20 ms·

What Problem Blockchains Solve

61 points by colinarms 5y ago

marcodiego 5y ago
Basically it allows demonstrability of ownership.
- dragontamer 5y ago
  So if I made an NFT of the Constitution, does that make me the owner of the Constitution?
  - xboxnolifes 5y ago
    Can we quit beating this straw horse?
    - fizzledbits 5y ago
      Please explain why it is a straw horse.
      - deleted 5y ago
        [deleted]
    - m3adow 5y ago
      I don't see how that's a straw horse. It's even mentioned in the blog post as the "Enforcement problem". Nobody can (or should) take NFTs for Real-Life goods seriously until this problem is solved for good. I myself doubt it can be solved properly without a centralised authority which would contradict the whole "trustless" selling point. But I'd be glad to hear approaches how this and the Oracle problem could be solved in a trustless manner.
      - PeterCorless 5y ago
        There are serious projects using distributed ledger technology that are trying to solve for "this distributed ledger entry stands for this real-world container of goods" or "this particular pallet," or "this particular box on that pallet, or "this particular diamond in that box" or "this particular fish." But the application-level definition of parsing and comprehending what an entry in a ledger stands for is not universal. These are proprietary, or at least, communally-held paradigms being set up independently by each ledger designer. We're lacking universal grammars so that the logic of an item designed to operate on distributed ledger X would be recognized or honored if migrated to distributed ledger Y.
      - meheleventyone 5y ago
        Or even digital goods because you still need to know for any digital good which chain or chains has legitimate versions and really which those are versus any copies that are also on the chain(s).
      - xboxnolifes 5y ago
        NFTs only assure ownership of the NFT data itself, not what the data may represents off of the chain or otherwise. The only people who think/claim that you now own a PNG or a lease by storing a link to one in a blockchain are idiots or people trying to sell things to idiots. Assuring ownership of the data itself in a decentralized way has value outside of this current fake / grifted meme of owning a random PNG. It's tiring that a community that seemingly prides itself on technical understanding gets so hung up on an overused fake use case.
    - mads 5y ago
      I am genuinely interested in how this problem is solved. I actually own around 200 frames of a certain movie (bought them from the production company as a way to help sponsor the movie) and I would like to put them up for sale as NFT's, but I dont really see how everyone else could just claim the ownership and do the same.
  - Karunamon 5y ago
    Provenance is a thing, so no. You're just some rando and nobody would care about your NFT. The same way you can buy or even make replicas of nearly any artwork out there. The one blessed by the creator has value that the illegitimate copies do not.
    - dmitriid 5y ago
      > You're just some rando and nobody would care about your NFT. Says (s)he as multiple artists see their artworks stolen and sold on OpenSea.
      - Karunamon 5y ago
        Plagiarism and art theft happens in the real world too.
        dmitriid 5y ago
        They do. However, I was responding to your claim which is objectively, probably wrong.
        Karunamon 5y ago
        No it isn't. The claim was "provenance matters". Your claim, "but NFTs of stolen art exist" is non-responsive. Stolen art isn't the norm, it's the exception, IRL and on-chain, it's not honest to imply otherwise, and you know better than that.
        dragontamer 5y ago
        The alleged promise of blockchain is that it solves the trust issue. But this discussion you are having proves that NFTs do not solve any trust issue what so ever, you still need to do research to see which NFTs are officially blessed by the creators. Except ownership is difficult. Eventually the creators will die, and the ownership of their IP will transfer to their estate. Those estates have arguments. If two people, part of a hypothetical estate with a claim on some IP / Artwork / whatever make competing NFTs, how does "blockchain" resolve the issue at all? Suddenly, we're back to courts and arguments. No technology seems to be able to magic-away the agreements we have with each other as a society. ------------ The other issue is: if you aren't using blockchain for trust, then blockchain is no better than a literal physical certificate. A fancy piece of paper with the signature of the artist.
  - bee_rider 5y ago
    NFT's are pretty dumb IMO. But I think there is something interesting in this question. What's the Constitution? It is a piece of paper with ink on it. The paper and ink aren't that valuable, actually I have many better pieces of paper and some better ink. So that isn't where the real value is. I could also buy a modern copy of the Constitution which would be, practically, much better than the original (in the sense that it would be made of modern materials and more durable as a result), so the value must not be there either. I guess it could be in the investment value of the Constitution. I mean, I bet if I had the Constitution and held onto it for a couple decades, I could sell it to some collector for more that I bought it for. But that's not really a satisfying answer -- clearly the investment value is derived from some other underlying belief that the thing is important. Anyway, if I was really good at writing I could string you along indefinitely and keep cutting away aspects of the Constitution that clearly don't provide the value, but I'm just a programmer so let's get to the point: I think the value of the Constitution is actually completely divorced from the physical thing itself. It comes from the history that it represents -- which is actually an intangible idea. So, if someone were to mint an NFT of the Constitution and we decided that it also represented that idea, I guess it would be just as valuable? Good luck convincing other people! But I don't really see why the physical piece of paper is fundamentally a better representation of the idea, other than that's just the way we've always done it. Maybe you can mint an NFT of the Constitution for yourself, and convince yourself it represents the idea better than the piece of paper did. I think this would be a pretty silly thing to do, but no more so than trying to own the paper representation. These are all just ways of satisfying our irrational desire to own part of an idea, the problem comes from our belief that ideas are ownable, not the shape of the token.
    - dragontamer 5y ago
