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What would you say is the best example of a concrete, real-world use case for one of those tokens that would refute the article's claim that blockchains are “a

by paulgb 5y ago

What would you say is the best example of a concrete, real-world use case for one of those tokens that would refute the article's claim that blockchains are “a solution in search of a problem”? I ask because a lot of these things (exchanging one USD-pegged token for another, borrowing a token for another token) seem like problems that wouldn't exist to begin with, without blockchains.

brightstep 5y ago
Exactly, each of those examples is only interesting or useful to someone who already believes crypto has value. It's totally circular.
- chrisco255 5y ago
  Your argument is circular. Lending, borrowing, human coordination, liquidity management, censorship resistance, art patronage, royalties, permissionless non-custodial 24/7 trading, community development, a global pool of start up capital that rivals silicon valley and will eventually eclipse it, transparent treasury management across jurisdictions, user ownership, etc. There's no need to believe crypto has value. It has value. It trades 24/7 with a market cap approaching $3 trillion. The market isn't wrong about what has value, the market determines what has value. Deny that all you want, but it's not going anywhere, it will only evolve and grow from here. We've barely explored the design space for what is possible.
prohobo 5y ago
Autonomous services (similar to vending machines): See PoolTogether, a service which before blockchain would be considered almost certainly a scam, and would be nearly impossible to audit. Because it's on Ethereum the contract is publicly auditable, and the rules are simple: insert currency into a pool, and have a chance of winning a %age of total interest earned once a week. No one owns the service. If the site goes down nothing changes. The developers can't just change the rules (backend) on you. They also have a DAO so the users can manage the service themselves. A similar service is Compound, which recently was found to have a bug that gave away something like $90 million worth of currency to random users. That's the main danger with blockchain services: exploitable bugs. Besides that, I've been thinking about something like a blockchain based Wikipedia (or Research Gate?), with monetary incentives for research teams to answer questions posed by the community (when they can't get funding by other means) and a codified scientific process for grading the quality of papers, as well as mechanisms to reliably cite related research papers to use as supporting evidence or jumping off points. Think of this: a debunked paper causing a cascade of debunked papers that cited it. The point of using the blockchain would be to create a decentralized repository of research information with strict rules to maintain integrity of the information submitted (as opposed to relying on a centralized committee that might become corrupt through perverse incentives).
- brightstep 5y ago
  The first two are just gambling, which is not very different from the speculation the author talks about. Your idea is interesting and speaks to another desire that seems to me to run beneath a lot of interest in crypto, which is the desire to make social change without political action. My perspective is, we don't need a blockchain to reward that kind of behavior. We could decide as a society to create such a system in myriad other ways. The real problem I see is that we're (especially in the US) very much disconnected from the political process, which leads some to look for technological solutions to the problems they see around them.
  - prohobo 5y ago
    The first two are not gambling. There is no mechanism where you can lose your pooled funds. Don't believe me? Read the fucking contracts. How much clearer can this be? As for the rest of your comment, I think your diagnosis is wrong. This is purely political action, which is why so many people can't see the benefits. They think blockchain tech was supposed to clearly change what's possible - but it doesn't: instead it decentralizes it and removes the requirement of trust, which indirectly enables new possibilities. There is no current system that doesn't degrade over time due to various influences, or is immune from corruption. Blockchain based solutions don't solve the physical aspect of trust, and so would require the buy-in and cooperation of society through politics. What blockchains do is solve digital corruption and codifying rules, which changes the way people interact with systems.
    - paulgb 5y ago
      But it is gambling, it's just that you're gambling your interest foregone rather than the principal. Back to my original question, though, I don't see what real-world problem it solves to add stochastic variability to interest payments.
      - prohobo 5y ago
        That's not what my point was about. The point was autonomous services, and I also outlined an idea for one that would have real-world benefit (if properly designed). You can argue that there are no "useful" services yet, but not that there will never be any.
015a 5y ago
