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Blockchains make no sense when the "asset" they are tracking have to be imported from the outside world because they lose the trustless property which is the wh

• joshwa 8y ago
  I always say "the moment you need to verify that a human did something outside the system, your blockchain is broken."
  • dnautics 8y ago
    That is great.
  • osrec 8y ago
    I extend it further: the moment you need to verify that something happened outside the system, your blockchain is broken.
    • dnautics 8y ago
      There are ideas around trusted oracles and consensus recommendation ratings for oracles that aren't terrible and may work (no comment on scalability, of course).
      • therein 8y ago
        I cannot trust a system that trusts an oracle.
        • hndamien 8y ago
          What if it is a trustless Oracle? Augur kind of tries to be this, and appears to do well within a limited scope.
          • davidgerard 8y ago
            Very limited, i.e. they're down to a few tens of people bothering to vote daily.
            • hndamien 8y ago
              The amount of people “voting” seems to be less important than the amount at stake, as if it was a large stake proved incorrectly somebody may come in and fix that. $1.2m trades in 1 market with $800k open interest isn’t that bad.
      • qyv 8y ago
        Trusted is the opposite of trustless.
        • dnautics 8y ago
          The point is that in a trustless system trust can be earned by reputation, which is distributable and relatively trustless. Sure, you are taking the risk that you'll get screwed, but that risk factor should be calculable.
      • tim333 8y ago
        It's worked so far for the Dai, a USD tethered stablecoin based on Ethereum. Smart contracts buy or sell Dai against ETH to keep the price around US$1, the oracles feed in the USD/ETH rate from various exchanges. No actual USD are bought or sold by the Dai contracts. https://coinmarketcap.com/currencies/dai/ https://coinmarketcap.com/currencies/dai/
  • mathnmusic 8y ago
    This is not necessarily true. You can create a marketplace for facts (eg: oracles or prediction markets) and therefore create incentives for bystanders to bring facts to blockchain. Sure, it doesn't have 100% guarantees, but it might improve on the current scenario in certain cases.
    • thisisit 8y ago
      That is assuming everyone is moved by money and everything works in perfectly rational way. The problem is - humans are irrational.
      • pas 8y ago
        No, that's a very bad model. Humans have a hidden utility function and they maximize that. (See also bounded rationality, weak revealed preference axiom for market modeling.)
    • davidgerard 8y ago
      Your claim is remarkably hypothetical and lacking in details. That said, even then - when would it be cheaper just to bribe the voters?
      • pas 8y ago
        That's why people stake claims, and the more money they put up, the more they bet on what they claim, the more you can be sure that it's not just a troll, not a hoax, not someone trying to move the market, not someone bought and paid for (so not a Sybil attack).
        • theamk 8y ago
          But staking is naturally limited by the amount of money one has -- so it would be a great advantage for big corps with PR budgets and a disadvantage for individuals. Do we really want that? Hypothetical example: - The Citizen (on blockchain): EvilCorp is dumping toxic waste on my property! They are making millions of dollars from my ruin! I stake all of my available money -- $20,000 -- on this statement. - EvilCorp (on blockchain): No we are not. We stake 1% of our discretionary PR budget -- $200,000 -- on this statement. - PR firm (on blockchain): We stake $200,000 to support EvilCorp. They are our biggest customer, and we can handle the (unlikely) money loss if this means good relationship. - Other citizens of the town: yeah, that sludge looks really nasty.. but EvilCorp has a ton of money. That guy has almost nothing, I do not think he is going to win. If we support him, we will likely lose our stake. So it makes financial sense to side with EvilCorp. - Blockchain decides EvilCorp is correct. The Citizen now has backyard full of toxic sludge and broke. - EvilCorp and PR firm both get even more money.
  • Groxx 8y ago
    if you need accurate verification, or it boils down to a single person, agreed. (though that's not often possible, e.g. bribery) if you need to know the final consensus (or lack thereof) about that verification, regardless of how consensus is determined, it's not a deal-breaker. multi-party signatures, basically, which is what ethereum is designed to do. (for context tho: broadly I agree, blockchains make zero sense in very nearly all potential scenarios)
• nostrademons 8y ago
  They make sense when the primary vulnerability isn't the person doing the recording but the possibility that the data might be tampered with or misrepresented before it gets to the consumer. Consider, for example, the problem of restaurant reviews. We know that one person's review of a restaurant isn't going to be 100% accurate, because it's subjective. Socially, we've figured out ways of getting around that, like soliciting reviews from many different people, looking for reviews from people with tastes like ours, looking at the specific details they post, etc. They're also not generally incentivized to lie, because they've already eaten there and their review isn't likely to influence their service in the future. All this falls apart if, say, the platform responsible for collecting these reviews has a business model where they are incentivized to bury negative reviews and manipulate scores upwards, but only for restaurants that have given them money. It'd be a much more trustworthy system if the reviewers could receive currency directly for the information they provide, provided by the potential customers who benefit directly from that information. Alas, basically nothing on the web works that way. If only current blockchain implementations had acceptable performance to handle terabytes of data on mobile phones...