      I think its simpler than that. If Alice makes a Constitution NFT, and Bob makes a Constitution NFT, which NFT is the legitimate one? I'm not sure how using "Blockchain" to track the trust issue helps at all. If you say "The first one to file the NFT wins" (lets ignore the fact that this only works if both Alice and Bob are using the same blockchain with the same concept of time), then what if Bob files the NFT but doesn't in fact, have ownership of the Constitution? What if Alice is the true owner, but heard about NFTs later and thus does the filing process after Bob?
- PeterCorless 5y ago
  Blockchain is not a grammar for intellectual property rights. You literally need to create a grammar for that, and an application layer, which is not part nor parcel to the blockchain architecture. Nor should it be. You should be able to make an assertion of rights, and then provide proof of those rights, based on multiple computing paradigms, whether from a SQL or NoSQL database, or embedded within a computer file itself, or so on. There's a whole body of work in my life associated with this idea, and no, blockchain doesn't automagically solve for many or any of the problems I saw looming back in the 1990s: https://patents.google.com/?inventor=Peter+P.+Corless https://patents.google.com/?inventor=Peter+P.+Corless
edgyquant 5y ago
Could it potentially be used to keep a distributed database of information collected by a large array of satellites orbiting something like the sun? I know I’m reaching here, and I’m pretty anti-cryptocurrency so I’m not looking for a nail really, but I just think distributed stuff is cool and the way blockchains work surely has some purpose when light lag is in play. Like couldn’t it be used across a dyson swarm of rotating habitats or something as the transaction currency between them?
- lmm 5y ago
  Only if the setup needs to be zero-trust. Systems of correspondent banks etc. worked very well even in times where worldwide communication took weeks, and even today there are e.g. traditional Islamic money-transmission networks that operate extremely efficiently because they rely on trust.
  - edgyquant 5y ago
    True I’ve been reading the culture series lately so my vision was off a truly decentralized series of habitats. I could see a trustless ledger being a solution to them all wanting to trade currency etc but not necessarily being a single coherent group. Then again as I said I may just be reaching.
    - lmm 5y ago
      It's hard to imagine that such a collection of habitats would have bigger cultural differences, and lower trust, than people at opposite ends of the historic Silk Road (say), though it's not completely impossible.
- beambot 5y ago
  Crypto transactions featured heavily in Stross' Neptune's Brood for synchronizing transactions over interstellar distances: https://en.m.wikipedia.org/wiki/Neptune%27s_Brood https://en.m.wikipedia.org/wiki/Neptune%27s_Brood Money was split into slow, medium, and fast variants -- the former of which was subject to speed of light limitations in the key signing for verification.
m3nu 5y ago
> The very mechanical understanding of a contract means that we cannot tell the difference between a transaction that abides by the rules and one that exploits a bug in the system, respecting the letter of the law but not its spirit. This is really the key issue, which is difficult to change. I can't think of many important systems where we wouldn't expect human intervention if something goes wrong.
- fastball 5y ago
  I'm not sure having humans in the pipeline ameliorates this issue as much as you think it does. Take the existing legal system in the US – laws are interpreted by courts/judges/etc, who AFAICT generally choose to interpret laws by their letter rather than their spirit. As an example, you can look at the recent Kyle Rittenhouse trial with regards to whether or not it was legal for Rittenhouse to be carrying his firearm. The way the law was written, it basically carved out an exception so that 17 year olds can open carry, even though that was unlikely to be the intent of the law's drafters. But of course the judge found Rittenhouse to be not in violation because that's how the law was written. Smart contracts don't seem much different, except you're removing the inefficiency of someone having to judge what the letter of the law is.
  - meheleventyone 5y ago
    That sort of law and a business contract are quite different though. But if the legal system was immutable code we couldn’t fix that law whereas with a softer humans in the loop system we can. For contracts you don’t know what you want up front. Same issue in a lot of programming where you don’t know all the requirements up front. You horse trade towards mutual agreement but things are usually always open for renegotiation. There was a very dry article published yesterday that had this great insight: “A key tenet of economic analysis is that enterprises are unable to devise contracts that cover all possible eventualities, eg in terms of interactions with staff or suppliers. Centralisation allows firms to deal with this "contract incompleteness" (Coase (1937) and Grossman and Hart (1986)). In DeFi, the equivalent concept is "algorithm incompleteness", whereby it is impossible to write code spelling out what actions to take in all contingencies.” https://www.bis.org/publ/qtrpdf/r_qt2112b.htm https://www.bis.org/publ/qtrpdf/r_qt2112b.htm
dangus 5y ago
I think a good resource to give you an idea of what blockchain can actually do comes from the "Blockchain use cases " and "Blockchain solutions" sections of IBM's Blockchain marketing page: https://www.ibm.com/blockchain https://www.ibm.com/blockchain This gives you an idea of some real world business problems that have been solved with the technology. Still, personally, I find the question of "when do I decide to consider using a blockchain as an implementation choice?" a difficult one to answer.
- bydlocoder 5y ago
  You do know that IBM essentially shut down its blockchain division? https://finance.yahoo.com/news/ibm-blockchain-shell-former-self-175818192.html#:~:text=IBM%20has%20cut%20its%20blockchain,to%20one%20of%20the%20sources https://finance.yahoo.com/news/ibm-blockchain-shell-former-s....
  - arcticbull 5y ago
    Azure Blockchain followed suit, shutting down in September 2021. [1] [1] https://cointelegraph.com/news/microsoft-quietly-closing-down-azure-blockchain-in-september https://cointelegraph.com/news/microsoft-quietly-closing-dow...
  - dangus 5y ago
    No. I don’t really follow them closely, I just thought their marketing page was a good list of possible use cases. The article did a good job explaining what general problem blockchain solves, but didn’t give me a very good idea of what problems one might try to solve beyond existing implementations.
- PeterCorless 5y ago