Helium (https://www.helium.com/); https://www.helium.com/); a decentralized mobile internet network operator which enables anyone to host radios and earn tokens for usage, without compromising the connection security of endpoint users. Filecoin (https://filecoin.io/); https://filecoin.io/); an incentive layer on top of IPFS to create a decentralized long-term object storage system. Tradelens (https://www.tradelens.com/); https://www.tradelens.com/); in development, AP Moller Maersk's enterprise container logistics/coordination blockchain. Anytime someone says "blockchains don't do anything which centralized systems can't do", I mentally interpret that as someone in 1995 saying "email can't do anything fax machines can't do". In the sense that: its kind of true, in that they accomplish a similar goal of sending a document from one person to another over wire, but it discounts as irrelevant the most critical, foundational thrust of why this new technology is interesting. For email: that it is all-digital. For blockchain: that it is decentralized. In the 90s, the people who still clung to fax machines didn't understand why an all-digital future was important or would matter. They had spent their entire lives living in physicality, working with paper and file cabinets, and it was fine. The fax machine made sense. Email didn't. Sure, centralized systems can do many of these things better. But they do so with the sacrifice of being centralized! Some critics inexplicably gloss over this like its an irrelevant, minor part of the argument. They've spent their entire lives among big tech billion dollar centralized multinational conglomerates, and its been fine. More centralization makes sense; email, I mean, decentralization, doesn't. The point is not to make a better system, in every way; the point is making a functional system that is decentralized, so it can operate in a trustless, geo-distributed, multi-party way.
- Daishiman 5y ago
  I'm not actually seeing how this helps decentralization. At some point if you're a rich-enough party you can just take over these networks with enough money and resources. There aren't that many mining pools for BTC, and the distribution of ownership of most coins still follows a power law. These systems don't really do anything to discourage that. Also you talk about the benefits of decentralization as if they were more important than the gains you get from centralized systems. They're generally not, except for fringe cases. For the most part I want a centralized system with someone to blame/sue who can use one big database to make my transactions flow fast. I won't deny that there's value at the fringes to decentralized, robust systems, but that value is at best 2% of what crypto defenders claim.
h00dui 5y ago
I personally think some of the community DAO tokens are interesting. For ex, $FWB (friends w benefits) is this membership type community where there are members + workers in a DAO like operation that utilizes a token for governance / membership etc. There are a lot of others popping up & I think in terms of tokens there is some room for improvement but some people are making money actually working in these systems. Sometimes these memberships are in the forms of NFT(s)/tokens for access & that is interesting. DAOs trying to pool money for causes, that are interesting. It's early, yes. The problems you write about - specifically the Token swapping id done because there was a problem (taxes).
chrisco255 5y ago
Tokens are a novel capital formation mechanism. Because tokens are programmable and blockchain native, they are qualitatively superior to other forms of "fractionalized ownership", such as a stock certificate, for example. A token can be used as an authentication mechanic for a piece of software. It can be used as a voting mechanic in a DAO, for example. You might argue that voting is the purpose of stock certificates, but in practice, it's quite impractical to participate in corporate politics. You generally have to attend an annual stockholder's meeting and put you vote forward there, and even then, you only get to vote on the Board of Directors (and this is rarely used in practice). In DAOs, it's far more similar to open source software development. People create an improvement proposal and pitch the idea in the forums and chat rooms for the project, and try to drum up enough support, and then it will go to a vote, and depending on how the DAO is set up, either you do an initial temperature check vote followed by a final implementation by the core team, or someone actually submits a PR to merge into the DAO source code and users vote on that code directly. The transparency of the treasury mechanics is also far more superior to anything else in the corporate world. With a DAO, I know at all times, precisely how much is in the treasury, how they've spent their funds in the past, what mechanics and rules guard that treasury, etc. It's all inspectable and visible on-chain. That makes a qualitative difference in the amount of trust you can generate among a group of dispersed strangers from potentially all corners of the earth, and it allows them to proceed in a productive manner in such a way that was not possible except for largely through groups of close-knit people working within a single jurisdiction (for the most part). Open source does work this way (which has also had a monetization problem), but pair open source ideals with open source money and open source treasury management, and you get something that is powerful in the same way that Linux is powerful for computing. Except it unlocks this type of coordination for things beyond software development. It encompasses everything, from art, entertainment, charity, politics, business, etc. It's a sea change in the ability to coordinate human beings and capital across distances and to incentivize people to participate in a more sustainable way. But stable coins of course, also solve a problem in and of themselves, because they make dollar-denominated token mechanics possible. If you want to program a smart contract in such a way that the terms and conditions and programmed rules depend on dollars as a base pair, you need stable coins. Programmable money is powerful for all the reasons above (it can be held in a smart contract, governed by a DAO, controlled by a multisig or by DAO votes or by certain boolean conditions being met) and more. It's also borderless, it's as easy to use in Argentina as it is in Kentucky. And slippage and liquidity are very real problems that do exist in traditional markets, such as stock markets. We've seen the traditional system mechanics breakdown, like what happened with GameStop earlier this year, when trading was halted due to liquidity issues. At any rate, powerful stuff here, it's here to stay, and it will change everything.

