4 ms·

You sound pretty well informed, so I'm genuinely curious - what's the "killer app" of smart contracts? What use case do they fulfill that the traditional financ

You sound pretty well informed, so I'm genuinely curious - what's the "killer app" of smart contracts? What use case do they fulfill that the traditional financial system just falls flat on?

xur17 6y ago
The GP gave one, uniswap - a trustless exchange between 2 assets.
- landryraccoon 6y ago
  Please forgive my ignorance, because I still don't get it. Can you give me an example of how this would work in practice? What two assets would you swap in this manner, for example, and why wouldn't that work with traditional financial instruments?
  - vvpan 6y ago
    Well it would work with traditional financial instruments. But what wouldn't work with traditional financial instruments is an ability to integrate with them in a matter of, literally, an hour or two. These systems are open and nobody can be stopped from inter-operating with them in any way their imagination suggests. If you wanted to write a bot that does arbitrage between Yen and USD you would be able to do it, easily actually. If we are going to talk "decentralized finance" - I agree it is weird and dangerous, but I see it a proof of concept. You can get a collateralized loan in seconds, even if you live in a country where banking is almost unheard of. Yes, there need to be things of value that you own on the blockchain but value tied to physical world is becoming more of a thing. And, again, yes it's dangerous and untested. But these are the hacking and experimentation years. One must be able to crawl before one can run.
vvpan 6y ago
Um, well I'll try my best. In a way it's true that it's a solution looking for a problem and I think we are seeing novel ways to use it. I think a problem is that people still associate blockchain with "currencies" and payment. That is a fairly narrow view of an immutable ledger. A project that, in my opinion, gives a glimpse of the direction blockchain will go in is the Baseline Protocol - a joint project between EY, MS and Consensys. I have tried describing it in another comment [1]. But to give a basic idea is that it does not necessarily use blockchain to transfer value, but instead to coordinate two entities. Basically it puts communication between business entities exchanging, for example, supply chain orders on the blockchain. Essentially the blockchain becomes an auditable protocol for communication, reducing technical overhead and making things like adjudication easier. Coca-cola is piloting this: https://medium.com/unibrightio/baselining-the-north-america-coca-cola-bottling-supply-chain-f87539220269 https://medium.com/unibrightio/baselining-the-north-america-... And here is a more technical example of hooking up SAP to order-matching on Ethereum. It's a little basic, but gives an idea. https://blogs.sap.com/2020/08/21/sap-integration-with-ethereum-mainnet/ https://blogs.sap.com/2020/08/21/sap-integration-with-ethere... [1] - https://news.ycombinator.com/item?id=23824584 https://news.ycombinator.com/item?id=23824584

You sound pretty well informed, so I'm genuinely curious - what's the "killer app" of smart contracts? What use case do they fulfill that the traditional financial system just falls flat on?

xur17 6y ago

The GP gave one, uniswap - a trustless exchange between 2 assets.

landryraccoon 6y ago
Please forgive my ignorance, because I still don't get it. Can you give me an example of how this would work in practice? What two assets would you swap in this manner, for example, and why wouldn't that work with traditional financial instruments?
- vvpan 6y ago
  Well it would work with traditional financial instruments. But what wouldn't work with traditional financial instruments is an ability to integrate with them in a matter of, literally, an hour or two. These systems are open and nobody can be stopped from inter-operating with them in any way their imagination suggests. If you wanted to write a bot that does arbitrage between Yen and USD you would be able to do it, easily actually. If we are going to talk "decentralized finance" - I agree it is weird and dangerous, but I see it a proof of concept. You can get a collateralized loan in seconds, even if you live in a country where banking is almost unheard of. Yes, there need to be things of value that you own on the blockchain but value tied to physical world is becoming more of a thing. And, again, yes it's dangerous and untested. But these are the hacking and experimentation years. One must be able to crawl before one can run.

vvpan 6y ago

Um, well I'll try my best. In a way it's true that it's a solution looking for a problem and I think we are seeing novel ways to use it. I think a problem is that people still associate blockchain with "currencies" and payment. That is a fairly narrow view of an immutable ledger. A project that, in my opinion, gives a glimpse of the direction blockchain will go in is the Baseline Protocol - a joint project between EY, MS and Consensys. I have tried describing it in another comment [1]. But to give a basic idea is that it does not necessarily use blockchain to transfer value, but instead to coordinate two entities. Basically it puts communication between business entities exchanging, for example, supply chain orders on the blockchain. Essentially the blockchain becomes an auditable protocol for communication, reducing technical overhead and making things like adjudication easier. Coca-cola is piloting this: https://medium.com/unibrightio/baselining-the-north-america-coca-cola-bottling-supply-chain-f87539220269 https://medium.com/unibrightio/baselining-the-north-america-... And here is a more technical example of hooking up SAP to order-matching on Ethereum. It's a little basic, but gives an idea. https://blogs.sap.com/2020/08/21/sap-integration-with-ethereum-mainnet/ https://blogs.sap.com/2020/08/21/sap-integration-with-ethere... [1] - https://news.ycombinator.com/item?id=23824584 https://news.ycombinator.com/item?id=23824584