  1. If you need to share all the data and the data distribution methods across multiple legal entities — there's no one 'owner' of the data like a company. If you are doing a blockchain implementation for an internal project... why? Why are you not just using a regular database like Postgres or MongoDB or Oracle or ScyllaDB? But if you are going to be sharing all this data across 50-100 companies, and no one themselves wants to "own" the project and host it, and if everyone wants to be participating as a near equal partner in a solution? Okay. Maybe distributed ledger is warranted. 2. If you need to be able to add more entities who want to participate in the distributed ledger. Or, conversely, drop out entities that are no longer participating, but everyone else still wants to preserve the history of their transactions. If you do deploy to a centrally-owned databsase, if the managing entity ever wants, for any reason, they can pull the plug on the whole operation. A distributed ledger ensures you can add people at any time — no one can lock you out from joining. And also it ensures that if you ever want to leave, the data and the work continue. 3. If you need strongly-consistent views of data, and you don't care about transactional limits. Most distributed ledger technologies are greatly bottlenecked in terms of transactions per second. And I mean some are limited to less than 10 transactions per second. Others can scale to thousands of operations per second. But many centrally-managed and even distributed databases can operate at millions of operations per second. So blockchain is not going to do anything like "eventual consistency." It just won't. And because of that, you'll have these strong throughput (ops per second) limits.
pengwing 5y ago
Ethereum has only been around since 2015. Naturally smart contracts, DAos and NFTs are somewhat newer technology, still exhibiting flaws. Block chain as a concept with the single use case of store of value has been around since 2009 in the form of Bitcoin. So let me only pick one battle here: The problem is federally-issued inflationary currency. Bitcoin solves it.
- PeterCorless 5y ago
  "we find no evidence of any positive links between inflation and either Bitcoin or Ethereum during times of increasing forward inflation expectations. This raises significant doubts over the ability of cryptocurrencies to hedge expected inflation in the short- or long-run." https://www.sciencedirect.com/science/article/pii/S0165176521002731 https://www.sciencedirect.com/science/article/pii/S016517652...
  - trevyn 5y ago
    Are “inflation expectations” different than measured inflation?
  - pengwing 5y ago
    A really great study, albeit of a completely different topic. Let me explain the it in layman's terms: Can expectation of inflation be used as a trading signal to profit from a rising price of Bitcoin and Ethereum? Result: Not really, it was only briefly possible during Covid19 and does not hold as a general relationship. My point was: BTC is more deflationary than USD. A relationship between the topic of the study and my statement does not exist. But if you read chart 1 of Figure 1 carefully, you will find that its data in fact supports my statement.
- da-x 5y ago
  However so far it's not proving to be a currency (short term stability, long term deprecation or preservation) but only an asset class (short term instability, long term preservation). So far it is only proving that it cannot be both. For assets, one can choose to invest in already existing inflation resistant assets, and many investors and even unsophisticated laypeople did that across the ages before Bitcoin was invented. So essentially federally-issued inflationary currency is not really a problem of investment because there are other alternatives to it when investment is concerned.
mrjin 5y ago
IMO, nothing. Regarding security/integrity of records, block chain is not better but with more complexity. And for the so claimed decentralization, it is a catch 22: centralized organizations are there for reasons, and block chain resolved none of them. So now you can see a funny situation that so called decentralized transactions are through centralized exchanges. But if you do need exchanges, why not simply go for banks?
jayd16 5y ago
Solves the problem of getting money out of the country, legality be damned. I assume this contributes a lot to its popularity.
wtsnz 5y ago
They also allow for micro transactions in a way we’ve not been able to do so far. You can use the original Bitcoin protocol to stream (and pay) for each packet of data. We can now make a pay-to-use netflix, something we haven’t done yet. https://xiaohuiliu.medium.com/netflix-over-bitcoin-payment-channels-ec55b3c242da https://xiaohuiliu.medium.com/netflix-over-bitcoin-payment-c...
- Tepix 5y ago
  David Chaum's Digicoin enabled this back in the mid 90s. He has the (expired) patents to prove it.
- dmitriid 5y ago
  > They also allow for micro transactions in a way we’ve not been able to do so far. Yes. Extremely slow, inefficient and expensive. We really haven't been able to do micro transactions this way before.
  - wtsnz 5y ago
    They don’t have to be what you described. The BSV network does more transactions each day than any other network at a magnitude less cost. Less cost in both user end and CO2. https://coincarboncap.com/ https://coincarboncap.com/
    - dmitriid 5y ago
      > They don’t have to be what you described. The BSV network There's always a "not true blockchain" in these discussions, isn't there > more transactions each day than any other network at a magnitude less cost. So. It maybe, barely approached real world. It's a far cry from "allow for micro transactions in a way we’ve not been able to do so far" > Less cost in both user end and CO2. I don't buy "we only run on clean energy" claims
- arcticbull 5y ago
  Microtransactions have been something we could take advantage of since the dawn of custodial wallets - at least since PayPal came into existence in 1998. However, microtransactions aren't something humans actually like. It's something technocrats think people want, but when they get it, well - let's just say there's piles of carcasses of dead startups littering the field. As Nick Szabo will attest, each transaction you make consciously carries with it a mental cost. It sucks. People would much rather a Netflix model to a pay-as-you-go model even if it ends up costing them more money in the long run. [1] > We can now make a pay-to-use netflix, something we haven’t done yet. [edit] I hate to break this to you, but you just described the Apple Music, TV and Movie stores, the first of which (music) has existed since the dawn of the iPod in 2001. Also the Amazon equivalents. And a pile of others. [1] https://nakamotoinstitute.org/static/docs/micropayments-and-mental-transaction-costs.pdf https://nakamotoinstitute.org/static/docs/micropayments-and-...
malthaus 5y ago
There is not one actual practical problem blockchains solve. It's a get rich quick / pyramid scheme built on top of a theoretical concept that appeals to nerds but doesn't work in the world we live in. The same issues persist, they're just packaged/framed differently - and, due to lack of regulation and norms to mitigate them in the real world, can still be exploited. People were complaining that Google eats up so many engineers to solve ad-problems but the whole blockchain space is much worse - what a colossal waste of human and ecological resources.
