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I posted this as a response below but still I find it interesting that OP says public crypto failed because of both fundamental misunderstandings and immature

I posted this as a response below but still I find it interesting that OP says public crypto failed because of both fundamental misunderstandings and immature tech (internet trying to compete with newspapers in the 80s). Eventually, the internet was able to compete with newspapers and I think eventually public blockchain will compete with centralized companies. Networks can benefit from economies of scale without the rent seeking bottlenecks of centralized agents. I agree with op that in some cases centralization naturally happens but it doesn't follow that this is true in all cases. On a diff note, has anyone read the Master Switch that OP recommended? Worth reading?

TheOtherHobbes 8y ago
I'm scratching my head trying to think of any significant distributed and decentralised economic entities. In fact I think this is the Big Lie of Disruption. The reality is that instead of breaking up existing monopolies, "disruption" simply creates new, bigger, even more centralised and powerful monopolies. Economic systems are rather like cellular automata. They either splutter around for a while and die out, or they take over the board and assimilate everything. Although it claims to solve this problem, blockchain doesn't - not even close. You can only solve it by consciously moving entropy around the system to keep it in a permanently metastable state - supporting smaller structures that generate new information, and splitting up large structures that threaten to engulf everything around them.
- tim333 8y ago
  >scratching my head trying to think of any significant distributed and decentralised economic entities The banking system? Sure it ends up a bit centralised but still most countries have their own ones.
- majewsky 8y ago
  > Economic systems are rather like cellular automata. They either splutter around for a while and die out, or they take over the board and assimilate everything. This metaphor is amazing. I wanted to reply that cellular automata can in fact produce highly-localized, stable systems (like glider cannons in Conway's GoL). Then I realized that while those systems are stable, they are also so brittle that a single flipped bit will destroy them incredibly fast. That sounds a lot like economics.
bb88 8y ago
> I find it interesting that OP says public crypto failed because of both fundamental misunderstandings and immature tech (internet trying to compete with newspapers in the 80s). Eventually, the internet was able to compete with newspapers and I think eventually public blockchain will compete with centralized companies. Keep in mind that both of those technologies took years. TCP started development in 1973. It didn't fully mature for another decade, and then it wasn't mainstream until 1994-1996. And even then it was the web that drove the adoption of the internet, not the other way around. Until the web, the internet was more of an academic curiosity. > Networks can benefit from economies of scale without the rent seeking bottlenecks of centralized agents. But there are side effects of non-centralized agents -- everyone needs to agree upon running the same algorithm (forking, security holes, etc). And immature networks can suffer a majority attack. Meanwhile from a security perspective, there's greater efficiency with a centralized system. One security hole can be fixed for everyone on the network in one spot.
- dhh2106 8y ago
  Agree it took decades for TCP. We might still be a long time away for blockchain and associated technologies (ipfs, zkp, etc.) going mainstream The privacy use case in blockchain has trade-offs and is not a panacea. There are some situations where the centralized efficiency outweighs the risks
- Tesl 8y ago
  It is not reasonable to compare Blockchain versus TCP. Only advocates do this because despite Blockchain technology being completely useless, it's a simple line that excuses all lack of progress / usecases, whilst simultaneously implying it will still take over the world. It's a dishonest line to come out with and people on Hacker News should know better.
  - bb88 8y ago
    I think if you go over my comment history, you'll not find me a fan of cryptocurrencies nor blockchains. I'm partial to this comment I made recently. https://news.ycombinator.com/item?id=18538733 https://news.ycombinator.com/item?id=18538733 The point wasn't to defend bitcoin and blockchain, but just the opposite, to point out how immature the technology is to something vastly simpler, moving data from point A to B on the internet. And TCP took years to get right.
chrispeel 8y ago
"The Master Switch" is a good book to read. If we apply the ideas from that book to the blockchain space, we'd expect large players to eventually dominate, as Apple,Amazon,Facebook,Google... dominate today. I.e. you might expect companies (such as the Consensys conglomerate that invests in the Ethereum ecosystem) to dominate if the space continues to grow. One possible counter to this line of thought is projects such as Ethereum, Augur, 0x, and Gnosis have non-profit foundations behind them and are working on protocols and APIs and thus do not have the same for-profit motive to grow large. Wu also has a new book "The Curse of Bigness" that I recommend: https://www.amazon.com/gp/product/B07HRLQSLG/ref=dbs_a_def_rwt_hsch_vapi_taft_p1_i0 https://www.amazon.com/gp/product/B07HRLQSLG/ref=dbs_a_def_r...
- dhh2106 8y ago
  Any thoughts on which to start with?
johnny22 8y ago
when we were talking about the internet competing with newspapers back in the day.. What we see now isn't what we wanted. It's still mostly the same entities in control. In a sense, the internet lost.
- leppr 8y ago
  And yet here we are freely discussing the diverse opinions of many involved individuals around the world, around a Twitter thread. Back then the only relevant opinion you'd hear of was the journalists'.

