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From the article, the use case discussed is distributed consensus. With cryptocurrencies we as society have the option of a new way of organizing labor and cap

by lowkey 5y ago

From the article, the use case discussed is distributed consensus. With cryptocurrencies we as society have the option of a new way of organizing labor and capital to achieve a goal. Instead of kings, politicians, corporate owners or middlemen - we have the opportunity to build systems based on the idea of rules without rulers. Bitcoin eliminates the need for central bankers to control the money supply. Ethereum replaces armies of lawyers and beaurocrats with smart contract code. In the future crypto might allow you to build Ubercoin so we can have a distributed ride-sharing platform without a central entity in the middle. These new distributed consensus mechanisms eliminate the weaknesses of traditional approaches which rely on fallible human leaders who can be corrupted replacing them with code and incentives. This allows for emergent properties such as censorship resistant money that can be transmitted quickly and irrevocably over the internet. These are novel and innovative use cases powered by the most important invention of the 21at century.

mypastself 5y ago
How does real-life information enter a smart contract, and how do you make sure all sides make good on their dues?
- lowkey 5y ago
  One option today is Chainlink which uses a host of oracles to achieve distributed consensus on real-world prices, weather or other signals.
  - mypastself 5y ago
    And how would Chainlink prove that a particular side of a contract has, say, delivered a particular item or performed a particar service and the other party’s funds must be released?
    - lowkey 5y ago
      Chainlink hasn’t solved for every external blockchain integration - I never claimed they did. Chainlink simply provides a distributed consensus mechanism for getting real world observations in a robust and difficult to manipulate way, onto a blockchain.
      - mypastself 5y ago
        It sounds to me like the technology doesn’t really replace lawyers with code, then. The one use case presented so far is a contract that relies on publicly available data arbitered by a majority of external sources, each of which is presumably inducted into the system by a trusted third party.
        lowkey 5y ago
        Give it a chance. It may not replace every contract in every case but Ethereum in conjunction with Chainlink does address an increasing number of legacy contract use cases. This is a nascent technology and per the article, major structural transformations such as this may play out over 30 or more years. If you are genuinely curious I would suggest reading up on the details of how Chainlink works [1]. As you can see these are not trivial challenges and the solutions often require a bit of effort to understand. (Not claiming to be an expert, just an interested student) [1] https://chain.link/solutions https://chain.link/solutions
        mypastself 5y ago
        I actually am curious about the entire crypto space, and I’ve been trying to get a good theoretical grounding. I find the tech fascinating and potentially valuable. But the majority of potential use cases so far, particularly those relating to applications beyond the strictly financial, seem to rely on flawed premises. The idea of oracles seems to go against the whole point of even using the blockchain. Perhaps Chainlink or any number of competitors will eventually resolve some of these issues, but I don’t think they’ve presented a convincing case yet. Or I just don’t quite understand it.
  - deleted 5y ago
    [deleted]
- dcolkitt 5y ago
  A real life human still has to decide about real life information to put on the chain, but the point is we’re now globally unconstrained about who we choose to arbitrate that information. That allows for an intense global competition for trustworthy and reliable sources. Say we enter a weather derivative contract that pays off based on total rainfall. If there’s a dispute, instead of a two-bit local judge playing amateur meteorologist, we can simply point our smart contract at AccuWeather’s daily data. AccuWeather is going to be far less likely to destroy their entire franchise by publicly releasing bad data to corrupt a single contract. The point of smart contracts isn’t that everything’s automated. It’s that we can identify the areas that do require human input, and mix and match the best and most trustworthy oracles with high domain expertise.
  - ipython 5y ago
    But how does that change anything? I don’t like the output of the smart contract, so I sue accuweather, the smart contract owner, and anyone else involved in the transaction. Some “two bit” judge then adjudicates the dispute after all. What if the judge rules that accuweather’s record is incorrect? All I see is that now I have yet another party to trust: whomever wrote the smart contract. Why should I trust him/her? How do I know that there isn’t an intentional logic issue or unintentional bug that will end up with me losing my money? What’s my recourse then?
    - dcolkitt 5y ago
      The judge has no say. The smart contract is collateralized ahead of time. Both parties lock sufficient value in the contract to make sure that the payment can be made good. After the value is locked in the contract, there's nothing any fiat judge on Earth can do to reverse the smart contract, short of shutting down the entire blockchain. I agree that you have to trust the software underlying the contract. But it's highly likely that you'll use an open standard that's battle tested across time. Typically it's much easier to develop trust in software than it is institutions. Every day you trust your life, privacy and money to open software standards across a wide variety of contexts.
      - 5y ago
lottin 5y ago
The questions that you fail to address is what problem this "distributed consensus" is solving and what advantages and disadvantages has compared to existing solutions.
- lowkey 5y ago
  Distributed consensus eliminates a whole host of problems associated with centralized middlemen. For example, with Bitcoin the rules of the system are transparent to all participants and cannot be changed by any single party. 21 million coins is the limit and the emission rate is fixed. With traditional fiat, no one can promise or predict the supply or debasement rate this year, next year or ten years from now.
  - lottin 5y ago
    > Distributed consensus eliminates a whole host of problems associated with centralized middlemen. Which ones? > With traditional fiat, no one can promise or predict the supply or debasement rate this year, next year or ten years from now. Nobody wants to predict the supply. What people want to predict is the inflation rate, and the inflation rate is only predictable when you have a central bank.
    - lowkey 5y ago
      My comment provided the first example (currency supply and debasement rate) but you then go on to claim that nobody wants those things. I want those things as do others so objectively your claim is false. Also your claim that inflation rate is only predictable when you have a central bank is just plain silly. It makes no sense.
      - lottin 5y ago
        You said there are a "whole host of problems associated with centralized middlemen" but the only "problem" you mention is the unpredictability of the money supply in fiat currencies, which, leaving aside whether it's even a problem, it certainly isn't representative of a set of problems "associated with centralized middlemen". And the claim that the inflation rate is unpredictable in the absence of an adaptive monetary policy is not controversial among economists, as far as I know. If you think such a claim is "plain silly" and that it "makes no sense" maybe you need to explain why.