- mekster 5y ago
  I'm amazed at the end of 2021, I still get to see these responses about blockchain on hacker news. Somehow Reddit looks smarter when it comes to blockchain topics.
  - lmm 5y ago
    I'm amazed that the whole thing has somehow kept going despite the same lack of legitimate use cases that it's had from the start.
    - 0x0nyandesu 5y ago
      It's amazing that I can transfer wealth across borders with zero bank involvement using this technology and I still have to see people like you claim the sky isn't blue. Like that's nice and all but you sound like sour grapes.
      - arcticbull 5y ago
        Right, that's called regulatory arbitrage. It's not a [edit](unique) use case, it's basically crime, give or take. You're just skipping the AML and KYC checks that you'd ordinarily be required to take. Believe it or not sending money takes a few milliseconds in a classical system, except for, you know, regulatory and compliance checks that coiners pretend aren't actually needed. The use cases are: regulatory arbitrage, crime and grift. That's it and that's all folks. Nothing more. Everything else is better solved by classical means. The golden rule of blockchain is: if you think blockchain solves any given problem better than a classical solution you either don't know enough about the problem, or you don't know enough about the blockchain. > Like that's nice and all but you sound like sour grapes. [edit] As always, it's important to remind crypto folks that outside of the cult, ad hominem attacks are not suitable replacements for fact.
neiman 5y ago
The comments here show, again, that this is maybe the most charged topic in hackernews. Why is this topic so charged? Is it because the environmental damage (but then PoS should change it)? or because there's money involved (but then ENS+IPFS are poor, so should be good)? Or is it just because it's complex and takes a lot of effort to understand?
- kkjjkgjjgg 5y ago
  Could be envy of people who saw other people get rich.
  - john_alan 5y ago
    Precisely, it upsets the pseudo-intellectuals.
- jagger27 5y ago
  It's because of the non-stop barrage of bullshit projects that don't solve actual problems besides "I wish I bought Bitcoin at $100 so here's my attempt to recreate that magic". TFA makes a solid argument about the limited problem space where blockchain tech is useful. > Or is it just because it's complex and takes a lot of effort to understand? Look, I see that you're deep into the ecosystem and you're excited about it. The core ideas of blockchain are not that complex. It's the human factors surrounding all of it that make it so fucking tiresome thread after thread.
  - kkjjkgjjgg 5y ago
    "It's the human factors surrounding all of it that make it so fucking tiresome thread after thread." But that is also what makes it so interesting. Nobody forces people to use and assign value to Bitcoin. It all happens only because people want it. No government mandates, nothing.
    - deleted 5y ago
      [deleted]
_xnmw 5y ago
What blockchains solve is the whole pesky problem of following the law and paying taxes, and being a normal member of society. No wonder that much of the early crypto literature was all about anarchy. To this day, the only useful thing that crypto has enabled (on a very small scale) international asset transfer that bypasses mainstream financial systems. As Diehl[1] wrote, decentralized trustless systems are only useful to criminals -- every other social system on the planet has "trust" embedded in it, because that is more efficient, socially constructive, and powerful. Oh, and crypto isn't actually decentralized or trustless either, as you still need to trust the developers that wrote the code, and the people that run your exchanges, because otherwise you will get robbed by them, as it happens on a regular basis in the crypto world. [1] https://www.stephendiehl.com/blog/nothing-burger.html https://www.stephendiehl.com/blog/nothing-burger.html
- ur-whale 5y ago
  The problem with statist thinking like this is that it never ever takes into account what happens when the state fails. This is a typical way of looking at the world from people who were lucky enough to grow up in a society that sort of works, unfortunately not the norm for a large fraction of the human race. I suspect that - had you lived under German occupation in 39-45 - you would have a very different take on things.
  - sofixa 5y ago
    But very few people in the world today are under the risk of having to live in such a situation.
  - arcticbull 5y ago
    If your state fails you have much, much bigger problems than your hard currency. So much so, that your hard currency is kind of a rounding error in this situation. If the state loses its monopoly on violence, well, someone can just beat you until you're dead or you give up your private keys. Either one should be fine. I don't optimize my life for some hypothetical dystopian failed state situation in any other aspect of my life. I don't have a fallout shelter in my back yard. I don't have bricks of gold. I don't have Kalashnikovs. I don't have bullets. I don't keep a stash of canned peaches. I don't have gas masks or iodine pills. This isn't Metro Exodus. It's massively inefficient to plan for such a situation in any aspect of my life. The risk-reward profile is just flat out nuts. I can't know ahead of time beyond these key resources what I'd actually need. And I know I can't count on the internet being up for me to trade spreadsheet cells for gasoline in the apocalypse - nor can I count on good actors to have 51% control of the network. Why on earth would we force our currency to operate as though there was a German occupation at all times, and take on all the massive inefficiency that goes along with it? Especially when its climate implications are pushing us towards this dystopian future.
foxes 5y ago
The profile picture of the author sums up the whole thing. Emotional outburst. I understand blockchains perfectly. Aiding crime and being a pyramid scheme are the only things they have been shown to solve so far.
bartaxyz 5y ago
It solves the double spending problem in a decentralised network. Whether that has an application is another question.
gmays 5y ago
Great writeup. I don't know how big crypto/blockchains will get, but I do know 1) a lot of smart people are betting on it, and 2) I've learned not to confuse the limits of my imagination with the limits of reality. So I've made a relatively small investment in crypto across a couple of dozen coins as an experiment. I am cautiously optimistic in the future, assuming it'll be 5-10 years until viability at any practical level for a mainstream audience.

