cryptocurrencies than other alternatives.
mindfulplay 8y ago
This is pretty silly. There is no technology to bet. Nobody bet money on Linux or Android. They just happened. These things are not money problems... They are people problems: greed, stupidity and thinking they are better than the average Joe or Jane.
- SlowRobotAhead 8y ago
  Well... surely you could make the point that as android was starting “to happen” money did get involved and cemented that. Samsung, LG, Sony, etc did spend big to support Android early on.
- angel_j 8y ago
  Developers bet expensive time and professional standing on Linux. Google bet billions on Android.
- all2 8y ago
  Technology doesn't just 'happen'. Someone has to foot the bill (sign at the bottom).
  - mindfulplay 8y ago
    The point is that these things are free already. There is nothing to invest. Linux took the creativity and hard work of several people. Nobody involved in it actually got richer as you might imagine people did with shitcoins... People are investing into cryptocrapto like it is some fintech.
    - hanniabu 8y ago
      It is fintech. Since they carry utility it intrinsically has value. Since thousands are unique that value is amplified. If the was a limited number of linux images and they could not be copied, you would see them carry a value.
    - nostrademons 8y ago
      "Linux took the creativity and hard work of several people. Nobody involved in it actually got richer as you might imagine people did with shitcoins..." Not necessarily true. Both RedHat & VA Linux gifted Linus Torvalds with stock during the dot-com boom, enough for him to become independently wealthy.

na85 8y ago

Has anyone come up with a use case for blockchains yet, that isn't buying illegal drugs or money laundering? I keep seeing pie in the sky hypotheticals like "supply chain trust" from people who think farmers are etching their cucumbers with serial numbers, but I've yet to see any use case presented for a blockchain that has real utility and isn't better solved by existing processes or systems.