by paulgb 5y ago

brightstep 5y ago

Exactly, each of those examples is only interesting or useful to someone who already believes crypto has value. It's totally circular.

chrisco255 5y ago
Your argument is circular. Lending, borrowing, human coordination, liquidity management, censorship resistance, art patronage, royalties, permissionless non-custodial 24/7 trading, community development, a global pool of start up capital that rivals silicon valley and will eventually eclipse it, transparent treasury management across jurisdictions, user ownership, etc. There's no need to believe crypto has value. It has value. It trades 24/7 with a market cap approaching $3 trillion. The market isn't wrong about what has value, the market determines what has value. Deny that all you want, but it's not going anywhere, it will only evolve and grow from here. We've barely explored the design space for what is possible.

prohobo 5y ago

Autonomous services (similar to vending machines): See PoolTogether, a service which before blockchain would be considered almost certainly a scam, and would be nearly impossible to audit. Because it's on Ethereum the contract is publicly auditable, and the rules are simple: insert currency into a pool, and have a chance of winning a %age of total interest earned once a week. No one owns the service. If the site goes down nothing changes. The developers can't just change the rules (backend) on you. They also have a DAO so the users can manage the service themselves. A similar service is Compound, which recently was found to have a bug that gave away something like $90 million worth of currency to random users. That's the main danger with blockchain services: exploitable bugs. Besides that, I've been thinking about something like a blockchain based Wikipedia (or Research Gate?), with monetary incentives for research teams to answer questions posed by the community (when they can't get funding by other means) and a codified scientific process for grading the quality of papers, as well as mechanisms to reliably cite related research papers to use as supporting evidence or jumping off points. Think of this: a debunked paper causing a cascade of debunked papers that cited it. The point of using the blockchain would be to create a decentralized repository of research information with strict rules to maintain integrity of the information submitted (as opposed to relying on a centralized committee that might become corrupt through perverse incentives).

brightstep 5y ago
The first two are just gambling, which is not very different from the speculation the author talks about. Your idea is interesting and speaks to another desire that seems to me to run beneath a lot of interest in crypto, which is the desire to make social change without political action. My perspective is, we don't need a blockchain to reward that kind of behavior. We could decide as a society to create such a system in myriad other ways. The real problem I see is that we're (especially in the US) very much disconnected from the political process, which leads some to look for technological solutions to the problems they see around them.
- prohobo 5y ago
  The first two are not gambling. There is no mechanism where you can lose your pooled funds. Don't believe me? Read the fucking contracts. How much clearer can this be? As for the rest of your comment, I think your diagnosis is wrong. This is purely political action, which is why so many people can't see the benefits. They think blockchain tech was supposed to clearly change what's possible - but it doesn't: instead it decentralizes it and removes the requirement of trust, which indirectly enables new possibilities. There is no current system that doesn't degrade over time due to various influences, or is immune from corruption. Blockchain based solutions don't solve the physical aspect of trust, and so would require the buy-in and cooperation of society through politics. What blockchains do is solve digital corruption and codifying rules, which changes the way people interact with systems.
  - paulgb 5y ago
    But it is gambling, it's just that you're gambling your interest foregone rather than the principal. Back to my original question, though, I don't see what real-world problem it solves to add stochastic variability to interest payments.
    - prohobo 5y ago
      That's not what my point was about. The point was autonomous services, and I also outlined an idea for one that would have real-world benefit (if properly designed). You can argue that there are no "useful" services yet, but not that there will never be any.