61 points by colinarms 5y ago

marcodiego 5y ago

Basically it allows demonstrability of ownership.

dragontamer 5y ago
So if I made an NFT of the Constitution, does that make me the owner of the Constitution?
- xboxnolifes 5y ago
  Can we quit beating this straw horse?
  - fizzledbits 5y ago
    Please explain why it is a straw horse.
    - deleted 5y ago
      [deleted]
  - m3adow 5y ago
    I don't see how that's a straw horse. It's even mentioned in the blog post as the "Enforcement problem". Nobody can (or should) take NFTs for Real-Life goods seriously until this problem is solved for good. I myself doubt it can be solved properly without a centralised authority which would contradict the whole "trustless" selling point. But I'd be glad to hear approaches how this and the Oracle problem could be solved in a trustless manner.
    - PeterCorless 5y ago
      There are serious projects using distributed ledger technology that are trying to solve for "this distributed ledger entry stands for this real-world container of goods" or "this particular pallet," or "this particular box on that pallet, or "this particular diamond in that box" or "this particular fish." But the application-level definition of parsing and comprehending what an entry in a ledger stands for is not universal. These are proprietary, or at least, communally-held paradigms being set up independently by each ledger designer. We're lacking universal grammars so that the logic of an item designed to operate on distributed ledger X would be recognized or honored if migrated to distributed ledger Y.
    - meheleventyone 5y ago
      Or even digital goods because you still need to know for any digital good which chain or chains has legitimate versions and really which those are versus any copies that are also on the chain(s).
    - xboxnolifes 5y ago
      NFTs only assure ownership of the NFT data itself, not what the data may represents off of the chain or otherwise. The only people who think/claim that you now own a PNG or a lease by storing a link to one in a blockchain are idiots or people trying to sell things to idiots. Assuring ownership of the data itself in a decentralized way has value outside of this current fake / grifted meme of owning a random PNG. It's tiring that a community that seemingly prides itself on technical understanding gets so hung up on an overused fake use case.
  - mads 5y ago
    I am genuinely interested in how this problem is solved. I actually own around 200 frames of a certain movie (bought them from the production company as a way to help sponsor the movie) and I would like to put them up for sale as NFT's, but I dont really see how everyone else could just claim the ownership and do the same.
- Karunamon 5y ago
  Provenance is a thing, so no. You're just some rando and nobody would care about your NFT. The same way you can buy or even make replicas of nearly any artwork out there. The one blessed by the creator has value that the illegitimate copies do not.
  - dmitriid 5y ago
    > You're just some rando and nobody would care about your NFT. Says (s)he as multiple artists see their artworks stolen and sold on OpenSea.
    - Karunamon 5y ago
      Plagiarism and art theft happens in the real world too.
      - dmitriid 5y ago
        They do. However, I was responding to your claim which is objectively, probably wrong.
        Karunamon 5y ago
        No it isn't. The claim was "provenance matters". Your claim, "but NFTs of stolen art exist" is non-responsive. Stolen art isn't the norm, it's the exception, IRL and on-chain, it's not honest to imply otherwise, and you know better than that.
        dragontamer 5y ago
        The alleged promise of blockchain is that it solves the trust issue. But this discussion you are having proves that NFTs do not solve any trust issue what so ever, you still need to do research to see which NFTs are officially blessed by the creators. Except ownership is difficult. Eventually the creators will die, and the ownership of their IP will transfer to their estate. Those estates have arguments. If two people, part of a hypothetical estate with a claim on some IP / Artwork / whatever make competing NFTs, how does "blockchain" resolve the issue at all? Suddenly, we're back to courts and arguments. No technology seems to be able to magic-away the agreements we have with each other as a society. ------------ The other issue is: if you aren't using blockchain for trust, then blockchain is no better than a literal physical certificate. A fancy piece of paper with the signature of the artist.
- bee_rider 5y ago
  NFT's are pretty dumb IMO. But I think there is something interesting in this question. What's the Constitution? It is a piece of paper with ink on it. The paper and ink aren't that valuable, actually I have many better pieces of paper and some better ink. So that isn't where the real value is. I could also buy a modern copy of the Constitution which would be, practically, much better than the original (in the sense that it would be made of modern materials and more durable as a result), so the value must not be there either. I guess it could be in the investment value of the Constitution. I mean, I bet if I had the Constitution and held onto it for a couple decades, I could sell it to some collector for more that I bought it for. But that's not really a satisfying answer -- clearly the investment value is derived from some other underlying belief that the thing is important. Anyway, if I was really good at writing I could string you along indefinitely and keep cutting away aspects of the Constitution that clearly don't provide the value, but I'm just a programmer so let's get to the point: I think the value of the Constitution is actually completely divorced from the physical thing itself. It comes from the history that it represents -- which is actually an intangible idea. So, if someone were to mint an NFT of the Constitution and we decided that it also represented that idea, I guess it would be just as valuable? Good luck convincing other people! But I don't really see why the physical piece of paper is fundamentally a better representation of the idea, other than that's just the way we've always done it. Maybe you can mint an NFT of the Constitution for yourself, and convince yourself it represents the idea better than the piece of paper did. I think this would be a pretty silly thing to do, but no more so than trying to own the paper representation. These are all just ways of satisfying our irrational desire to own part of an idea, the problem comes from our belief that ideas are ownable, not the shape of the token.
  - dragontamer 5y ago
    I think its simpler than that. If Alice makes a Constitution NFT, and Bob makes a Constitution NFT, which NFT is the legitimate one? I'm not sure how using "Blockchain" to track the trust issue helps at all. If you say "The first one to file the NFT wins" (lets ignore the fact that this only works if both Alice and Bob are using the same blockchain with the same concept of time), then what if Bob files the NFT but doesn't in fact, have ownership of the Constitution? What if Alice is the true owner, but heard about NFTs later and thus does the filing process after Bob?
PeterCorless 5y ago
Blockchain is not a grammar for intellectual property rights. You literally need to create a grammar for that, and an application layer, which is not part nor parcel to the blockchain architecture. Nor should it be. You should be able to make an assertion of rights, and then provide proof of those rights, based on multiple computing paradigms, whether from a SQL or NoSQL database, or embedded within a computer file itself, or so on. There's a whole body of work in my life associated with this idea, and no, blockchain doesn't automagically solve for many or any of the problems I saw looming back in the 1990s: https://patents.google.com/?inventor=Peter+P.+Corless https://patents.google.com/?inventor=Peter+P.+Corless