  • coryrc 8y ago
    Also doesn't address astroturfing or spam, which are more of a problem without a gatekeeper.
  • theoh 8y ago
    What makes your proposed system immune from abuse? "reviewers could receive currency directly for the information they provide, provided by the potential customers who benefit directly" The greatest benefit goes to restaurants with positive reviews, which are thereby incentivized to game the system. Blockchain might have solved the problem of trustless consensus with proof-of-work, but you are now introducing a new situation in which any number of fake, anonymous contributors can distort the review system. If the review reader pays the review writer directly, upvoting their own phony reviews doesn't cost the corrupt restaurant anything.
    • nostrademons 8y ago
• deleted 8y ago
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• Alex3917 8y ago
  > Yes but how do I know that you didn't swap the barcodes or you didn't fiddle with the GPS or the thermometer was working or a million other things? Game theory. Without DLT you make more money by doing these things. With DLT it just becomes the cream skimming problem, where you're just paying money to shuffle assets around but you're actually losing money because the total value of all the assets is still the same. E.g. if you replace Wagyu beef with flank steak, A) you can only do that once rather than infinite times, like you can currently, because each asset still needs to have been originated somewhere B) you now have to either sell Wagyu beef as flank steak or else sell it into an unregulated market as a potential lemon, where you'll take a huge price hit anyway. So it certainly doesn't eliminate all fraud, but it eliminates the vast majority of fraud by A) ensuring you can only commit fraud at most once per genuine item produced B) vastly reducing the profitability of any fraud you do commit. Keep in mind that once DLT is common place, what's a status symbol isn't going to be the watch itself or whatever, but rather it's going to be having your purchase of the watch recorded in the DLT. This means that even if you do defeat all the tamper proof mechanisms or whatever, the original item is going to be basically worthless. Whether it's going to eliminate 99% of fraud or only 97.5% of fraud or whatever in each industry is difficult to say, but regardless of the exact number it's going to be high enough that everything not on the DLT is going to be both considered a potential lemon and also carry substantial legal risk, and as such will priced accordingly.
  • ghaff 8y ago
    The fact that a blockchain can’t always be guaranteed to always represent the ground truth about physical assets is certainly a limitation. But I agree with you. This isn’t about 100% guarantees. It’s about making fraud harder and more expensive, increasing visibility, and streamlining the whole process. I remain something of a skeptic but there’s certainly a lot of interest in and money for things like provenance and supply chain tracking. Just reducing fraud and otherwise cutting costs could be a big win.
    • Alex3917 8y ago
      > Just reducing fraud and otherwise cutting costs could be a big win. I mean that alone is a several trillion dollar a year improvement that will continue on indefinitely, and that's only one of the many applications for blockchain. Consider that roughly 75% of American adults of working age are either unemployed or underemployed, and in most countries it's vastly worse than that. The reason most of them are unemployed or underemployed isn't (for the most part) that they're unable or unwilling to work or that they don't have valuable skills, but rather that double entry accounting doesn't enable a broad enough spectrum of economic relationships to capture the long tail of human talent. When I say this is going to be a multi-quadrillion dollar technology I'm not kidding around. 99% of the stuff you own today wouldn't have been possible without the invention of double entry accounting, which vastly expanded the types of economic relationships that were possible and thereby vastly expanded the types of goods and services that could be produced. DLT isn't a replacement for your MySQL instance, it's a replacement for double entry accounting, and a 10x improvement at that. When people look back 500 years from now they're going to see that the vast majority of the (then) modern world wouldn't have been possible without it. It's going to largely replace the middle class in the same way that automation has largely replaced the working class, because if you go down the Bureau of Labor Statistics list of jobs it's pretty clear that most middle class American jobs are basically just fulfilling glorified accounting functions. Even just considering supply chain, as the profitability of creating counterfeit items decreases that doesn't just reduce the percentage of things you buy that are counterfeit, but it also makes it possible to make entirely new classes of (genuine) products that wouldn't have been economically viable previously.