by lowkey 5y ago

mypastself 5y ago

How does real-life information enter a smart contract, and how do you make sure all sides make good on their dues?

lowkey 5y ago
One option today is Chainlink which uses a host of oracles to achieve distributed consensus on real-world prices, weather or other signals.
- mypastself 5y ago
  And how would Chainlink prove that a particular side of a contract has, say, delivered a particular item or performed a particar service and the other party’s funds must be released?
  - lowkey 5y ago
    Chainlink hasn’t solved for every external blockchain integration - I never claimed they did. Chainlink simply provides a distributed consensus mechanism for getting real world observations in a robust and difficult to manipulate way, onto a blockchain.
    - mypastself 5y ago
      It sounds to me like the technology doesn’t really replace lawyers with code, then. The one use case presented so far is a contract that relies on publicly available data arbitered by a majority of external sources, each of which is presumably inducted into the system by a trusted third party.
      - lowkey 5y ago
        Give it a chance. It may not replace every contract in every case but Ethereum in conjunction with Chainlink does address an increasing number of legacy contract use cases. This is a nascent technology and per the article, major structural transformations such as this may play out over 30 or more years. If you are genuinely curious I would suggest reading up on the details of how Chainlink works [1]. As you can see these are not trivial challenges and the solutions often require a bit of effort to understand. (Not claiming to be an expert, just an interested student) [1] https://chain.link/solutions https://chain.link/solutions
        mypastself 5y ago
        I actually am curious about the entire crypto space, and I’ve been trying to get a good theoretical grounding. I find the tech fascinating and potentially valuable. But the majority of potential use cases so far, particularly those relating to applications beyond the strictly financial, seem to rely on flawed premises. The idea of oracles seems to go against the whole point of even using the blockchain. Perhaps Chainlink or any number of competitors will eventually resolve some of these issues, but I don’t think they’ve presented a convincing case yet. Or I just don’t quite understand it.
- deleted 5y ago
  [deleted]
dcolkitt 5y ago
A real life human still has to decide about real life information to put on the chain, but the point is we’re now globally unconstrained about who we choose to arbitrate that information. That allows for an intense global competition for trustworthy and reliable sources. Say we enter a weather derivative contract that pays off based on total rainfall. If there’s a dispute, instead of a two-bit local judge playing amateur meteorologist, we can simply point our smart contract at AccuWeather’s daily data. AccuWeather is going to be far less likely to destroy their entire franchise by publicly releasing bad data to corrupt a single contract. The point of smart contracts isn’t that everything’s automated. It’s that we can identify the areas that do require human input, and mix and match the best and most trustworthy oracles with high domain expertise.
- ipython 5y ago
  But how does that change anything? I don’t like the output of the smart contract, so I sue accuweather, the smart contract owner, and anyone else involved in the transaction. Some “two bit” judge then adjudicates the dispute after all. What if the judge rules that accuweather’s record is incorrect? All I see is that now I have yet another party to trust: whomever wrote the smart contract. Why should I trust him/her? How do I know that there isn’t an intentional logic issue or unintentional bug that will end up with me losing my money? What’s my recourse then?
  - dcolkitt 5y ago
    The judge has no say. The smart contract is collateralized ahead of time. Both parties lock sufficient value in the contract to make sure that the payment can be made good. After the value is locked in the contract, there's nothing any fiat judge on Earth can do to reverse the smart contract, short of shutting down the entire blockchain. I agree that you have to trust the software underlying the contract. But it's highly likely that you'll use an open standard that's battle tested across time. Typically it's much easier to develop trust in software than it is institutions. Every day you trust your life, privacy and money to open software standards across a wide variety of contexts.
    - 5y ago

lottin 5y ago

The questions that you fail to address is what problem this "distributed consensus" is solving and what advantages and disadvantages has compared to existing solutions.

lowkey 5y ago
Distributed consensus eliminates a whole host of problems associated with centralized middlemen. For example, with Bitcoin the rules of the system are transparent to all participants and cannot be changed by any single party. 21 million coins is the limit and the emission rate is fixed. With traditional fiat, no one can promise or predict the supply or debasement rate this year, next year or ten years from now.
- lottin 5y ago
  > Distributed consensus eliminates a whole host of problems associated with centralized middlemen. Which ones? > With traditional fiat, no one can promise or predict the supply or debasement rate this year, next year or ten years from now. Nobody wants to predict the supply. What people want to predict is the inflation rate, and the inflation rate is only predictable when you have a central bank.
  - lowkey 5y ago
    My comment provided the first example (currency supply and debasement rate) but you then go on to claim that nobody wants those things. I want those things as do others so objectively your claim is false. Also your claim that inflation rate is only predictable when you have a central bank is just plain silly. It makes no sense.
    - lottin 5y ago
      You said there are a "whole host of problems associated with centralized middlemen" but the only "problem" you mention is the unpredictability of the money supply in fiat currencies, which, leaving aside whether it's even a problem, it certainly isn't representative of a set of problems "associated with centralized middlemen". And the claim that the inflation rate is unpredictable in the absence of an adaptive monetary policy is not controversial among economists, as far as I know. If you think such a claim is "plain silly" and that it "makes no sense" maybe you need to explain why.