TheOtherHobbes 8y ago

I'm scratching my head trying to think of any significant distributed and decentralised economic entities. In fact I think this is the Big Lie of Disruption. The reality is that instead of breaking up existing monopolies, "disruption" simply creates new, bigger, even more centralised and powerful monopolies. Economic systems are rather like cellular automata. They either splutter around for a while and die out, or they take over the board and assimilate everything. Although it claims to solve this problem, blockchain doesn't - not even close. You can only solve it by consciously moving entropy around the system to keep it in a permanently metastable state - supporting smaller structures that generate new information, and splitting up large structures that threaten to engulf everything around them.

tim333 8y ago
>scratching my head trying to think of any significant distributed and decentralised economic entities The banking system? Sure it ends up a bit centralised but still most countries have their own ones.
majewsky 8y ago
> Economic systems are rather like cellular automata. They either splutter around for a while and die out, or they take over the board and assimilate everything. This metaphor is amazing. I wanted to reply that cellular automata can in fact produce highly-localized, stable systems (like glider cannons in Conway's GoL). Then I realized that while those systems are stable, they are also so brittle that a single flipped bit will destroy them incredibly fast. That sounds a lot like economics.

bb88 8y ago

> I find it interesting that OP says public crypto failed because of both fundamental misunderstandings and immature tech (internet trying to compete with newspapers in the 80s). Eventually, the internet was able to compete with newspapers and I think eventually public blockchain will compete with centralized companies. Keep in mind that both of those technologies took years. TCP started development in 1973. It didn't fully mature for another decade, and then it wasn't mainstream until 1994-1996. And even then it was the web that drove the adoption of the internet, not the other way around. Until the web, the internet was more of an academic curiosity. > Networks can benefit from economies of scale without the rent seeking bottlenecks of centralized agents. But there are side effects of non-centralized agents -- everyone needs to agree upon running the same algorithm (forking, security holes, etc). And immature networks can suffer a majority attack. Meanwhile from a security perspective, there's greater efficiency with a centralized system. One security hole can be fixed for everyone on the network in one spot.

dhh2106 8y ago
Agree it took decades for TCP. We might still be a long time away for blockchain and associated technologies (ipfs, zkp, etc.) going mainstream The privacy use case in blockchain has trade-offs and is not a panacea. There are some situations where the centralized efficiency outweighs the risks
Tesl 8y ago
It is not reasonable to compare Blockchain versus TCP. Only advocates do this because despite Blockchain technology being completely useless, it's a simple line that excuses all lack of progress / usecases, whilst simultaneously implying it will still take over the world. It's a dishonest line to come out with and people on Hacker News should know better.
- bb88 8y ago
  I think if you go over my comment history, you'll not find me a fan of cryptocurrencies nor blockchains. I'm partial to this comment I made recently. https://news.ycombinator.com/item?id=18538733 https://news.ycombinator.com/item?id=18538733 The point wasn't to defend bitcoin and blockchain, but just the opposite, to point out how immature the technology is to something vastly simpler, moving data from point A to B on the internet. And TCP took years to get right.

chrispeel 8y ago

"The Master Switch" is a good book to read. If we apply the ideas from that book to the blockchain space, we'd expect large players to eventually dominate, as Apple,Amazon,Facebook,Google... dominate today. I.e. you might expect companies (such as the Consensys conglomerate that invests in the Ethereum ecosystem) to dominate if the space continues to grow. One possible counter to this line of thought is projects such as Ethereum, Augur, 0x, and Gnosis have non-profit foundations behind them and are working on protocols and APIs and thus do not have the same for-profit motive to grow large. Wu also has a new book "The Curse of Bigness" that I recommend: https://www.amazon.com/gp/product/B07HRLQSLG/ref=dbs_a_def_rwt_hsch_vapi_taft_p1_i0 https://www.amazon.com/gp/product/B07HRLQSLG/ref=dbs_a_def_r...

dhh2106 8y ago
Any thoughts on which to start with?

johnny22 8y ago

when we were talking about the internet competing with newspapers back in the day.. What we see now isn't what we wanted. It's still mostly the same entities in control. In a sense, the internet lost.

leppr 8y ago
And yet here we are freely discussing the diverse opinions of many involved individuals around the world, around a Twitter thread. Back then the only relevant opinion you'd hear of was the journalists'.