edgyquant 5y ago

Could it potentially be used to keep a distributed database of information collected by a large array of satellites orbiting something like the sun? I know I’m reaching here, and I’m pretty anti-cryptocurrency so I’m not looking for a nail really, but I just think distributed stuff is cool and the way blockchains work surely has some purpose when light lag is in play. Like couldn’t it be used across a dyson swarm of rotating habitats or something as the transaction currency between them?

lmm 5y ago
Only if the setup needs to be zero-trust. Systems of correspondent banks etc. worked very well even in times where worldwide communication took weeks, and even today there are e.g. traditional Islamic money-transmission networks that operate extremely efficiently because they rely on trust.
- edgyquant 5y ago
  True I’ve been reading the culture series lately so my vision was off a truly decentralized series of habitats. I could see a trustless ledger being a solution to them all wanting to trade currency etc but not necessarily being a single coherent group. Then again as I said I may just be reaching.
  - lmm 5y ago
    It's hard to imagine that such a collection of habitats would have bigger cultural differences, and lower trust, than people at opposite ends of the historic Silk Road (say), though it's not completely impossible.
beambot 5y ago
Crypto transactions featured heavily in Stross' Neptune's Brood for synchronizing transactions over interstellar distances: https://en.m.wikipedia.org/wiki/Neptune%27s_Brood https://en.m.wikipedia.org/wiki/Neptune%27s_Brood Money was split into slow, medium, and fast variants -- the former of which was subject to speed of light limitations in the key signing for verification.

m3nu 5y ago

> The very mechanical understanding of a contract means that we cannot tell the difference between a transaction that abides by the rules and one that exploits a bug in the system, respecting the letter of the law but not its spirit. This is really the key issue, which is difficult to change. I can't think of many important systems where we wouldn't expect human intervention if something goes wrong.

fastball 5y ago
I'm not sure having humans in the pipeline ameliorates this issue as much as you think it does. Take the existing legal system in the US – laws are interpreted by courts/judges/etc, who AFAICT generally choose to interpret laws by their letter rather than their spirit. As an example, you can look at the recent Kyle Rittenhouse trial with regards to whether or not it was legal for Rittenhouse to be carrying his firearm. The way the law was written, it basically carved out an exception so that 17 year olds can open carry, even though that was unlikely to be the intent of the law's drafters. But of course the judge found Rittenhouse to be not in violation because that's how the law was written. Smart contracts don't seem much different, except you're removing the inefficiency of someone having to judge what the letter of the law is.
- meheleventyone 5y ago
  That sort of law and a business contract are quite different though. But if the legal system was immutable code we couldn’t fix that law whereas with a softer humans in the loop system we can. For contracts you don’t know what you want up front. Same issue in a lot of programming where you don’t know all the requirements up front. You horse trade towards mutual agreement but things are usually always open for renegotiation. There was a very dry article published yesterday that had this great insight: “A key tenet of economic analysis is that enterprises are unable to devise contracts that cover all possible eventualities, eg in terms of interactions with staff or suppliers. Centralisation allows firms to deal with this "contract incompleteness" (Coase (1937) and Grossman and Hart (1986)). In DeFi, the equivalent concept is "algorithm incompleteness", whereby it is impossible to write code spelling out what actions to take in all contingencies.” https://www.bis.org/publ/qtrpdf/r_qt2112b.htm https://www.bis.org/publ/qtrpdf/r_qt2112b.htm

dangus 5y ago

I think a good resource to give you an idea of what blockchain can actually do comes from the "Blockchain use cases " and "Blockchain solutions" sections of IBM's Blockchain marketing page: https://www.ibm.com/blockchain https://www.ibm.com/blockchain This gives you an idea of some real world business problems that have been solved with the technology. Still, personally, I find the question of "when do I decide to consider using a blockchain as an implementation choice?" a difficult one to answer.