• tuxxy 8y ago
  I alluded to this problem in my comment. This is the crux of the oracle-problem. There is no way to reliably (key word here: reliably) take non-cryptographically provable information and achieve consensus on it in a decentralized manner.
  • dnautics 8y ago
    To some degree the block chain is not 100% reliable, there is a vanishing but nonzero likelihood that you are not on the correct chain of maximal likelihood. You can calculate this likelihood and feel settled that your ledger transaction is "secure enough" after some time has passed. One could imagine a trusted oracle system that operates on similar "eventually vanishing lack of confidence" principle if the oracle's actions are generally, independently verifiable. It will of course be less scalable than the blockchain itself as a generalization.
• p1mrx 8y ago
  What we need is an edible blockchain, perhaps based on a proof of steak model.
• ibeckermayer 8y ago
  Sure, cryptocurrency is the perfect use case if for some reason you think currency should not be be tied to anything of physical value in the non-digital world.
• baby 8y ago
  Ah! I keep hearing people talking about blockchain and supply chain and it makes zero sense to me. So we agree that this is bullshit?
  • atq2119 8y ago
    Cryptocurrency and proof of work/stake and automated conteacts make no sense in the context of the supply chain. A distributed database ("ledger") might make sense in the context of supply chains. The competing technology is to have a central clearinghouse for the relevant data. Or to just not track the data at all.
  • tim333 8y ago
    Part bullshit. I'd say the jury is still out.
• sk221 8y ago
  I think blockchains can help minimize trust even if it's dealing with assets outside the blockchain. Let's use your beef example. The beef might come from a farm. It's certified organic. It gets shipped off to a distributor. The distributor sells it to a store. You go to a store and buy it. In the current system, if the store is a bad actor (e.g. selling beef it claims is organic, when it's actually not) then you don't really have a way of knowing. However, if the beef was tracked on the blockchain and transferred to you on the blockchain at the point of purchase, then you are no longer relying on just the store telling you it's organic. The claim is verified by chain of custody on the blockchain. So now multiple parties (the farm, distributor, and store) would have to cooperate to dupe you. You can still get defrauded by the store if they completely swap the beef. But, they would STILL have to purchase legitimate beef and transfer it on the blockchain to you. It would be harder to get away with it vs. just changing the label. That's just one example of where it can minimize trust. But once more assets are tracked on the blockchain, you can start to do REALLY COOL things with them. For example, imagine using real estate to get decentralized collateral backed loans on MakerDAO. I can go on and on about this stuff...but it's really cool and we're just getting our feet wet with the technology.
  • joshwa 8y ago
    Nothing about the blockchain can tell you whether somebody switched the labels, or who did it. And the not-guilty parties probably have no way of verifying what they received, either. Having movements logged in a federated database has all the same properties.
    • arisAlexis 8y ago
      What do you think is easier: making several companies run on their servers a federated databases or using a worldwide publicly available one?
      • kllrnohj 8y ago
        What do you think is easier: convincing farms to send a cheap message to a federated database when they ship out products, or have them buy up insane quantities of computational power to compute crypto hashes, using insane amounts of power to do it? Blockchain is crazy expensive to run. Why would anyone pay for that when there's dirt cheap alternatives that are every bit as effective at solving the problem?
• arisAlexis 8y ago
  If (there are trackers for supply chains already) then { blockchain is surely better because it is immutable and can have multiple validators } and there are trackers for supply chain already run on centralized databases that can be tampered.
  • theamk 8y ago
    You don't need blockchain for immutable log with multiple validators, you just need system like the one Certificate Transparency does [1]. It looks pretty similar to blockchain, but it has lots of advantages for supply chain tracking: much better scaleability, no energy waste, no need for full chain, ability to only care about specific subset of entries, and so on. There are a number of current CT servers, and they are generally free -- they are so cheap that a large company can run one as a public service. For supply chain, have a few competing companies and govt's of US, Russia and EU run it, and you would have very tamper-proof system. [1] http://www.certificate-transparency.org/log-proofs-work http://www.certificate-transparency.org/log-proofs-work
• InfinityLoop 8y ago
  You do make a valid point - however, there are ways to ameliorate (or even eliminate) this risk introduced into the blockchain, by relying on external verification. One way would be to have each "verified" transaction to be associated with an individual or entity who is providing the "verification", with legally enforceable dire penalties for "submitting" a transaction that is later found to be fraudulent. So, if a transaction is found to be fraudulent, it can be traced back down to the first transaction in which a fraudulent transaction was submitted as "verified".