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True ownership of scarce digital assets is something that blockchains excel at, particularly decentralized blockchains (because true ownership means no individu

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.
- dragonwriter 8y ago
  > What "scarce digital assets" exist other than blockchain-backed cryptocurrencies? Other digital collectibles predate cryptocurrency (a fact pointed to be the name of a prominent, and now famously defunct, early Bitcoin exchange.)

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.
dragonwriter 8y ago
> What "scarce digital assets" exist other than blockchain-backed cryptocurrencies? Other digital collectibles predate cryptocurrency (a fact pointed to be the name of a prominent, and now famously defunct, early Bitcoin exchange.)