bydlocoder 5y ago
You do know that IBM essentially shut down its blockchain division? https://finance.yahoo.com/news/ibm-blockchain-shell-former-self-175818192.html#:~:text=IBM%20has%20cut%20its%20blockchain,to%20one%20of%20the%20sources https://finance.yahoo.com/news/ibm-blockchain-shell-former-s....
- arcticbull 5y ago
  Azure Blockchain followed suit, shutting down in September 2021. [1] [1] https://cointelegraph.com/news/microsoft-quietly-closing-down-azure-blockchain-in-september https://cointelegraph.com/news/microsoft-quietly-closing-dow...
- dangus 5y ago
  No. I don’t really follow them closely, I just thought their marketing page was a good list of possible use cases. The article did a good job explaining what general problem blockchain solves, but didn’t give me a very good idea of what problems one might try to solve beyond existing implementations.
PeterCorless 5y ago
1. If you need to share all the data and the data distribution methods across multiple legal entities — there's no one 'owner' of the data like a company. If you are doing a blockchain implementation for an internal project... why? Why are you not just using a regular database like Postgres or MongoDB or Oracle or ScyllaDB? But if you are going to be sharing all this data across 50-100 companies, and no one themselves wants to "own" the project and host it, and if everyone wants to be participating as a near equal partner in a solution? Okay. Maybe distributed ledger is warranted. 2. If you need to be able to add more entities who want to participate in the distributed ledger. Or, conversely, drop out entities that are no longer participating, but everyone else still wants to preserve the history of their transactions. If you do deploy to a centrally-owned databsase, if the managing entity ever wants, for any reason, they can pull the plug on the whole operation. A distributed ledger ensures you can add people at any time — no one can lock you out from joining. And also it ensures that if you ever want to leave, the data and the work continue. 3. If you need strongly-consistent views of data, and you don't care about transactional limits. Most distributed ledger technologies are greatly bottlenecked in terms of transactions per second. And I mean some are limited to less than 10 transactions per second. Others can scale to thousands of operations per second. But many centrally-managed and even distributed databases can operate at millions of operations per second. So blockchain is not going to do anything like "eventual consistency." It just won't. And because of that, you'll have these strong throughput (ops per second) limits.

pengwing 5y ago

Ethereum has only been around since 2015. Naturally smart contracts, DAos and NFTs are somewhat newer technology, still exhibiting flaws. Block chain as a concept with the single use case of store of value has been around since 2009 in the form of Bitcoin. So let me only pick one battle here: The problem is federally-issued inflationary currency. Bitcoin solves it.

PeterCorless 5y ago
"we find no evidence of any positive links between inflation and either Bitcoin or Ethereum during times of increasing forward inflation expectations. This raises significant doubts over the ability of cryptocurrencies to hedge expected inflation in the short- or long-run." https://www.sciencedirect.com/science/article/pii/S0165176521002731 https://www.sciencedirect.com/science/article/pii/S016517652...
- trevyn 5y ago
  Are “inflation expectations” different than measured inflation?
- pengwing 5y ago
  A really great study, albeit of a completely different topic. Let me explain the it in layman's terms: Can expectation of inflation be used as a trading signal to profit from a rising price of Bitcoin and Ethereum? Result: Not really, it was only briefly possible during Covid19 and does not hold as a general relationship. My point was: BTC is more deflationary than USD. A relationship between the topic of the study and my statement does not exist. But if you read chart 1 of Figure 1 carefully, you will find that its data in fact supports my statement.
da-x 5y ago
However so far it's not proving to be a currency (short term stability, long term deprecation or preservation) but only an asset class (short term instability, long term preservation). So far it is only proving that it cannot be both. For assets, one can choose to invest in already existing inflation resistant assets, and many investors and even unsophisticated laypeople did that across the ages before Bitcoin was invented. So essentially federally-issued inflationary currency is not really a problem of investment because there are other alternatives to it when investment is concerned.

mrjin 5y ago

IMO, nothing. Regarding security/integrity of records, block chain is not better but with more complexity. And for the so claimed decentralization, it is a catch 22: centralized organizations are there for reasons, and block chain resolved none of them. So now you can see a funny situation that so called decentralized transactions are through centralized exchanges. But if you do need exchanges, why not simply go for banks?

jayd16 5y ago

Solves the problem of getting money out of the country, legality be damned. I assume this contributes a lot to its popularity.

wtsnz 5y ago

They also allow for micro transactions in a way we’ve not been able to do so far. You can use the original Bitcoin protocol to stream (and pay) for each packet of data. We can now make a pay-to-use netflix, something we haven’t done yet. https://xiaohuiliu.medium.com/netflix-over-bitcoin-payment-channels-ec55b3c242da https://xiaohuiliu.medium.com/netflix-over-bitcoin-payment-c...

Tepix 5y ago
David Chaum's Digicoin enabled this back in the mid 90s. He has the (expired) patents to prove it.
dmitriid 5y ago
> They also allow for micro transactions in a way we’ve not been able to do so far. Yes. Extremely slow, inefficient and expensive. We really haven't been able to do micro transactions this way before.
- wtsnz 5y ago
  They don’t have to be what you described. The BSV network does more transactions each day than any other network at a magnitude less cost. Less cost in both user end and CO2. https://coincarboncap.com/ https://coincarboncap.com/
  - dmitriid 5y ago
    > They don’t have to be what you described. The BSV network There's always a "not true blockchain" in these discussions, isn't there > more transactions each day than any other network at a magnitude less cost. So. It maybe, barely approached real world. It's a far cry from "allow for micro transactions in a way we’ve not been able to do so far" > Less cost in both user end and CO2. I don't buy "we only run on clean energy" claims
arcticbull 5y ago
Microtransactions have been something we could take advantage of since the dawn of custodial wallets - at least since PayPal came into existence in 1998. However, microtransactions aren't something humans actually like. It's something technocrats think people want, but when they get it, well - let's just say there's piles of carcasses of dead startups littering the field. As Nick Szabo will attest, each transaction you make consciously carries with it a mental cost. It sucks. People would much rather a Netflix model to a pay-as-you-go model even if it ends up costing them more money in the long run. [1] > We can now make a pay-to-use netflix, something we haven’t done yet. [edit] I hate to break this to you, but you just described the Apple Music, TV and Movie stores, the first of which (music) has existed since the dawn of the iPod in 2001. Also the Amazon equivalents. And a pile of others. [1] https://nakamotoinstitute.org/static/docs/micropayments-and-mental-transaction-costs.pdf https://nakamotoinstitute.org/static/docs/micropayments-and-...

malthaus 5y ago

There is not one actual practical problem blockchains solve. It's a get rich quick / pyramid scheme built on top of a theoretical concept that appeals to nerds but doesn't work in the world we live in. The same issues persist, they're just packaged/framed differently - and, due to lack of regulation and norms to mitigate them in the real world, can still be exploited. People were complaining that Google eats up so many engineers to solve ad-problems but the whole blockchain space is much worse - what a colossal waste of human and ecological resources.