015a 5y ago

Helium (https://www.helium.com/); https://www.helium.com/); a decentralized mobile internet network operator which enables anyone to host radios and earn tokens for usage, without compromising the connection security of endpoint users. Filecoin (https://filecoin.io/); https://filecoin.io/); an incentive layer on top of IPFS to create a decentralized long-term object storage system. Tradelens (https://www.tradelens.com/); https://www.tradelens.com/); in development, AP Moller Maersk's enterprise container logistics/coordination blockchain. Anytime someone says "blockchains don't do anything which centralized systems can't do", I mentally interpret that as someone in 1995 saying "email can't do anything fax machines can't do". In the sense that: its kind of true, in that they accomplish a similar goal of sending a document from one person to another over wire, but it discounts as irrelevant the most critical, foundational thrust of why this new technology is interesting. For email: that it is all-digital. For blockchain: that it is decentralized. In the 90s, the people who still clung to fax machines didn't understand why an all-digital future was important or would matter. They had spent their entire lives living in physicality, working with paper and file cabinets, and it was fine. The fax machine made sense. Email didn't. Sure, centralized systems can do many of these things better. But they do so with the sacrifice of being centralized! Some critics inexplicably gloss over this like its an irrelevant, minor part of the argument. They've spent their entire lives among big tech billion dollar centralized multinational conglomerates, and its been fine. More centralization makes sense; email, I mean, decentralization, doesn't. The point is not to make a better system, in every way; the point is making a functional system that is decentralized, so it can operate in a trustless, geo-distributed, multi-party way.

Daishiman 5y ago
I'm not actually seeing how this helps decentralization. At some point if you're a rich-enough party you can just take over these networks with enough money and resources. There aren't that many mining pools for BTC, and the distribution of ownership of most coins still follows a power law. These systems don't really do anything to discourage that. Also you talk about the benefits of decentralization as if they were more important than the gains you get from centralized systems. They're generally not, except for fringe cases. For the most part I want a centralized system with someone to blame/sue who can use one big database to make my transactions flow fast. I won't deny that there's value at the fringes to decentralized, robust systems, but that value is at best 2% of what crypto defenders claim.

h00dui 5y ago

I personally think some of the community DAO tokens are interesting. For ex, $FWB (friends w benefits) is this membership type community where there are members + workers in a DAO like operation that utilizes a token for governance / membership etc. There are a lot of others popping up & I think in terms of tokens there is some room for improvement but some people are making money actually working in these systems. Sometimes these memberships are in the forms of NFT(s)/tokens for access & that is interesting. DAOs trying to pool money for causes, that are interesting. It's early, yes. The problems you write about - specifically the Token swapping id done because there was a problem (taxes).

chrisco255 5y ago

Tokens are a novel capital formation mechanism. Because tokens are programmable and blockchain native, they are qualitatively superior to other forms of "fractionalized ownership", such as a stock certificate, for example. A token can be used as an authentication mechanic for a piece of software. It can be used as a voting mechanic in a DAO, for example. You might argue that voting is the purpose of stock certificates, but in practice, it's quite impractical to participate in corporate politics. You generally have to attend an annual stockholder's meeting and put you vote forward there, and even then, you only get to vote on the Board of Directors (and this is rarely used in practice). In DAOs, it's far more similar to open source software development. People create an improvement proposal and pitch the idea in the forums and chat rooms for the project, and try to drum up enough support, and then it will go to a vote, and depending on how the DAO is set up, either you do an initial temperature check vote followed by a final implementation by the core team, or someone actually submits a PR to merge into the DAO source code and users vote on that code directly. The transparency of the treasury mechanics is also far more superior to anything else in the corporate world. With a DAO, I know at all times, precisely how much is in the treasury, how they've spent their funds in the past, what mechanics and rules guard that treasury, etc. It's all inspectable and visible on-chain. That makes a qualitative difference in the amount of trust you can generate among a group of dispersed strangers from potentially all corners of the earth, and it allows them to proceed in a productive manner in such a way that was not possible except for largely through groups of close-knit people working within a single jurisdiction (for the most part). Open source does work this way (which has also had a monetization problem), but pair open source ideals with open source money and open source treasury management, and you get something that is powerful in the same way that Linux is powerful for computing. Except it unlocks this type of coordination for things beyond software development. It encompasses everything, from art, entertainment, charity, politics, business, etc. It's a sea change in the ability to coordinate human beings and capital across distances and to incentivize people to participate in a more sustainable way. But stable coins of course, also solve a problem in and of themselves, because they make dollar-denominated token mechanics possible. If you want to program a smart contract in such a way that the terms and conditions and programmed rules depend on dollars as a base pair, you need stable coins. Programmable money is powerful for all the reasons above (it can be held in a smart contract, governed by a DAO, controlled by a multisig or by DAO votes or by certain boolean conditions being met) and more. It's also borderless, it's as easy to use in Argentina as it is in Kentucky. And slippage and liquidity are very real problems that do exist in traditional markets, such as stock markets. We've seen the traditional system mechanics breakdown, like what happened with GameStop earlier this year, when trading was halted due to liquidity issues. At any rate, powerful stuff here, it's here to stay, and it will change everything.