mruts 8y ago
stablecoins seem like a good idea. But, besides, isn’t buying drugs a pretty good application of crypto? I know I have derived value from that.
- acdha 8y ago
  Ignoring the question of legality for the moment, it sharply limits the potential size and increases the costs. Legitimate businesses are going to be less likely to use a service which is strongly associated with criminal activity, exchanging for useful currency is going to be riskier and more expensive, and transactions are going to be easier to monitor with lower transaction volumes. All of those world-changing pitches are a lot harder to sustain when the volume is that much smaller and most of the players have a strong incentive not to talk about it.
wgerard 8y ago
Personally, and by no means am I a bitcoin-enthusiast, there's a lot of value to be had by something that allows relatively frictionless international money transfer. I realize that's not necessarily a feature of blockchains, though it is a feature of cryptocurrencies (for now, at least). We had a friend who lives in a commonwealth country working for us as a contractor, and figuring out how to pay them was a pretty big PITA. I was really close to just paying them in bitcoin, because it was that much of a hassle. Ultimately I was too afraid of any potential tax/legal implications to follow through on that, and we ended up just using TransferWise instead. Still, it was that much of a pain.
- throwbacktictac 8y ago
  Tranferwise makes me cringe. I fell for the hype. I failed to do research and fell into the same tarpit that even a cursory glance would have revealed. They withdrew my funds. Promised a transfer date by the following date. Three days pass and the suddenly lock me out of my account and asked for a bunch of documents to complete the transfer.
  - wgerard 8y ago
    I can say from the sender side, it was fairly straight-forward and great to use. Sorry to hear about it being a pain from the recipient side.
  - Symbiote 8y ago
    For most people making normal-person-sized transactions, TransferWise is fine, and doesn't need lots of documentation. For example, paying rent on a holiday home, or sending money to a son or daughter studying abroad. Larger sums, or transfers involving Americans, are more likely to need the additional identity checks. (Source: my usage, and feedback from people I've recommended the service to.)
alanfalcon 8y ago
True ownership of scarce digital assets is something that blockchains excel at, particularly decentralized blockchains (because true ownership means no individuals have the power to control your asset) - there are still endless questions about what this means and how this plays out in practice, but it’s a real use case with a fascinating future that will live independently of the get rich quick fantasies of most blockchain proponents.
- ForHackernews 8y ago
  What "scarce digital assets" exist other than blockchain-backed cryptocurrencies? You've invented a problem for your solution.
  - andrewla 8y ago
    There are plenty of scarce assets defined by no utility except for their scarcity; we call those assets money. That said, even before Bitcoin arose, most real-world (fiat) currencies were handled primarily through electronic transfers. There, the double-spend and scarcity-preservation was largely maintained through a combination of accounting convention, interbank agreements, audits, regulations, and occasional criminal prosecution (for things like counterfeiting). So "scarce digital assets" in the form of entries on the Fed's (or the ECB's) balance sheet existed before and continue to exist after the emergence of blockchain-backed cryptocurrencies. Gold-backed ETFs represent another form of "scarce digital asset", but more of a hybrid asset since they only arose and kept their value stable after creation/redemption mechanisms were formalized, and continue to maintain counterparty trust through auditing. But they do provide a liquid means of owning electronic gold; gold being the traditional scarcity-based asset.
    - mgolawala 8y ago
      >> There are plenty of scarce assets defined by no utility except for their scarcity; we call those assets money. Money doesn't hold value because of its scarcity. Money holds value because of the faith and credit of the entity that backs it. If a person issued a single unit of currency tomorrow and promptly died, it wouldn't suddenly hold any value simply because it is scarce and guaranteed to remain so. To put it another way, money's value lies in the fact that it is "legal tender". That status is backed by a powerful organization and people have to trust that organization. When the trust is gone, the value is gone, regardless of how scarce or plentiful the units of money.
bhaak 8y ago
They aren't cucumbers but over here in Europe, eggs do have a serial number. Making an analog asset machine readable and tied to a trackable digital asset is certainly an entertaining thought. Especially for an industry like the food industry where currently we have to trust that the state is controlling them correctly or even that they are controlling them themselves (which several food scandals showed that this isn't working very well). But we're still early days in that regard. None of the existing crypto coins could handle the necessary transaction volume.
- nsomaru 8y ago
  do you have a counter argument for: "you still need to trust the devices that write to the blockchain" -- so ultimately you would be trusting the supplier.
  - bhaak 8y ago
    But that is much less of a problem than other similar constraints. You can use any computer, wipe it and use something like Tails to access the blockchain. There is not a centralized supplier of blockchain manipulation devices.
  - hanniabu 8y ago
    In order to write to chain you need a key. If malicious activity is found, these keys can be banned from the network along with any products that they verify. It's not that the system can't be exploited, it's introducing incentives to make it economically unviable to do so.
- ghthor 8y ago
  And also making it very difficult to post a story and change it later. This is why I'm skeptical about needing higher transaction volume to support supply chain use cases. The supply records a record, immutable(like a git commit log), and posts the resulting hash every hour-is to the public chain. The information recorded remains confidential, but the posted public hash can be used to prove during an audit that the log didn't change. The confidential log can have extremely high transaction volumes, because its internal.
canadaduane 8y ago
I think the next big breakthrough enabled by blockchain is going to be self-sovereign identity--the ability to represent yourself online, without a centralized intermediary/point of failure. Several companies and foundations are trying to do it--Sovrin, Evernym, uPort, Jolocom, Iden3, and others.
andrewla 8y ago
I'll go out on a limb and say that if we expand "buying illegal drugs" to "buying anything", or more accurately, "sending money securely, reliably over the internet in a censorship-resistant fashion" then that seems like a sufficiently interesting use case. Even treating Bitcoin as a settlement layer, and saying that we have "an electronic bearer currency that is deterministically produced and cannot be forged" is pretty powerful as a use case. I'm a huge skeptic on the remaining uses of "blockchain" such as it is. If we define "blockchain" as a one-sided Merkle tree, then we have things like git that qualify, that are very useful in their own right. Similarly log-based database updates are also chains of blocks that are used to represent immutable updates that can be combined into a mutable view of the present, and those are also useful in databases and filesystems. But a bitcoin-like blockchain is not novel or interesting in this regard.
- habitue 8y ago
  There's this big wall between "buying illegally" and "buying anything". The only reason people are using it to buy things illegally is because they can't use normal methods like credit cards. It's strictly more annoying and higher friction to use than a credit card for non-illegal purposes. It's kind of like those free speech platforms. If you're a free speech anything goes platform, but everyone who isn't saying terrible things isn't encountering any problems on Twitter, then you end up with only people saying terrible things on the free speech platform even if that wasn't the original purpose. All this is to say, I think for Bitcoin or crypto to overtake credit cards, it has to provide massive benefits above and beyond credit cards to get people who have no problems with credit cards to switch to it. Right now, that's not the case.
  - andrewla 8y ago
    I don't see it being higher friction per se; spending Bitcoin and most other cryptos is actually pretty easy (modulo fees, which I'll grant is a not great area right now). If you look at Bitcoin more as a cash replacement than a credit card replacement, then it works better, and there really is no "cash" alternative in online systems, which is fine, mostly, for consumers, but not great, mostly, for vendors. Credit cards are convenient because there are so many protections for consumers in terms of fraud, but that is an increasing burden on the consumer, as credit cards get rejected because of "unusual spending patterns", and dealing with credit card theft and arranging a replacement card, and having to answer questions like "did you spend $7.23 at MTG ENT LLC last Thursday". Consumers get the benefits of reward systems and deferred payment (which is a blessing and a curse for many consumers). For vendors the advantage is clear (except for the problems involved in storing bitcoin); in a hypothetical world where bitcoin's value is stable, they could offer substantial discounts for purchases made with bitcoin instead of credit cards, because of the diminished counterparty risk. All of that said, there's no reason that credit cards can't be offered for cryptocurrencies as the settlement currency, and offer many of the same benefits of existing credit cards; this more goes to the notion of Bitcoin as a settlement system. The biggest problem with adoption of Bitcoin as a spending platform is price volatility, which is a chicken-and-egg problem; if the supply chain is denominated in bitcoin, then that will make the price stable, but nobody will denominate their supply chain in bitcoin unless the price is stable. I've expressed the idea before that power companies in particular could charge for electricity in bitcoin very easily, because the conversion is pretty direct -- the price of electricity is the number of bitcoins you could mine for that amount of electricity, and the electric companies have a built-in solution if demand falls too low -- they can just mine bitcoin with the "unused" power. This is a little pie in the sky, though.
lawn 8y ago
Some use cases for digital p2p cash : * Porn * Donations to wikileaks * Pot * Sending money to Venezuela * Leaving Venezuela with your wealth intact * Payments without giving all transaction info third parties (PayPal, VISA, etc). Look into Monero for untraceable transactions. * Digital payments for the unbanked These are all served better by cryptocurrencies than other alternatives.