mekster 5y ago
I'm amazed at the end of 2021, I still get to see these responses about blockchain on hacker news. Somehow Reddit looks smarter when it comes to blockchain topics.
- lmm 5y ago
  I'm amazed that the whole thing has somehow kept going despite the same lack of legitimate use cases that it's had from the start.
  - 0x0nyandesu 5y ago
    It's amazing that I can transfer wealth across borders with zero bank involvement using this technology and I still have to see people like you claim the sky isn't blue. Like that's nice and all but you sound like sour grapes.
    - arcticbull 5y ago
      Right, that's called regulatory arbitrage. It's not a [edit](unique) use case, it's basically crime, give or take. You're just skipping the AML and KYC checks that you'd ordinarily be required to take. Believe it or not sending money takes a few milliseconds in a classical system, except for, you know, regulatory and compliance checks that coiners pretend aren't actually needed. The use cases are: regulatory arbitrage, crime and grift. That's it and that's all folks. Nothing more. Everything else is better solved by classical means. The golden rule of blockchain is: if you think blockchain solves any given problem better than a classical solution you either don't know enough about the problem, or you don't know enough about the blockchain. > Like that's nice and all but you sound like sour grapes. [edit] As always, it's important to remind crypto folks that outside of the cult, ad hominem attacks are not suitable replacements for fact.

neiman 5y ago

The comments here show, again, that this is maybe the most charged topic in hackernews. Why is this topic so charged? Is it because the environmental damage (but then PoS should change it)? or because there's money involved (but then ENS+IPFS are poor, so should be good)? Or is it just because it's complex and takes a lot of effort to understand?

kkjjkgjjgg 5y ago
Could be envy of people who saw other people get rich.
- john_alan 5y ago
  Precisely, it upsets the pseudo-intellectuals.
jagger27 5y ago
It's because of the non-stop barrage of bullshit projects that don't solve actual problems besides "I wish I bought Bitcoin at $100 so here's my attempt to recreate that magic". TFA makes a solid argument about the limited problem space where blockchain tech is useful. > Or is it just because it's complex and takes a lot of effort to understand? Look, I see that you're deep into the ecosystem and you're excited about it. The core ideas of blockchain are not that complex. It's the human factors surrounding all of it that make it so fucking tiresome thread after thread.
- kkjjkgjjgg 5y ago
  "It's the human factors surrounding all of it that make it so fucking tiresome thread after thread." But that is also what makes it so interesting. Nobody forces people to use and assign value to Bitcoin. It all happens only because people want it. No government mandates, nothing.
  - deleted 5y ago
    [deleted]

_xnmw 5y ago

What blockchains solve is the whole pesky problem of following the law and paying taxes, and being a normal member of society. No wonder that much of the early crypto literature was all about anarchy. To this day, the only useful thing that crypto has enabled (on a very small scale) international asset transfer that bypasses mainstream financial systems. As Diehl[1] wrote, decentralized trustless systems are only useful to criminals -- every other social system on the planet has "trust" embedded in it, because that is more efficient, socially constructive, and powerful. Oh, and crypto isn't actually decentralized or trustless either, as you still need to trust the developers that wrote the code, and the people that run your exchanges, because otherwise you will get robbed by them, as it happens on a regular basis in the crypto world. [1] https://www.stephendiehl.com/blog/nothing-burger.html https://www.stephendiehl.com/blog/nothing-burger.html

ur-whale 5y ago
The problem with statist thinking like this is that it never ever takes into account what happens when the state fails. This is a typical way of looking at the world from people who were lucky enough to grow up in a society that sort of works, unfortunately not the norm for a large fraction of the human race. I suspect that - had you lived under German occupation in 39-45 - you would have a very different take on things.
- sofixa 5y ago
  But very few people in the world today are under the risk of having to live in such a situation.
- arcticbull 5y ago
  If your state fails you have much, much bigger problems than your hard currency. So much so, that your hard currency is kind of a rounding error in this situation. If the state loses its monopoly on violence, well, someone can just beat you until you're dead or you give up your private keys. Either one should be fine. I don't optimize my life for some hypothetical dystopian failed state situation in any other aspect of my life. I don't have a fallout shelter in my back yard. I don't have bricks of gold. I don't have Kalashnikovs. I don't have bullets. I don't keep a stash of canned peaches. I don't have gas masks or iodine pills. This isn't Metro Exodus. It's massively inefficient to plan for such a situation in any aspect of my life. The risk-reward profile is just flat out nuts. I can't know ahead of time beyond these key resources what I'd actually need. And I know I can't count on the internet being up for me to trade spreadsheet cells for gasoline in the apocalypse - nor can I count on good actors to have 51% control of the network. Why on earth would we force our currency to operate as though there was a German occupation at all times, and take on all the massive inefficiency that goes along with it? Especially when its climate implications are pushing us towards this dystopian future.

foxes 5y ago

The profile picture of the author sums up the whole thing. Emotional outburst. I understand blockchains perfectly. Aiding crime and being a pyramid scheme are the only things they have been shown to solve so far.

bartaxyz 5y ago

It solves the double spending problem in a decentralised network. Whether that has an application is another question.

gmays 5y ago

Great writeup. I don't know how big crypto/blockchains will get, but I do know 1) a lot of smart people are betting on it, and 2) I've learned not to confuse the limits of my imagination with the limits of reality. So I've made a relatively small investment in crypto across a couple of dozen coins as an experiment. I am cautiously optimistic in the future, assuming it'll be 5-10 years until viability at any practical level for a mainstream audience.