mindfulplay 8y ago

This is pretty silly. There is no technology to bet. Nobody bet money on Linux or Android. They just happened. These things are not money problems... They are people problems: greed, stupidity and thinking they are better than the average Joe or Jane.

SlowRobotAhead 8y ago
Well... surely you could make the point that as android was starting “to happen” money did get involved and cemented that. Samsung, LG, Sony, etc did spend big to support Android early on.
angel_j 8y ago
Developers bet expensive time and professional standing on Linux. Google bet billions on Android.
all2 8y ago
Technology doesn't just 'happen'. Someone has to foot the bill (sign at the bottom).
- mindfulplay 8y ago
  The point is that these things are free already. There is nothing to invest. Linux took the creativity and hard work of several people. Nobody involved in it actually got richer as you might imagine people did with shitcoins... People are investing into cryptocrapto like it is some fintech.
  - hanniabu 8y ago
    It is fintech. Since they carry utility it intrinsically has value. Since thousands are unique that value is amplified. If the was a limited number of linux images and they could not be copied, you would see them carry a value.
  - nostrademons 8y ago
    "Linux took the creativity and hard work of several people. Nobody involved in it actually got richer as you might imagine people did with shitcoins..." Not necessarily true. Both RedHat & VA Linux gifted Linus Torvalds with stock during the dot-com boom, enough for him to become independently wealthy.